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1. The Plaintiff alleges that he was injured in a road traffic accident on 24 April 1995. Arising out of that accident he commenced proceedings in this court against the Defendants on 11 December 1998. Having regard to those two dates it is clear that these proceedings were prima facie statute barred at the time they were instituted.

The statement of claim was delivered on 11 June 1999 and the defence followed on 14 July 1999. Given the dates already mentioned, it is not surprising that the defence includes a plea at paragraph 8 thereof to the effect that the Plaintiff's claim is statute barred by virtue of the provisions of section 11(2)(b) of the Statute of Limitations Act 1957.

To that defence there was delivered a reply. Having joined issue with the Defendants on the defence and having denied the allegation of contributory negligence, the reply goes on as follows:

"3. Without prejudice to the foregoing the conduct and representations express and implied of the Defendants herein their servants or agents from the time of notification of the motor collision of the 26 April 1995 up to the commencement of proceedings herein by Plenary Summons dated 11 December 1998 caused and induced the Plaintiff to refrain from issuing proceedings within the period prescribed by statute.

"4. By reason of the aforementioned conduct of the Defendants their servants or agents the Defendants are estopped from relying on the provisions of the Statute of Limitations 1957 as pleaded."

Having regard to that exchange of pleadings an application was made to the court for the trial of a preliminary issue. By order of 1 February 2000 McGuinness J directed that there be a trial of such an issue, the question being "whether the Plaintiff's claim herein is or is not statute barred by virtue of the provisions of section 11(2)(b) of the Statute of Limitations 1957, as amended".

It does not seem to me that the question posed in that form is really the issue for trial. It is accepted by the Plaintiff that, prima facie, the Plaintiff's claim is statute barred but he contends that the raising of a plea of that nature is a matter for defence and that the Defendants are precluded from standing on their legal rights in the circumstances outlined in the evidence put before this court. In other words, the Plaintiff says that the Defendants are estopped from raising the plea of the Plaintiff's action being time barred because of their conduct. This court is therefore asked to exercise the jurisdiction of a court of equity which, over the centuries in appropriate cases, has intervened so as to prevent a defendant from exercising strict legal rights and entitlements in circumstances where it would be inequitable to do so.

In order to understand how this plea comes to be made on the part of the Plaintiff and how this application is brought, it is necessary to look at the correspondence exchanged between the parties' solicitors and the Hibernian Insurance Company, the insurance company representing the Defendants in the action.

Without further ado I have to deal with a legal objection which was raised at the hearing to my looking at this correspondence. It is said that the correspondence is protected by privilege and that therefore it is not open to the Plaintiff to seek to adduce it. I was invited to look at the correspondence on a de bene esse basis so as to make an adjudication as to whether this allegation of the correspondence being privileged was or was not well made out.

The basis upon which it is said that the correspondence is privileged is the fact that it is headed in practically every case by the legend "without prejudice", it is clear from the authorities that the mere attaching of such a label to correspondence does not make such letters privileged. The court has to look to see whether they fall within the rubric of what is properly privileged correspondence. Having read through the letters exhibited at TD.3 in the Affidavit of Thomas D'Alton I am satisfied that they are not privileged letters notwithstanding the fact that most of them are headed "without prejudice" and it is therefore open to me on this application to have regard to them.

The correspondence begins by a letter of 23 May 1995, just one month after the road traffic accident in suit. That letter was from the Plaintiff's solicitors to the Hibernian Insurance Company and it reads:

"Please find enclosed copy letter which we have today sent to your insured Anne Marie Connell in relation to a road traffic accident which took place at Furbo, Galway, on 26 April 1995."

Attached to that was a letter written in a very standard form to the Defendant Ann Marie Connolly by the Plaintiff's solicitors making the allegation of negligence in respect of her involvement in the road traffic accident in question. In the final paragraph of that letter she was invited by the Plaintiff's solicitors to pass it on to the Hibernian Insurance Company.

There next came a letter from the Hibernian Insurance Company of 11 July 1995 pointing out that the recent communication from the Plaintiff's solicitors was having attention and seeking a considerable amount of information including, inter alia, the allegations of negligence which were being made against the Defendants. That was then followed on 27 July 1995 by a letter indicating that an appointment had been made to have the Plaintiff medically examined by a consultant orthopaedic surgeon in Galway and giving a time for that examination. There then followed a letter on 1 September 1995 from the Plaintiff's solicitors to the Hibernian Insurance Company in response to the request made in July of that year for detailed information.

There was then an important letter dated 9 July 1996 from the Hibernian Insurance Company to the Plaintiff's solicitors. It reads as follows: "With regard to the above matter we refer to previous correspondence and confirm that we have obtained a medical report on your client.

"We have concluded the damage claim direct with your client's insurers Norwich Union.

"Please advise if you are in a position to discuss settlement at this time.

"We await hearing from you."

On 24 July 1996 receipt of that letter was confirmed by the Plaintiff's solicitors in which they indicated confirmation of the appointment for an up-to-date medical report and indicating that they would respond as soon as the report came to hand.

On 13 March 1997 there was a further letter to the Plaintiff's solicitors from the Hibernian Insurance Company in the following terms:

"With regard to the above matter we refer to previous correspondence. Please advise if you are interested in discussing the case with us at this time.

"We look forward to hearing from you.

There does not appear to have been a response (certainly there was no response in writing) to that letter from the Plaintiff's solicitors.

On 30 October 1997 there was a further letter from the Hibernian Insurance Company to the Plaintiff's solicitors. It reads:

"We refer to the above and to previous correspondence in connection with same.

"Could you please advise if you are in a position to meet for settlement discussions at the October Galway High Court or alternatively the February 1998 Galway High Court.

"We await hearing from you in due course."

Again, there does not appear to have been any response to that letter from the Plaintiff's solicitors. On 6 November 1997 there was a further letter from the Hibernian Insurance Company setting up another medical examination to be carried out by the same consultant in Galway. Apparently the Plaintiff did not attend for that examination and on 8 December 1997 there was a letter from the Hibernian Insurance Company to the Plaintiff's solicitors pointing that out. The letter asked for confirmation in writing that the Plaintiff would attend any future medicals organised by Hibernian. There does not appear to have been any response in writing to that letter.

On the same day there was a letter from Mr Kelly, the orthopaedic surgeon, to the Plaintiff's solicitors indicating that a further appointment had been made for the 8 January 1998 at the request of the Hibernian Insurance Company. That appointment was confirmed by a letter of 9 December 1997 from the Hibernian to the Plaintiff's solicitors.

On 27 January 1998 there was another letter from the Hibernian Insurance Company asking the Plaintiff's solicitors to advise if they were in a position to meet for discussions at the forthcoming Galway High Court. There does not appear to have been any response to that letter.

On 2 July 1998 the Hibernian Insurance Company wrote as follows:

"Could you please advise if you are in a position to meet for without prejudice talks at the forthcoming Galway High Court sessions.

"We have tried to phone your office on a number of times in relation to this matter but have been unable to get through.

"We await hearing from you in due course."

It is of some interest to note that that letter was written at a time (2 July 1998) when the action was already statute barred, the accident having occurred on 24 April 1995.

Nothing more appears to have happened until there was a letter of 30 April 1999 from the Plaintiff's solicitors asking the Insurance Company to nominate a solicitor to accept service of proceedings.

On 12 May 1999 the final letter came from the Hibernian Insurance Company in the following terms:

"We refer to your letter of 30 April 1999 and to our telephone conversation with Mr Thomas D'Alton when we phoned you on 10 May in this regard.

"We must confess to being surprised to receive your letter as this case is clearly statute barred, the accident having happened over four years ago.

"We note your request for a nomination to accept service of proceedings and we entirely without prejudice to the Statute of Limitations nominate Corrigan & Corrigan solicitors . . ."

On 18 May 1999 the Plaintiff's solicitors wrote to Corrigan & Corrigan seeking the indorsement of acceptance by them of the Plenary Summons which had been issued in the preceding December.

In the light of that correspondence the Plaintiff says that it would be inequitable to permit the Defendants' insurers to now plead the Statute of Limitations.

As to the case law on the topic, I am satisfied that the decision which binds me is that of the Supreme Court in Doran v Thompson and Sons Limited [1978] IR 223. As it is not necessary for me to set out in detail the factual background to that case, I merely cite from the headnote as follows:

"On the 20 July 1972 the plaintiff was injured in an accident which occurred while he was working for his employer, the defendant. Shortly after they were consulted by the plaintiff. In October 1973 the plaintiff's solicitors wrote to the defendant on behalf of the plaintiff and claimed compensation for his injuries and loss. The defendant's insurers replied on the 18 December 1973 stating that they were investigating the accident and asking for arrangements to be made for the examination of the plaintiff by the insurer's doctor. The plaintiff's solicitors experienced considerable difficulty in making arrangements for the plaintiff's doctor to attend such examination. In May 1975 the insurers were informed by the plaintiff's solicitors that they agreed to the plaintiff being examined by the insurer's doctor atone provided that they received a copy of the doctor's report. The plaintiff's cause of action became statute barred on the 20 July 1975. The plaintiff was examined by the insurer's doctor on the 29 July 1975. The insurers did not inform the plaintiff's solicitors of the results of the insurer's investigation of the accident or notify the solicitors that liability was being denied, nor did the insurers discuss liability or damages with the plaintiff or his solicitors. The plaintiff claimed damages from the defendant in an action which was instituted in the High Court on the 28 February 1976. The defendant pleaded that the plaintiff's claim was statute barred and the plaintiff replied that the defendant was estopped by the acts and representations of the defendant's insurers from pleading the statute. At the trial of the preliminary point of law raised by the pleadings it was decided by the High Court that the defendant was estopped from pleading the statute. On appeal by the defendant it was

Held by the Supreme Court (Henchy, Griffin and Kenny JJ) in allowing the appeal, 1, that any misapprehension in the mind of the plaintiff or his solicitors was not shown to have been induced by any representation made by the defendant or by the defendant's insurers.

2. That, accordingly, the defendant was not estopped from pleading the statute."

I do not propose to go through the correspondence which was exchanged in that case in extenso as it is set forth most particularly in the judgments of Griffin J and Kenny J, but there is quite a difference between the correspondence in that case and the correspondence in this case. Be that as it may, the test which has to be applied is set forth in the judgment of Henchy J at page 225 where he says:

"Where in a claim for damages such as this a defendant has engaged in words or conduct from which it was reasonable to infer, and from which it was in fact inferred, that liability would be admitted, and on foot of that representation the plaintiff has refrained from instituting proceedings within the period prescribed by the statute, the defendant will be held estopped from escaping liability by pleading the statute. The reason is that it would be dishonest or unconscionable for the defendant, having misled the plaintiff into a feeling of security on the issue of liability and, thereby, into a justifiable belief that the statute would no be used to defeat his claim, to escape liability by pleading the statute. The representation necessary to support this kind of estoppel need not be clear and unambiguous in the sense of being susceptible of only one interpretation. It is sufficient if, despite possible ambiguity or lack of certainty, on its true construction it bears the meaning that was drawn from it. Nor is it necessary to give evidence of an express intention to deceive the plaintiff. An intention to that effect will be read into the representation if the defendant has so conducted himself that, in the opinion of the court, he ought not be heard to say that an admission of liability was not intended."

It is clear from that judgment that a twofold test has to be applied:

Have the Plaintiff's legal advisers in fact inferred from the correspondence which I have read that the statute would not be pleaded against them and was it reasonable for them to so infer?

The answer to the first part of that question is clearly to be found in the affidavit of Mr D'Alton. This affidavit was not controverted and it was not sought to cross-examine Mr D'Alton on it. In making submissions on behalf of the Defendants' Insurance Company it is right to say that Mr McCann accepted as a matter of fact that the Plaintiff's advisers formed the views which are set forth in particular at paragraphs 11 to 14 of Mr D'Alton's affidavit:

"11. Correspondence from Hibernian Insurance to this deponent from 9 July 1996 onwards indicated (1) that the Plaintiff's material damage claim had been concluded with his insurers directly and (2) that the Hibernian Insurance were anxious to engage in settlement discussions if that was the case. The Defendants' insurers in fact invited the Plaintiff to settle in discussions or a total of five occasions, on 9 July 1996, 13 March 1997, 27 January 1998 and the 2 July 1998.

Only four occasions are mentioned there although the body of the affidavit speaks of five.

"12. I say that I did not meet with the Defendants' insurers as the Plaintiff continuously expressed concerns about his injuries and I sought further medical reports and waited on his condition to show more indication of settlement. Matters were further complicated somewhat by the Plaintiff suffering a second accident on or about the 11 September 1997.

"13. I say that I at all times considered this case to be one that would be settled with the Defendants' insurers once I was in a position to meet with them, most likely at a sitting of Galway High Court and in these circumstances, which were in very large part cultivated by the Defendants' insurer's correspondence, I refrained from issuing proceedings within the time prescribed by statute. Indeed, although I did not know it at the time it is worth noting that the Defendants' insurer even invited the writer to a settlement meeting by letter of 2 July 1998 which was two to three months after the expiry of the limitation period which the Defendant now seeks to rely upon.

"14. I say and believe that the failure to issue the proceedings herein within the time prescribed by statute arises in circumstances where settlement of the case was anticipated when all of the parties were ready to meet and that this climate arose from the correspondence issued from the Defendants' insurer.

It therefore seems clear that the Plaintiff's legal advisers did in fact infer as a result of that correspondence that the Statute of Limitation would not be raised against them. The net issue which I have to decide is whether it was reasonable to so infer. If it was, then it would follow that the attempt on the part of the Defendants' insurers to raise the Statute of Limitations would be inequitable.

I have opened the correspondence in some detail. As I pointed out earlier, the letters do differ from the type of correspondence that was exchanged in Doran v Thompson. The correspondence really falls into two parts. The first part is the indication that was given to the Plaintiff's solicitors from the Hibernian Insurance Company on 9 July 1996 to the effect that the material damage claim of the Plaintiff had been settled direct with his insurance company. The second part of the correspondence can be characterized as the setting up of appointments with a consultant for the medical examination of the Plaintiff and a series of invitations to engage in settlement negotiations with the Defendants' insurance company.

In all the circumstances it seems to me that the view that was formed by the Plaintiff's solicitor was a reasonable one. First of all, he was put on notice that the material damage claim had been concluded directly with the Plaintiff's insurer. On a reasonable reading of that correspondence it seems to me that the Defendants' insurance company was prepared to settle, and did in fact settle, that part of the claim. That must have been an indication that the invitations to engage in settlement negotiations were being extended in circumstances where the Defendants' insurance company had in fact settled the property damage claim.

Taking into account that correspondence and the frequent invitations to engage in settlement negotiations, including one letter which was written after the defence of the statute was open to the Defendants, I have come to the conclusion that it would now be inequitable to allow the Defendants' insurance company to plead the Statute of Limitations as against the Plaintiff. I am not for a moment saying that the mere fact that an insurance company invites a plaintiff's legal representative to settlement negotiations would be sufficient of itself to bar it from pleading the Statute of Limitations. That was a fear expressed by Counsel on behalf of the Insurance Company at the hearing on Friday last. I quite accept that it would make life very difficult for insurance companies if they were subsequently precluded from pleading the Statute of Limitations simply by extending an invitation to engage in settlement negotiations.

However, that is not the case here. Those invitations to attend settlement negotiations were preceded by a clear indication from the Hibernian Insurance Company that it had already settled the material damage part of the Plaintiff's claim directly with his insurance company. Seeing those invitations in the light of that admission, it seems to me that it would be inequitable to allow the Hibernian Insurance Company to now stand on its legal rights.

Applying the test which has been propounded by Henchy J in Doran v Thompson, I have come to the conclusion that the Defendants have "engaged in words or conduct from which it was reasonable to infer, and from which it was in fact inferred" that the Statute of Limitations would not be relied on. Accordingly, I do not propose to answer the precise question that was put in the order of McGuinness J because I do not think that that is the correct question to answer. Whilst this case was commenced outside of the period of three years from the date of the accident, in the circumstances I find that it is not now open to the Defendants to rely upon the Statute of Limitations as a defence. I therefore propose to strike out paragraph 8 of the Defence. That means that the action can proceed to trial. However, the question of liability for the accident is in issue on the pleadings and there is no impediment placed in the way of the Defendants from fighting the action in full as to both liability and quantum of damages.