McNamara v Irish Life Assurance Plc

JurisdictionIreland
JudgeMs. Justice Murphy
Judgment Date06 July 2017
Neutral Citation[2017] IEHC 469
Date06 July 2017
CourtHigh Court
Docket Number[2004 No. 7017 P] [2004 No. 10427 P] [2004 No. 8590 P]
BETWEEN
PATRICK MCNAMARA

AND

PAULA MCNAMARA
PLAINTIFFS
AND
IRISH LIFE ASSURANCE PLC
DEFENDANT
BETWEEN
JOHN TOM CONLON

AND

KATHLEEN CONLON
PLAINTIFFS
AND
IRISH LIFE ASSURANCE PLC
DEFENDANT
BETWEEN
JAMES HIGGINS

AND

MARGARET HIGGINS
PLAINTIFFS
AND
IRISH LIFE ASSURANCE PLC
DEFENDANT

[2017] IEHC 469

[2004 No. 7017 P]

[2004 No. 10427 P]

[2004 No. 8590 P]

THE HIGH COURT

Insurance – Practice & Procedures – O.122, r.11 of the Rules of the Superior Courts (‘RSC’) – Dismissal of claim – Inordinate and inexcusable delay – Prejudice – Inherent jurisdiction – Balance of justice

Facts: The defendant sought an order under o.122, r.11 of the Rules of the Superior Courts (‘RSC’) or in the alternative under inherent jurisdiction of the Court for the dismissal of three sets of identical proceedings instituted by the plaintiffs. The defendant contended that he had been adversely prejudiced by the delay of more than 10 years by the plaintiffs in the prosecution of their claims. The plaintiffs had filed claims against the defendant disputing the defendant's entitlement of review of policy premium in relation to the sale of life assurance product to the plaintiffs.

Ms. Justice Murphy declined to dismiss the claims of the plaintiffs. The Court held that in order to make an application under o.122, r.11 of the RSC, two years must have lapsed since the last proceedings that the plaintiffs had. The Court found that in the present case, only six months had lapsed since the plaintiffs served the notice of trial and the making of the present application, and thus, the application must fail. The Court further observed that it had inherent jurisdiction to dismiss a case where there was inordinate and inexcusable delay subject to weighing the balance of justice. The Court found that the issue between the parties was not complex warranting the delay of more than 10 years and thus, there was culpable delay. The Court found that the defendant had contributed to the delay by adopting the ‘wait and watch’ policy and not filing the dismissal application earlier. The Court noted that even after inordinate and inexcusable delay, the balance of justice favoured that the proceedings must be continued as the defendant was not getting adversely prejudiced. The Court opined that the contracts at issue in the present cases were subsisting and a fresh issue in relation to construction could arise and thus, the dismissal of proceedings would not serve the purpose of natural justice.

JUDGMENT of Ms. Justice Murphy delivered on the 6th day of July, 2017.
1

This is the defendant's application to dismiss each of the above named plaintiffs' claims for want of prosecution. By way of notice of motion dated 24th May, 2016, the defendant seeks orders in each of the above proceedings pursuant to the inherent jurisdiction of the Court and/or pursuant to Order 122 of the Rules of the Superior Courts dismissing the plaintiffs' claims as against the defendant for want of prosecution and/or on the ground of inordinate and inexcusable delay causing prejudice to the defendant in the conduct of its defence.

Background
2

The three claims arise in similar circumstances although there are some factual differences in each case.

3

Each claim arises from the sale of a life assurance product known as ‘ The Lifesaver Plan’ by the defendant to the plaintiffs. The plan provided for a combination of investment and life cover.

4

The McNamaras signed a proposal form on 20th July, 1983; the Conlons signed their proposal form on 4th April, 1989; and the Higgins signed theirs on 14th August, 1986. Each policy commenced shortly thereafter and each remains in force. From inception until the year 2000, the policy operated with inflation-linked adjustments to premiums and benefits.

5

Between September and November, 2000, the defendant wrote to each of the plaintiffs notifying them that the defendant had conducted a review of the premium payable on the policy and that following the review, it had noted that the premium currently being paid by each plaintiff was insufficient to maintain the chosen level of life cover into the future. The plaintiffs were offered the option of paying an increased premium to remain on the cover currently held, or alternatively, to maintain the same level of premium and have their level of cover reduced.

6

The plaintiffs disputed the defendant's entitlement to carry out such a policy review. When the plaintiffs declined to exercise the option, a default position was imposed upon them in 2002 whereby they continued to pay the same premia with a considerable reduction of life cover, 31.7% in the McNamara case, 10.6% in the Higgins case, while at that juncture, the defendant accepted that the Conlons could maintain their existing life cover and their premia.

7

The plaintiffs in each case allege that prior to signing the proposal form in respect of the life assurance cover, they were not told of any provision for reviewing the amount of premiums payable or the amount of life cover, other than provision for index-linking. The defendant on the other hand alleges that the terms of the contract between the parties included a policy review provision set out in the policy document. The plaintiffs assert that they were not provided with the policy document at the time they made the contract. The Higgins could not recall whether they ever received such a document although Mrs. Higgins averred in her affidavit that they were not provided with the policy document.

8

Following the invocation by the defendant of the alleged “ policy review” in or about 2000/2001, there followed in each case, correspondence between the plaintiffs and the defendant in relation to the ‘ policy review’. No resolution was achieved, and between May and July, 2004, plenary summonses were issued in each of the three cases. The plaintiffs each claim the following reliefs:-

(i) a declaration that the defendant was not entitled to adjust unilaterally the premiums payable and/or the amount of life cover effected under the policy, or otherwise to avail of any policy review clause contained in the contract while the contract remains in force;

(ii) an order requiring the defendant to restore the terms of the policy to the prior levels;

(iii) damages for misrepresentation;

(iv) damages for negligent misstatement;

(v) damages for breach of contract.

9

A number of similar claims have been initiated and it was proposed by those affected, that these three claims proceed as test or ‘ pathfinder’ cases.

10

Having served notice of trial in November, 2015 each plaintiff made an application for a trial date in April, 2016. At that point, the defendant indicated its intention to bring this motion.

11

By notice of motion dated 24th May, 2016, the defendant seeks orders dismissing each of the proceedings for want of prosecution and/or on the ground of inordinate and inexcusable delay giving rise to alleged prejudice. The motions in each case are grounded on the affidavit of Mr. John O'Toole, senior administrator of Irish Life Assurance plc who, the Court notes, was materially involved in the activation of the policy renew clause in 2000/2001 and who was also materially involved in the pre-litigation correspondence.

12

The essence of the plaintiffs' claim in each case is that they were informed by the defendant that the policy would provide for increases in the amounts of life cover, and corresponding increases in premiums, to protect the amount of cover against the effects of inflation, such increases to be at the option of the plaintiffs. The plaintiffs were not told, either verbally or in writing, before entering the contract, of any other basis on which premiums could be increased or cover reduced. They were not provided with a copy of the policy document for the said Lifesaver life assurance policy prior to completing the proposal form. In particular, they were not made aware of any policy review clause that purported to entitle the defendant to impose unilaterally either increased premiums to maintain existing cover or reduced cover for existing premiums.

13

The defendants have specifically denied each of the factual assertions made by each plaintiff and have further denied breach of contract or misrepresentation. In its defence the defendant makes specific denials in respect of the plaintiffs' claims at paras. 1 to 13 of its defence and alternatively pleads that if the ‘ policy review clause’ was not part of the contract proposal, the actual policy issued containing the ‘ policy review clause’ represented a counteroffer by the defendant which was accepted by the plaintiffs.

Delay
14

In support of its application to dismiss the defendant relies on three alleged periods of delay by the plaintiffs in each case:-

McNamara chronology
15

Paula McNamara who was born on 25th June, 1947 is aged 70. Patrick J. McNamara was born on 26th November, 1943 and is aged 74. They are married to each other and reside in Co. Roscommon. The Court has been furnished with an agreed chronology of the McNamara proceedings. It reads as follows:-

‘Chronology

20 July 1983: The Plaintiffs signed the proposal form.

1 September 1983: Policy commences.

1983 – 2000: Policy operates with inflationary adjustments only to premium and benefits

20 October 2000: Irish Life writes to the Plaintiffs reminding them of the policy review clause and informing them of their options in relation to same.

31 October 2000: Plaintiffs make a phone call to Irish Life and by letter of 1 November 2000 Irish Life says it will contact them shortly “regarding the issues you have raised”, and Irish life then gives its response on 14 November 2000.

17 January 2001: Irish Life write to the Plaintiffs (signed by Mr O'Toole).

10 August 2001: Further letter to Plaintiffs from Irish Life offering additional options.

21...

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1 cases
  • O'Leary v Turner
    • Ireland
    • High Court
    • 18 Enero 2018
    ...has occurred' (para. 61). 48 The plaintiff relies on the recent judgment of Murphy J. in McNamara and Others v Irish Life Assurance plc [2017] IEHC 469, in which she refused to strike out proceedings where there was a delay of eleven and a half years from the date of the institution of the ......

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