Alan Bate v Aviva Insurance UK Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Tomlinson,Lord Justice Christopher Clarke,Lord Justice Maurice Kay |
| Judgment Date | 21 March 2014 |
| Neutral Citation | [2014] EWCA Civ 334 |
| Docket Number | Case No: A3/2013/2151 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 March 2014 |
[2014] EWCA Civ 334
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION, COMMERCIAL COURT
His Honour Judge Mackie QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Maurice Kay
Vice-President of the Court of Appeal, Civil Division
Lord Justice Tomlinson
and
Lord Justice Christopher Clarke
Case No: A3/2013/2151
The Appellant appeared in person
Graham Eklund QC and Nick Broomfield (instructed by Berrymans Lace Mawer) for the Respondent
Hearing date: 11 February 2014
The Appellant, Mr Alan Bate, appeals against the dismissal by His Honour Judge Mackie QC in the Commercial Court of his claim against the Respondent insurers for an indemnity and damages arising out of a fire on 5 June 2006 at his home, the Long House at Dobcross near Oldham. It is accepted that the Long House was largely destroyed by an accidental fire. The judge held that the insurers were entitled to rescind or avoid the policy by reason of material misrepresentation and non-disclosure. The judge also dismissed a claim for damages pursuant to s.150 of the Financial Services and Markets Act 2000, (" FSMA"). In rejecting the claim the insurers had not, as alleged by Mr Bate, acted in breach of Rule 7.3.6 of the Insurance Conduct of Business Rules ("ICOB") contained in the relevant Insurance Conduct of Business Sourcebook.
Permission to appeal was granted by me on an application on the papers supported by Grounds of Appeal and a skeleton argument prepared by Mr Bate's leading counsel at trial, Neil Moody QC, although not by junior counsel who appeared with him at trial. It was alleged that there had been serious procedural irregularity at trial amounting to unfairness, an allegation the strength of which is difficult to assess without the benefit of adversarial argument and extensive reference to the transcript of proceedings. I shall revert to this later.
At the hearing before us Mr Bate was without legal representation and presented his own appeal. He did so with skill and courtesy, and with considerable insight as to the legal issues involved, but his task was quite hopeless.
As will appear hereafter, the judge found against Mr Bate on a whole raft of issues, on each of which he must persuade us that the judge was wrong if the appeal is to succeed. It was accepted before us that, contrary to the findings of the judge, the insurers could not rely upon the failure to disclose the extent of works being carried out at the Long House, a breach of General Condition 4 of the policy which required such disclosure, as justifying rejection of the claim on that ground alone, as the 2006 fire was unconnected with the breach – see ICOB clause 7.3.6(2)(c) set out below. One issue out of many therefore falls away. In relation to one of the judge's major findings of non-disclosure there was in fact no appeal, save possibly inferentially a reliance upon the ICOB Rules as precluding insurers from reliance thereon. If reliance on the ICOB Rules is unavailing, Mr Bate needs to succeed on every issue of misrepresentation and non-disclosure if his appeal is to succeed. Accordingly, I shall in this judgment concentrate on the major issues. If Mr Bate cannot succeed on these his appeal must fail.
Background
In the account of the background which follows I gratefully adopt with some modification the account given by Mr Graham Eklund QC and Mr Nicholas Broomfield in their skeleton argument prepared for the purposes of the appeal.
Mr Bate has previously operated as a property surveyor ("Alan Bate & Co"), loss assessor ("Bate & Co Loss Assessors and Surveyors"), a Property Consultant who undertook work for solicitors, surveyors, accountants and engineers, and as a director of Parthenon Building and Design Services Limited. In addition to this considerable experience of property-related and insurance-related work, Mr Bate also arranged for various policies of insurance for his numerous companies over the years. His own company, Bate & Co Loss Assessors and Surveyors, carried on from one of the garages at the Long House, at times conducted the instant claim on Mr Bate's behalf.
Long House was a large country house on what was sometimes called the "Long House Estate", although it extended to only 1.9 acres, and was also referred to at times as the "Long House Hamlet".
The Long House "Estate" was originally comprised of the Long House, stables and a tack-house. In January 2001 Mr Bate obtained planning permission to change the use of the Long House to five dwellings and in 2001 Parthenon Building and Design Services Limited ("Parthenon") was incorporated with Mr Bate and his daughter, Emma Bate, as the only shareholders and directors. It was intended that Parthenon would carry out the development works and on 3 April 2003 Mr Bate entered into an agreement with Parthenon to convert the property into five dwellings and to sell them post-conversion.
The development works were intended to create the following buildings at the Long House Estate:-
i) "The Stables", which was to be converted out of the old tack house. The conversion works at the stables were completed by autumn 2004. The Stables, a distinct property, was situated 8.25 metres from the Long House and was registered at HM Land Registry under a separate title on 1 May 2004.
ii) "South View", " East View", and "The Gables", which were to be individual dwellings within the shell of the Long House itself.
iii) The "Coach House", which was to be in part carved out of the Long House and to include the Long House gymnasium, kitchen and laundry areas.
iv) Five garages, one of which would be reserved for each of the five aforementioned dwellings. Three of the garages remained on the Long House title, whilst one was assigned to the Coach House and one was assigned to the Stables.
On 4 April 2004, at which time the Long House was insured by the Zurich Insurance Company, Parthenon caused a fire at the Long House by cutting through an electricity cable. Parthenon had inadequate insurance cover to meet the claim. Mr Bate made a claim in respect of loss and damage quantified at about £50,000 against his household insurers, the Zurich.
Aviva provided Mr Bate with two policies for domestic property cover as a "High Net Worth" individual, placed through Home and Legacy Insurance Services Limited, ("Home and Legacy"), an insurance intermediary with limited underwriting authority on behalf of various leading insurers including Norwich Union, now Aviva. Following submission of a proposal form completed on Mr Bate's behalf by his brokers, Hamptons International, and signed by him on 28 November 2004, the cover incepted for "The Stables" at the Long House and another property, 51 Radnor Drive, Egremont, New Brighton. I shall call this the "2004 policy". In April 2005 a further proposal form was completed on Mr Bate's behalf by Hamptons International and signed by him on 13 April 2005, in consequence of which insurance for the Long House incepted on 31 March 2005. I shall call this second policy the "2005 policy". The two policies were merged in March 2006 with the Long House effectively being placed onto the 2004 policy. Although there was a glitch as to the renewal process in respect of which Mr Bate was critical of the insurers' competence, all three properties were provided with cover retrospectively in May 2006 so that there is no dispute that the insurance was in place at the time of the fire.
The Coach House was an annex onto the rear elevation of the Long House. On 2 April 2004 Mr Bate agreed to sell the Coach House to his daughter, Emma Bate, and an agreement was entered into with Parthenon to undertake conversion works. On 11 June 2004 Mr Bate granted a 999 year lease of the Coach House to Emma Bate and the construction of the Coach House was carried out by Parthenon in the second half of 2004. It was handed over to Emma Bate in February 2006. The Long House and the Coach House remained connected by an internal door and shared a common gas supply.
A fire, accepted to have been accidental, broke out at the Long House on 6 June 2006. By letter dated 21 August 2006 Aviva rescinded and/or avoided the relevant policy on the grounds of misrepresentation and non-disclosure. Proceedings were begun on 16 December 2011.
At the time of the fire in June 2006 Mr Bate was living in the Long House. One unit of the Long House was being converted for the purpose of providing accommodation for his invalid brother, Terence. Emma Bate was living in the Coach House which was having works done to it. The Stables was unoccupied. Efforts to sell it after conversion had failed. It was first let and then Mr Bate's brother Terence lived there between Christmas 2004 and mid-2005. Thereafter unsuccessful efforts were made to let it once more. One garage belonged to the Stables and one belonged to the Coach House. The other three garages were within the registered title of the Long House. Two garages, the Coach House garage and the adjacent garage, which was within the registered title of the Long House, were being occupied for business purposes by Parthenon and by Mr Bate's loss assessing and surveying business respectively. Parthenon carried out work for clients other than Mr Bate and at locations other than the Long House. Next to the garages was the "yard" which Parthenon used substantially for storage of machinery and materials.
The judge's findings in outline
The facts and the findings...
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