Supreme Court of Ireland Decisions

1. This is an appeal by the Plaintiff/Appellant from a Judgment and Order of the High Court (Murphy, J.) delivered and made on the 19th February, 1993 whereby the Appellant’s claim against the Respondents for the sum of £46,585.00 was dismissed. The Appellant claimed that the said sum was due on foot of a policy of insurance entered into by the Appellant with the Respondents in May 1987 in respect of the contents of the Appellant’s dwellinghouse and premises known as Mountain View situate at Kilkerley, Co. Louth a few miles from the town of Dundalk. He further claimed that the said contents were destroyed, damaged and/or stolen in the course of a burglary and malicious fire on the night of the 11th-l2th March, 1989.

2. The Appellant was born in Ireland about 1935 . He emigrated to New Zealand in 1957 and lived there until 1978. He married in New Zealand in 1958 and had six children, three boys and three girls. He returned to Ireland in 1978 and within a couple of years he bought the house and premises known as Mountain View aforesaid. This purchase was financed with advances by the Irish Permanent Building Society who arranged appropriate insurance in respect of the buildings and no issue arose between the parties as to that policy.

3. The Appellant’s wife died on the 8th May, 1984. The contents of the house were first insured in May, 1987 and the Appellant sought to arrange this through the Building Society. It came to the knowledge of the Respondents only during the trial in the High Court that a proposal was first prepared by the Appellant with the assistance of his daughter Eileen in which the contents were valued at over £130,000. When this was submitted to the Building Society and the premium calculated by them the Appellant decided that he could not afford that level of insurance and accordingly with the assistance of his daughter Eileen he prepared a fresh proposal. This proposal in setting out details of the contents reduced their value to somewhere in the region of £65,000 - £75,000 but cover was sought from the Respondents only to a limit of £40,000 contents and £6,585.00 all risks cover the total of which two sums comes to the amount claimed by the Appellant in this action.

4. By the year 1987 the Appellant’s family were growing into adults and his three daughters had left home, the eldest daughter Eileen marrying a Mr. Clinton on the 8th June, 1987, and all three daughters had gone to live in nearby Dundalk. Only two sons remained in Mountain View and in November 1987 the Appellant agreed to sell the premises the sale not to be completed until the 30th September, 1988. The Appellant was at that time contemplating remarriage which in fact took place with the present Mrs. Sylvia Fagan on the

5. In the meantime the Appellant had purchased a house at Warrenpoint where he planned to live with his new wife on completion of the sale of Mountain View. Problems arose about the completion of that sale and hence the Appellant and his new wife Sylvia Fagan were still in occupation in March, 1989. They had however gone to Dublin for the weekend on which the fire occurred and the Appellant’s two sons who were living with him had gone to stay with their married sister Eileen Clinton in Dundalk and so the house was unoccupied during that weekend.

6. Following the fire, the Respondents engaged Messrs. Scully Tyrrell and Co. Chartered Loss Adjusters to investigate the claim on their behalf. The Appellant engaged Messrs. Balcombes Public Loss Assessors to assist in presenting his claim under the policy. Four meetings took place between these parties as follows:-

7. On the 14th March, 1989, Mr. Joseph Tyrrell of Scully Tyrrell and Co. met with the Appellant at Mountain View.

8. On the 30th March, 1989 Mr. Tyrrell and his assistant Mr. Feely met with the Appellant and Mr. Owen J. O’Connor of Balcombes at Mr. Tyrrell’s office.

9. On the 11th and 19th April, 1989 Mr. Tyrrell and Mr. Feely met with the Appellant and Mr. O’Connor at Mountain View.

10. On the 3rd April, 1989 Mr. O’Connor sent to Mr. Tyrrell a detailed list of items in respect of which the Appellant was claiming compensation under the policy. This list ran to many hundreds of categories of items making a total of over 1,000 individual items with total valuation stated to be £102,481.59 (although the claim was of course limited to the insured amount) and this list was discussed at the meetings of the 11th and 19th April, 1989. On the 24th April, 1989 Mr. Tyrrell wrote to Mr. O’Connor asking in respect of each item of the claim particulars of:-.

11. Undoubtedly this was a burdensome request in view of the number of items in the list of the 3rd April, 1989. On the other hand there was no independent corroboration in the form of receipts, Bank Statements with cheque stubs, credit card statements or of any nature whatever to enable the Respondents to satisfy themselves as to the value of the various items or as to the existence of items which were alleged to have been stolen or completely consumed in the fire. It was in that context that Mr. Tyrrell included in his letter of the 24th April, 1989 the following paragraph:-

12. It seems obvious that if the Appellant could get corroboration from customs records of the importation of items of a stated value with a stated duty paid that would establish the claim in respect of such items conclusively and by inference help to establish the bona fides of the claim in general. However on the 8th May, 1989 Mr. O’Connor sent a revised list of items and replied to Mr. Tyrrell’s request for customs documentation as follows:-

13. What was being asked for at this stage by Mr. Tyrrell was customs corroboration relating to one single item which he has been informed was recently purchased and imported from Northern Ireland and if such corroboration was forthcoming it would obviously establish the claim in relation to that item and as I have already said as a matter of probability assist in relation to the claim generally. Unfortunately Mr. O’Connor’s letter of reply of 11th May, 1989 completely ignored this request which was never replied to or complied with. The letter of the 11th May deals with a matter that was never really in issue - the existence of the policy. What was in issue was whether liability on foot of the policy would be accepted or rejected by the Respondents. The Appellant’s Solicitors Messrs. Terence V. Grant & Co. then came on record with a letter of the 18th May, 1989 repeating the query put in Mr. O’Connor’s letter of the 11th May, 1989 as to whether a valid contract existed or not and a further letter of the 30th May, 1989 threatening proceedings.

14. On the 7th June, 1989 the Respondent’s Solicitors Messrs. Good and Murray Smith and Co. wrote to the Appellant as follows:-

15. The Appellant’s Solicitors replied on the 9th June, 1989 as follows:-

16. On the 10th October, 1989 Messrs. Good and Murray Smith & Co. replied to Messrs. Terence V. Grant and Co. as follows:-

17. Conditions 6 and 9 of the policy provide as follows:-

18. This action was commenced by the issue of a plenary summons on the 4th May, 1990. The Statement of Claim was delivered on the 20th August, 1990 and as in the case of the lists of the 3rd April and 8th May, 1989 the Statement of Claim contains hundreds of items and categories of items and monetary figures. The defence was delivered on the 9th November, 1990. In addition to general traverses, the defence pleads breaches of conditions 6 and 9 of the policy and of an implied duty of good faith owed by the Appellant to the

19. Respondents and it particularises the alleged breaches by reference to the letter of the 10th October, 1989.

20. Mr. Geraghty S.C. and Mr. O’Neill S.C. submitted on behalf of the Appellant:-

21. Mr. Gallagher S.C. submitted on behalf of the Respondents:-

22. I shall deal first with the Appellant’s submissions relating to constitutional justice and fair procedures. The Appellant relied on a passage from the Judgment of Denham, J. in the Superwood Holdings Case at page 360 which is as follows:-

23. It must first be remembered that this was said in the context of condition 4 of the policy in that case which related to the giving of notice by the insured and details of the loss to the insurer and not to fraud. In the present case the Appellant complains that the Respondents did not give him a fair opportunity of dealing with their objections as they ought to have done. In this context it is relevant to refer again to the letters of the 24th April, 8th May, 9th May and

24. The concluding sentence in that answer is unsustainable especially in the light of the evidence given by earlier witnesses, Mr. O’Connor being the last

25. On this item of the JVC video recorder (which is not actually one of the items mentioned in the letter of 10th October, 1989) it is interesting to note some of the evidence which was given at the trial. Mr. Tyrrell emphasised its importance in his opinion at transcript 1 questions 46-50 as giving an opportunity to the Appellant to substantiate items and that this was not done. At transcript 2 Q. 474 he refers again to this matter and at transcript 3 Q. 2 he says that Mr. O’Connor’s attitude on the telephone to him was absurd and at

26. In regard to Mr. O’Connor’s protestation at Q.474 of transcript 12 that he was never asked for substantiating documentation, it is worth recalling some of the evidence of witnesses who gave evidence before him. Mr. Tyrrell at transcript 2 Q.5 said:-

27. And then at Q.7 he was asked if there were any bank accounts or credit card statements or anything like that ever produced to which he replied “No, nothing at all” . At transcript 4 Mr. Jim McCormick Claims Superintendent of the Respondents who had thirty-one years experience of the insurance industry said at Q.8

28. At Q.31 he was asked:-

29. At Q.89 he was asked:-

30. In the light of the foregoing evidence by Mr. Tyrrell and Mr. McCormick who said they never before had a claim without any substantiation whatever it is incomprehensible that Mr. O’Connor should have formed the views which he expressed in the answer at Q.474 of transcript 12 which I have quoted above.

31. It was never challenged during Mr. Tyrrell’s evidence that the JVC video recorder was bought and imported from the North of Ireland about four months before the fire. There is no reason to doubt Mrs. Sylvia Fagan’s evidence that she bought the video recorder in the North of Ireland about one year before the fire and imported it about four months before the fire. It was not clarified whether customs duty was paid by her or not on its importation but even if not and therefore no useful evidence would have been available from the Customs Authorities the complete ignoring of Mr. Tyrrell’s request is difficult to understand and must have inevitably raised suspicions in the minds of Mr. Tyrrell and the Respondents.

32. Having regard to the foregoing circumstances including the ignoring of requests for some documentary corroboration there was no obligation on the Respondents to conduct a kind of trial or hearing before repudiating liability under the policy. In some cases, contracts can create relationships which may entitle a party to some form of hearing before the contract may be repudiated or terminated. The most common examples are contracts of employment. See Glover v. BLN Ltd. [1973] IR 388. The Contract of Insurance is a commercial contract and the Courts should be slow to impose terms on either party which have not been expressly agreed by them. Carna Foods Ltd. and Anor. v. Eagle Star Insurance Company (Ireland) Ltd. [1977] 2 ILRM 499.

33. Freedom of contract especially in the commercial field is a valuable right of the citizen. The Contract of Insurance undoubtedly involves mutual obligations of good faith but that does not mean that the insurer cannot (provided that he is acting bona fide ) disclaim liability without first conducting some form of trial. The trial comes afterwards in the Courts if the insured contends that the disclaimer of liability by the insurer is unwarranted and in breach of contract.

34. In the present case I am satisfied that there was no breach of constitutional justice or fair procedures, and accordingly this ground of appeal based on such alleged breach fails and is refused.

35. The Judgment of the High Court in this case was delivered on the 19th February, 1993 that is to say over two years before the Judgment of the Supreme Court in the Superwood Case. If the learned trial Judge had had the benefit of the Judgments of the Supreme Court in the Superwood case he might have expressed himself more positively in certain respects than he did. Nevertheless his meaning is quite clear to me.

36. The learned trial Judge set out correctly the principles of law applicable to this case at pages 1 - 4 of his Judgment and also the correct approach to exaggeration at pages 41 and 42. He did not overlook the fact that the

37. One of the primary tasks of the learned trial Judge and especially so in this sort of case was to assess the credibility of the witnesses and to find the

38. At page 16 of his Judgment the learned trial Judge says:-

39. At pages 17, 18 and 19 of his Judgment the learned trial Judge said:-

40. At pages 20, 21 and 22 the learned trial Judge said:-

41. That document is dated 29th October, 1992 and Mrs. Clinton says it represented the transcription by her of a manuscript letter written by her father to queries raised by Mr Tyrrell. It was the evidence of Mrs. Clinton that she did not direct her mind to the contents of this document. That seemed improbable in any event but in the context that she was preparing or reviewing other notes at the same time is quite unbelievable. Not only is there nothing wrong with the witnesses reviewing the evidence in anticipation of the trial I would have thought it

42. The learned trial Judge also expressed reservations regarding the reliability of the evidence given by the Plaintiff’s wife Mrs. Sylvia Fagan although not in as positive terms as in relation to the Appellant or his daughter.

43. The learned trial Judge went through the items set out in the letter of the 10th October, 1989 and arrived at the following conclusions:-

44. This item was not established to the satisfaction of the learned trial Judge.

45. Again this item appears not to have been established to the satisfaction of the learned trial Judge.

46. This item was not established to the satisfaction of the learned trial Judge.

47. This is not a finding of fraud or mala fides .

48. At No. 13 above the learned trial Judge is explicit in finding that the particular claim was neither fraudulent nor mala fide . This makes clear that his other findings to the effect that “the claim for £1,000 is grossly excessive and must have been known by Mr Fagan to be such”, and similar though not identical wording constitute a definite finding of fraud and/or mala fides . There was ample evidence to support these findings and this Court cannot therefore and will not interfere with them.

49. In these circumstances the Respondents were entitled to repudiate liability under the policy and this appeal must be dismissed.