Sandys v Irish Agricultural Machinery Ltd

• Jurisdiction: Ireland
• Judgment Date: 24 February 1965
• Docket Number: (1965. No. 31 Sp.)
• Date: 24 February 1965
• Court: High Court

(H.C.)

Sandys

and

Irish Agricultural Machinery Ltd

Compensation fund - Action against insured -Solicitor nominated by insurance company -Continuance and compromise of action by insured alone - Whether continued with consent of company - Costs of solicitor nominated by company -Costs of insured's solicitor - Whether incurred with consent of company - Whether payable out of Fund - Whether taxation necessary - Companies (Consolidation) Act, 1908, s. 151 - Insurance Act, 1964, ss. 2 (7), 3 (1), (3).

The respondent company was entitled to be indemnified, by the terms of a policy issued by an insurance company, against all workmen's compensation payments and damages at common law for which it became liable and against all costs and expenses which it incurred "with the consent"of the insurance company. The respondent company paid to one of its workmen, who had been injured, appropriate payments as workmen's compensation and also the sum of £93. The workman claimed damages at common law in an action which he brought against the respondent company, and the insurance company nominated solicitors to act for the respondent company in that action. Subsequently the insurance company was ordered to be wound up and the applicant was appointed to be its official liquidator. The applicant wrote to the respondent company, stating that he had not been directed to defend any proceedings or to protect the interests of policy holders and that "such policy holders should take such action as they may deem necessary". Thereupon the respondent company instructed its own solicitors to act in the defence to the workman's action. That action was compromised on terms which provided that the workman should retain the workmen's compensation payments already made and should also be entitled to enter judgment for an agreed sum as damages and his costs. The solicitors nominated by the insurance company incurred costs amounting to £3 3s. and the solicitors instructed by the respondent company incurred costs amounting to £383 18s. 6d. in the workman's action. The judge having control of the liquidation of the insurance company found that the sum of £2,657 10s. 0d. (being the amount of the workmen's compensation payments, the agreed damages and the workman's costs) was due to the respondent company under the policy and was a reasonable amount, within the meaning of s. 3 (3) of the Insurance Act, 1964, to be paid out of the Insurance Compensation Fund established by s. 2 (1) of that...