Neutral Citation no.  [1999] 1945

Ref:    

SHEC2876

 

 

 

Judgment: approved by the Court for handing down

Delivered:

18/06/99

(subject to editorial corrections)

 

 

                                                                                                                                                      

 

                       IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND

 

                                                   QUEEN'S BENCH DIVISION

 

                                                                  ------------

 

BETWEEN:

 

                  ROBERT EMMET MORGAN (A MINOR) BY MALACHY MORGAN,

                                               HIS UNCLE AND NEXT FRIEND

 

                                                                                                                                           Plaintiff;

 

                                                                         and

 

                                     EAMON MORGAN AND NORA LENAGHAN

 

                                                                                                                                     Defendants;

 

                                                                         and

 

                                                           GRE (UK) LIMITED

 

                                                                                                                                     Third Party.

 

                                                                   -----------

SHEIL J

            This matter comes before the court on foot of an order made by Kerr J on 18 September 1998 pursuant to Order 33 Rule 3 of the Rules of the Supreme Court (Northern Ireland) 1980 that the following questions, at the request of the third party, be tried as preliminary issues in advance of the trial of this action:

(a)        Whether the plaintiff was a member of the policyholder's family normally residing in the private residence on 3 December 1990?

(b)        Whether the third party is liable under the policy of insurance MH616/S811603 in the event of the plaintiff having suffered the injury set out in the statement of claim in the circumstances set out in the statement of claim?

            It is unnecessary for the court to determine the answer to question (a) as the defendants now concede that the plaintiff was a member of the policyholder's family normally residing in the private residence on 3 December 1990.  That leaves only the answer to question (b) to be determined by this court.

            The matter arises out of an accident which occurred in the defendants' private residence on 3 December 1990 when the minor plaintiff, who was the 3 year old son of the defendants, sustained severe burn injuries when an oven toppled over onto him.  The plaintiff instituted proceedings through his uncle and next friend, Malachy Morgan, against his parents, the defendants in this action.  The defendants instituted third party proceedings against GRE (UK) Limited seeking an indemnity from them in respect of any damages awarded against the defendants in favour of the plaintiff, relying upon a policy of insurance taken out by the defendants jointly with the third party, GRE (UK) Limited. 

            Section C, subsection 1 of the policy deals with liability to the public.  It is in the format now commonly found in modern policies stating on the left-hand side of the page in one colour "What is covered", and stating on the other side of the same page in a different colour "What is not covered".  Under "What is covered" it states:

 

                        "Any amount that You become legally liable to pay as damages for

 

                        bodily injury (including death or disease) to any person

 

                        loss of or damage to property

 

                        occurring anywhere in the world during the period of insurance."

Under "What is not covered" it states:

 

                        "1.        Liability in respect of

 

                                    (a)1      bodily injury to You

 

                                       2       bodily injury sustained by any person under a contract of service or apprenticeship with You and arising out of and in the course of such person's employment by You

 

                                    (b)        loss or damage to property belonging to You or in Your custody or control."

            The third party submits that it is not liable to indemnify the defendants in respect of the injury sustained by the minor plaintiff, asserting that he falls within the meaning of "You" in the policy of insurance.  The third party relies upon the opening words on page 2 of the policy which read as follows:

 

                        "In this policy

 

                        If We explain what a word means that word has the same meaning wherever it is used in the policy or Schedule.  These words are highlighted by the use of bold print

                        For example:

 

                        You/Your/the Insured -          means the person named as the Policyholder in the Schedule and each member of the Policyholder's family normally residing in the Building."

On that same opening page it gives a brief explanation of the colour coding for what is covered and what is not covered, as already explained above.

            Mr Bentley QC, who appears with Mr A J Maxwell on behalf of the defendants, submits that the word "You" is ambiguous when one reads the policy as a whole.  He referred the court to the principal rules of construction as set out in Hardy Ivamy's General Principles of Insurance Law, 6th Edition at page 357 et seq.  Reference was also made to McGillivray on Insurance Law, 9th Edition at page 264 et seq.  Mr Bentley submits that if there is an ambiguity as he suggests, the contra proferentem rule of construction comes into play. 

            However there must first be a real ambiguity.  In McGillivray on Insurance Law at paragraph 11-35, the text reads as follows:

 

                        "Ambiguity must be real.  The contra proferentem rule of construction arises only where there is a wording employed by those drafting the clause which leaves the court unable to decide by ordinary principles of interpretation which of two meanings is the right one.  One must not use the rule to create the ambiguity - one must find the ambiguity first.  The words should receive their ordinary and natural meaning unless that is displaced by a real ambiguity either appearing on the face of the policy, or possibly, by extrinsic evidence of surrounding circumstances.  If the meaning of the word used is reasonably clear it should be followed even if it is unreasonable or operates harshly against the assured, although the more unreasonable the result the clearer the words must be in order to lead to it.  The courts may be less ready to reach an interpretation of the terms of a consumer insurance contract which is unfavourable to the assured."

At this point it should perhaps be mentioned that the provisions of the Unfair Terms in Consumer Contracts Regulations 1994, No. 3159, only came into force on 1 July 1995; they are not retrospective and accordingly, as the accident which is the subject of this claim occurred on 3 December 1990, those regulations have no relevance in the present proceedings.

            I do not consider that there is any ambiguity in the use of the word "You" in this policy of insurance.  In relation to Section C, subsection 1, it is clear that the plaintiff, being a member of the policyholder's family normally residing in the private residence on 3 December 1990 is included in the word "YOU"; that being so the plaintiff is not covered by the policy of insurance in respect of the injury sustained by him on that date. 

            Accordingly I answer question (b) in the negative. 


                       IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND

 

                                                   QUEEN'S BENCH DIVISION

 

                                                                  ------------

 

BETWEEN:

 

                  ROBERT EMMET MORGAN (A MINOR) BY MALACHY MORGAN,

                                               HIS UNCLE AND NEXT FRIEND

 

                                                                                                                                           Plaintiff;

 

                                                                         and

 

                                     EAMON MORGAN AND NORA LENAGHAN

 

                                                                                                                                     Defendants;

 

                                                                         and

 

                                                           GRE (UK) LIMITED

 

                                                                                                                                     Third Party.

 

                                                                   -----------

 

                                                                 JUDGMENT

 

                                                                         OF

 

                                                                     SHEIL J

 

                                                                  ------------