Untoy v GE Capital Woodchester Finance Ltd & GE Capital Woodchester Ltd t/a GE Money

• Jurisdiction: Ireland
• Judge: Ms. Justice Iseult O'Malley
• Judgment Date: 25 August 2015
• Neutral Citation: [2015] IEHC 557
• Court: High Court
• Date: 25 August 2015

Untoy v GE Capital Woodchester Finance Ltd & GE Capital Woodchester Ltd t/a GE Money

BETWEEN

LARRY UNTOY

PLAINTIFF

AND

GE CAPITAL WOODCHESTER FINANCE LIMITED AND GE CAPITAL WOODCHESTER LIMITED TRADING AS GE MONEY

DEFENDANTS

[2015] IEHC 557

[Record No. 1871 SS/2014]

THE HIGH COURT

Insurance – Damages & Restitution – Appeal – S. 2 of the Summary Jurisdiction (Ireland) Act 1857, as extended by S. 52 (1) of the Courts (Supplemental Provisions) Act 1961 – Reg. 19 (1)(d) of the European Communities (Insurance Mediation) Regulations 2005 – The Consumer Protection Code 2006 – The Consumer Protection Act 2007 – Non-disclosure of commission – Duty of an insurance intermediary towards the customer

Facts: Following the dismissal of the claim of the plaintiff by the District Judge for damages against the defendants for mis-selling payment protection insurance, the plaintiff had now appealed the aforesaid decision as involving questions of law, the prominent one being the extent of duty owed by an insurance intermediary to the customer. The plaintiff alleged that there was an omission of disclosure of material fact by the defendants that it acted as an intermediary for an underwriting company, earning commission on the sale of policies.

Ms. Justice Iseult O'Malley held that the impugned order of the District Judge was vitiated by an error of law. The Court observed that since the plaintiff had acted under the belief that the defendant and the underwriter were the same company, it was the duty of the defendant to disclose to the plaintiff that it earned commission by selling the policies. The Court held that the issue of commission was a material fact u/s 46 (1) of the Consumer Protection Act 2007 and the failure to provide such information amounted to misleading commercial practice u/s 43(2) and s. 43 (3) (c) of the 2007 Act. The Court held that non-disclosure about commission, coupled with the connection between the intermediary and the underwriter, was a fact that would likely mislead a consumer in calculating the price of a product and thus constituted deceptive practices.

1 JUDGMENT of Ms. Justice Iseult O'Malley delivered the 25th day of August 2015.

Introduction

2 1. This is an appeal by way of case stated pursuant to the provisions of s.2 of the Summary Jurisdiction (Ireland) Act 1857, as extended by s. 51 of the Courts (Supplemental Provisions) Act 1961. The appeal is brought by the plaintiff, who makes a claim that GE Money mis-sold to him payment protection insurance products that he did not need, and that were of no benefit to him. He says that in so doing the defendant failed in its duty to advise him and also failed to ensure that the products sold to him were suitable. He also claims that it misled him in failing to disclose its relationship with the underwriter, and in failing to disclose the fact that it was earning commission on the sale.

3 2. The transaction arose in the context of loans taken out by the plaintiff with GE Money. In offering him a separate payment protection policy on each occasion, GE Money was in fact acting as intermediary for an underwriting company called Lighthouse. Lighthouse is owned by the same parent as the two named defendants (which, for the sake of simplicity, I shall refer to as "the defendant" or GE Money).

4 3. By civil process dated the 22 ^nd March, 2013, the plaintiff claimed that he had suffered loss due to the actions and omissions of the defendant and in particular by reason of negligence (including negligent misstatement and/or negligent misrepresentation), deceit, breach of duty (including breach of contractual duty, fiduciary duty and statutory duty).

5 4. It was pleaded that the defendant advised and represented to the plaintiff that the policies were of benefit to him when in fact he was not eligible or entitled to avail of such benefit. It was further pleaded that it advised and represented that the policies were in his best interests when it knew, or ought to have known, that alternative policies were available and would have been better suited to his needs. The particulars of negligence include pleas that the defendant failed to conduct an adequate assessment of the plaintiff's circumstances and needs.

6 5. As a separate issue it was pleaded that, in breach of an implied term of the agreement and in breach of duty to the plaintiff, the defendant secretly received a commission, the value of which was unknown to him.

7 6. The plaintiff has sought reimbursement of his premiums, general damages and exemplary damages.

8 7. In paragraph 4 of the Case Stated the facts described as "proved or admitted or agreed and as found" by the learned District Judge are outlined as follows:

9 (1) Mr. Untoy is a senior staff nurse in the urology department of the Adelaide and Meath Hospital, Dublin incorporating the National Children's Hospital in Tallaght. Mr. Untoy gave evidence that he believed this to be a public hospital and that he was employed in the public sector.

10 (2) He is a naturalised Irish citizen originally from the Philippines. He graduated with his Bachelor of Science degree in nursing in 1997. After working for a time in Saudi Arabia, he arrived in Ireland 2001 where he commenced employment initially under a temporary working visa which was renewed biennially until he obtained citizenship in 2009.

11 (3) Mr. Untoy became aware from media reports in 2012 that payment protection insurance may have been mis-sold and on that basis sought to take legal advice which commenced with the completion of an application form on the website of McHcde Muldoon solicitors. Mr. Untoy gave evidence under cross examination that it was his understanding that at that time that it would be a straight-forward claim and that he had an automatic entitlement to repayment of any premiums paid by him. Mr. Untoy also confirmed that he did not know that he may have to go to court in relation to his claim.

12 (4) Under cross examination, Mr. Untoy gave evidence that he received a response from McHale Muldoon solicitors following the completion of the online form and did not have any further contact with them until Monday, 7 ^th April, 2014, at which point he was advised that the hearing of the within proceedings would take place on 10 ^th April, 2014. Mr. Untoy gave further evidence under cross examination that he was not aware that he could bring his complaint to the Financial Services Ombudsman however he became aware of this independently two days previously when searching online.

13 (5) McHale Muldoon, on behalf of Mr. Untoy, wrote to GE by letter dated the 21 ^st November, 2012, setting out Mr. Untoy's claim against GE for the mis-selling of payment protection insurance.

14 (6) GE responded to that letter under cover date the 21 ^st January 2013 and signed by Ms. Heidi M. Carreiro, with the title of compliance manager.

15 (7) The within proceedings were issued out of the District Court Office on the 22 ^nd May 2013.

16 (8) Mr. Untoy gave evidence in chief that he entered into three linked credit agreements with GE, all of which, by their terms, were flexible loans regulated by the Consumer Credit Act 1995.

17 (9) The three loan agreements are respectively dated the 18 ^th September 2007, the 31st December 2007 and the 12th May 2008. The three loan agreements were annexed to Ms. Carreiro's letter dated the 21 ^st January 2013.

18 (10) The first loan was in respect of the sum of €5,000 for a period of 24 months and which was for the purpose of taking a holiday to the Philippines. Payment protection insurance was offered in conjunction with the first loan in a separate section of the loan agreement headed "Payment Protection Plan" and "Please sign only if availing of optional cover". Mr. Untoy did not apply his signature in the separate section of the loan agreement to indicate his acceptance of same. Mr. Untoy gave evidence that he did not accept the offer of payment protection insurance in respect of this loan as it was only a small amount of money.

19 (11) The second loan was for the amount of €24,703.87, which incorporated a top up amount of €20,000 for a period of 60 months. Mr. Untoy advised GE that the purpose of the loan was to clear credit card debt, however Mr. Untoy gave evidence that the actual use of the monies advanced was for the construction of a house in the Philippines for his mother.

20 (12) Payment protection insurance was also offered to Mr. Untoy in conjunction with that loan in a separate section of the loan agreement headed "Payment Protection Plan" and "Please sign only if availing of optional cover ". Two levels of optional cover were offered. The first was for life, accident, sickness, redundancy and was stated to be available only to employees other than those employed directly by the state. The second was for life, accident, sickness and critical illness and was stated to be available only to self-employed or state employed customers.

21 (13) The separate section also stated:

"You can avail of the Payment Protection Plan as long as you are over 18 and under 65 years of age for the period of this agreement. I understand that the payment protection Plan is optional. I understand that no medical condition which I have received medical treatment advice or consultation for during the 12 months immediately prior to the date of my agreement will be covered. I confirm that I have read the terms of the Payment Protection Plan and that I am aware of those terms and that they meet my requirements. I understand that I must be actively at work in my normal occupation to avail of Payment Protection Plan. You may cancel the Payment Protection Plan within 30 days from the date you receive your certificate of insurance and receive a refund of any premium paid. If you cancel the...