Premier Dale Ltd (Trading as the Devlin Hotel) v Arachas Corporate Brokers Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Denis McDonald
• Judgment Date: 30 March 2022
• Neutral Citation: [2022] IEHC 178
• Court: High Court
• Docket Number: Record No: 2020/3998P

Between

Premier Dale Limited (Trading as the Devlin Hotel)

Plaintiff

and

Arachas Corporate Brokers Limited

and

RSA Insurance Ireland Designated Activity Company

Defendants

[2022] IEHC 178

Record No: 2020/3998P

THE HIGH COURT

COMMERCIAL

Insurance policy – Interpretation – Causation – High Court asked to address issues of interpretation of a particular provision in a policy of insurance – Whether the requirements were satisfied

Facts: The High Court (McDonald J) was asked to address a number of issues of interpretation of a particular provision (which the parties described as “the Closure/Disease clause”) in a policy of insurance issued by the second defendant, RSA Insurance Ireland DAC (RSA), in respect of the premises of the plaintiff known as the Devlin Hotel in Ranelagh, Dublin 6 (the Premises). The Closure/Disease clause was contained in extension 6(A). The issues arose in the context of the availability of insurance cover under the RSA policy in respect of business interruption suffered by the plaintiff as a consequence of the closure of the Premises in the wake of the Government measures introduced to address the COVID-19 pandemic. The proceedings as between the plaintiff, Premier Dale Ltd, and the first defendant, Arachas Corporate Brokers Ltd (the broker), were struck out by consent in early 2022. The parties identified that the key issue for determination was whether, on the facts, there was cover under the Closure/Disease clause. The parties identified the following questions as requiring determination in the context of the consideration of that issue: (a) For there to be cover, does the closure or restriction have to cause a total cessation of business or will a partial restriction suffice? (b) What is meant by a notifiable disease “manifesting itself at the Premises”? Without prejudice to the generality of the foregoing issue: - (i) Does there have to be a medically confirmed or medically diagnosed case of COVID-19 within the body of the Premises in order to satisfy the requirement of “a notifiable human disease manifesting itself at the premises? (ii) If not, what does the plaintiff need to prove to show that there was a notifiable disease manifesting itself at the Premises? (iii) If a medically confirmed or medically diagnosed case in the vicinity of the Premises has occurred is that sufficient to satisfy the requirement of “a notifiable human disease manifesting itself at the Premises”? (c) If the insured peril has occurred, is the loss covered under the Closure/Disease clause confined to loss caused by the human notifiable disease manifesting itself at the Premises rather than loss caused by any wider manifestation of a human notifiable disease beyond the Premises? (d) If any of the foregoing issues are determined in the Plaintiff’s favour, on the evidence, are the requirements satisfied?

Held by McDonald J that: (a) both sides were agreed that, having regard to the language used in extension 6(A), cover, if otherwise available, was not restricted to circumstances where there was a total cessation of business and given his conclusions on the other questions, it was unnecessary to consider any issue as to the severity of restrictions required to trigger cover under extension 6(A); (b) with regard to what was meant by a notifiable disease “manifesting itself at the Premises”, he concluded that this required at least one of the following: a symptomatic case of a notifiable disease at the Premises, a diagnosed case of a notifiable disease at the Premises or the detection of the causative pathogen at the Premises; (i) while a symptomatic or diagnosed case of COVID-19 or the detection of its causative pathogen within the body of the Premises would qualify as a notifiable disease manifesting itself at the Premises, extension 6(A) also extended to such a case immediately outside the Premises such as at the coffee hatch or the outside dining area; (ii) the answer at (i) above also addressed this question; (iii) save to the extent that a case arose immediately outside the Premises, a symptomatic or diagnosed case of COVID-19 or the detection of its causative pathogen in the vicinity of the Premises did not fall within the ambit of extension 6(A); (c) in light of the conclusions set out above, this question did not arise; (d) for similar reasons, this question did not require consideration.

McDonald J held against the plaintiff in relation to its case based on extension 6(A). He held that no issue of causation arose and there was no basis to conclude that the decisions in March and September 2020 to close the Premises were proximately caused by a manifestation of a notifiable human disease at the Premises.

Judgment approved.

JUDGMENT of Mr. Justice Denis McDonald delivered on 30 ^th March, 2022

1 . I am asked to address a number of issues of interpretation of a particular provision (which the parties have described as “the Closure/Disease clause”) in a policy of insurance issued by the second named defendant ( “RSA”) in respect of the premises of the plaintiff known as the Devlin Hotel in Ranelagh, Dublin 6 ( “the Premises”). For completeness, it should be noted that there are other issues raised in the proceedings but, for present purposes, the only issues which I am asked to decide at this point relate to the interpretation of the Closure/Disease clause and an interrelated issue of causation. These issues arise in the context of the availability of insurance cover under the RSA policy in respect of business interruption suffered by the plaintiff as a consequence of the closure of the Premises in the wake of the Government measures introduced to address the COVID-19 pandemic. The proceedings as between the plaintiff and the first named defendant ( “the broker”) were struck out by consent in early 2022.

The Disease/Closure clause

2 . The RSA policy (which was put in place in October, 2019 in respect of the period from 15 ^th October, 2019 to 15 ^th October, 2020) provides cover in respect of a number of risks including business interruption. The term of the policy was subsequently extended to 29 ^th October, 2020. The business interruption section of the policy firstly addresses losses sustained as a consequence of an interruption or interference in the business caused by risks such as damage to property. In addition, this section of the policy also includes a number of extensions. The Closure/Disease clause is contained in extension 6(A) and is in the following terms:-

“This insurance is extended to include loss as insured in consequence of…

6(A)

A. ‘ Closure or restrictions placed on the Premises on the advice or with the approval of the Medical Officer of Health of the Public Authority as a result of a notifiable human disease manifesting itself at the Premises’”.

3 . The parties agree that the peril insured in the Closure/Disease clause is a composite peril which is triggered when each of the following elements are present (i) closure or restrictions are placed on the Premises (ii) on the advice or with the approval of the Medical Officer of Health of the Public Authority (iii) as a result of a notifiable human disease manifesting itself at the Premises. For there to be cover, inter alia, each element of the composite peril must be established as having occurred and each element of the composite peril must be established as having occurred sequentially in the temporal order specified in the Closure/Disease clause. The parties also agree that the notifiable human disease manifesting itself at the Premises must be a proximate cause of the “advice…or approval” given by a medical officer of a public authority to order the closure of the Premises.

The issues to be decided

4 . In the agreed issues paper, the parties agreed on the issues that require to be determined by the court in the context of ( inter alia) the Closure/Disease clause. They identified that the key issue for determination is whether, on the facts, there is cover under the Closure/Disease clause. Without prejudice to the generality of that formulation, the parties have identified the following questions as requiring determination in the context of the consideration of this issue:-

• (a) For there to be cover, does the closure or restriction have to cause a total cessation of business or will a partial restriction suffice?

• (b) What is meant by a notifiable disease “manifesting itself at the Premises”? Without prejudice to the generality of the foregoing issue:-

  • (i) Does there have to be a medically confirmed or medically diagnosed case of COVID-19 within the body of the Premises in order to satisfy the requirement of “a notifiable human disease manifesting itself at the premises?

  • (ii) If not, what does the plaintiff need to prove to show that there was a notifiable disease manifesting itself at the Premises?

  • (iii) If a medically confirmed or medically diagnosed case in the vicinity of the Premises has occurred is that sufficient to satisfy the requirement of “a notifiable human disease manifesting itself at the Premises”?

• (c) If the insured peril has occurred, is the loss covered under the Closure/Disease clause confined to loss caused by the human notifiable disease manifesting itself at the Premises rather than loss caused by any wider manifestation of a human notifiable disease beyond the Premises?

• (d) If any of the foregoing issues are determined in the Plaintiff's favour, on the evidence, are the requirements satisfied?

The agreed facts

5 . For the purposes of determining the issues that arise in relation to the interpretation of the Closure/Disease clause, the plaintiff and RSA have agreed the following facts:-

• (a) The plaintiff is a private limited company incorporated in Ireland under Companies Registration Number 599923 and with a registered office at 41A Pleasant Street, Dublin 8. It operates from the Premises at the Devlin Hotel,...