Doherty (A Minor) v North Western Health Board

• Jurisdiction: Ireland
• Judgment Date: 20 May 2010
• Docket Number: [2000 No. 8756 P and
• Date: 20 May 2010
• Court: High Court

[2010] IEHC 283,

High Court

[2000 No. 8756 P and 2002 No. 16269 P]

Doherty (a minor) v. North Western Health Board

Cheryl Doherty (a minor suing by her mother and next friend Sarah Doherty)

Plaintiff

and

The North Western Health Board, Defendant, and Brian Davidson, Third Party, and The Medical Defence Union Ltd. and M.D.U. Services Ltd.,Additional Third Parties, and Nicole Hassett (a minor suing by her mother and next friend Orla Hassett), Plaintiff v.The South Eastern Health Board, Defendant, and Raymond Howard, Third Party, and The Medical Defence Union Ltd. and M.D.U. Services Ltd., Additional Third Parties

Cases mentioned in this report:-

Barry v. Medical Defence Union Ltd. [2005] IESC 41, (Unreported, Supreme Court, 16th June, 2005).

Coin Controls Ltd. v. SuzoInternational (U.K.) Ltd.[1999] Ch. 33; [1998] 3 W.L.R. 420; [1997] 3 All E.R. 45.

Dansommer A/S v. Götz (Case C-8/98) [2000] E.C.R. I-393.

Grupo Torras SA v. Al-Sabah [1995] 1 Lloyd's Rep. 374; [1996] 1 Lloyd's Rep. 7.

Hassett (a minor) v. South Eastern Health Board[2006] IEHC 105, [2007] 1 I.R. 644.

Hassett v. South Eastern Health Board (Case C-372/07)[2008] E.C.R. I-7403.

Henderson v. Henderson (1843) 3 Hare 100; [1843-1860] All E.R. Rep. 378.

JP Morgan NA v. Berliner Verkehrsbetriebe (BVG)[2009] EWHC 1627 (Comm), [2010] Q.B. 276; [2010] 2 W.L.R. 690.

Land Oberösterreich v. CEZ AS (Case C-343/04) [2006] 2 All E.R. (Comm.) 665; [2006] E.C.R. I-4557.

Newtherapeutics Ltd. v. Katz [1991] Ch. 226; [1990] 3 W.L.R. 1183; [1991] 2 All E.R. 151.

Sanders v. van der Putte (Case 73/77) [1977] E.C.R. 2383.

Webb v. Webb (Case C-294/92) [1994] Q.B. 696; [1994] 3 W.L.R. 801; [1994] E.C.R. I-1717.

White v. Spendlove [1942] I.R. 224.

Practice and procedure - Jurisdiction - Conflict of laws - Exclusive jurisdiction - Third party proceedings - Challenge to jurisdiction - Test to be applied - Contract - Legitimate expectation - Abuse of discretion - Challenge to reasonableness of decision - Whether challenge to validity of decision of organ of company - Whether previous decision of European Court of Justice in same proceedings determinative of issue - Whether change in circumstances having occurred - Council Regulation (E.C.) No. 44/2001, articles 2, 5, 6, 22 and 25.

Motions on notice

The facts have been summarised in the headnote and are more fully set out in the judgment of McKechnie J., infra.

The additional third parties issued identical notices of motion dated the 12th October, 2009, in both sets of proceedings, wherein they sought various reliefs including, inter alia, a declaration to the effect that the court had no jurisdiction to determine the claims against them as set out in the statements of claim of the third parties.

The applications were heard together by the High Court (McKechnie J.) on the 12th March, 2010.

Council Regulation (E.C.) No. 44/2001 of the 22nd December, 2000, on the jurisdiction of courts and enforcement of judgments in civil and commercial matters ("the Brussels Regulation") governs the issue of which member state's courts have jurisdiction to hear disputes in such matters brought within the European Union. By way of exception from the basic rule that the courts of the place of the defendant's domicile have jurisdiction as contained in article 2 of the Brussels Regulation, article 22 provides, inter alia, as follows:-

• "The following courts shall have exclusive jurisdiction regardless of domicile:-

… in proceedings which have as their object … the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat …"

The third parties in each set of proceedings were medical consultants who were formerly employed by the respective defendants, against whom a right of indemnity and/or contribution was claimed by the defendants in relation to personal injuries claims brought by the infant plaintiffs arising from the circumstances of their births and which had been compromised as between the plaintiffs and the defendants. The third parties were each members of the first additional third party, a body which provided assistance and indemnity to its members on a discretionary basis, when the plaintiffs' claims arose. When the third parties notified it of the proceedings being brought against them by the defendants, the first additional third party agreed to provide assistance. Later, the board of management of the first additional third party decided that, whilst the first additional third party would continue to provide assistance to the third parties, it would not provide an indemnity in respect of any damages and costs awarded against the third parties in these claims. Under article 48 of the articles of association of the first additional third party, its board of management had "absolute discretion" to decide to grant and/or continue to grant assistance and/or indemnity to members and former members faced with professional negligence claims against them.

Following the refusal of an indemnity, the third parties were granted liberty to issue and serve third party notices on the additional third parties outside the jurisdiction, on grounds,inter alia, that they had a legitimate expectation that the additional third parties would provide an indemnity in respect of the defendants' claims against them, that the additional third parties had abused their discretion in refusing to indemnify them and that the additional third parties were estopped from refusing the indemnity.

The additional third parties applied to set aside service of the third party notices on them on the grounds that the Irish courts did not have jurisdiction to hear the third parties' claims against them. They argued that as the proceedings against them sought to challenge the validity of a decision of one of their organs, namely the board of management of the first additional third party, and as their seat was in England and Wales, the proceedings should be heard in that jurisdiction pursuant to article 22(2) of the Brussels Regulation.

The High Court (Finnegan P.) refused the applications of the additional third parties (see [2006] IEHC 105, [2007] 1 I.R. 644), who appealed to the Supreme Court. The Supreme Court referred a question to the European Court of Justice under Article 234 of the EC Treaty, which ruled on the 2nd October, 2008, that claims such as those the third parties wished to bring against the additional third parties did not concern the validity of a decision of an organ of a company within the meaning of article 22 of the Brussels Regulation. On the basis of the preliminary ruling of the European Court of Justice, the Supreme Court dismissed the appeals of the additional third parties but gave them liberty to make such further applications regarding jurisdiction to the High Court, having regard to the scope and import of the preliminary ruling of the Court of Justice, as they might deem appropriate once the claims of the third parties were fully pleaded.

The additional third parties brought a further motion contesting the jurisdiction of the High Court following the delivery of the third parties' statements of claim. They argued that there had been a material change in the case pleaded against them, in that it was clear from their pleadings that the third parties contested the power of the Board of Management of the first additional third party to refuse the indemnities sought. The third parties argued that there was no material difference between the third party notices and the statements of claim and that the preliminary ruling of the European Court of Justice remained determinative of the issue.

Held by the High Court (McKechnie J.), in dismissing the applications, 1, that the rules governing the attribution of exclusive jurisdiction under article 22 of the Brussels Regulation ought not to be given an interpretation which was broader than was required by their objective.

Grupo Torras SA v. Al-Sabah [1995] 1 Lloyd's Rep. 374 and Hassett v. South Eastern Health Board (Case C-372/07) [2008] E.C.R. I-7403 approved. Sanders v. van der Putte (Case 73/77) [1977] E.C.R. 2383,Dansommer A/S v. Götz (Case C-8/98) [2000] E.C.R. I-393 and Land Oberösterreich v. CEZ AS (Case C-343/04) [2006] 2 All E.R. (Comm.) 665 considered.

2. That, if the rules governing the attribution of jurisdiction were to retain their purposeful utility, not all disputes concerning the validity of a decision by an organ of a company could fall within the exclusive jurisdiction of the courts of the member state in which the company had its seat.

Hassett v. South Eastern Health (Case C-372/07)[2008] E.C.R. I-7403 approved.

3. That the fact that the court might require evidence in relation to the law of another member state would not, of itself, be a sufficient basis upon which to decline jurisdiction.

Grupo Torras SA v. Al-Sabah [1995] 1 Lloyd's Rep. 374 followed.

4. That the true purpose of article 22(2) of the Brussels Regulation was to prevent potential conflict between judgments in different jurisdictions with regards to the status of a company or decisions of its organs.

JP Morgan NA v. Berliner Verkehrsbetriebe (BVG)[2009] EWHC 1627 (Comm), [2010] Q.B. 276 approved.

5. That the principal concern of the proceedings before the court was the commercial relationship between the parties and, in particular, whether there had been any misrepresentation, breach of legitimate expectation or improper exercise of discretion on the part of the additional third parties. The third parties' statements of claim amounted to a more detailed exposition of their claims against the additional third parties, but did not contain any substantively different allegations. No material change had occurred in the case which was being made against the additional third parties.

Cur. adv. vult.

McKechnie J. 20th May, 2010

[1] This judgment concerns an application brought, by...