364 / 370
GAZETTE
OCTOBER 1988
contract in the manner in w h i ch the works
were constructed. The High Court held that
t he d e f e n d a n ts w e re n ot o b l i g ed to
indemnify the Plaintiffs.
The Supreme Court held: It is well settled
that in constructing the terms of a policy the
cardinal rule is that the intention of the
parties must prevail, but the intention is to
be looked for on the face of the policy,
including any d o c ume n ts incorporated
therewith, in the words in wh i ch the parties
have themselves chosen to express their
meaning. The Court must not speculate as
to their intention, apart from their words, but
may, if necessary, interpret the words by
reference to the surrounding circumstances.
The whole of the policy must be looked at,
and not merely a particular clause. See Ivamy
on Insurance Law, 5th ed. (1986) at
p . 3 3 3 / 3 3 4.
In their defence the Defendants relied
upon the judgment of Devlin J in
West Wake
Price & Co. -v- Ching
(1957)1 W.L.R. 45,
where a firm of accountants had a PI policy
to cover loss against any claim " i n respect
of any act of neglect, default or error arising
out of the conduct of their business as
a c c o u n t a n t s ". In t h a t c a se a clerk
fraudulently converted clients money to his
o w n use. It was held that the claim on the
policy failed as the claim was a mixed one
of fraud and negligence.
Griffin J. though did not see h ow an act
amounting to both a tort and a breach of
contract could enable the insurers to avoid
liability under a PI policy on the basis that
it was a mixed claim — " if that were the true
legal position, such a policy would be of little
avail to a professional man, such as solicitor,
accountant, architect, engineer, doctor,
dentist etc., as the same act of negligence
causing damage to the client is almost
invariably a breach of contract also — see
for example,
Finlay -v- Murtagh,
Supreme
Court, 21 November, 1978.
The Public Liability Policy provided that the
Defendants would indemnify the insured " i n
respect of accidents happening". The Court
had reservations as to wh e t h er w h at
occurred was an accident but considered it
unnecessary to express any concluded view
on the matter.
The Court considered that (1) the intention
of the parties must prevail in the cons-
truction of the Public Liability Policy, (2) the
intention of the parties clearly appeared to
be that cover was intended for w h at the
ordinary reasonable man wo u ld understand
by an " a c c i d e n t" occurring, and (3) the
intention of the parties was not that this
policy should apply to the events w h i ch
occurred.
The appeal was allowed to the extent that
the Plaintiffs were held to be entitled to be
indemnified by the Defendants in respect of
the PI policy.
Rohan Construction
Limited
and
Rohan
Group pic -v- Insurance
Corporation
of
Ireland pic — Supreme Court (per Griffin J.)
- 10 April 1987 -
unreported.
William Johnston
iv