Brady v Irish National Insurance Company Ltd

• Jurisdiction: Ireland
• Judge: (O'Hanlon J.),O'Hanlon J.,
• Judgment Date: 14 June 1985
• Neutral Citation: 1985 WJSC-HC 873
• Docket Number: 4899P/1983
• Court: High Court
• Date: 14 June 1985

1985 WJSC-HC 873

The High Court

4899P/1983

BRADY v. IRISH NATIONAL INSURANCE COMPANY LTD

Patrick Brady

v

Irish National Insurance Co. Ltd.

Citations:

FACTORIES ACT 1961

FRASER V B N FURMAN (PRODUCTIONS) LTD 1967 3 AER 57, 1967 1 WLR 898

INSTITUTE OF YACHT CLAUSES NO 16

MARINE INSURANCE ACT 1906 S18

MARINE INSURANCE ACT 1906 S18(3)(b)

MARINE INSURANCE ACT 1906 S33

MARINE INSURANCE ACT 1906 S33(3)

RIVERSTONE MEAT CO V LANCASHIRE SHIPPING CO LTD 1960 1 AER 193

SEA CARRIAGE OF GOODS ACT 1924 AUSTRALIA

WOODFALL & RIMMER LTD V MOYLE & ANOR

Synopsis:

CONTRACT

Insurance

Marine insurance - Liability - Exception - Insured owner of motor cruiser - Vessel laid up - Intermittent maintenance effected by owner while vessel laid up - Insured removing water geyser from Calor gas cylinder - Cooker and geyser coupled to cylinder's supply of gas - Geyser supply pipe left connected to cylinder but disconnected from geyser - Authorised friend of insured attempting to use galley's cooker in absence of insured - Explosion - Defendant insurers disclaiming liability - Insurers exempted from liability where loss resulted from want of "due diligence" by insured - Exemption not applicable - Warranty by insured that vessel, while laid up, would not be used for any purpose other than dismantling, fitting out or customary overhauling - Breach of warranty by insured exempting insurer from liability - Marine Insurance Act, 1906, s. 33 - (1983 No. 4899P - O'Hanlon J. - 14/6/85). - [1986] IR 698 - [1986] ILRM 669

Brady v. Irish National Insurance

INSURANCE

Insurer

Liability - Exception - Marine insurance - Insured owner of motor cruiser - Vessel laid up - Intermittent maintenance effected by owner while vessel laid up - Insured removing water geyser from Calor gas cylinder - Cooker and geyser coupled to cylinder's supply of gas - Geyser supply pipe left connected to cylinder but disconnected from geyser - Authorised friend of insured attempting to use galley's cooker in absence of insured - Explosion - Defendant insurers disclaiming liability - Insurers exempted from liability where loss resulted from want of "due diligence" by insured - Exemption not applicable - Warranty by insured that vessel, while laid up, would not be used for any purpose other than dismantling, fitting out or customary overhauling - Breach of warranty by insured exempting insurer from liability - Marine Insurance Act, 1906, s. 33 - (1983 No. 4899P - O'Hanlon J. - 14/6/85). - [1986] IR 698 - [1986] ILRM 669

Brady v. Irish National Insurance

WORDS & PHRASES

"Due diligence"

Explosion - Defendant insurers disclaiming liability - Insurers exempted from liability where loss resulted from want of "due diligence" by insured - Exemption not applicable - Warranty by insured that vessel, while laid up, would not be used for any purpose other than dismantling, fitting out or customary overhauling - Breach of warranty by insured exempting insurer from liability - Marine Insurance Act, 1906, s. 33 - (1983 No. 4899P - O'Hanlon J. - 14/6/85). - [1986] IR 698 - [1986] ILRM 669

1 (O'Hanlon J.)14th June, 1985

2 Motor Cruiser damaged by explosion – claim for indemnity under insurance policy – interpretation of policy – Marine Insurance Act, 1906, ss. 17, 18, 33 – meaning of "due diligence" to be used by assured – interpretation of special warranties as to seaworthiness and fitness for purpose and use intended and as to limitations on use during laid up period – whether insurer entitled to repudiate liability.

3 Judgment delivered by O'Hanlon J.,the 14th June, 1985.

4 The facts are not in dispute in this case, and the issue to be determined between the parties concerns the proper interpretation to be placed on the terms of a contract of insurance made between them on the 9th July, 1982 whereby the Defendant agreed to insure the Plaintiff against loss of, or damage to, a Motor Cruiser called "Dutch Maid", and against liabilities to third parties arising out of user of the said vessel or the Plaintiff's interest therein.

5 The Plaintiff bought the vessel, in a second-hand condition, in the year 1982 with a view to using her as a Shannon cruiser, and to some extent for sailing on the canals. The insurance contract was based on a Proposal Form dated the 21st June, 1982, which contained the following questions and answers, (inter alia):-

"18. Who undertakes repairs, overhauls, or alterations when necessary?" Answer: "Self if possible".

6 a "24. (a) Where will the Vessel be laid up? (State whether on mud berth, ashore or afloat)?" Answer: "Afloat Canal or Shannon".

7 b "(b) State the exact period the vessel will be laid-up, e.g. 1st November to 31st March," Answer: "Nov. toApril".

8 c "(c) State nature of supervision during such period".

9 Answer: "Supervised mooring."

10 The Proposal Form contained the usual provision at the end, asfollows:-

"I warrant that the above statement and particulars are correct and complete. I agree that this proposal shall be the basis of the contract between me and the Company".

11 Having used the cruiser on the Shannon during the Summer of 1982 the Plaintiff proceeded to lay her up for the Winter at Lowtown, on the canal between Dublin and the Shannon. Apparently a marina has been established at Lowtown, at an old C.I.E. Depot, and large numbers of boats are laid up there for the Winter, either afloat or on the hard. A friend of the Plaintiff, called Eric Timon, also a boatowner, and a fellow-employee of the Plaintiff in the E.S.B., was another to avail of these facilities, and his boat was laid up on the hard, immediately adjoining where the "Dutch Maid" was afloat.

12 Both men used the laying-up period to effect necessary works of maintenance and overhaul on their vessels, and co-operated with one another in doing so – to the extent that each had a key to the other's boat and was free to go on board whenever they visited Lowtown to check that all was well, and at times, to carry out somework for the benefit of the other party. They usually travelled down from Dublin together at weekends, and would work away on the boats, each concentrating at times on his own task and at other times combining their energies to deal with one of the vessels. If one happened to go down without the other, as happened from time to time, that one would set to work on whichever vessel needed most attention for the time being. No one else had a key to either vessel save the two ownersconcerned.

13 On Sunday, 6th March, 1982, the Plaintiff went down on his own to Lowtown and did some work on his boat. Its equipment included a cooker and refrigerator, operated by Calor gas, and a geyser located in the toilet area which was a source of hot water when required and which was also fuelled by Calor gas. All three pieces of equipment were connected to a single cylinder. On the date referred to, the Plaintiff knew that the geyser was giving trouble and he removed it to his car to bring it up to Dublin for servicing. Before doing so he disconnected the regulator which connected the three pieces of equipment to the gas cylinder, so that for the time being no gas was coming from the cylinder. There was a stop-cock attachment provided on the cooker and refrigerator which would enable the supply of gas to these fittings to be cut off, while allowing it to come through to other equipment, but no stop-cock was provided on the geyser, and when he disconnected it, the Plaintiff left the connecting pipe hanging loose and open. He anticipated that he would have the geyser back in commission by the following weekend.

14 Next day, Monday, 7th, June, the Plaintiff called in to Mr. Timon' place of employment to have a chat with him, but was told that he was "out on a job." Had Mr. Timon been there, the Plaintiff says that he would, in the normal course of things have told him about such work as he had carried out on the Sunday,including the removal of the geyser from his own boat for servicing purposes. Having missed his friend on the Monday, he called again on the Tuesday, to be told that Mr. Timon was on leave. Unknown to the Plaintiff, Mr. Timon had made a late decision the previous evening to spend Tuesday down in Lowtown working on his boat. While there, as his own boat was on its side on the hard, he availed of the galley facilities on the Plaintiff' boat, reconnected the regulator on the Calor gas cylinder, and unwittingly caused two very serious explosions which damaged the vessel extensively and caused injuries to Mr. Timon and to two other men who were in the vicinity. Once he reconnected the regulator, put in a new cylinder, and attempted to light the cooker for a second time, gas had escaped from the open pipe which normally served the geyser and accumulated in the lower reaches of the vessel, and this was clearly the cause of the explosions which took place.

15 The outcome of this unfortunate occurrence was that the Plaintiff' motor cruiser had to be regarded as a total loss, subject to an allowance for the salvage value of the hull, and he has had an intimation from the injured parties of their intention to claim damages against him fornegligence.

16 In this situation the Plaintiff has applied to the Defendant, as his insurer, to indemnify him against the damage to his vessel, and to undertake responsibility for meeting any claims which may be established by the third parties, up to the limit of £100,000 referred to in the policy.

17 The Defendant contends that in the circumstances of this case the obligation to provide such indemnity does not arise, by reason of certain clauses and conditions which are found in the policy. The particular provisions relied on are as...