The Gazette 1981

D E CEMBER

GAZETTE

19

Chariot Inn. Policies were sub- sequently issued to Chariot in respect of the various forms of liability for which cover had been sought. On 14 May 1978 a serious fire occurred causing extensive damage to the Chariot premises. In June 1978, the first-named Defendants repudiated the policy on the grounds of non-disclosure of the fire in Leeson Street. The Plaintiffs then com- menced this action, claiming a de- claration that the policy issued by the first-named Defendant insurance company giving indemnity against material loss was valid and, as against the second-named Defendant brokers for damages for breach of contract and negligence. In the High Court the trial judge de- cided that the non-disclosure of the fire in Leeson Street was not a material fact and therefore the policy issued by the first-named defendants was valid and he dismissed the claim against the brokers. The first-named Defendants appealed. On appeal Kenny, J. emphasised that a contract of insurance required the highest standard of accuracy, good faith, candour and disclosure by the insured when making a proposal for insurance to an insur- ance company. Any mis-statement in the answers given when they related to a material fact affecting the insurance entitled the insurance company to avoid the policy. What was material was a matter or circumstance which would reasonably influence the judgment of a prudent insurer in de- ciding whether he would take the risk and, if so, in determing the premium he would demand. The generally accepted test of materiality was that stated in Section 18 (2) of the Marine Insurance Act 1906 i.e. "every cir- cumstance is material which would in- fluence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk." This test was followed by L. J. McKinnon in Zurich General Accident and Liability Insurance Co. Ltd. v. Morrison [1942] 1 All E.R. 529 where McKinnon LJ. went on to state: "Under the general law of insur- ance an insurer can avoid a policy if he proves that there has been mis- representation or concealment of a material fact by the insured. What is material is that which would in- fluence the mind of a prudent

partly of chance) for stakes hazarded by the players." However, it was not "unlawful gaming" as defined by Section 4 (1) of the Act, because at the time of the offence, unlawful gaming by means of slot machines was con- fined to slot machines not prohibited by Section 10; and it was agreed that the machine the subject of this case did not fall into that category. Counsel for the Defendant argued that when Section 9 (1) prohibited a licencee from permitting "gaming" on licensed premises the prohibition applied only to "unlawful gaming." It was con- tended that in these Sections and elsewhere in the Act where the word "gaming" was used, that it should be read as "unlawful gaming." Held (per Henchy J.): (1) That in the Act "gaming" did not equate to "unlawful gaming"; (2) Gaming prohibited on licensed premises was not confined to "unlawful gaming." Accordingly the appeal was dismissed. As to the specific questions put by the District Justice, the Supreme Court replied: (1) For the purpose of Section 9(1) there was no distinction to be drawn between "unlawful gaming" and "gaming." (2) (a) The slot machine in this case constituted a gaming in- strument for the purpose of Section 2. (b) The operation of this slot The Court noted that as the law now stands, following the passing of the amending Act of 1979, that if a licencee of licensed premises (which expression included more than public houses) permitted gaming as defined, and whether unlawful or not, in licen- sed premises, he committed an offence, unless he was exempted by Section 9 (2) or Section 9 (3); and the conviction might be recorded on the Licence. D.P.P. (Hurlihy) v. Hannon - Supreme Court (per Henchy J. with Griffin and Kenny JJ.) - 4 March 1981 —unreported. machine by a player con- stituted "gaming" as defined by Section 2.

INSURANCE CONTRACTS Necessity to complete insurance pro- posal forms accurately — there must be full disclosure of all matters material to the risk against which the Insured is seeking Indemnity. In 1976 the Plaintiffs ("Chariot"), whose directors were Mr. and Mrs. W., bought the "Chariot Inn" in Ranelagh, Dublin. Due to certain re- novations which had to be carried out there, the directors decided to store some furnishings temporarily in other premises in Lower Leeson Street, Dublin, owned by Consolidated Investment Holdings Limited, whose shares had been purchased by Mr. W. and his business partner, although re- gistered in the respective maiden names of their wives. The Insurance Brokers acting for Mr. W. were the second-named Defendants and more specifically their employee Mr. H. The Leeson Street premises were insured with the Sun Alliance Insurance Company Limited, and when the additional furnishings were stored there additional insurance cover was arranged with the Sun Alliance, valuing the furnishings at £15,000. Subsequently malicious damage was caused to the premises and the fur- nishings by squatters and a claim was lodged with the local authority. The claim was eventually settled and Chariot were paid a sum of £8,000 directly by the Sun Alliance in respect of the damage to their furnishing. Originally Chariot had been insured with the General Accident but when extended cover on the premises was requested the premium sought was increased by 50%. Chariot were dissatisfied with this and requested its then Brokers to ask for tenders for the insurance. The first-named defen- dants sent in the lowest tender. Mr. H. of the second-named Defendants, who had remained on good terms with the Plaintiffs, obtained the proposal forms and called to the Plaintiffs' premises with them in order to have same com- pleted. One of these proposal forms related to material damage. Mr. H asked the questions and filled in the answers and disclosed that the negotiating brokers were the second- named Defendants. He advised that it was totally unnecessary to disclose the facts about the fire in the Leeson Street premises as they were dealing with a different company and only had to show what was relevant to the

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