Previous Page  590 / 822 Next Page
Information
Show Menu
Previous Page 590 / 822 Next Page
Page Background

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