4.10.5Encashment : Active Concealment of Dishonest Intention

The policy Conditions stated that the Policy may be encashed at any time after it has been in force for two complete years. As already highlighted in Section 3.7.5, the silence of First National / Irish Life on this matter constitutes a Misrepresentation.

But this is also an onerous condition present in the Endowment Mortgage Contract. In order that such a condition should become binding as a part of the contract, it must be brought to our notice before or at the time the contract was made. It was not. (See Section 2.2.2: The Exemption Clause.)

In addition, as an Endowment Mortgage Contract is a Contract of Adhesion, First National / Irish Life would be burdened with showing (objectively) that such a condition was brought to our attention and explained prior to or at the time of contract, before it could be given any contractual effect.

(See Section 2.2.3: The Standard Form of Contract.)


As detailed in Section 4.4, a prima facie decoding of the Encashment Value clearly implies that there is 100% investment of the Premiums paid to Irish Life into the Homeway Mortgage Fund (Series 4). This decoding educes an understanding of ‘investing’ that is wholly compatible with THE SCHEDULE, and with the pre-contract representations of First National when giving advice and of First National / Irish Life in their Mortgage Quotations. As such, it affirms the Misrepresentation already exposed above.

But the evaluation of the Encashment Value cannot be ascertained from the contract documentation as provided —— it cannot be determined. Determination of the Encashment Value can only be effected by incorporation of the ‘rules and resolutions’ into the contract. (See Appendix 4/1.) These ‘rules and resolutions’ indicate that many matters relating to the value of the Endowment Policy to the Policyholder are at the discretion of the Life Assurance Company or the Assurance Company’s Actuary.

In effect, these ‘rules and resolutions’
constitute additional clauses of the contract. These additional clauses have an important bearing on the interpretation of the contract.

Neither the existence of the ‘rules and resolutions’, nor their incorporation into the contract, nor an explanation of their bearing on the contract, was ever mentioned prior to or at the time of contract.

Any onerous or limiting clauses within the ‘rules and resolutions’ cannot therefore become binding as part of the contract.

(See Section 2.2.2: The Exemption Clause. See also Section 2.2.3: The Standard Form Contract.)


The failure by both First National and Irish Life to disclose the material fact that the ‘rules and resolutions’ are an intrinsic part of the contract, and their failure to adequately explain the import of these ‘rules and resolutions’, constitutes a Misrepresentation.

(See Section 2.3.4: The Duty to Disclose and Silence as a Misrepresentation. See also Section 2.8.1: The Right to Revoke the Contract, and Section 2.8.3: The Measure of Damages as a result of a successful Action based on the Common Law liability under Negligent Misrepresentation.)


The application of extreme ingenuity, evidenced, by the tortuous manner in which the key parameters necessary to the understanding of the policy definition of Encashment Value ultimately lead to the ‘resolutions’, and also by the covert manner in which the ‘rules and resolutions’ are themselves camouflaged within the Policy Conditions text
(see Section 4.4), must surely come within the ambit of ‘active concealment'.

This concealment again deceives the Policyholder and further compounds the pre-contract misrepresentations by First National and Irish Life. The existence of ‘dishonest intention’ will be evidenced in the following Sections by exposing the pre-contract misrepresentations of Investment and Benefits, and will become even more evident as we expose the many other instances of fraudulent misrepresentation in the Chapters that follow.

(See Section 2.3.2: Fraudulent Misrepresentation. See also Section 2.8.1: The Right to Revoke the Contract, and Section 2.8.2: The Measure of Damages as a result of a successful Action based on the Common Law liability under Fraudulent Misrepresentation.)


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