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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Hibernian Insurance plc v. Eagle Star Insurance plc & Ors [1987] IEHC 25 (17 February 1987) URL: http://www.bailii.org/ie/cases/IEHC/1987/1987_IEHC_25.html Cite as: [1987] IEHC 25 |
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Hibernian Insurance plc v. Eagle Star Insurance plc & Ors [1987] IEHC 25 (17 February 1987)\
THE HIGH COURT
1985 No. 6700P
BETWEEN:
HIBERNIAN INSURANCE Plc.
PLAINTIFFS
AND
EAGLE STAR INSURANCE Plc.
GUARDIAN ROYAL EXCHANGE
ASSURANCE Plc.
DEFENDANTS
Judgment of Mr. Justice Costello delivered the 17th day of February, 1987.
The deceased Robert Gent was employed as a Workshop Manager by Dublin Road Motors (Dundalk) Ltd when he was killed in an accident which occurred on the 18th May, 1981. He was driving a red Alpine car owned by Talbot (Ireland) Ltd. The accident involved a collision with another car, whose driver, James Townsend, sued Dublin Road Motors, Talbot, and Mr Gent's widow and personal representative.
Prior to the accident, Mrs Gent (now Mrs McGuigan) had entered into a contract of insurance in respect of a Hillman Imp car which she then owned with Hibernian Insurance Plc. the Plaintiffs herein. Mr Gent was a named driver on the policy. On the morning of the accident Mr Gent arranged that the red Alpine would be put on his wife's policy. As a result the Hibernian became liable to indemnify Mrs Gent in respect of the claim made against her by Mr Townsend. The Hibernian settled Mr Townsend's claim for a very large sum and in these proceedings claim a contribution in respect of the settled claim: firstly, against Eagle Star Insurance Plc, who had in May, 1981 entered into a contract of insurance with Talbot (the owners of the red Alpine) and secondly against Guardian Royal Exchange Assurance Plc who at that time had entered into contract of insurance with Dublin Road Motors (Mr Gent's employers) in respect of, inter alia, vehicles in their custody or control.
The Eagle Star policy covered any motor vehicle the property of Talbot, and any driver of a car the property of Talbot which was being driven with Talbot's permission. The issue in the Hibernian claim against Talbot is whether at the time of the accident Mr Gent was driving the red Alpine with their consent.
The Guardian Royal Exchange's policy was a policy of indemnity in respect of any vehicle "in the custody or control" of Dublin Road Motors. Mr Gent was a named driver on the policy when using such a vehicle for social, domestic and pleasure purposes. The issue in the Hibernian claim against the Guardian Royal Exchange is whether the red Alpine was in the custody or under the control of Dublin Road Motors at the time of the accident.
I can give the reasons for my conclusions briefly as they depend on findings of fact. These findings depend on how I resolve the strongly conflicting evidence in the case; in particular whether I accept the evidence of Mr Wallace, the General Manager of Dublin Road Motors, where it differs from that of witnesses from Talbot, in particular Mr Kenny and Mr Cunningham. I have concluded that I should prefer Mr Wallace's evidence, partly because I found him more convincing, and partly because his evidence is corroborated in important respects by the contemporary records and is consistent with the probabilities of the case. (I should add, that, I think Mrs McGuigan's recollection on important aspects of this case is not accurate - which is perfectly understandable in the light of the tragic events in which she was involved).
I hold:
(1) there was no question that the red Alpine was borrowed for the purpose of demonstrating it by a potential customer whose interest in the model had been stimulated by a white Alpine on which the deceased had been working prior to the accident.
(2) In April 1981 the deceased had approached Mr Wallace for a loan of a car with an automatic transmission which he could lend to Canadian friends (Mr and Mrs O'Driscoll) who were to visit him and his wife in the following May. Mr Wallace agreed to do so if such a car was in the company's possession when the O'Driscoll's arrived.
(3) There was no suitable car available in Dublin Road Motors as the O'Driscoll visit was approaching. Mr Wallace agreed with Mr Gent's suggestion that he (Mr Gent) should approach Talbot with a view to getting a loan of a car from Talbot for the O'Driscolls but he made it clear that Mr Gent would have to make his own arrangments to have it insured.
(4) The car was delivered on Friday, 15th May. Mr Wallace agreed a few days earlier that during the period of its loan a replacement car, a blue Alpine, then in the possession of Dublin Road Motors would be given to Talbot. He agreed to this to facilitate the transaction which the deceased had arranged with Talbot. The red Alpine was not in fact required for the business of Dublin Road Motors and was not used for it. It was taken away by the deceased, and used by him and his wife on the week-end of the 16th-17th May, and by the deceased alone en the 18th May, the day of the accident.
(5) On the morning of the 18th May the deceased telephoned the local office of the Hibernian to add the red Alpine to his wife's policy and the names of Mr and Mrs O'Driscoll as named drivers on his wife's policy (in respect of whom he had earlier obtained signed forms for this purpose). An extra premium of £30 was later paid by Mrs. McGuigan.
(6) At no time was the red Alpine in the custody of Dublin Road Motors or under its control. It was in the custody and control of the deceased, but he was not acting as their agents when he took possession of it - he obtained it for his own private purposes, unconnected with the Company's business.
(7) It follows that as the Guardian Royal Exchange was only liable under this policy in respect of vehicles owned by or under the control or custody of Dublin Road Motors that they are under no liability in respect of Mr. Townsend's claim. It further follows that the claim by the Hibernian against them for a contribution fails.
I now turn to the claim by the Hibernian against the Eagle Star.
The first condition of Eagle Star's liability under their policy with Talbot was that the vehicle involved in an accident which gave rise to a third-party claim was a vehicle the property of or under the control of or in the custody of Talbot. As the red Alpine which the deceased was driving was the property of Talbot the terms of the first conditions were met.
But the policy only covered third-party claims if the vehicle was being driven with Talbot's permission, and so if the deceased was driving with Talbot's permission when the accident occurred Eagle Star are liable to contribute half the claim arising out of Mr. Townsend's accident.
In relation to this claim I make the following findings:
(1) The negotiations which lent to the loan of the red Alpine were conducted by the deceased and Talbot's representatives, and not by Mr Wallace and those representatives.
(2) I think it is unlikely that the deceased informed either Mr Cunningham or Mr Kenny or Mr Grimes that he was proposing to lend the red Alpine to his Canadian friends. I think that Talbot's representatives lent it to the deceased as a courtesy car, that is one which would be used by the employees of Dublin Road Motors for showing it to prospective purchasers.
(3) The arrangment was a casual and an informal one. There was no express limitation placed by Talbot's representatives on how the car was to be used by the employees of Dublin Road Motors. The evidence satisfies me that Talbot's representatives must have been aware that when courtesy cars are lent to dealers that employees of the dealers not only use them to demonstrate them to potential customers, but also use them for their own private purposes. I cannot imply into the permission granted a term that when employees are using courtesy cars for private purposes such user would be limited in any particular way.
(4) At the time of the accident the car was being driven by the deceased for private purposes, that is he was driving it to Dublin to meet his Canadian friends when they arrived at Dublin airport. In my view when the accident happened the deceased was driving within the terms of the permission which had been granted by Talbot for the use of the car.
I conclude therefore that the Hibernian is entitled to claim a fifty per cent contribution against the Eagle Star in respect of the sums paid to Mr Townsend arising out of the accident of the 18th May, 1981.