Moloney v Cashel Taverns Ltd (in Voluntary Liquidation)

• Jurisdiction: Ireland
• Judge: Mr. Justice Mark Heslin
• Judgment Date: 10 December 2020
• Neutral Citation: [2020] IEHC 658
• Docket Number: [2013 / 1925 P]
• Court: High Court
• Date: 10 December 2020

BETWEEN

STEPHANIE MOLONEY

PLAINTIFF

AND

CASHEL TAVERNS LIMITED (IN VOLUNTARY LIQUIDATION)

AND

LIBERTY INSURANCE DAC

DEFENDANTS

[2020] IEHC 658

Mark Heslin

[2013 / 1925 P]

THE HIGH COURT

Personal injuries – Insurance – Liability – Plaintiff seeking damages – Whether the second defendant was justified in refusing to indemnify the first defendant

Facts: The plaintiff, Ms Moloney, was employed by the first defendant, Cashel Taverns Ltd, and alleged that she sustained an accident at work on 8 May 2010. Arising out of same, the plaintiff issued a personal injuries summons dated 25 February 2013. At the time of the accident, the first defendant had an insurance policy with Quinn Direct which subsequently became the second defendant, Liberty Insurance DAC (Liberty). Liberty was first notified of the accident some seventeen months after it occurred. When the personal injuries summons was issued, it named only the first defendant. The proceedings were set down for hearing and listed before Haughton J on 20 June 2017, in Waterford. On that date, there being no appearance on behalf of the defendant, and on hearing oral evidence by the plaintiff, an order was made that the name of the defendant be amended to read “Cashel Taverns Ltd (in voluntary liquidation)” and the court found that the said defendant was negligent and assessed damages in the sum of €35,000 for general damages and €2,332 for special damages. The said order also granted the plaintiff liberty to serve short notice of a motion returnable for 29 June 2017. On 29 June 2017, Haughton J made an order, in the absence of any attendance by the defendant, that Liberty be joined as a co-defendant. The plaintiff’s application to join Liberty was for the purposes of enforcing judgment and reliance was placed on s. 62 of the Civil Liability Act 1961. Liberty contended that it was entitled to repudiate the relevant insurance policy which the first defendant had at the time of the accident. At the heart of the matter before the High Court was whether Liberty was within its rights to refuse to indemnify the first defendant by reason of late notification.

Held by Heslin J that as the wording in section and the relevant authorities make clear, s. 62 refers to moneys payable on foot of a policy of insurance. Heslin J held that in this case the facts proved that the insurance company was entitled to and validly repudiated liability and the second defendant had undoubtedly discharged the burden of proof in that regard; therefore, no moneys were, or are, payable on foot of the relevant policy of insurance. Heslin J held that the evidence demonstrated that the plaintiff had no entitlement to recover from the second defendant. Heslin J was satisfied that the second defendant was without doubt justified in refusing to indemnify the first defendant; thus, no moneys were or are payable by the second defendant to the plaintiff under the relevant insurance policy.

Heslin J held that he would dismiss the plaintiff’s claim against the second defendant.

Claim dismissed.

JUDGMENT of Mr. Justice Mark Heslin delivered on the 10th day of December, 2020

Introduction

1 The Plaintiff was employed by the First Named Defendant and alleges that she sustained an accident at work on 8 May 2010. Arising out of same, the Plaintiff issued a personal injuries summons dated 25 February 2013. At the time of the accident, the First Named Defendant had an insurance policy with Quinn Direct which subsequently became Liberty Insurance DAC (hereinafter “Liberty”). Liberty was first notified of the accident some seventeen months after it occurred. When the personal injuries summons was issued, it named only the First Named Defendant. The proceedings were set down for hearing and listed before Mr. Justice Haughton on 20 June 2017, in Waterford. On that date, and there being no appearance on behalf of the then - Defendant, Cashel Taverns Ltd., and on hearing oral evidence by the Plaintiff, an order was made that the name of the Defendant be amended to read “Cashel Taverns Ltd. (in voluntary liquidation)” and the court found that the said Defendant was negligent and assessed damages in the sum of €35,000 for general damages and €2,332 for special damages. The said order also granted the Plaintiff liberty to serve short notice of a motion returnable for 29 June 2017. On 29 June 2017, Haughton J. made an order, in the absence of any attendance by the Defendant, that Liberty be joined as a co-Defendant.

Section 62 of the Civil Liability Act, 1961

2 The Plaintiff's application to join Liberty was for the purposes of enforcing judgment and reliance was placed on s. 62 of the Civil Liability Act, 1961. It is appropriate at this juncture to quote that section in full as follows: -

“Application of moneys payable under certain policies of insurance.

62. Where a person (hereinafter referred to as the insured) who has effected a policy of insurance in respect of liability for a wrong, if an individual, becomes a bankrupt or dies or, if a corporate body, is wound up or, if a partnership or other unincorporated association, is dissolved, moneys payable to the insured under the policy shall be applicable only to discharging in full all valid claims against the insured in respect of which those moneys are payable, and no part of those moneys shall be assets of the insured or applicable to the payment of the debts (other than those claims) of the insured in the bankruptcy or in the administration of the estate of the insured or in the winding-up or dissolution, and no such claim shall be provable in the bankruptcy, administration, winding-up or dissolution”.

Moneys payable in respect of a valid claim

3 It is fair to say that the import of the foregoing provision is that, where a company is wound up, and where “ moneys are payable” to the insured company under an insurance policy in respect of a “ valid” claim, such moneys do not constitute the assets of the company in question and such moneys are not available to discharge the company's debts. It is uncontroversial to observe that s. 62 does not create a blanket entitlement for a Plaintiff to receive moneys from an insurance company in respect of a policy which was maintained by a company which is subsequently wound up. On the contrary, s. 62 explicitly refers, inter alia, to moneys which are “ payable”. It is equally uncontroversial to say that if a policy maintained by a particular company was validly repudiated by the insurer, moneys will not be payable and, in such circumstances, s. 62 will not avail the Plaintiff. On behalf of the Second Named Defendant, Liberty, it is said that the foregoing is precisely what has arisen in the present case. At the heart of the application before this Court is Liberty's contention that it was entitled to repudiate the relevant insurance policy which the First Named Defendant had at the time of the accident. Liberty accepts that the onus is on it to prove that its repudiation of the relevant policy was valid and, in that context, the Second Named Defendant is, in effect, Plaintiff or Applicant in relation to the matter before the court, whereas the Plaintiff opposes Liberty's application.

Matters which are not in dispute

4 It is also appropriate to make clear, as Mr. Nolan for the Applicant did at the outset, that there is a considerable amount of common ground between the parties, in that the following is not in dispute: -

(i) It is agreed that an accident took place;

(ii) It is agreed that the Plaintiff was, at the time of the accident, employed by the First Named Defendant;

(iii) It is agreed that the Plaintiff suffered an injury and was out of work for a relatively short period of time, (there was some dispute as to whether this period amounted to two days, ten days or two weeks and this is something which will be discussed later in this judgment but, for present purposes, I am satisfied that nothing turns on the length of the Plaintiff's absence from work);

(iv) It is also agreed that the manager of the bar in which the accident occurred, a Mr. Patrick Horan, was aware of the accident on the day it occurred;

(v) It is also agreed that the First Named Defendant did not notify the insurer at the time the accident occurred;

(vi) Furthermore, it is agreed that the first time the insurer was notified of the accident was on 14 October 2011, which was some seventeen months after the accident which occurred at the First Named Defendant's premises on 8 May 2010;

(vii) It is agreed that, in or about July 2012, Liberty formally refused to indemnify the First Named Defendant and;

(viii) It is not in dispute that, prior to July 2012, Liberty advised the First Named Defendant on a number of occasions that it was late in relation to giving notice of the accident and that Liberty reserved its position.

5 At the heart of the matter before this Court is whether Liberty was within its rights to refuse to indemnify the First Named Defendant by reason of late notification. This is the key issue which this judgment considers. Two books of discovery documents were handed into court, comprising 1,003 pages of documentation in total.

No witnesses as to fact

6 Most helpfully, Mr. Nolan SC for Liberty, and Mr. Tracey SC for the Plaintiff agreed between themselves that it would not be necessary for Liberty to call any witness to prove any document. The concession made by the Plaintiff at the outset of the hearing was that anything written in any document could be taken as evidence. That concession was entirely appropriate and served to increase the efficiency with which the trial proceeded and the Court can only be grateful to Mr. Nolan and to Mr. Tracey, to the respective junior counsel and to the instructing solicitors on both sides, for ensuring this efficiency. Mr. Tracey, however, emphasised very clearly that no concession was being made on behalf of the Plaintiff with regard to the...