Cork restaurant operator sues broker after insurer avoided claim over fire at premises

A restaurant operator claiming to have suffered losses of €395,000 due to a fire must provide security for an insurance broker’s costs of defending the operator’s case alleging negligence, the High Court has ruled.

Mr Justice Garrett Simons, in a judgment on Thursday on a pre-trial application by the broker, Campion Insurance Ltd, said the broker was entitled to a security for costs order. The amount of security will be fixed later.

The judge noted, in its action, Nobil Food Limited claims Campion failed to ensure Nobil’s claims history was disclosed to Allianz plc when renewing its insurance policy with the insurer.

Nobil alleges Campion acted negligently and in breach of contract in putting in place the agreement between it and Allianz.

Nobil said a fire broke out at its Opera Square Steakhouse & Seafood Restaurant in Cork in June 2016.


Allianz avoided the policy for insurance due to non-disclosure of previous claims, Mr Justice Simons noted.

Campion is defending the proceedings in full, he said. It pleads that one of Nobil’s director’s, Nabil Cherif, had completed the insurance proposal form and declared the statements contained were true and no material facts had been withheld, to the best of his belief and knowledge. It is alleged Mr Cherif knew this declaration was false.

Nobil claims it would have been entitled to recover some €325,000 from the insurance company, the alleged value of fixtures and fittings destroyed in the fire, the judge said.

The judge said this valuation is “not borne out” by the company’s financial statements. For the 2015 financial year, the company’s fixed assets were recorded as €147,853, while the year after the fire these assets were “surprisingly” valued at €139,804, he noted.

Legal costs

Nobil resisted the application for an order of security for Campion’s legal costs, estimated at €195,000, claiming the broker delayed in seeking the security order.

The restaurant operator also claims its inability to meet costs has been caused by Campion’s wrongdoing.

In response, the broker said Nobil had been struck off the company’s register and dissolved in March 2019, before being restored to the register 14 months later. While the company stood dissolved, the proceedings could not continue in its name, Campion claimed.

Financial performance

On reviewing Nobil’s historic financial performance, an independent chartered accountant for Campion found the company was insolvent before the fire and there has been no marked deterioration in its financial position since, Mr Justice Simons said.

The company had been “consistently loss-making” since its incorporation in 2012, while there was also an outstanding €190,984 director’s loan by Mr Cherif according to abridged financial statements for the end of 2018, he said.

Nobil’s removal from the register and dissolution was a “very significant event”, he said.

Mr Justice Simons found the security of costs motion was issued within a “reasonable” time frame.

He also found Nobil failed to demonstrate its inability to discharge costs was due to the alleged wrongdoing of the broker.

Having found no reason why Campion should not be entitled to security for the entirety of its costs, Mr Justice Simons said he would hear in December submissions from the parties on the appropriate costs order to be made.


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