The High Court has granted an injunction restraining an insurer from repudiating insurance policies for a Dublin crèche chain at the centre of an RTÉ programme.
Hyde And Seek Childcare Ltd and Hyde and Seek Glasnevin Ltd sought to prevent Ironshore Europe DAC cancelling insurance policies for four creches.
Ironshore said its move arose from investigations by it arising from matters in the RTÉ Investigates programme and subsequent media reports.
On Tuesday, Mr Justice Barniville said it was appropriate to grant the injunction pending the matter going to arbitration.
He accepted there would be enormous damage to the business, with the loss of 45 jobs and alternative places having to be found for 220 children by their parents, if the order was not granted.
The judge put the matter back to Wednesday to finalise an order to reflect his judgment. He also said he intends to keep the matter under review so he can be informed of the steps taken to set up arbitration over the matter.
Earlier, he said it was accepted during the injunction hearing by the insurer that a clause in the contract between the parties required a dispute such as this go to arbitration.
The insurance policies at issue provide cover for three Hyde and Seek crèches - located at Tolka Road, Pearse Street and Millbourne Avenue, Drumcondra, from January 1st to December 31st, 2019.
A fourth policy concerns a crèche at Prospect Avenue, Glasnevin, and runs from January 1st to December 20th, 2019.
Ann Davy, a director of both crèche companies, disputed in an affidavit the entitlement of Ironshore to avoid the policies on grounds including her failure, when entering into the policies, to disclose a District Court conviction of her in 2004 along with other adverse findings against her in 2006.
The 2004 conviction was for inadequate supervision and having inadequate staff and attendance records arising from a three-year-old boy being left behind during an outing to Fairview Park in 2004.
Supervising adults
The insurer also alleged non-disclosure of a May 2006 finding that Ms Davy had failed to ensure enough supervising adults for the children in her care and that no corporal punishment was inflicted.
A €1,500 fine and costs order imposed on Ms Davy after being accused by the HSE of failing to ensure a sufficient number of supervising adults for pre-school in April 2006 was also not disclosed, it claimed.
The insurer further claimed failure by Ms Davy to ensure her staff were Garda vetted before working with children.
Solicitors for Ms Davy said the Fairview Park incident arose when she was operating as a sole trader, she had defended herself “vigorously” and a number of inspection reports around this time were “generally favourable”.
They also said the May 2006 corporal punishment issue never proceeded to court and the supervision issues were dealt with.
On the Garda vetting, they said Ms Davy is “actively dealing” with Tusla in relation to these matters, the insurer would be kept updated and Ms Davy had confirmed the crèches are currently in compliance with all Garda vetting requirements.
Ms Davy also said the terms of the proposal form did not require her or the applicant companies to disclose the matters complained as those matters pre-dated 2014 when the crèches first took out policies with the insurer.
She had answered and signed the proposal forms accurately and to the best of her knowledge and belief and free from any fraudulent or dishonest intent or motive, she said. She made all relevant disclosures and provided the information in the full belief the matters now raised by the insurer would not have had any influence on its assessment and acceptance of insurance.
Ironshore said she was required under the policies to provide the information referred to by it and had also given an “unsatisfactory” response to the Garda vetting issue.
It also argued it was entitled to avoid, or in the alternative, cancel the policies as though they had never existed and return the premiums to Hyde and Seek.
Mr Justice Barniville said the applicants, represented by Ciaran Lewis SC, met certain tests for the granting of an injunction. He found there was a fair issue to tried in relation to the issue over Garda vetting of staff of the crèches.
He also found there was a fair issue to be tried in relation to the cancellation of the policies. In his view, it was arguable that there was no entitlement to cancel them in circumstances where the insurer had already stated it had avoided the policies in a letter to the applicants.
He was not satisfied there was a fair issue to be tried in relation to the “fair terms” of the cancellation issue.
In relation to the adequacy of damages, he accepted the crèche side’s argument it would cause enormous damage.
He accepted the applicants may find themselves in the same position at the end of the December when the policies expire at the end of their terms. However, the time between now and then may afford the crèches companies the opportunity to inform staff and parents.
He was also satisfied damages are an adequate remedy for the insurer.
He found the balance of convenience favoured the granting of the order as the least harm would be done by granting the injunction.