Judge upholds Insurers rights to repudiate policy

YUN Bing Hu v Duleek Formwork Limited and Aviva Direct Insurance


An injured employee fails to join his employer’s insurers into proceedings as a co-defendant where the insurance company has repudiated the employer’s policy of insurance.


The facts of this case were that the employee, a carpenter, was injured while working for a construction company. He sued the company which has gone into liquidation, and in September 2011 obtained judgement against the company in default of appearance.


When the carpenter issued proceeding against his employer he believed that his employer was insured. He subsequently learnt that his employer had breeched a condition precedent to liability. When he discovered this, the carpenter brought proceedings to have his employers insurers added to proceedings as a defendant.


The insurers defended the claim and sought to have the action struck out, on the basis their was no reasonable cause of action against them in these circumstance.


The accident occurred in August 2009 and the insurer was notified of an accident in September 2009. The carpenter lodged a claim with the Injuries Board but the employer failed to pay the Injuries Board fee. By the time the carpenter issued proceedings, the construction company had gone into liquidation.


Council for the argued that the insurer was aware that the carpenter was seeking to recover damages for injury and owed a duty of care to the carpenter, who was adversely effected by his employers breech of policy conditions.


Council for the insurer argued that their was no privity of contract between it and the carpenter.


Mr Justice Peart, while expressing sympathy for the carpenter, said he was satisfied that their was no privity of contract between the carpenter and the insured and that the carpenter could not seek to enforce the contract of insurance between his employers and the insurer. In this case no reasonable cause of action against the insurer was disclosed.


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