Dawson v Irish Brokers Association

• Jurisdiction: Ireland
• Judge: O'Flaherty J.
• Judgment Date: 27 February 1997
• Neutral Citation: 1997 WJSC-SC 676
• Docket Number: (207/96)
• Court: Supreme Court
• Date: 27 February 1997

1997 WJSC-SC 676

THE SUPREME COURT

Hamilton C.J.,

O'Flaherty J.,

Barrington J.,

(207/96)

DAWSON v. IRISH BROKERS ASSOCIATION

AN CH ÚIRT UACHTARACH

BETWEEN:

ALBERT DAWSON AND DUDLEY DAWSON trading as A.E. DAWSON & SONS

Plaintiffs/Respondents

.V.

IRISH BROKERS ASSOCIATION

Defendant/Appellant

Citations:

INSURANCE ACT 1989 PART IV

INSURANCE ACT 1989 S45

INSURANCE ACT 1989 S47

INSURANCE ACT 1989 S48

INSURANCE ACT 1989 S56

INSURANCE ACT 1989 S44(1)

REILLY V GILL & ORS 1946 85 ILTR 165

GREEN V BLAKE & ORS 1948 IR 242

COMPANIES ACT 1963 S214(b)

COMPANIES ACT 1963 S214(c)

IRISH BROKERS ASSOCIATION ART 16

IRISH BROKERS ASSOCIATION ART 17(j)

INSURANCE ACT 1989 S48(1)(a)

INSURANCE ACT 1989 S48(1)(b)

JOHN V REES 1970 1 CH 345

M'GRATH V BOURNE IR 10 CL 160

BARRETT V INDEPENDENT NEWSPAPERS LTD 1986 IR 13

ENTERPRISE & EMPLOYMENT (DELEGATION OF MINISTERIAL FUNCTIONS) ORDER 1993 SI 199/1993

IRISH BROKERS ASSOCIATION 15

Synopsis:

Defamation

Libel - expulsion of plaintiffs from membership of defendant association by prima facie defamatory letter - whether qualified privilege - whether damages excessive - Held: No qualified privilege due to breach of association's rules in expulsion - damages excessive - (Supreme Court: Hamilton C.J., O'Flaherty J., Barrington J. - 27/02/1997)

|Dawson & Dawson v. Irish Brokers Association|

1 Judgment delivered on the 27th day of February, 1997, by O'Flaherty J.

2 The plaintiffs, Albert Dawson and Dudley Dawson, are brothers who carry on an insurance brokerage business under the title "A.E. Dawson & Sons" at 1 Maywood Drive, Raheny, Dublin 5. The brokerage business was originally started by the plaintiffs” father, on his retirement from the Garda Siochana, over thirty years ago. Albert Dawson is a certified accountant as well as having qualifications as a company secretary; Dudley Dawson works for an insurance company and, in a sense, he plays a subsidiary role in the firm.

3 Although they were represented by solicitor and counsel when proceedings were drafted, and up to the trial of the matter, the brothers conducted the proceedings themselves at trial and also on this appeal. In fact, Albert Dawson conducted the oral procedure at both trial and on appeal; Dudley Dawson assisted him with checking the paper work in the case, and the like. I think I represent matters properly if I say that Albert Dawson is the chief protagonist in this litigation and any reference in the course of this judgment to "the plaintiff" or "Mr. Dawson" will be a reference to Albert Dawson, rather than Dudley Dawson, and I think Dudley Dawson accepts that there is an identity of interest between his brother and himself.

4 The working of the Insurance Act, 1989, provided the catalyst to this litigation. This Act was enacted on the 15th March, 1989, and, except for part IV came into force on the 20th March, 1989. By Ministerial order of the 1st October, 1990, Part IV was brought into force.

5 Prior to the enactment of this litigation there were two bodies which looked after the interests of insurance brokers throughout the country. The larger of these in terms of membership was the National Insurance and Investment Brokers Association ("NIIBA"); the other was the Corporation of Insurance Brokers of Ireland ("CIBI"). Prior to the Act, it was not necessary for an insurance broker to be a member of either body for the purpose of conducting business with members of the public or with insurance companies. The purpose of each of these associations was to represent the interests of its members and, also, to encourage and maintain a high standard of professional conduct in the manner in which they conducted their business with their clients, with the public in general and with the insurance companies. So it appears that NIIBA required its members to submit an annual accountant's report showing that the financial affairs of the brokerage in question were being conducted properly and that clients” monies, whether in the form of premiums or monies received from the insurance companies, were being properly managed. The administrative and other costs of each of these bodies were financed by annual subscriptions paid by the members. In addition, NIIBA had established a compensation fund in 1986, which was financed by a separate contribution paid annually by the members of the organisation.

6 It is not necessary to engage in an extensive analysis of the purposes and objects of the Insurance Act, 1989, except for Part IV which regulates insurance intermediaries. The breathing space which was allowed before Part IV came into force on the 1st October, 1990, was to enable insurance intermediaries, including brokers, to prepare for the new regime which would govern their activities in the manner in which they conducted business with their clients and with their insurance companies. Section 44 provides that a person shall not act as, or hold himself out to be an insurance broker unless he is a member of a representative body of insurance brokers which requires compliance with the provisions of the Act as a condition of membership, and that body is recognised as such by the Minister for Industry and Commerce (now the Minister for Enterprise and Employment under S.I. No. 199 of 1993) and he otherwise complies with the provisions of the Act. There is provision for an exception which is germane to this case - which I will note shortly hereafter - whereby a broker can carry on business without being a member of a representative body. Section 45 stipulates that the Minister may require brokers to have policies of professional indemnity insurance. Section 46 restricts insurance companies in their dealing with insurance intermediaries and also deals with commission payments. Section 47 deals with the insurance bond that is required by intermediaries. Section 48 provides for the keeping of separate bank accounts, and this section looms large in this particular litigation. The only other section that needs to be noticed is s.56 which provides that the Minister may be order prescribe codes of conduct to be observed by insurance brokers. Unfortunately, while a number of draft codes were produced from time to time, none has received the approval of the Minister as yet.

7 The defendant, the Irish Brokers Association, came into existence at the same time that Part IV of the 1989 Act came into effect, that is October, 1990. It was formed as a result of a merger agreement between NIIBA and CIBI. On the 19th February, 1992, it was incorporated as a company limited by guarantee and not having a share capital. The plaintiff firm, A.E. Dawson and Sons, completed an application form for membership of the Association and paid the appropriate subscription and also continued its subscription to the compensation fund. It also agreed to be bound by the Articles of Association of the Association.

8 On the 8th May, 1991, the Minister for Industry and Commerce accorded recognition to the Association as the sole regulatory body for insurance brokers of the purpose of s. 44(1) of the Act. However, a broker who chose not to be a member of the Association could have his compliance with the provisions of the Act monitored and regulated by the individual insurance companies with whom he held agency agreements. For this purpose the insurance companies established an organisation known as the Insurance Intermediaries Compliance Bureau ("IICB") to carry out these tasks.

9 It was the defendant's case at trial, and before us, that the enactment of the 1989 legislation brought about a radical transformation of the responsibilities of individual insurance brokers, and the manner in which they conducted their affairs. The Association now had 600 members who would have to be instructed in the requirements of the Act, and for a year after the coming into force of Part IV of the Act it appears that the Association did much in the way of circulating its members, and so forth, to apprise them of the requirements of the Act and how compliance should be achieved.

10 In particular, the Association also circulated its members requiring certain information and documentation from them so as to make sure that there was compliance with the Act. On the 1st October, 1991, the Association required such information from the plaintiffs and the plaintiffs duly furnished a completed renewal form and supplied all the necessary evidence of compliance with the Act and also furnished an accountant's report prepared by the plaintiff which they regarded as compliance with the Act because, as already related, the plaintiff is a qualified accountant. However, while the Association had been prepared to accept such a report in the past, on the 9th March, 1992, Mr. Paul Carty, who was the Chief Executive of the Association, wrote to the plaintiffs asking them to supply an accountant's report signed by "an independent accountant/auditor" and refused to accept the reports as previously furnished by the plaintiffs. By letter of the 19th March, 1992, the request was repeated.

11 This is the nub of what has lead to the dispute between the parties, which has culminated in this litigation. The plaintiffs always contended that the accountant's report furnished by them was sufficient compliance with the Act; the defendant Association took the view that it needed the report of an independent accountant. The plaintiffs felt that the requirement of the Association was simply a retaliatory measure to get at the plaintiffs because they had made numerous inquires on the way that the Association conducted its affairs, in particular its financial affairs.

12 The letters written by Mr. Carty of the 9th March and 19th March, 1992, had imposed a deadline, at first the 16th March, 1992, and then extended to the 3rd April, 1992, for the plaintiffs to comply with the requirements now imposed by the Association. The...