AIG Europe Ltd v McCormick Roofing Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Roger ter Haar |
| Judgment Date | 21 April 2020 |
| Neutral Citation | [2020] EWHC 943 (TCC) |
| Date | 21 April 2020 |
| Docket Number | Case No: HT-2019-000303 |
| Court | Queen's Bench Division (Technology and Construction Court) |
and
[2020] EWHC 943 (TCC)
Mr Roger Ter Haar QC
Sitting as a Deputy High Court Judge
Case No: HT-2019-000303
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
The Rolls Building
Fetter Lane, London, EC4A 1NL
Carlo Taczalski (instructed by Clyde & Co) for AIG Europe SA
James Davison (instructed by Clarkslegal) for the Defendants
James Watthey (instructed by DAC Beachcroft) for the Third Party
Hearing date: 12 March 2020
Approved Judgment
Mr Roger ter Haar QC:
AIG Europe SA applies to be substituted as the Claimant in this action. The application is opposed both by the Defendants and the Third Party.
On 31 August 2013 a fire broke out at 58 Fenchurch Street, London EC3M 4AB. AIG Europe Limited was then the leaseholder of that property.
The Particulars of Claim in these proceedings allege that the fire started in the course of works to convert a flat roof to a roof terrace. There is no dispute that the First and/or Second Defendants were involved in that work. It is the Defendants' case that their involvement was minimal.
The case against the Defendants is that the fire was caused by the negligence of one or other or both of the Defendants.
The Third Party was joined to these proceedings by an order made on 19 February 2020. The Third Party is the First and/or Second Defendant's liability insurer. As set out in the order, it was joined to this litigation with permission to:
1.1 Oppose, and be heard in, the Claimant's Application dated 20 December 2019 (that is the application upon which I am ruling in this judgment);
1.2 Seek a declaration that it is not liable to indemnify the First Defendant and/or the Second Defendant against any liability which they may have for the matters and sums claimed in this action;
1.3 Contest whether the First Defendant and/or the Second Defendant are liable as alleged or at all.
The proceedings were started by a Claim Form issued on 27 August 2019. It named the Claimant as “AIG Europe Ltd”. The brief details of the claim were stated as follows:
“In May 2012, the Claimant entered into a contract with Overbury Plc to convert the flat roof on level 13 of the property at 58 Fenchurch Street, London, EC3M 4AB (“the Property”) into a roof terrace.
The Defendant(s) were sub-contracted by Overbury Plc to design and install the roofing system which included installing a vapour control layer, insulation and single ply membrane on the roof terrace of the Property.
On 31 st August 2013 at approximately 17.43hrs, following completion of roofing works (which included hot work processes) by the Defendant(s) there was a fire at the Property which caused extensive loss and damage to the Claimant.
It is the Claimant's case that the Defendant(s) owed the Claimant a duty of care to:
i. carry out the roofing works without causing damage to the Property;
ii. adopt a safe system of work during the roofing and hot work processes; and
iii. take adequate care and precautions following completion of the hot works/roofing works to prevent/minimise the risk of fire.
The Claimant alleges that the Defendant(s) is liable for the loss and damage sustained by the Claimant.”
The Claim Form was served on 20 December 2019. It was accompanied by Particulars of Claim which pleaded the following in paragraphs 2 to 5:
“2. The Claimant is the successor company to AIG Europe Limited (“AIG”). Before its merger with the Claimant and dissolution, AIG held a long leasehold interest in, and operated an insurance business from, The AIG Building, 58 Fenchurch Street, London, EC3M 4AB (the “Property”); the Defendants (or one of them) owed AIG a duty of care and breached it causing damage to the Property. Following the merger, they are liable for the damage caused to that Property (and other losses) pursuant to an assignment of AIG's cause of action to the Claimant.
3. Unfortunately, the Claimant has been incorrectly named on the Claim Form.
3.1 The Claim Form states that the name of the Claimant is AIG. It is not. AIG was a company registered in England and Wales under company number 1486260 which held the leasehold interest in the Property from 21 May 2013 until December 2018.
3.2 However, on 1 December 2018, it transferred part of its business to an English company (“AIG UK Ltd”), and then merged its remaining business with AIG Europe SA which is a company registered in Luxembourg under number B218806; AIG's assets and liabilities (which assets included the cause of action sued upon in these proceedings) were transferred to AIG Europe SA.
3.2 Accordingly, the Claimant should have been named as AIG Europe SA.
An application to amend the Claim Form by substituting AIG Europe SA for AIG Europe Limited is made at the same time as serving the Claim Form and these Particulars.
4. The Defendants are two companies within the same group of companies. At all material times, they have both specialised in and held themselves out as specialising in construction operations relating to roofing including flat roofing. ….
5. Both Defendants are sued because although the Claimant understands that the company engaged by the main contractor to complete the relevant works was the First Defendant, there has been no proper response to the letter of claim which was directed to the First Defendant, and the Second Defendant's name appears on various documents.”
As the Particulars of Claim indicated would be done, the service of the Claim Form and the Particulars of Claim was accompanied by an Application Notice attaching a draft order that:
“AIG Europe SA be substituted in place of AIG Europe Ltd pursuant to rules 17.4 and 19.5 of the Civil Procedure Rules.”
Accompanying AIG's skeleton argument for the hearing before me was a draft Amended Claim Form. As was necessary, the amendments to the brief details of claim went further than a simple substitution of name:
“In May 2012, the Claimant AIG Europe Limited entered into a contract with Overbury Plc to convert the flat roof on level 13 of the property at 58 Fenchurch Street, London, EC3M 4AB (“the Property”) into a roof terrace.
The Defendant(s) were sub-contracted by Overbury Plc to design and install the roofing system which included installing a vapour control layer, insulation and single ply membrane on the roof terrace of the Property.
On 31 st August 2013 at approximately 17.43hrs, following completion of roofing works (which included hot work processes) by the Defendant(s) there was a fire at the Property which caused extensive loss and damage to the Claimant.
It is the Claimant's case that the Defendant(s) owed the Claimant AIG Europe Limited a duty of care to:
i. carry out the roofing works without causing damage to the Property;
ii. adopt a safe system of work during the roofing and hot work processes; and
iii. take adequate care and precautions following completion of the hot works/roofing works to prevent/minimise the risk of fire.
The Claimant alleges that the Defendant(s) is liable to it for the loss and damage sustained by the Claimant. AIG Europe Limited”
Supporting the application was a witness statement from Mr. Viran Ram, a partner in the firm of Clyde & Co., the Claimant's solicitors. The details at paragraphs 11 to 22 below come from that witness statement.
Transfer of the cause of action
AIG Building Limited and AIG Europe Limited were subsidiaries of American International Group Inc.
The Property was the subject of a lease between The Mayor and Commonalty and Citizens of the City of London and AIG Building Ltd dated 15 July 2003.
On 22 March 2013, as part of a corporate re-structure that led to the dissolution of AIG Building Ltd, the lease was assigned to AIG Europe Ltd and AIG Europe Ltd was the entity which primarily carried on business at the Property.
I was told by Mr. Taczalski that when he was drafting the Particulars of Claim that he identified that American International Group Inc's European business had gone through a Brexit driven restructure in 2018.
AIG Europe carried on a range of insurance related business in the UK which included business written in the UK, and business which relied upon passporting rights into the EU. As part of the restructure, the UK business was transferred to a new insurer AIG UK Ltd before the remaining business of AIG Europe Ltd was merged into AIG Europe SA.
On 1 December 2018, AIG Europe Limited and AIG Europe SA entered into a Merger Agreement. Article 3 of the Merger Agreement provided:
“3.1.1 In accordance with the sequence of events set out in article 1.2.3, on Merger Completion, all property, rights and powers of any description) of AEL shall be transferred to AESA as they are on Merger Completion (i.e. on Merger Completion, AEL shall transfer to AESA the entire business of AEL which remains following the UK Transfer, being the European Business including the business of the European Branches).
AESA shall constitute the universal legal successor to AEL (including for each European Branch) and shall continue, after the Merger, to exist under the form of a public limited company (societe anonyme).”
This (together with the balance of the Merger Agreement) gave effect to the intention of a specific carve-out in respect of the UK business (specifically defined), with the subsequent transfer of the entire remainder of AIG Europe Ltd to AIG Europe SA.
The Scheme by which the UK business was to be carved out from AIG...
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