Maxwell v Irish Life Assurance Plc
|Mr. Justice Keane
|07 March 2018
| IEHC 111
|07 March 2018
|[2010 No. 8234P]
 IEHC 111
THE HIGH COURT
[2010 No. 8234P]
Contract – Damages & Restitution – Breach of contract – Negligence – Specific performance of contract – Inordinate delay in prosecution – O. 122, r. 11 of the Rules of the Superior Courts – Balance of justice – Utmost good faith – Unfair trial
Facts: The defendants sought an order under inherent jurisdiction of the Court for the dismissal of the proceedings filed by the plaintiff on the ground of inordinate and inexcusable delay. The plaintiff filed the proceedings for seeking an order of specific performance of contract or damages for breach of contract or negligence. The defendants contended that the plaintiff had failed to disclose the material information under the terms of the contract, and thus, the contract was voidable. The defendants claimed that there were three crucial periods of delay on behalf of the appellant, and the total period of delay was almost four years.
Mr. Justice Keane ordered for the dismissal of the proceedings. The Court held that the delay in the case had given rise to a substantial risk of unfair trial. The Court observed that although the dismissal of proceedings prior to trial on grounds of delay was an inappropriate step, but after the balancing of justice, it was appropriate to dismiss the action.
This is the defendants' application for an order, pursuant to the inherent jurisdiction of the court, dismissing these proceedings for want of prosecution on grounds of inordinate and inexcusable delay.
It has been brought by notice of motion issued on 17 July 2015.
In the underlying action, the plaintiff (“Mr Maxwell”) seeks an order directing specific performance of the payment obligations of the first named defendant (“Irish Life”) under a serious illness insurance policy (“the contract”). In the alternative, Mr Maxwell seeks damages against Irish Life for breach of that contract or for negligence, or damages for negligence against the second named defendant (“Mr Fallon”) as an insurance broker and agent of Irish Life, or such damages against both defendants.
It is common case that Mr Maxwell and his wife, Helena Heffernan (“Ms Heffernan”), entered into the contract with Irish Life in or about June 2004 and that it was a term of the contract that Irish Life would pay Mr Maxwell the sum of €50,000 should he be diagnosed with any one of a list of specified serious illnesses, including a heart attack.
The defendants plead that the contract was one of the utmost good faith, imposing a duty on Mr Maxwell to disclose all material facts to them. The defendants allege that Mr Maxwell breached that duty by failing to disclose in answer to direct questions, first, that he was a smoker and, second, that his mother had died of a heart attack at 45 years of age. The defendants contend that, in those circumstances, the contract is voidable and they are entitled to avoid it.
The defendants assert that Mr Maxwell signed a declaration on 27 May 2004 confirming his understanding that the said declaration, together with others contained in both the booklet provided by Irish Life setting out the terms of the contract and in his online application form, constituted his application for the relevant insurance cover and confirming that he had read and understood a note provided of his obligation to disclose to Irish Life all facts material to his application, failing which the contract could be void, before declaring that all statements recorded in answer to the questions in his online application form were true and complete.
The parties agree that Irish Life wrote to Mr Maxwell and Ms Heffernan on 25 June 2004, confirming the details of their cover. A section of that letter is headed “Your health details” and states:
“Our decision to accept you for cover is based on the information you provided in either your paper or online application form. It is important you take note of the following:
• It is important that you have told us all relevant information that is likely to influence the assessment and acceptance of your application.
• You must carefully review you answers to the health questions and make sure they are correct.
• If any recorded details are incorrect…, you must let us know immediately.
• We have noted in our records that Brian Maxwell is a non-smoker….'
A copy of the health questions Irish Life had raised and the answers that Mr Maxwell had given were enclosed with the said letter. The questions and answers material to the defence are:
Have you smoked tobacco of any kind in the past 12 months or do you intend to smoke in the future? No
How much tobacco do you smoke, on average, each day? [blank]
26. Have your parents …suffered or died from heart disease…or other hereditary disorder before age 60? No
Although not expressly pleaded on either side, it appears to be common case that Mr Fallon went through the Irish Life health questions with Mr Maxwell and that Mr Maxwell's answers were recorded by Mr Fallon on his notebook computer for onward transmission to Irish Life. In his statement of claim, Mr Maxwell does not clarify whether he is making the case that Mr Fallon or, perhaps later, Irish Life erroneously recorded the answers that he gave to those questions or is acknowledging that he did initially provide erroneous information.
Mr Maxwell does plead that, on reviewing the documentation provided by Irish Life, he noticed an error concerning his smoking of cigarettes and contacted Mr Fallon to inform him of it. In replies to particulars, Mr Maxwell elucidated upon that claim by confirming: that the error he discovered was the notation that he was a non-smoker in the fourth bullet point quoted from the Irish Life letter of 25th June 2004; that he made that discovery at some point in September 2004; and that his wife Ms Heffernan telephoned Mr Fallon immediately afterwards to inform him of the error and to clarify that Mr Maxwell was, in fact, a smoker. The defendants deny that they were ever so advised.
Mr Maxwell pleads that Mr Fallon advised and assured him, through Ms Heffernan, that the error noted would be rectified immediately in a manner that would not affect his rights and liabilities under the policy. The defendants deny that they ever gave any such advice or assurance.
Mr Maxwell pleads that, in or about June 2006, he suffered a heart attack within the meaning of that term under the policy. In their defence, the defendants deny that the medical episode concerned comes within that definition.
Mr Maxwell submitted a claim form dated 27 September 2006. After various enquiries, Irish Life wrote to Mr Maxwell on 13 September 2007, declining his claim, voiding the contract, and cancelling the policy on the ground of material non-disclosure, specifically Mr Maxwell's failure to disclose that he was a smoker and that his mother had suffered a heart attack at 45 years of age. While noting that it was not obliged to do so where material non-disclosure had rendered the policy void, Irish Life indicated that it was prepared to refund Mr Maxwell's premium payments on an ex gratia basis.
It appears to be common case that, contrary to the express plea in the defence to that effect, Mr Maxwell's mother did not die when she suffered that heart attack in 1982 but, rather, was still alive when Mr Maxwell made his claim under the policy in 2006. The printed claim form contained the question: “Has any blood relative suffered from an illness similar to the one for which you are submitting this claim? If yes, please state relationship, nature of illness and date first diagnosed.” Mr Maxwell replied: “Mother – heart attack – (about 10 years ago).”
The printed claim form also contained the request: “Please give details of your tobacco consumption 1 year ago, 3 years ago and 6 years ago.”. Mr Maxwell left the space beside that request blank.
Mr Maxwell pleads that, through Mr Fallon as its agent, Irish Life was, or should have been, in possession of the relevant information concerning his mother's medical history and his status as a smoker. In particular, Mr Maxwell pleads that Mr Fallon knew all the relevant details about his mother's medical history because a number of members of Mr Maxwell's family had taken out policies of insurance with Irish Life through Mr Fallon previously. The defendants deny that Mr Fallon was in possession of the relevant information and, in the alternative, plead that, even if he was, it could not relieve Mr Maxwell of the obligation to disclose those facts as a matter of the utmost good faith in seeking and obtaining the relevant cover.
Mr Maxwell claims specific performance of the contract or damages for breach of contract or negligence. The defendants deny that Mr Maxwell is entitled to the relief he claims and counterclaim for a declaration that Irish Life was entitled to avoid the contract and has lawfully done so.
Mr Maxwell's solicitors wrote a letter before action to Irish Life on 5 October 2007, to which Irish Life replied on 7 December 2007. The letter before action contains the assertion that “all information” relevant to the policy had been furnished to Mr Fallon and goes on to state:
“Furthermore when the documentation subsequently came to our client, our client telephoned your Mr. Fallon to correct certain information that was incorrect in the answers and was advised by Mr. Fallon ‘that it would be sorted’.”
In its reply of 7 December 2007, Irish Life asserted that the defendants were satisfied that Mr Fallon was not made aware of any information beyond what was noted on Mr Maxwell and Ms Heffernan's application...
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