The Supreme Court dismissed an appeal by Admiral Underwriting Agents (Ireland) Ltd. against a High Court order requiring it to pay costs incurred by Peter Byrne in a negligence action and in an application by the estate of Patrick J. O’Connor. The appeal concerned the insurer’s joinder to the proceedings and the costs condition attached to solicitors coming off the record; it did not determine whether the insurer was entitled to avoid its policy.
Byrne had instructed John S. O’Connor & Co. Solicitors to pursue damages for an alleged assault by public-house employees in Rathmines, Dublin, on 11 July 1986. The judgment says John O’Connor, who was not a qualified solicitor, misled Byrne into believing proceedings had been started and a settlement judgment entered. No proceedings or settlement existed, and Byrne’s assault claim became statute barred in 1989.
Byrne later sued the firm for breach of contract and negligence. The insurer initially provided an indemnity subject to a condition that it could withdraw cover if evidence showed the insured knew of the matter before May 1993. After solicitors acting for the insurer warned in December 1998 that cover might be declined or avoided, the insurer gave notice of repudiation in March 1999. The solicitors then sought to come off the record.
The High Court allowed them to do so, but joined the insurer as a defendant and ordered it to pay Byrne’s costs to date and the costs of the application by Michael O’Connor, executor of Patrick O’Connor’s estate. The order said the application to come off the record would be refused if those costs were not paid.
On appeal, the insurer argued that it could not be joined solely to make it pay costs when Byrne had no direct cause of action against it. The Supreme Court noted that arbitration over the policy had been under way since at least 2002 and that the insurer’s appeal counsel had not been told about it. The Court said the arbitration’s result would bear on whether the purported avoidance was proper.
The Court held that Order 15, rule 13 gave the High Court jurisdiction to add a party whose presence was needed to resolve the questions in the case. It considered the plaintiff’s accumulated legal costs a collateral but integral part of those questions, given the insurer’s role in directing the defence and the delay before it sought to withdraw. The Court found that delay had not been justified, explained or excused, and that diligent inquiry had not been shown to be insufficient.
The Supreme Court dismissed the appeal, holding that the High Court had jurisdiction and had reasonably exercised its discretion. Its decision addressed the joinder and costs order, leaving the policy dispute to the arbitration.