Anthony Blake V. Psl Energy Services Limited
| Jurisdiction | Scotland |
| Judge | Sheriff J K Tierney |
| Court | Sheriff Court |
| Docket Number | CA40/07 |
| Date | 11 November 2008 |
| Published date | 09 December 2008 |
SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ABERDEEN
CA40/07
| DECISION by SHERIFF J K TIERNEY | ||
| in the cause | ||
| ANTHONY BLAKE | ||
| Pursuer | ||
| against | ||
| PSL ENERGY SERVICES LIMITED | ||
| Defenders |
Act: Beynon, Advocate instructed by Lefevre Litigation
Alt: Gibson, Solicitor Advocate, Paull & Williamsons
ABERDEEN, 11 November 2008.
The sheriff, having resumed consideration of the cause Sustains the defenders first plea in law and dismisses the action; Finds the pursuer liable to the defenders in the expenses of the action and allows an account thereof to be given in; Remits the same when lodged to the Auditor of Court to tax and to report; Certifies the cause as suitable for the employment of junior counsel
NOTE:/
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NOTE:
[1] In this action, the pursuer, a former employee of the defenders, seeks damages of £50,545 arising from alleged breaches of contract on the part of the defenders in that (1) The defenders failed to sue (or assign the right to sue) the insurers of their employees Permanent Health Scheme to obtain benefits to which the pursuer says he was entitled (This ground was originally pled as a crave for payment under the contract, but having heard the defenders submissions counsel for the pursued amended the ground to one of damages for breach, it being accepted that in terms of the contract of employment the defenders obligation was to pay the pursuer only such sums as they received from the insurers.) (2) The defenders terminated the pursuer's employment for no good reason and as a consequence he was unable to obtain the insured permanent health benefits which he says he would have been entitled to had his employment continued.. The action was raised by agreement between the parties as a commercial action
[2] Briefly the pursuer avers that in or about February 1994 the pursuer began employment with the defenders as an offshore engineer. His final (though unsigned) contract of employment with the defenders is dated 1st April 2004 and provides on page 3:-
"Permanent Health Insurance. After exhaustion of company sick pay, the employee will be eligible to join the Permanent Health Insurance/Income Protection Scheme. This is applicable in the event of absence from work through accident, sickness or injury lasting longer than 90 days. Please see Section 5 of the Employee Handbook for further details on this scheme.
The Permanent Health Insurance referred to in this clause is an insured scheme and payments will be made to the employee by the company only in so far as the terms of the relevant insurance policies provide for cover and in any such case as the relevant insurance policy provides for and pays such cover.
Any payments under the scheme referred to in this clause will cease upon termination of the employee's employment with the company for whatever reason".
[3] Section 5 of the Employee Handbook provides that employees between the ages of 18 and 59 are to be potentially eligible for benefiting from the Permanent Health Insurance until recovery or death or until the employee reaches the age of 60. Benefit is to be paid at 75% of net salary under deduction of social security and invalidity pensions. "Incapacity" is stated to be "subject to the Insurer having determined that such incapacity exists" is defined for an employee such as the pursuer as being such a condition:-
"That you are incapable of performing by reason of sickness or accident the material substantial duties of your occupation and unable to follow any occupation for which you are reasonably fitted by reason of training, education or experience"
[4] The defenders insured this scheme with Unum Limited who issued a group long-term Disability Insurance Policy GS/910200/A with the schedule and endorsements attached thereto.
[5] The insurance policy names the defenders as the policy holders and in terms thereof the insurers agree to pay the defenders the benefits described in the policy when they became payable. "Benefit" is defined as meaning any amounts "paid to or for the policy holder .... by reason of the incapacity of a member." "Member" is defined as meaning an employee of the policy holder or any associated company participating in the policy holder's scheme. Clause 5.5.1 of the policy provides:-
" An individual ceases to be a member under the policy (and therefore benefit entitlement ceases for that individual) on the earliest of the following:- (1) the date upon which he ceases to be an employee,.......)
[6] "Incapacitated member" means a member who is incapacitated under the test contained in clause 6.3, and "incapacity" is similarly defined in the definitions specific to offshore employees.
[7] Clause 6.3 provides in Test C (which applies to offshore workers):-
"If (a) Unum is satisfied that the member is unable by reason of illness or injury to perform the material and substantial duties of his insured occupation and (b) the member is unable by reason of illness or injury to follow any occupation for which he is reasonably fitted by reason of training, education or experience then the member is incapacitated".
[8] The pursuer avers that on or about the 18th June 1999 he ceased to be fit for his offshore work with the defenders, or for any form of employment which he otherwise would have been reasonably suitable for. He had surgery and radiotherapy for a cancerous lump on his neck. He has not worked since. As a member of the scheme he began to receive payments from the defenders of the sums which the defenders received from the insurers under the policy. This stopped in December 2004 when the insurers intimated to the defenders that they had resolved to cease payment of benefit in respect of the pursuer's incapacity. The defenders as policy holders appealed that decision but the insurers rejected the appeal on the basis that the pursuer had exaggerated his limitations and the extent of his ongoing disability. They wrote to that effect to the defenders on 22nd April 2005, setting out their reasons.
[9] The defenders appealed again and the insurers refused this appeal by letter to the defenders dated 3rd November 2005. This sets out in some detail the factors taken into account by the insurers in reaching their opinion that the pursuer was capable of performing some work, and that the earlier decision to cease payment of benefits was correct. The letter stated that this was the insurers' final decision on the claim and intimated that the Financial Ombudsman Service was prepared to consider complaints in respect of the final decision.
[10] The pursuer avers that "the insurers had no sound or proper basis for their decision to exclude the pursuer from membership and thereby from benefit in terms of the insurance policy" and says that there was contrary evidence that the pursuer was unfit for any form of employment.
[11] Against that background the pursuer contends that "the defenders should have challenged the determination by the insurers that the pursuer was not incapacitated within the definition provided for in paragraph 6.3(b) of the schedule to the insurance policy if necessary by means of bringing legal proceedings against the insurers". He contends in condescendence 4 line 4 that the defenders "should have instituted legal proceedings against the insurers requiring payment to them of the benefits which had been paid to them [my italics] relative to the pursuer prior to December 2005". (I proceed on the basis that the italicised part of the averment should read "the benefits which ought to have been paid to them"). The pursuer continues that in the event that the defenders were unwilling to bring these proceedings themselves they should have assigned their right to institute legal proceedings, presumably to the pursuer.
[12] The pursuer continues in condescendence 4 by averring:-
"It was an implied term of the contract of employment between the pursuer and the defenders that the defenders would take all necessary action including issuing legal proceedings against the insurers and separately assign to the pursuer the right to bring these proceedings (in the event that the defenders were unwilling to bring such proceedings against the insurers themselves and which he would have pursued) and all so that the pursuer would receive the benefit of membership under the insurance policy. This implied term falls to be implied on the basis that it is necessary in order for the Contract of Employment to be given business efficacy. Such a term is reasonable and equitable, is necessary in order for the employment contract to have essential business efficacy, and does not contradict any express term of the contract".
[13] In condescendence 5, the pursuer says that if the defenders had fulfilled this implied contractual obligation the pursuer would have received payment of the benefit under the insurance policy for the period between December 2004 and 13th December 2005, being the sum first craved.
[14] In condescendence 6, the pursuer explains that on the 13th December 2005 the defenders terminated the pursuer's employment with them on the grounds of ill-health and in particular due to the pursuer's ongoing disability caused by his treatment for cancer. As a result of this termination of employment the pursuer ceased to be eligible to benefit under the insurance policy. The pursuer continued in the original record with an averment that his contract of employment with the defenders was subject to an implied term that the defenders would not dismiss the pursuer prior to his reaching the age of 60 years of age unless he was responsible for gross misconduct. Having heard the defenders' submissions at the debate, counsel for the pursuer sought and without objection obtained leave to amend his pleadings by extending the acceptable reasons for dismissal to include "on being made redundant for proper reason, or the defenders' business terminating, and whilst the...
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