High Court: Application to amend pleadings granted despite eight-year delay and ‘completely new argument’ being raised

About this case:

• Citation:
  [2022] IEHC 69
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Garrett Simons

On the basis of the pleadings, the MIBI had determined that there was no potential liability for the MIBI where there was a valid policy of insurance. However, the proposed amendment would have rendered the MIBI potentially liable. It was held that the MIBI was not so prejudiced as to refuse the application, although the court only granted the application on certain conditions.

Background

In June 2012, the plaintiff was in a trailer that was attached to the back of a truck. The truck was owned an operated by his father, the second named defendant, but the truck was insured under the plaintiff’s name. It was alleged that the first named defendant drove their truck into the side of the trailer and caused the plaintiff to fall to the ground. The plaintiff suffered very severe injuries.

A personal summons issued against the first and second named defendants in 2014. Further, the MIBI were joined to the proceedings as the third named defendant. The case as originally pleaded was that the MIBI was obliged to satisfy any claim made against the first named defendant only. No pleading was made in respect of the second named defendant, being the father.

However, the valid policy of insurance over the first defendant’s vehicle meant that it was prima facie the case that the MIBI had no liability in the proceedings. As such, the same solicitor came on record for the first defendant and the MIBI. This point was outlined to the plaintiff in September 2016 in correspondence. It was only in March 2021 that the plaintiff issued the application to amend the proceedings to potentially hold the MIBI liable for the second named defendant as well.

No attempt was made in the original or amended pleadings to set out the basis for the plaintiff’s claim against the MIBI. However, in written and oral submissions at the hearing of the application, the plaintiff stated that the previous insurer for the second named defendant had voided the policy due to material non-disclosure and misrepresentation.

Specifically, the insurer was never notified of the claim by the plaintiff until December 2020, eight years after the event. The claim had been notified by the second named defendant but the policy of insurance was in the name of the plaintiff.

The MIBI argued that the amendment should not be made by the court. First, it was pointed out that there was extraordinary delay between the issuance of proceedings and the amendment application. In this regard, the MIBI relied on its correspondence in 2016.

Second, it was argued that the delay caused a manifest injustice to the MIBI in the defence of the proceedings because a “completely new argument” had been raised. Finally, the merits of the claim against the MIBI were challenged, as it was claimed that this was not a case relating to an uninsured driver per se.

High Court

The court began by outlining the well-established principles in amendment applications. The primary consideration was whether the amendments were necessary for determining the real issues of controversy between the parties (Croke v. Waterford Crystal Ltd [2004] IESC 97). Further, it was noted that an amendment should be allowed unless it was manifestly clear that the amended pleading must fail (Woori Bank v. KDB Ireland Ltd [2006] IEHC 156). However, it was not appropriate for a court to adjudicate on the likelihood of success at trial (Cuttle v. ACC Bank plc [2012] IEHC 105).

It was held that the amendment would “radically change the complexion of the case against the MIBI”. Given that this new liability arose nine years after the event, there was the potential for prejudice to apply to the MIBI’s defence. This prejudice was diminished by the fact that the MIBI had been involved in the proceedings from the beginning and had taken steps to investigate the accident.

The court held that the MIBI’s dispute as to the merits of the plaintiff’s case that the second defendant was an uninsured driver presented “difficult legal issues”. Having considered the points made by the MIBI, it was held that it a matter for the trial judge to determine. The court was not satisfied that it was manifest that the case against the MIBI would fail (Case C-442/10, Churchill Insurance Company, EU:C:2011:799; Case C-287/16, FidelidadeCompanhia de Seguros, EU:C:2017:575 considered).

The court held that the MIBI faced a significant task to analyse the affairs of the plaintiff and his father in 2012, which was critical to determining the ownership of the truck and trailer. The outcome of the proceedings depended on the precise circumstances of the plaintiff’s ownership of the truck and taking out the insurance policy, the court said.

The court held that there was not sufficient prejudice to refuse the amendment application. However, the court stressed that this was predicated on the assumption that documents relating to the application for the insurance policy in 2012 and the registration of ownership of the truck were available to the MIBI.

Conclusion

The court granted the application to amend the pleadings, but directed that a revised draft be furnished to the court because the proposed draft was too vague on the liability claim against the MIBI. Further, the amendment was conditional upon the relevant documents being available to the MIBI in the proceedings.

The court commented that it was now likely that the MIBI would have to retain new lawyers, which may be reflected in costs orders.