Doyle v Irish National Insurance Company Plc

• Jurisdiction: Ireland
• Judge: Mr Justice Kelly
• Judgment Date: 30 January 1998
• Neutral Citation: [1998] IEHC 13
• Court: High Court
• Docket Number: [1997 No. 3729P]
• Date: 30 January 1998

[1998] IEHC 13

THE HIGH COURT

No. 3729p/1997

DOYLE v. IRISH NATIONAL INSURANCE CO. PLC

BETWEEN

BERNARD DOYLE

PLAINTIFF

AND

IRISH NATIONAL INSURANCE COMPANY PLC

DEFENDANT

Citations:

HEYMAN V DARWINS LTD 1942 AC 356

MUSTILL & BOYD LAW & PRACTICE OF COMMERCIAL ARBITRATION 2ED 112

BREMER VULKAN SCHIFFBAU UND MASCHINENFABRIK V SOUTH INDIA

SHIPPING CORPORATION 1981 1 AER 289

MACKENDER V FELDIA AG 1967 2 QB 590

HARBOUR ASSURANCE CO LTD V KANSA GENERAL INTERNATIONAL ASSURANCE CO LTD 1993 3 AER 897

HURST V BRYK 1997 2 AER 283

PARKARAN LTD V M & P CONSTRUCTION LTD 1996 1 IR 83

H E DANIEL LTD V CARMEL EXPORTERS & IMPORTERS LTD 1953 2 QB 242

STEBBING V LIVERPOOL & LONDON & GLOBE INSURANCE CO LTD 1917 2 KB 433

Synopsis

Arbitration

Stay; application; arbitration clause; validity; jurisdiction; whether arbitration clause contained in a contract is independent of the main contract; whether clause survives if contract is rescinded due to non-disclosure of material fact; whether arbitrator has jurisdiction to rule upon existence of contract under which appointed; whether terms of clause wide enough to cover dispute; s.5 Arbitration Act, 1980 Held: Arbitration clause survived independently of the original contract and was wide enough to cover dispute (High Court: Kelly J.30/01/1998)

Doyle v. Irish National Insurance Company Plc. - [1998] 1 IR 89 -[ 1998] 1 ILRM 502

1 JUDGMENT of Mr Justice Kelly delivered on the 30th day of January 1998.

2 On Monday last I acceded to the Defendant's application to stay these proceedings pursuant to the provisions of Section 5 of the Arbitration Act, 1980. On that occasion I indicated that I would state my reasons for making that Order today. I now do so.

3 From 1983 until 1996 the Defendant was the motor insurer of the Plaintiff. On the 27th October, 1990 the Plaintiff was involved in an accident which caused personal injuries to his son. The Plaintiff's son made a claim against the Plaintiff arising from the accident. The Plaintiff sought indemnity from the Defendant in respect of any liability for this claim.

4 In the course of investigating the son's claim the Defendant became aware that the Plaintiff had been convicted of the offence of being in charge of a mechanically propelled vehicle with excess alcohol in his blood contrary to Section 50 of the Road Traffic Act, 1961. That conviction had been recorded at Cappawhite District Court on the 10th May, 1983. The Defendant contends that that conviction was not disclosed to it at any renewals of the policy of insurance or indeed at any time. The Defendant takes the view that the failure to disclose this conviction amounts to a non-disclosure of a material fact. Accordingly, on the 5th January, 1996 the Defendant wrote to the Plaintiff and indicated that it was exercising its entitlement to avoid the policy of insurance on the grounds of non-disclosure of a material fact. It also notified the Plaintiff that it would not be indemnifying him in respect of his son's claim. The letter went on to point out that the effect of the Defendant's avoidance was to retrospectively invalidate each renewal of the policy which occurred after he had been convicted of the offence in question.

5 On the 12th January, 1996 the Defendant sent a cheque for £3,433.16 to the Plaintiff. It was accompanied by a letter which indicated that the cheque was a refund in respect of "unexpired term on the above policy following cancellation of same".

6 The Plaintiff does not accept the validity of the Defendant's purported avoidance of the policy of insurance. Consequently he began these proceedings on the 2nd April, 1997 seeking specific performance of the contract of insurance.

7 The Defendant countered by bringing the motion which I ruled on last Monday and which sought to stay these proceedings on foot of an arbitration clause contained in the policy of insurance pursuant to the provisions of Section 5 of the Arbitration Act, 1980.

8 The insurance policy contained the following condition

"All differences arising out of this policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision of two Arbitrators, one to be appointed in writing by each of the parties within one calendar month after having been required in writing so to do by either of the parties, or, in case the Arbitrators do not agree, of an Umpire appointed in writing by the Arbitrators before entering upon the reference. The Umpire shall sit with the Arbitrators and preside at their meetings and the making of an award shall be a condition precedent to any right of action against the company. If the company shall disclaim liability to the insured for any claim hereunder and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration under the provisions herein contained then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder".

9 The Plaintiff's answer to the application to stay the proceedings can be stated simply. He says that since the insurance company is effectively treating the policy as void with retrospective effect, it cannot seek to rely upon the arbitration clause because if the Defendant is correct, that clause has also been avoided as part of the policy. He says that his position is fortified by the return of...