INTRODUCTION.
The
Private Motorists Insurance Company Limited was the principal company in a
large group of companies which in the early 1980's dominated the motor
insurance market in this country. The group collapsed disastrously towards the
end of 1983. An administrator of the Insurance Company under the provisions of
the Insurance (Number 2) Act 1983 was appointed on the 25 October 1983 and
since then the company has been under administration under the provisions of
the Act. Two other companies in the group feature in these proceedings. The
first is the Private Motorists Provident Society Limited which is a body
corporate registered as an Industrial and Provident Society. It was ordered to
be wound up on the 19 December 1983. The second is the Private Motorists
Protection Association Limited which was ordered to be wound up on the 10
December 1984. Mr William Horgan was official liquidator of both the Provident
Society and the Protection Association. The present administrator of the
Insurance Company is Mr Vincent Clancy.
These
two actions arise out of what is referred to as a "scheme" for the payment of
insurance premiums by instalments. A motorist availing of the scheme was
required to pay a deposit of 25% of the annual premium to the Insurance
Company. He then obtained a loan from the Provident Society of the balance of
the premium and as security he completed a promissory note in favour of the
Provident Society for the amount of the loan plus interest and charges which he
agreed to repay over a period of nine months. The Insurance Company issued to
the motorist an insurance certificate for the twelve month period. The
Provident Society made the loan to the motorist by issuing the loan cheque
directly to the Insurance Company to discharge the balance of the premium due
to it by the motorist and the Provident Society was given the promissory note
signed by the motorist. Arising from the operation of this scheme and
subsequent developments the Protection Association, by summons issued on the 2
November 1992, instituted proceedings against the Provident Society and the
Provident Society joined the Insurance Company as a Third Party. In a second
action the Provident Society, by summons issued on the 18 August 1995, has sued
the Insurance Company. The Insurance Company has applied to dismiss the Third
Party claim against it in the first action and the plaintiff's claim in the
second action on the ground of delay. These applications are the subject matter
of this judgment.
THE
FIRST ACTION.
The
claim by the Protection Association in the first action is as follows. It is
claimed that the Protection Association (the plaintiffs) and the Provident
Society (the defendant) and the Insurance Company (the third party) all fell
under the common control and direction of a number of individuals referred to
as "the directors". It is claimed (and accepted) that the persons who took out
motor insurance with the Insurance Company were required to become members of
the Protection Association and paid a membership fee to that association. In
the course of the preparation of the accounts of the PMPA group of companies
for the year ended the 31 December 1978 it is claimed that it became clear that
there was due to the Provident Society a sum of £970,000.00 in respect of
uncollected debts from individual motorists to whom loans had been made
pursuant to the "scheme" to which I have already referred during the periods
between the 1 January 1977 and the 31 May 1978 and it is claimed that at a date
unknown "the directors" decided that the uncollected debts due to the Provident
Society (ie the sum of £970,000.00) would be assigned by the Provident
Society to the Protection Association. It is claimed that this was done and
that the Protection Association agreed to purchase the said debts in
consideration for the sum of £970,000.00, that it paid to the defendant
the sum of £250,000.00 on the 11 September 1979 and a further sum of
£200,000 on the 14 March 1980 making in all a sum of £450,000.00,
part of the consideration of £970,000.00. It is claimed that the value of
the debts as of the 31 December 1978 was substantially less than the sum of
£970,000.00 and that this fact was well known to "the directors" and the
Provident Society. The Provident Society continued to collect the debts due and
ultimately collected a sum of £467,000.00 which was deducted from the
balance of £520,000.00 due to it by the Provident Society. It is claimed
that the primary purpose of the purported sale and purchase of the uncollected
debts was to avoid showing the unpaid £970,000.00 in the accounts of the
Provident Society, that the purchase of the uncollected debts was ultra vires
the powers of the Protection Association, and that the sum of £450,000.00
paid by the Protection Association to the Provident Society remained the
property of the Protection Association and a claim was made in these
proceedings for a declaration that the purported agreement to purchase the
uncollected debts was ultra vires and thereby null and void and, inter alia, an
order directing the Provident Society to account for this sum and a tracing
order if appropriate.
The
Provident Society obtained an order joining the Insurance Company as a third
party. In a statement of claim delivered by it on the 30 August 1995 it was
pleaded that on the 27 June 1994 the Provident Society consented to judgment in
favour df the Protection Association for the sum of £450,000.00 and that
the High Court determined that interest should be applied at the rate of 10%
per annum in respect of the sums paid by the Protection Association to the
Provident Society. The Provident Society claimed to be indemnified by the
Insurance Company against the judgment and the interest. The claim against the
Third Party is based on the following (in an amended Statement of Claim of the
30 August 1995). It is pleaded that the Provident Society and the Insurance
Company fell under the common control and direction of a number of individuals
called "the Directors". The "scheme" to which I have already referred is set
out. It is pleaded that for the year ended the 31 December 1979 that there was
still due to the Provident Society the sum of £976,956.00 (not
£970,000) in respect of uncollected debts from motorists arising between
the 1 January 1977 and 13 May 1978. The agreement to assign the debts is
pleaded the consideration being £976,956.00. The payment by the Protection
Association to the Provident Society of the sum of £450,000.00 is then
pleaded. It is claimed that the Provident Society collected a total of
£476,856.00 (not £467,000.00) from motorists and that this was
deducted from the sum of £526,956.00 (due to the Provident Society from
the Protection Association) leaving a balance of £50,100.00 unpaid to the
Provident Society either by the motorists or the Protection Association.
It
will be recalled that it was pleaded by the Protection Association that the
purchase by this company of the loans was ultra vires. It is pleaded in the
Third Party statement of claim that the making of the loans by the Provident
Society was ultra vires in that the Provident Society had no power to make such
loans or alternatively had no power to make such loans without obtaining
security therefore. It is further claimed that the Insurance Company "was at
all times aware or ought to have been aware that the defendant had no such
power to make the said loans and receive the monies in respect of the loans
knowing such to be the case". It is claimed that the sum of £450,000.00
advanced by the Provident Society to the motorists, but paid to the Insurance
Company on their behalf, remained the property of the Provident Society and
declarations were sought that the purported loan to the motorists were ultra
vires the defendant and void and that the Insurance Company as recipient of the
monies arising from the loans "knew at all material times that the loans to the
motorists were ultra vires the defendant", that the Insurance Company holds all
sums received less any repayments in trust for the Provident Society and
tracing orders or accounts as appropriate are sought in order to ascertain the
amount of interest to which the defendant is entitled in relation to
outstanding balances.
THE
SECOND ACTION.
The
second action was commenced by summons of the 18 August 1995. The Provident
Society is plaintiff and the Insurance Company is defendant. This raised issues
similar to those in an action commenced by the Provident Society in 1994 but
which discontinued in August 1995. The statement of claim is dated the 30
August 1995 (that is, the same day as the Third Party Statement of Claim in the
first action). There are two sums claimed;
(a)
£50,100.00, due it is claimed by the Insurance Company to the Provident
Society together with interest on the principal sum of £976,956.00 and
various reducing balances from the 14 May 1978 to date and
(b)
the sum of £73,801.00, being an amount due and owing by the defendant to
the plaintiff together with interest from the 1 January 1977 to date.
The
cause of action is the same as that pleaded against the Insurance Company in
the Third Party proceedings in the first action and the second action arises
because the Provident Society claims that there are further sums, over and
above the sum of £450,000.00 referred to in the first action due to it by
the Insurance Company.
The
claim in the second action is pleaded in the same manner as the claim in the
Third Party proceedings, namely, the 1977 "scheme" is set out, the agreement to
assign the debts to the Protection Association is pleaded as is the continued
collection of the debts by the Provident Society from the motorists. It is
claimed that the making of the loans was ultra vires for the reasons given in
the Third Party proceedings and that the Insurance Company was at all times
"aware or ought to have been aware that the plaintiff had no such power to make
the said loans and receive the monies in respect of the loans knowing such to
be the case".
The
sums claimed in this second action are claimed on the following basis. It is
claimed that for the year ended the 31 December 1978 the sums due to the
Provident Society by the motorists between the 1 January 1977 to the 31 May
1978 was the sum of £976,956.00, that this was the sum assigned to the
Provident Association, that the sum paid by the Provident Society for the debts
amounted to £450,000.00, that the Provident Society continued to collect
the debts from the motorists and ultimately collected a total of
£476,856.00 which it deduced from the balance of £526,956.00 due by
the Protection Association to it leaving a balance of £50,100.00. This is
the first sum in respect of which judgment against the Insurance Company is
claimed. The second sum of £73,801.00 is made up as follows. It is claimed
that in the financial year ended 31 December 1976 (a year in respect of which
no claim is made in the first action) the Provident Society advanced to
motorists the sum of £521,607.28 and that as of the 31 December 1978 there
was due and owing to the Provident Society in respect of these loans a sum of
£73,801.00. It is claimed that both these sums had been advanced by the
Provident Society to motorists for the benefit of the Insurance Company and
that at all times these sums remained the property of the plaintiff.
Declaratory relief, similar to that in the first action, is claimed as well as
a tracing order and accounts and directions as may be appropriate and judgment
for the two sums to which I have referred together with interest is also sought.
CHRONOLOGY
The
Insurance Company which has brought these motions to dismiss proceedings
against it in the first and second actions claims that the delay which occurred
in instituting these proceedings and in prosecuting them has resulted in
prejudice which makes a fair trial impossible. Before examining its case in
detail it will, I think, be of help if I set out a chronology of the relevant
dates, as follows;
(1)
January 1976 At a date unknown the "scheme" commenced by which the Provident
Society made loans to motorists for the balance of premiums due to the
Insurance Company, and paid the amounts of the loans to the Insurance Company.
(2)
1979 At a date unknown the Provident Society agreed to assign debts then due by
motorists to it amounting to £970,000.00 or alternatively £976,956.00
to the Protection Association (the plaintiff in the first action). The
agreement was to assign these debts for the sum of £970,000.00 or
alternatively £976,956.00. On the 11 September 1979 the Protection
Association paid a sum of £250,000.00 in part discharge of the purchase
price to the Provident Society.
(3)
1980 On the 14 March the Protection Association paid to the Provident Society a
further sum of £200,000.00 in respect of the Assignment of the motorists
debts.
(4)
1983 The group collapsed. On the 25 October Mr Kevin J Kelly appointed
administrator of the Insurance Company (later replaced by Mr Peter Fitzpatrick
and later by Mr Vincent Clancy). On the 19 December 1983 Mr Horgan was
appointed official liquidator of the Provident Society.
(5)
1984 Discussions between Mr Kelly and Mr Horgan concerning the "scheme" took
place. On the 10 December 1984 Mr Horgan was appointed official liquidator of
the Protection Association.
(6)
1986 For the first time a claim was made by Mr Horgan against Mr Kelly in
relation to the operation of the "scheme" prior to the month of May 1978. On
the 30 July 1986 Mr Kelly on behalf of the Insurance Company repudiated the
claim and the matter was then dropped.
(7)
1992 Plenary Summons issued by the Protection Association against the Provident
Society claiming a declaration that its agreement to purchase for
£970,000.00 the debts due by motorists to the Provident Society was ultra
vires null and void and the return of the sum of £450,000.00 paid under
the agreement.
(8)
1993 5 of July an order of the High Court giving liberty to the Provident
Society to issue and serve a Third Party notice on the Insurance Company. On
the 16 July such a notice was served. On the 19 July a second Third Party
notice was served and on the 26 August an appearance to it was entered.
(9)
1994 1 of June a Plenary Summons was issued by the Provident Society against
the Insurance Company. On the 23 August 1995 those proceedings were
discontinued. On the 27 June the Provident Society consented to Judgment in the
first action in favour of the Protection Association in the sum of
£450,000.00. Later interest at the rate of 10% was determined as being
payable by the Provident Society to the Protection Association.
(10)
1995 A summons (issued on the 18 August) was served on the Insurance Company.
These are the proceedings referred to in this judgment as "the second action".
On the 30 August the Provident Society served a statement of claim in the first
action and a statement of claim in the second action.
(11)
1995 The Insurance Company had instituted proceedings against the company's
former auditors and accountants and by an order of the Supreme Court of the 19
December 1995 it was ordered that because a fair trial was not possible by
reason of the delay which had occurred the proceedings should be dismissed.
(12)
1996 By motion of the 20 May 1996, and the 24 June 1996 the claims to dismiss
were instituted.
It
appears from the above that;
(a)
The "scheme" under which the Provident Society made loans to motorists who
entered into Insurance Contracts with the Insurance Company and which is now
claimed was ultra vires the powers of the Provident Society was made in 1976
that is, twenty one years ago. A claim by the Provident Society in the second
action relates to a balance due for loans made in that year.
(b)
A claim that the "scheme" was invalid was made in 1986 by the official
liquidator of the Provident Society three years after his appointment but not
proceeded with at that time.
(c)
The first action was commenced in 1992. A claim that the "scheme" was ultra
vires the powers of the Provident Society and that the Insurance Company should
indemnify the Provident Society in respect of the claim made by the Protection
Association was made in a third party notice served on the 16 July 1993, that
is 17 years after "the scheme" was first operated.
(d)
The present claim in the second action was commenced in August 1995, that is 19
years after the operation of "the scheme" commenced.
THE
ISSUES.
In
both these actions the Insurance Company has applied under Order 122 rule 11 of
the Rules of the Superior Court or alternatively under the court's inherent
jurisdiction dismissing the claim of the Provident Society for want of
prosecution. The order relied on refers to a situation in which there has been
no proceedings for two years from the last proceedings (which is not applicable
in these cases) and it seems to me that the more appropriate rule in this case
is order 63 rule (8) which allows the Master to dismiss a claim for want of
prosecution. The point, however, is not of importance because counsel on behalf
of the Provident Society accepts that the court has the inherent jurisdiction
claimed. When a claim is considered under this jurisdiction the principles
which are to be applied are well settled. The judge has a discretionary power
to strike out an action for want of prosecution if two preconditions are
satisfied, viz (1) that the plaintiff has been guilty of inordinate and
inexcusable delay and (2) that such delay gives rise to a substantial risk that
it is not possible to have a fair trial or is likely to cause or to have caused
serious prejudice to the Defendant (Roebuck v Mungovin [1994] 1 All ER 568 and
Primor plc v Stokes Kennedy Crowley and another, Supreme Court, 19 December,
1995). But the Chief Justice in the Primor Case made clear that the court's
inherent jurisdiction is not just to strike out proceedings in which there has
been delay causing prejudice in prosecuting them, but also where there has been
delay in instituting them (see page 49). This has been accepted by counsel for
the Provident Society and so the debate has been (a) whether the delay in (i)
instituting and/or (ii) prosecuting these two actions has been inordinate and
inexcusable and if so whether a fair trial has been fatally prejudiced.
The
Insurance Company claims that the delay in the first action in instituting and
prosecuting the Third Party proceedings was inordinate and inexcusable and the
court should exercise its jurisdiction under the Rules or alternatively its
inherent jurisdiction and strike out the Third Party proceedings because a fair
trial is now impossible.
As
to the second action, there has been no delay in prosecuting these proceedings
because after the service of the summons and statement of claim (which were
effected simultaneously) the defendant moved to have them dismissed on the
ground of delay. In these proceedings the court is asked to exercise its
inherent jurisdiction to dismiss.
In
both actions the prejudice to the Insurance Company is the same. It is pointed
out that the central allegation in both proceedings is that the making of loans
by the Society to motorists in accordance with the Scheme was ultra vires the
Society's powers in that it had no power to make loans or no power to make
loans without obtaining security and that the persons referred to in the
pleadings as the "directors" were at all times aware or ought to have been
aware that the Society had no such power. It is claimed that these two actions
could not be determined without an inquiry into the facts surrounding the
"scheme" referred to in the pleadings and the awareness of the directors that
the loans were ultra vires the Society's powers. A schedule was prepared of the
persons described as "the directors" for the relevant period, that is between
1976 to 1978, and the examiner, Mr Clancy, avers as follows:
"As
will be seen from the Schedule, for the year 1976 two of the four directors,
namely, Mr Joseph Moore and Mr JP Anderson are deceased. As far as Primor is
concerned, the most crucial loss is the death of Mr Joseph Moore. I believe
that it is commonly accepted that he had day to day control over Primor and the
PMPA group of companies during the relevant period. Given my understanding of
the workings of Primor I believe that Mr Joseph Moore would have been the
central figure in devising and operating the scheme. Mr Moore died in June,
1989 almost three years after Mr Horgan first intimated to this claim but four
years before proceedings were first issued. Therefore, it is hard to see how a
trial could take place in relation to the Scheme without him. Of the other two
directors Mr MJ Dore is now in his 80's and I believe he has been quite ill
over the last number of years and Mr JN Jennings is in his 90th year. I am
advised that these proceedings are still at an early stage and that even if
they were to proceed with all haste, it might be another couple of years before
the case comes to trial. Everyone's recollection must fade with time, but,
moreover in this case, I think it would be unreasonable and unrealistic to
expect that Mr Dore and Mr Jennings would at their stage in life be able to
recall for the first time events of 20 years ago. Furthermore, I consider that
the preparatory work and stress associated with having to give evidence in a
trial which would be an unnecessary burden for them to have to bear after all
these years. For the years 1977 and 1978 there were two additional directors Mr
MP Phillips and Mr Michael Martin. Mr Phillips is now 86 years of age and my
comments in relation to Mr Dore and Mr Jennings equally apply to him. I am
informed and believe that at the relevant time Mr Michael Martin was a
non-executive director and, in fact, was and remains a solicitor in private
practise. I say and believe therefore that it is unlikely that MrMartin would
have any detailed knowledge or recollection of the Scheme".
The
Examiner also referred to the prejudice which he said would result from the
problems caused by the delay in making a full and proper discovery. He stated:-
"It
would be an enormous burden on Primor to embark on discovery of documents
relevant to the issues in these proceedings at this time. The ongoing insurance
business of Primor was sold to GRE in 1989. Primor currently has no employees
and is concerned with the wind-down of pre- 1989 claims. Accordingly, I believe
that there is real doubt as to whether all relevant documents could be located
and adequate discovery provided. I believe that the same considerations
probably applied to PMPS also".
In
answer to these arguments the Provident Society makes a number of points;
(a)
The principles to be applied are not denied but it is firstly claimed that in
considering the lapse of time the court should start from the date of the
liquidation of the society, namely December 1983 and in the light of the
particular circumstances of this case it is urged that the delay in instituting
the Third-Party proceedings and in prosecuting them was neither inordinate or
inexcusable. I cannot agree.
(i)
Firstly it is clear from the judgment in the Primor case (p 49 of judgment of
the Chief Justice) that the period of the delay is to be considered by
reference to the date on which the wrong was committed by the Society in making
the ultra vires loans, not the date on which the Society's liquidator was
appointed.
(ii)
Secondly, the delay in instituting a claim which was made in the Third Party
proceedings and the delay in prosecuting that claim, and the delay in
instituting the second action were both inordinate and inexcusable. The Third
Party claim relates to loans made in 1978 and subsequently. It was initiated in
1993, that is 16 years after the first ultra vires loan was made. The second
action relates to loans made in 1976 and subsequently. It was initiated in
1995, that is 19 years after the first ultra vires loan was made. Such delays,
by any standard, must be regarded as inordinate. It is to be remembered that a
claim in respect of these loans was raised in 1983 by the liquidator of the
Society and when liability was denied no further action was taken until the
dates I have just mentioned. No plausible reason has been advanced as to why
such inordinate delays should be excused by the Court. The first condition
therefore which would justify the court in dismissing both proceedings is
fulfilled.
(b)
It was submitted on behalf of the Society that even if the delay was inordinate
and inexcusable it does not cause such prejudice as would render a fair trial
impossible. This is because the evidence of the directors or indeed any
witnesses to the "Scheme" under which the loans to motorists were made by the
Society is not necessary and that once the Society can establish that the loans
were ultra vires they are recoverable as a matter of law.
I
cannot agree that a fair trial could now be held. It seems to me that the delay
has deprived the Insurance Company of the opportunity of obtaining the
attendance of witnesses whose evidence would certainly be admissible and
perhaps decisive for determining the issues in the case. The law in relation to
the power of a lender who has made an ultra vires loan to recover it from the
borrower and to recover it from a guarantor who has guaranteed the borrowers
debt was considered by Mr Justice Murphy in In Re PMPA Garages Limited (No 2)
[1992] 1 IR 332. This was also a case relating to the PMPA group of companies
and to ultra vires loans made by the Private Motorists Provident Society
Limited, the defendant in the first action and the plaintiff in the second
action before me. Murphy, J considered the circumstances in which a lender can
recover from a borrower monies lent ultra vires its powers. He pointed out that
loans could be recovered in an action in rem (where the monies borrowed could
be traced) or in an action for monies had and received where it would be unjust
and inequitable to allow the borrower to retain the monies borrowed. But it is
important to remember that this is not a case in which a lender who lacked
capacity made a loan and is then seeking its recovery from the borrower. In
this case the borrowers (ie the motorists) directed the Provident Society to
pay the monies they borrowed to discharge debts due by them to a Third Party
(the Insurance Company). Thus the transaction did not create a debt by the
Insurance Company to the Provident Society and it seems to me that different
considerations may well apply when considering whether or not it would be
unconscionable and inequitable to allow the Insurance Company to retain the
money they received than in a case where a lender claims the return of monies
lent to a borrower. The issues that arise in the present cases could only be
properly determined by evidence relating to the entire transaction and in
particular the evidence of the persons involved in the "Scheme".
(c)
In support of its argument the Provident Society submitted that oral evidence
would not be as relevant in this case to establish whether the directors of the
Insurance Company knew that the loans were ultra vires the Provident Society --
knowledge of the ultra vires nature of the loans would be imputed to them as a
matter of law. Again, I cannot agree.
Section 8 of the
Companies Act 1963 and
the European Communities (Companies) Regulations, 1973 SI No 163 of 1973 apply
in this case. This means that as a matter of law it cannot be said that they
had constructive knowledge the Provident Society's lack of capacity to make the
loans.
(c)
It was further submitted that there is in fact a witness available a Mr Gordon
Gallagher, a former group financial controller has "knowledge of the genesis of
the scheme and its day-to-day working". But even if this were so the fact that
there is only one witness as to the "genesis" of the "scheme" only highlights
the prejudice which the delay will cause. There must have been many persons
with his knowledge. The delay will have deprived the court of the benefit of
the evidence and it would not be just to allow the issues now to be determined
when, but for the delay, they could have been determined with much greater
certitude.
(c)
The Provident Society has raised one final issue to which I should refer. It is
claimed that the Provident Society and the Insurance Company and other
companies in the PMPA group entered into an agreement of compromise on the 11
July 1994 and that by virtue of this agreement the Insurance Company is now
estopped from disputing the Provident Society's claims in the two actions or
alternatively has waived the right to contest them.
The
agreement was entered into between 52 companies in the PMPA Group. It recited
that the parties had agreed to compromise the debts due by each party to the
other parties "with the exception of those matters specified in the second
schedule". It provided for a "payment date" and that every debtor (as defined)
would pay to its creditors the sum specified in the fourth schedule and that
every creditor would accept the payment received from every debtor in full and
final settlement of all liabilities of the debtor "with the exception of the
excluded matters".
The
"excluded matters" were described as "issues arising in litigation entitled"
(a) the High Court proceedings which are referred to in this judgment as the
first action "being issues between the defendant and the Third Party". This
meant that the issues between the Private Motorists Protection Association
Limited and the Private Motorists Provident Society Limited in the first action
were not "excluded matters" but that the claims by the Provident Society
against the Insurance Company were excluded matters. Secondly, issues in the
proceedings between the Society and Primor Plc (Record Number 1994 No 3293P)
were also excluded. These are referred to in paragraph 9 of the chronology set
out earlier in this judgment. These 1994 proceedings were in fact discontinued
but the issues arising in them were immediately revived in the proceedings to
which I have referred to as the "second action" and no point is taken that the
compromise agreement should not be read as excluding the issues in this second
action.
I
cannot agree with the submission that by entering into the compromise agreement
the Insurance Company acquiesced in the payment by the Provident Society to the
Private Motorists Protection Association of the claim against it in the first
action and that by this acquiesence the Insurance Company is now estopped from
contesting both the Provident Society's claim in the Third Party proceedings in
the first action and its claim in the second action. The compromise was between
each of the named parties and their own creditors. By executing this agreement
the Insurance Company made no agreement relating to the debts of the other
parties to the agreement and, in particular, the debts which the Provident
Society may have owed to the Protection Association. Nor did it make any
representation relating to the debts of others. The issues relating to the
claims made by the Provident Society against the Insurance Company were
specifically excluded from the terms of the compromise agreement and
accordingly the Insurance Company is no way debarred from contesting its
liability to the Provident Society in both the first and second action.
Furthermore the issue that is now before the court in both actions is whether
the claim should be struck out by virtue of the delay of the Provident Society.
By entering into the compromise agreement I cannot see how the Insurance
Company is now debarred from raising this issue -- it is one expressly excluded
by the terms of the compromise agreement. I should add that in negotiating the
terms of the compromise agreement the examiner did not waive his claim to have
these actions dismissed merely because he failed to refer to the possibility
that such a claim might subsequently be advanced.
I
must conclude, therefore, that in respect of both actions there has been
inordinate and inexcusable delay on the part of the Provident Society, that
this delay would prejudice the fair trial of the claims by the Provident
Society against the Insurance Company in both actions. This prejudice arises
not only because of the absence of necessary oral testimony but also the
difficulty in obtaining the relevant documentary evidence. Accordingly in the
exercise of the courts inherent jurisdiction I must dismiss the Third Party
claim in the first action and the plaintiff's claim in the second action.
