The Gazette 1988

OCTOBER 1988

GAZETTE

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

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