Nicole Hassett (a minor suing by her mother and next fried Orla Hassett) v The South Eastern Health Board

• Jurisdiction: Ireland
• Judge: Finnegan P.
• Judgment Date: 05 April 2006
• Neutral Citation: [2006] IEHC 105
• Court: High Court
• Docket Number: [2002 No. 16269 P]
• Date: 05 April 2006

[2006] IEHC 105

THE HIGH COURT

NO. 16269P/2002

HASSETT (A MINOR) v SOUTH EASTERN HEALTH BOARD

BETWEEN

NICOLE HASSETT (A MINOR) SUING BY HER MOTHER AND NEXT FRIEND ORLA HASSETT

PLAINTIFF

AND

THE SOUTH EASTERN HEALTH BOARD

DEFENDANT

AND

RAYMOND HOWARD

THIRD PARTY

AND

THE MEDICAL DEFENCE UNION LIMITED AND M.D.U SERVICES LIMITED

ADDITIONAL THIRD PARTIES

EEC REG 44/2001 ART 5.1

EEC REG 44/2001 ART 5.3

EEC REG 44/2001 ART 6.2

EEC REG 44/2001 ART 24

RSC O.12 r26RSC O.16 r3

EEC REG 44/2001 ART 22

ARTICLES OF ASSOCIATION ART47

ARTICLES OF ASSOCIATION ART 48

MEDICAL DEFENCE UNION LTD v DEPARTMENT OF TRADE 1980 1 CH 82

INSURANCE COMPANIES ACT 1974 (UK)

BARRY v MEDICAL DEFENCE UNION LTD UNREP SUPREME 16.6.2005 2005/3/588

COMPANIES ACT 1985 S14 (UK)

COMPANIES ACT 1963 S25

BRUSSELS CONVENTION 1968 ART 16.2

GRUPO TORRAS SA v AL SABAH 1996 1 LLOYDS 7

ROSSLER v ROTTWINKEL 1986 QB 33

WEBB v WEBB 1994 ECR 1717

SPEED INVESTMENTS LTD v FORMULA ONE HOLDINGS LTD 2005 1 WLR 1936

PAPANICOLAOU v THIELEN 1998 2 IR 42

SANDERS v RONALD VAN DER PUTTE 1977 ECR 2382

BRUSSELS CONVENTION ART 16.1

PETERS v ZUID NETHERLANDSE 1983 ECR 987

BRUSSELS CONVENTION 1968 ART 2

SPIELBERG v ROWLEY & ORS UNREP FINLAY-GEOGHEGAN 26.11.2004 2004/47/10870

NEWTHERAPEUTICS LTD v KATZ 1991 CH 226

KAYE CIVIL JURISDICTION & ENFORCEMENT OF FOREIGN JUDGMENTS 945

EEC REG 44/2001 ART 2

EEC REG 44/2001 ART 5

EEC REG 44/2001 ART 6

COMPANIES ACT 1985 S371 (UK)

FOSS v HARBOTTLE 1843 2 HARE 461

PRACTICE AND PROCEDURE

Service out of jurisdiction

Third party proceedings -- Application to set aside - Contract - Legitimate expectation -Abuse of discretion - Challenge to reasonableness of decision - Whether challenge to validity of decision of organ of company - Whether third party notice should be set aside - Case 73/77 Sanders v van der Putte [1977] ECR 2383; Newtherapeutics Ltd v Katz [1991] Ch 226; Grupo Torras v Al-Sabah [1996] 1 Lloyd's Rep 7 and Spielberg v Rowley [2004] IEHC 384 (Unrep, FinlayGeoghegan J, 26/11/2004) followed - Speed Investments Ltd v Formula One Holdings Ltd [2004] EWCA Civ 1512, [2005] 1 WLR 1936 distinguished - Council Regulation (EC) No44/2001, arts 2, 5(1), 5(3), 6(2), 22, 24, 47 and 48 - Rules of the Superior Courts 1986(SI 15/1986), O 11, r (1)(f); O 12, r 26 and O15, r 3 - Order setting aside service refused(2002/16269P - Finnegan P - 5/4/2006) - [2006] IEHC 105; [2007] 1 IR 644;

Hassett v South Eastern Health Board

Facts: The applicants sought to set aside service of a Third Party notice on the grounds that the Court did not have exclusive jurisdiction to hear the claim pursuant to Article 22.2 of Council EC Regulation 44/2001. The Applicants contended that the proceedings by the Respondent had as their object the validity of the decisions of the applicants, whose seat of their incorporated body was situated in the UK.

Held by Finnegan P, in refusing the reliefs sought, that the claims did not relate to the validity of a decision of an organ of the applicants but rather to their propriety or correctness and were not thus within the exclusive jurisdiction provisions of Article 22.2.

Reporter: E.F.

1 Judgment of Finnegan P. delivered on the 5th day of April 2006

2 The Plaintiff instituted these proceedings against the Defendant claiming damages for negligence and breach of duty. The Defendant joined the Third Party claiming against him an indemnity or contribution against the said claim the Defendant being a consultant engaged by the Defendant. The Third Party in turn joined the Additional Third Parties claiming an indemnity and/or contribution against the Defendant's claim for indemnity and/or contribution. On the issue before me I propose referring to the Additional Third Parties as the Applicants and the Third Party as the Respondent.

3 The issue arises as follows. The Respondent is a consultant surgeon. At all material times he was a member of the Medical Defence Union Limited, the first Additional Third Party, and claims to be entitled to an indemnity from the Applicants on the grounds set out in the Third Party Notice in the following terms û

"And further take notice that the grounds of the said claim to an indemnity and/or contribution are:"

(i) that having acted on behalf of Dr. Howard a member of the M.D.U for 32 years without any indication that an indemnity would not be available you are estopped or otherwise precluded from withholding or failing to provide an indemnity in respect of the Defendant's claim against Dr. Howard;

(ii) that in the circumstances Dr. Howard has a legitimate expectation that an indemnity would be provided;

(iii) that your decision to withdraw cover is in any event unlawful and contrary to Dr. Howard's entitlement under the terms of his contract with you;

(iv) that your decision is not valid or lawful in circumstances where you fail to give any adequate individual consideration to the particular circumstances of Dr. Howard but rather that you apply the blanket policy decision to withdraw indemnity to certain of your Irish members;

(v) that you have not used or applied any discretion you might have in deciding on the grant or withdrawal of an indemnity to Dr. Howard but you have, on the contrary, adopted a rigid rule that you will as a matter of course decline to assist members and former members who are Irish obstetricians and in doing so you have not acted in good faith;

(vi) that your unequivocal and unconditional decision not to grant an indemnity to any Irish obstetrician members or former members constitutes a breach of Dr. Howard's contract with you;

(vii) that you (as solvent bodies) in refusing to meet your liabilities to Irish members and former members including Dr. Howard have discriminated against Dr. Howard (and his obstetric colleagues) on grounds of nationality and your refusal to meet your Irish liabilities to Dr. Howard, and his obstetric colleagues is therefore contrary to EC law and to constitutional and natural justice;

(viii) that your decision to withdraw indemnity from Dr. Howard was actuated not by any proper exercise of any discretion you might have in relation to Dr. Howard but rather by your purported concerns about the level of payments being made in respect of claims in Ireland generally and the impact which the general level of payments in Ireland might have upon your finances. This was not a proper exercise by you of any discretion you might have had but rather constitutes unwarranted and unjustified discrimination against Irish members and former members;

(ix) that you canvassed for business in the Irish jurisdiction and represented that you would provide services to (inter alia) obstetricians in the Irish jurisdiction and, in doing so, represented that an indemnity would be provided in the event of a successful medical negligence claim against persons such as Dr. Howard and in consideration of which Dr. Howard paid annual membership fees (which you accepted). In the circumstances, Dr. Howard is entitled to rely on the said representations and you are estopped from not providing an indemnity to Dr. Howard in respect of the above described claim;

(x) that your decision to deny indemnity to Dr. Howard is unfair and unreasonable.

4 The Third Party relies on Council Regulation (EC) 44/2001 of 22nd December 2000 on the Jurisdiction of Courts and Enforcement of Judgments in Civil and Commercial Matters ("the Regulation") Articles 5.1, 5.3 and 6.2 thereof as conferring jurisdiction on the Irish Courts. The Applicant entered a Conditional Appearance without prejudice and solely to contest the jurisdiction of the court and relies upon Article 24 of the Regulation the effect of which is that such an appearance shall not confer jurisdiction on the Irish courts. The Applicants then issued a Notice of Motion seeking an order pursuant to Order 12 Rule 26 (as applied to Third Party proceedings by Order 16 Rule 3) of the Rules of the Superior Courts setting aside service of the Third Party Notice on the Applicants on the grounds that the Court does not have jurisdiction to hear the Respondent's claim against the Applicants having regard to the provisions of Article 22.2 of the Regulation.

The Affidavits

5 The application is grounded on an Affidavit of Michael Thomas Saunders the Chief Executive of the Applicants from which the following appears. The Regulation provides in Article 22 so far as relevant as follows û

"Article 22. The following courts shall have exclusive jurisdiction regardless of domicile:

2. In proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or of 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. In order to determine the seat, the court shall apply its rules of private international law;"

6 The claim of the Respondent in his Third Party Notice constitutes a challenge to the validity of a decision of an organ of the first named Applicant not to assist the Respondent by indemnifying him against or contributing to him in respect of damages and costs claimed against him by the Defendant. The Applicants had however assisted the Respondent in defence of the Defendants claim against him as Third Party. The Applicants have their seat for the purposes of Article 22.2 in England and Wales. The first named Applicant is a doctor's mutual defence organisation. It is a limited liability company. Under its Memorandum and Articles of Association it provides assistance and an indemnity on a discretionary basis to members. The Memorandum of the first named Applicant provides as the objects for which the first named Applicant is established inter alia the...