Hu v Duleek Formwork Ltd and Another

• Jurisdiction: Ireland
• Judge: Mr Justice Michael Peart
• Judgment Date: 05 February 2013
• Neutral Citation: [2013] IEHC 50
• Court: High Court
• Date: 05 February 2013

[2013] IEHC 50

THE HIGH COURT

Record Number: No. 5209P/2011

Hu v Duleek Formwork Ltd (in liquidation) & Aviva Direct Irl Ltd t/a Aviva

Between:

Yun Bing Hu

Plaintiff

And

Duleek Formwork Limited (In Liquidation)

And

Aviva Direct Ireland Limited t/a "Aviva"

Defendants

RSC O.19 r28

CIVIL LIABILITY ACT 1961 S62

ROAD TRAFFIC ACT 1961 S76(1)

POWER v GUARDIAN PMPA INSURANCE LTD UNREP LAFFOY 2.2.2007 2007/51/10795 2007 IEHC 105

MCCARRON v MODERN TIMBER HOMES LTD UNREP KEARNS 3.12.2012 2012 IEHC 530

DUNNE v P J WHITE CONSTRUCTION CO LTD 1989 ILRM 803

MCKENNA v BEST TRAVEL LTD & ORS 1995 1 IR 577 1995 2 ILRM 471 1995/10/2847

Insurance law – Personal injuries – Privity of contract – Failure to pay excess – Negligence – Compensation – Repudiation of claim – Order to strike out proceedings – Whether insurer entitled to have claim struck out – Rules of the Superior Courts Order 19, rule 28 – Civil Liability Act, 1961.

Facts The plaintiff whilst employed as a carpenter had sustained an injury and commenced proceedings against his employer, the first named defendant, which was now in liquidation. The first named defendant had insurance with Aviva. At the time the original proceedings were issued and served on the first named defendant the excess payment of €1000 under the insurance policy had not been paid. Aviva repudiated liability for the claim and having been joined the proceedings issued the present motion seeking an order striking out these proceedings pursuant to Order 19, rule 28 of the Rules of the Superior Courts. On behalf of the plaintiff it was contended that he had been unaware that the excess had not been paid and had he been informed, pressure could have been brought on the first named defendant or the liquidator to ensure that the payment was made. On behalf of Aviva it was submitted that there was no privity of contract between the parties and that the only party entitled under law to challenge the decision to decline cover for this accident to the plaintiff was the first named defendant.

Held by Peart J in striking out the proceedings against Aviva: The court was satisfied that the plaintiff had no privity of contract with Aviva could not seek to enforce the contract of insurance as between the first named defendant and Aviva. Section 62 of the Civil Liability Act of 1961 did not provide the plaintiff with a remedy in this case against Aviva. In order to plead negligence (an amendment which counsel for the plaintiff had contended for) there would have to be in the first instance a duty of care owed to the plaintiff. The court could not see how Aviva were under a duty of care to the plaintiff to ensure that he had been provided with information as to whether or not the insured had complied with the conditions of the insurance policy with Aviva.

1 The plaintiff is a carpenter, and while working for his employer at a building site in Spencer Dock in Dublin on the 17 ^th August 2009, he sustained an injury to his thumb. He believes that this injury was sustained as a result of negligence on the part of his employer the first named defendant. He commenced these proceedings with a view to obtaining compensation for these injuries, and of course believed that his employer had the benefit of a contract of insurance in respect of any claim successfully brought against him on the basis of negligence. He has since learned that while his employer had a contract of insurance which was intended to cover employer's negligence, the first named defendant breached one of the conditions precedent to liability, namely the payment of an excess of €1000.

2 The first named defendant has gone into liquidation, and the plaintiff has obtained judgment in default of appearance against that defendant by order of the High Court obtained on the 28 ^th September 2011. Damages have yet to be assessed.

3 These proceedings, when first issued, named only the plaintiff's employer as a defendant. However, when the plaintiff discovered in due course that the defendant's insurer "Aviva" was repudiating liability for this claim, he sought to have Aviva added as a defendant. That order was granted on the 7 ^th March 2012, and the Personal Injury Summons was amended accordingly on the 9 ^th May 2012 and was served immediately thereafter.

4 Having entered an appearance, Aviva issued a Notice of Motion dated 22 ^nd June 2012 seeking an order to strike out these proceedings pursuant to Order 19, rule 28 RSC on the grounds that they disclose no reasonable cause of action against Aviva. Alternatively, Aviva seek to have the proceedings struck out under the inherent jurisdiction of the Court on that ground and/or on the basis that they are bound to fail.

5 The relief sought against Aviva is set forth as being:

"A declaration that any sum awarded by this Honourable Court at the trial of this action and any costs awarded to the plaintiff as a result of his injuries constitutes an award for a wrong and the second named defendant is obliged, under the terms of the policy of insurance entered into with the first named defendant herein, to pay the required monies to the plaintiff and to discharge any sum awarded for damages and costs pursuant to the provisions of the policy of insurance".

The affidavit sworn by Sandra Murphy of Aviva on the 22 ^nd June 2012 reveals that Aviva first received a notification of the plaintiff's accident on the 3 ^rd September 2009, being just over two weeks after it had occurred. It appointed a firm of loss adjusters to investigate. It reveals also that following the application by the plaintiff to the Personal Injuries Assessment Board, the first named defendant failed to pay its contribution to PIAB's fees despite being requested to do so. By the time the present proceedings were first issued the first named defendant was in liquidation.

6 It appears also that the excess payment of €1000 under the insurance policy, a condition precedent to liability to the insured, had not been paid by the insured by the time these proceedings were issued and served on the first named defendant. The loss adjusters wrote to the liquidator informing him that unless that excess was paid, cover under the policy would be declined. Not having received this payment by the 25 ^th March 2011, the loss adjusters wrote again on that date to state that cover was declined.

7 The plaintiff was unaware of these events at that time. In a replying affidavit sworn on the plaintiff's behalf, Ivan Williams, solicitor, states that if the plaintiff had been made aware that the excess payment of €1000 had not been paid by the insured or the liquidator, it is likely that some form of pressure could have been brought to bear on the first named defendant or the liquidator to ensure that the payment was made, including by possible court order. Alternatively, it is stated, the plaintiff would have endeavoured to discharge that payment himself in order to ensure that his claim would be met under the policy. Mr Williams had been informed by letter dated 25 ^th March 2010 that Aviva had declined cover, but no reason was provided in that letter. The plaintiff did not become aware of the reason until he received Aviva's affidavit grounding this application.

8 Mr Williams goes on to state that the plaintiff is still even at this late stage prepared to himself make the excess payment to Aviva. He complains also about the difficulties which he encountered in finding out the reason for the refusal of cover. He makes the point that it took 14 months to get that information. He makes the point in his affidavit that depriving the plaintiff of an opportunity to make that payment to Aviva himself has wrought an injustice on the plaintiff by him effectively being unable to...