The Gazette 1981

GAZETTE

CEMBER

partly of chance) for stakes hazarded

by the players." However, it was not

"unlawful gaming" as defined by

Section 4 (1) of the Act, because at the

time of the offence, unlawful gaming

by means of slot machines was con-

fined to slot machines not prohibited

by Section 10; and it was agreed that

the machine the subject of this case

did not fall into that category. Counsel

for the Defendant argued that when

Section 9 (1) prohibited a licencee

from permitting "gaming" on licensed

premises the prohibition applied only

to "unlawful gaming." It was con-

tended that in these Sections and

elsewhere in the Act where the word

"gaming" was used, that it should be

read as "unlawful gaming."

Held

(per Henchy J.):

(1) That in the Act "gaming" did not

equate to "unlawful gaming";

(2) Gaming prohibited on licensed

premises was not confined to

"unlawful gaming." Accordingly

the appeal was dismissed.

As to the specific questions put by the

District Justice, the Supreme Court

replied:

(1) For the purpose of Section 9(1)

there was no distinction to be

drawn

between

"unlawful

gaming" and "gaming."

(2) (a) The slot machine in this case

constituted a gaming in-

strument for the purpose of

Section 2.

(b) The operation of this slot

machine by a player con-

stituted "gaming" as defined

by Section 2.

The Court noted that as the law now

stands, following the passing of the

amending Act of 1979, that if a

licencee of licensed premises (which

expression included more than public

houses) permitted gaming as defined,

and whether unlawful or not, in licen-

sed premises, he committed an

offence, unless he was exempted by

Section 9 (2) or Section 9 (3); and the

conviction might be recorded on the

Licence.

D.P.P. (Hurlihy) v. Hannon

Supreme Court (per Henchy J. with

Griffin and Kenny JJ.) - 4 March

1981 —unreported.

INSURANCE CONTRACTS

Necessity to complete insurance pro-

posal forms accurately — there must

be full disclosure of all matters

material to the risk against which the

Insured is seeking Indemnity.

In 1976 the Plaintiffs ("Chariot"),

whose directors were Mr. and Mrs.

W., bought the "Chariot Inn" in

Ranelagh, Dublin. Due to certain re-

novations which had to be carried out

there, the directors decided to store

some furnishings temporarily in other

premises in Lower Leeson Street,

Dublin, owned by Consolidated

Investment Holdings Limited, whose

shares had been purchased by Mr. W.

and his business partner, although re-

gistered in the respective maiden

names of their wives. The Insurance

Brokers acting for Mr. W. were the

second-named Defendants and more

specifically their employee Mr. H. The

Leeson Street premises were insured

with the Sun Alliance Insurance

Company Limited, and when the

additional furnishings were stored

there additional insurance cover was

arranged with the Sun Alliance,

valuing the furnishings at £15,000.

Subsequently malicious damage was

caused to the premises and the fur-

nishings by squatters and a claim was

lodged with the local authority. The

claim was eventually settled and

Chariot were paid a sum of £8,000

directly by the Sun Alliance in respect

of the damage to their furnishing.

Originally Chariot had been

insured with the General Accident but

when extended cover on the premises

was requested the premium sought

was increased by 50%. Chariot were

dissatisfied with this and requested its

then Brokers to ask for tenders for the

insurance. The first-named defen-

dants sent in the lowest tender. Mr. H.

of the second-named Defendants, who

had remained on good terms with the

Plaintiffs, obtained the proposal forms

and called to the Plaintiffs' premises

with them in order to have same com-

pleted. One of these proposal forms

related to material damage. Mr. H

asked the questions and filled in the

answers and disclosed that the

negotiating brokers were the second-

named Defendants. He advised that it

was totally unnecessary to disclose

the facts about the fire in the Leeson

Street premises as they were dealing

with a different company and only

had to show what was relevant to the

Chariot Inn. Policies were sub-

sequently issued to Chariot in respect

of the various forms of liability for

which cover had been sought.

On 14 May 1978 a serious fire

occurred causing extensive damage to

the Chariot premises. In June 1978,

the

first-named

Defendants

repudiated the policy on the grounds

of non-disclosure of the fire in Leeson

Street. The Plaintiffs then com-

menced this action, claiming a de-

claration that the policy issued by the

first-named Defendant insurance

company giving indemnity against

material loss was valid and, as against

the second-named Defendant brokers

for damages for breach of contract

and negligence.

In the High Court the trial judge de-

cided that the non-disclosure of the

fire in Leeson Street was not a

material fact and therefore the policy

issued by the first-named defendants

was valid and he dismissed the claim

against the brokers. The first-named

Defendants appealed.

On appeal Kenny, J. emphasised that

a contract of insurance required

the highest standard of accuracy,

good faith, candour and disclosure

by the insured when making a

proposal for insurance to an insur-

ance company. Any mis-statement in

the answers given when they related to

a material fact affecting the insurance

entitled the insurance company to

avoid the policy. What was material

was a matter or circumstance which

would reasonably influence the

judgment of a prudent insurer in de-

ciding whether he would take the risk

and, if so, in determing the premium

he would demand. The generally

accepted test of materiality was that

stated in Section 18 (2) of the Marine

Insurance Act 1906 i.e. "every cir-

cumstance is material which would in-

fluence the judgment of a prudent

insurer in fixing the premium or

determining whether he will take the

risk." This test was followed by L. J.

McKinnon in

Zurich

General

Accident and Liability Insurance Co.

Ltd.

Morrison

[1942] 1 All E.R.

529 where McKinnon LJ. went on to

state:

"Under the general law of insur-

ance an insurer can avoid a policy

if he proves that there has been mis-

representation or concealment of a

material fact by the insured. What

is material is that which would in-

fluence the mind of a prudent

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