Primor wins dismissal of actions

PRIMOR plc (under administration), the successor to the Private Motorists Insurance Co Ltd, yesterday won its High Court claim that legal proceedings brought against it by former associated companies should be dismissed.

The claims were made by two companies in liquidation, the Private Motorists' Protection Association Ltd (PMPA) and the Private Motorists' Provident Society Ltd.

The President of the High Court Mr Justice Costello in a reserved judgment said the insurance company had dominated the motor insurance market in this country in the early 1980s. The group of companies collapsed disastrously towards the end of 1983.

The actions arose out of a scheme which allowed motorists to pay insurance premiums by instalments.

The judge said that in preparing accounts of the group of companies for the year to December 1978, it was claimed it became clear the Provident Society was owed £970,000 in uncollected debts from motorists who had got loans.

It was claimed the directors decided the uncollected debts would be assigned by the Provident Society to the PMPA which agreed to purchase the debts and paid the Provident Society a total of £450,000 by March 1980.

It was alleged the primary purpose of the purported sale and purchase of uncollected debts was to avoid showing the unpaid £970,000 in Provident Society accounts that the PMPA exceeded its powers in purchasing the debt and that the £450,000 was the property of the PMPA.

The Provident Society pleaded that in June 1994 it consented to judgment in favour of the PMPA for £450,000 but claimed it should be indemnified by the insurance company.

In the second action, which started in August, 1995, the Provident Society claimed two other sums, £50,100 (dating from 1978) and £73,801 (dating from 1977) was owed to it by the insurance company. Interest was also claimed.

Mr Vincent Clancy, the examiner to Primor plc, had told of the difficulty of preparing a defence in relation to the period between 1976 and 1978. One of the group directors, Mr Joe Moore, a central figure, had died in 1989 another was in his 80s and quite ill; and a third was in his 90th year.

Mr Clancy had stated that the ongoing business of Primor was sold to GRE in 1989 and Primor currently had no employees. There was a real doubt as to whether all relevant documents could be located.

Mr Justice Costello said there was a delay in instituting claims against Primor. One claim was initiated in 1993 and related to loans made in 1978 and subsequently. The second action related to loans made in 1976 and afterwards and was initiated in 1995. Such delays by any standard must be regarded as inordinate.

The judge said he could not agree a fair trial could now be held. It seemed the delay had deprived the insurance company of the opportunity of getting witnesses. There had been inordinate and inexcusable delay and that would prejudice a fair trial.