Marlin Apartments Ltd trading as Marlin Hotel Dublin v Allianz PLC (Approved)

Factual and Procedural Background

This judgment is supplemental to a principal judgment previously delivered concerning a dispute between Plaintiff and Defendant relating to claims under Extension 6 of the Defendant's business interruption insurance policy. The Plaintiff operates a hotel with an in-house restaurant and bar, which was subject to government-imposed restrictions during three distinct periods in 2020 due to the COVID-19 pandemic. The insurance policy covers losses arising from interruption caused by occurrences of a notifiable disease at the insured premises that lead to restrictions ordered by competent authorities.

The principal judgment concluded that for the first two restriction periods (March and September 2020), there was no evidence of COVID-19 cases at the Plaintiff's premises causing the restrictions. However, for the third restriction period commencing 24 December 2020, the Court found at least two COVID-19 cases at the premises prior to the order, including the hotel manager who tested positive on 23 December 2020 and had not left the premises for the preceding two weeks. The Court held that these infections, including unreported cases, proximately caused the third restriction order, entitling the Plaintiff to recover losses under the policy.

The Defendant, pursuant to regulatory supervisory obligations, sought further guidance on two issues related to the implications of the principal judgment for other insureds under the policy: (a) whether a cut-off date exists for causation of the third restriction order by COVID-19 cases, and (b) whether infections diagnosed after a restriction order can be considered as having occurred prior to the order for causation purposes.

Legal Issues Presented

1. Is there a cut-off date beyond which occurrences of COVID-19 at insured premises cannot be said to have caused the third government restriction order of 23 December 2020?
2. To what extent can COVID-19 cases diagnosed or becoming apparent after the making of a restriction order be considered as having occurred prior to that order for the purposes of establishing causation?

Arguments of the Parties

Defendant's Arguments

• The Defendant argued that no COVID-19 cases occurring prior to 1 December 2020 could have caused the third restriction order, as a prior order had relaxed restrictions effective from that date, breaking the causation chain.
• Based on Health Protection Surveillance Centre (HPSC) reports, the Defendant contended that cases prior to 17 December 2020, including those covered by reports dated 2, 9, and 16 December 2020, could not have caused the restriction order of 23 December 2020.
• The Defendant submitted that only cases arising in the seven-day period between 15 and 22 December 2020 could be said to have caused the third restriction order, relying on the sharp increase in cases shown in HPSC data during that time.
• Regarding infections diagnosed after the restriction order, the Defendant sought a clear and simple approach to causation, consistent with prior authority, that infections diagnosed within a defined incubation period post-order could be considered as occurring prior to the order.

Plaintiff's Arguments

• The Plaintiff did not seriously dispute that cases prior to 1 December 2020 could not have caused the third restriction order.
• The Plaintiff agreed to act as legitimus contradictor for the purpose of the Defendant's application regarding the cut-off date.
• The Plaintiff contended that infections diagnosed within five days after a restriction order should be accepted as having occurred prior to the order, reflecting the agreed incubation period.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analyzed the causation requirement under Extension 6 of the insurance policy, which requires an occurrence of a notifiable disease at the insured premises that proximately causes government restrictions. The Court reaffirmed that the Minister for Health considered both reported and unreported COVID-19 cases when enacting the third restriction order due to an immediate and manifest risk to public health.

Regarding the cut-off date for causation, the Court accepted that the lifting of restrictions effective 1 December 2020, as per an earlier order, broke any chain of causation from cases before that date to the third restriction order. This was supported by HPSC reports and subsequent easing of restrictions on 17 December 2020, which indicated the Minister was not alarmed by cases prior to that date.

The Court emphasized the standard public health practice of assessing pandemic trends over 14-day periods, noting that the 23 December 2020 HPSC report showed a significant rise in cases during the 14-day period ending on that date. The Court found that cases occurring from midnight on 9 December 2020 up to 22 December 2020 were causative of the third restriction order, while cases before midnight on 9 December were not.

The Court declined to establish cut-off dates for the earlier restriction orders in March and September 2020 due to insufficient material but noted that the Defendant may rely on guidance from other cases.

On whether infections diagnosed after a restriction order could be causative, the Court concluded that due to the incubation period of COVID-19 (three to five days) and infectiousness lasting up to 14 days, infections diagnosed within five days after a restriction order should be treated as occurring prior to the order if the infected person was present on the insured premises during that relevant pre-order period. The Court rejected a more restrictive three-day post-order period suggested in the principal judgment as insufficiently clear.

The Court acknowledged the need for a clear and simple causation approach to avoid imposing impossible evidential burdens on insureds, consistent with authoritative decisions emphasizing policyholder certainty.

Finally, the Court recognized that claims involving diagnoses more than five days after a restriction order might be possible in limited circumstances, such as delayed test results or prolonged infectiousness, but would require appropriate evidential support.

Holding and Implications

The Court made the following declarations:

• COVID-19 cases occurring prior to midnight on 9 December 2020 cannot be said to have caused the third restriction order of 23 December 2020.
• COVID-19 cases occurring between midnight on 9 December 2020 and 22 December 2020, inclusive, are causative of the third restriction order.
• For causation purposes, infections diagnosed up to five days after a restriction order may be treated as having occurred prior to the order if the infected person was present on the insured premises during the relevant incubation period before the order.

DISPOSED OF

The decision provides clarity on the temporal scope of causation for COVID-19-related business interruption claims under the Defendant's policy, offering guidance for both the Defendant and other insureds. No new broader legal precedent was established beyond the application of existing principles to the facts of this case. The parties were directed to agree on the precise form of declarations to be made, with the Court reserving the right to determine the terms if agreement is not reached. The parties have also agreed costs, obviating the need for a costs order.