Marlin Apartments Ltd Trading as Marlin Hotel Dublin v Allianz Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Denis McDonald
• Judgment Date: 19 September 2024
• Neutral Citation: [2024] IEHC 550
• Court: High Court
• Docket Number: [Record No. 2021/1485P]

Between

Marlin Apartments Limited Trading as Marlin Hotel Dublin

Plaintiff

and

Allianz Plc

Defendant

[2024] IEHC 550

[Record No. 2021/1485P]

THE HIGH COURT

COMMERCIAL

Insurance policy – Extensions of cover – Business interruption – Plaintiff seeking to be indemnified by the defendant – Whether an undiagnosed or asymptomatic case of COVID-19 at the hotel premises caused the Government imposed restrictions on the use of the hotel

Facts: The plaintiff, Marlin Apartments Ltd, sought to be indemnified by the defendant, Allianz PLC, in respect of losses alleged to have been sustained by it as a consequence of the restrictions imposed on the normal operation of its premises in the wake of the COVID-19 pandemic. The plaintiff had an insurance policy with the defendant during the relevant periods for which it paid an annual premium of €80.339.66. There were two extensions of cover under the policy which were relied upon by the plaintiff in the proceedings. Extension 6 provided cover for business interruption resulting from the occurrence of a notifiable disease at the hotel premises which causes a “competent authority” to impose restrictions on the use of the hotel premises. Extension 7 provided cover for business interruption caused by damage by an insured peril to other premises within a 1.5 kilometre radius of the hotel.

Held by the High Court (McDonald J) that there was no evidence to show that the closure of the hotel was required in response to any “infection” of any premises in the vicinity of the hotel. He concluded that there was no basis to suggest that Extension 7 had been triggered. He rejected the plaintiff's claim insofar as it was based upon Extension 7. He found that there were, at least, two occurrences of COVID-19 at the hotel during the third period in issue. In his view, the defendant’s submissions on the meaning of Extension 6 constituted an attempt to re-write the clause; in advancing the “localised nature of the peril” argument, the defendant was seeking to set up the existence of cases outside the premises as a basis for disapplying cover even where an insured proves each element of the peril. He held that each occurrence forming the spread of COVID-19 referred to in the recitals to the Amendment Regulations of 23rd December 2020 was equally effective in the decision to enact them, such that each occurrence could be said to be the concurrent proximate cause of their enactment. He believed that the reasonable person would understand that Extension 6 was intended to provide cover in respect of any occurrence of such a disease at the premises (whether diagnosed or not) which leads (either on its own or in combination with all other occurrences of that disease outside the premises) to the imposition by a competent authority of restrictions on the operation of the premises. He did not believe that the plaintiff’s claim could be defeated by the application of the “but for” test.

McDonald J held that the plaintiff’s claim under Extension 6 in respect of the first and second set of restrictions on its business (imposed respectively in March and September 2020) must be dismissed. In so far as the restrictions imposed on 23rd December 2020 were concerned, he held that cover had been triggered under Extension 6.

Claim dismissed in part.

JUDGMENT of Mr. Justice Denis McDonald delivered on 19 ^th September 2024 .

Table of Contents

Introduction	2
The agreed facts	5
Extension 7	9
Extension 6	11
The evidence of Professor Patrick Mallon	12
The evidence of Professor Mary Horgan	30
The evidence of Dr. Mark Roe	34
The challenge to the admissibility of Professor Mallon's evidence	56
What is the meaning to be given to the word “occurrence” in Extension 6 of the policy?	68
What meaning is to be given to the words “at the Premises” in Extension 6	76
Does the evidence before the Court demonstrate, on the balance of probabilities, that there was an occurrence of COVID-19 at the Marlin Hotel during any of the three periods in issue?	77
Period 3	78
Period 2	80
Period 1	88
The additional issues that arise in the wake of the finding in respect of period 3	92
Is Extension 6 limited to “localised” cases of COVID-19 at the hotel?	92
Can it be said that an undiagnosed or asymptomatic case of COVID-19 at the hotel caused the Government imposed restrictions on the use of the hotel? If so, is that within the ambit of what was contemplated by Extension 6?	97
The application of the “but for” test	103
The belated attempt by the plaintiff to rely on Regulations enacted after 23rd December 2020	106
Conclusion	107
SCHEDULE OF CONFIDENCE INTERVALS	108

Introduction

1 . In these proceedings, the plaintiff seeks to be indemnified by the defendant insurer in respect of losses alleged to have been sustained by it as a consequence of the restrictions imposed on the normal operation of its premises in the wake of the COVID-19 pandemic. The plaintiff is the operator of the Marlin Hotel at 11 Bow Lane East, St. Stephen's Green, Dublin. The hotel premises includes two restaurants called “Canteen Ireland” and “Marlin Bar & Grill”, together with a co-working area, a coffee dock, a public bar and a gymnasium. The hotel has 300 bedrooms.

2 . The plaintiff had an insurance policy with the defendant during the relevant periods for which it paid an annual premium of €80.339.66. While there are a number of provisions of the policy that will require to be considered in due course, there are two extensions of cover under the policy which are relied upon by the plaintiff in these proceedings. The first relevant provision is Extension 6. It provides cover for business interruption resulting from the occurrence of a notifiable disease at the hotel premises which causes a “competent authority” to impose restrictions on the use of the hotel premises. Extension 6 is the main focus of the case made by the plaintiff. It is an essential element of the cover available under Extension 6 that there should be an occurrence of the disease “at the premises”. This is in contrast to some other policies available in the marketplace that responded where the disease occurred within a specified radial distance from the insured premises. The second relevant provision is Extension 7 which provides cover for business interruption caused by damage by an insured peril to other premises within a 1.5 kilometre radius of the hotel. The case made in respect of Extension 7 was not pressed strongly by the plaintiff at the hearing. There was no evidence of damage to other premises within that radius..

3 . In due course, it will be necessary to consider the terms of the policy in more detail but, at this point, it is sufficient to record the provisions of the two extensions in issue:-

(a) Extension 6 provides as follows:-

“ Notifiable Disease

The insurance by this Policy shall subject to all the Exclusions and Conditions of the Policy (except insofar as they may be hereby expressly varied) and the special conditions set out below extend to include loss resulting from interruption or interference with the Business carried on by the insured at the premises in consequence of:

1(a) any occurrence of a Notifiable Disease (as defined below) at the Premises or attributable to food or drink supplied from the Premises …

2. the discovery of vermin or pests at the Premises

3. any accident causing defect in drains … at the Premises which causes restrictions on the use of the premises on the order or advice of the competent authority.

4. any occurrence of murder or suicide at the Premises.

Special Conditions

1. Notifiable Disease shall mean illness sustained by any

person resulting from

(a) food or drink poisoning or

(b) any human infectious or human contagious

disease (excluding Acquired Immune Deficiency Syndrome (AIDS)) an outbreak of which the competent authority had stipulated as shall be notified to them.

2. For the purposes of this memorandum:

Indemnity Period shall mean the period during which the results of the Business shall be affected in consequence of the occurrence, discovery or accident, beginning… with the date from which the restrictions on the Premises are applied… and ending not later than the Maximum Indemnity Period thereafter.

Maximum Indemnity Period shall mean 3 months.

Premises shall only mean those locations stated in the Premises definition on; in the event that the policy includes an extension which deems loss, destruction or damage at other locations to be an incident such extension shall not apply to this memorandum. …

4. The Company shall only be liable for the loss arising at those Premises which are directly affected by the occurrence discovery or accident.

The liability of the company shall not exceed €250,000 in respect of any one occurrence or €250,000 in any one Period of Insurance”

(b) Extension 7 provides as follows:-

“7. Prevention of Access

Loss as insured by this Section resulting from interruption of or interference with the Business in consequence of damage by an insured Defined Peril to property as undernoted shall be deemed to be loss resulting from damage to property used by the Insured at the Premises provided that after the application all other terms Conditions and provisions of the policy the liability under this Extension in respect of any one occurrence or in any period of insurance shall not exceed €250,000.

Property in the immediate vicinity (meaning within 1.5 kilometres) of the Premises destruction of or damage to which shall prevent or hinder the use of the Premises or access thereto whether the premises or property of the insured therein shall be damaged or not.”

4 . Virtually all of the debate in this case revolved around Extension 6 rather than Extension 7. Other than very brief references to it in the...