Allianz Insurance Plc v The University of Exeter
| Jurisdiction | England & Wales |
| Judge | Bird |
| Judgment Date | 22 March 2023 |
| Neutral Citation | [2023] EWHC 630 (TCC) |
| Docket Number | Claim No: HT-2022-000021 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2023] EWHC 630 (TCC)
His Honour Judge Bird sitting as a Judge of this Court
Claim No: HT-2022-000021
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building
London, EC4A 1NL
Miss Isabel Hitching KC (instructed by DAC Beachcroft LLP) for the Claimant
Mr David Pliener (instructed by Fenchurch Law Limited) for the Defendant
Hearing dates: 24th & 25th January 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Wednesday 22 nd March 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
A. Introduction
This case concerns an insurance claim submitted by the defendant and declined by the claimant.
The damage suffered by the defendant, and the subject of the claim, came about in the circumstances set out below. The facts are agreed. In summary, in 1942 a bomb was dropped by hostile German forces in Exeter. The bomb did not explode but lay undiscovered until 2021 when it was unearthed during building works. Bomb disposal experts were called in. They determined that the bomb should be exploded and that it could not safely be transported away. The damage was caused when the bomb exploded as the result of a controlled detonation.
The claimant insurer is bound to honour the claim made by the defendant if the claim is one covered by the contract of insurance. The issue that arises for determination in this case can be simply stated: was the damage in respect of which the claim is made “ occasioned by war”? If it was, the claim and damage are excluded. If it was not, the claim and damage fall within the terms of the insurance cover and the claim (subject to working the relevant detail) must be met.
B. The Claim
Part 8 proceedings were issued by the insurer on 26 January 2022. The claimant seeks declarations to the effect that it is entitled to decline the defendant's claim on the policy.
The process by which the claim comes to a final hearing is unorthodox. The requirements of CPR part 8 have not been followed so that neither party has for example filed any evidence. Instead the claimant has served Particulars of Claim as if the claim was one governed by CPR part 7. The parties have not treated the claim as one made under part 7 because there is no defence.
Further the claim is headed as being in the “shorter trials list” per CPR PD 57AB. The shorter trials scheme only appears to apply to part 7 claims and none of the usual directions as to witness statements or disclosure have been given. I am not clear if there has ever been a case management conference.
Despite these procedural anomalies, the parties have brought the matter to trial efficiently and there is no suggestion that any unfairness has arisen. The issues are clear, and the relevant facts are agreed. The parties have agreed to proceed on the basis that the claim is a part 8 claim. I endorse that agreement. The effect is that the claim is not one to which the shorter trials scheme applies.
C. Agreed Facts
The following agreed facts are taken, in the most part, from the “ Particulars of Claim” but are supplemented in places by the content of an incident report compiled after the successful detonation of the bomb.
On 26 February 2021 contractors working on a construction site adjacent to the defendant's campus unearthed an unexploded bomb. The Emergency Services were immediately contacted and a safety cordon, initially of 100-metre radius and subsequently of 400-metre radius, was established around it. Halls of residence owned by the defendant, known as blocks A to E inclusive of Birks Grange Village and Block B of Clydesdale Rise (‘the halls of residence’), fell within the safety cordon and were evacuated.
An Explosive Ordnance Disposal (‘EOD’) team from the Royal Logistic Corps (‘the RLC’), under the command of Colonel Daniel Reyland, Commander of 29 Explosive Ordnance Disposal and Search Group 3, identified the bomb as a 1000kg/2,200lb SC1000 thin cased, high explosive bomb dropped by German forces during World War II, and nicknamed ‘the Hermann’ after Hermann Göring. The bomb's fuze was carefully excavated in an attempt to identify it. The attempt revealed a single, very degraded, Transverse Fuze. The corrosion was such that no identification markings were visible, and it was noted that the metal had deteriorated to a point where the electrical contacts of the fuze were exposed, and fragments of the fuze were being dislodged from the bomb when brushed. The EOD team determined that the condition of the bomb (due to age, rusting, and uncertainty as to whether it was booby trapped) was such that it could not safely be removed from the site for controlled explosion, nor could a trepanning method be employed to remove some or all of the explosive. The post incident report notes that “ the only realistic course open to the team” was to detonate the bomb on site, a very short distance (25–30 m) from where it lay, in a controlled explosion adopting safety measures designed to reduce, as far as possible, the consequences of such an explosion. These comprised the creation, by the EOD working with the Royal Navy during 27 February 2021, of a ‘sand box’ (a metal fence erected around the bomb which was then packed with 400 tonnes of sand) and the digging of trenches to limit the ground shock caused by the explosion.
D. Damage
The controlled explosion (“the detonation”) took place at 18:10 on 27 February 2021. It resulted in the complete destruction of the bomb and the consequent release of its full explosive load. The post incident report notes that “ it was unfortunate, but unavoidable given the [fact the bomb contained between 520kg and 630kg of high explosive which exploded] and the small distances involved, that some damage was caused to some buildings in the immediate vicinity of the site”.
E. Insurance
On 1 April 2020, the claimant had issued a policy of insurance to the defendant, with a term of one year. The defendant notified a claim under the Policy in respect of physical damage to student halls of residence and business interruption in connection with the temporary re-housing of students.
On 28 April 2021, the claimant declined the defendant's claim on the basis that any loss or damage suffered by the defendant fell within the scope of the War Exclusion clause, being loss and damage ‘occasioned by war’.
The sole issue before the court is whether, properly construed, the War Exclusion clause excludes the alleged physical damage and loss suffered by the defendant from the cover provided by the general insuring clause.
F. The Policy
The claimant has treated the claim as one made under the general insuring clause. It provides that the insurer will:
“ Indemnify or otherwise compensate the insured against loss, destruction, damage, injury or liability (as described in and subject to the terms, conditions, limits and exclusions of this policy or any section of this policy) occurring or arising in connection with the business during the period of insurance or any subsequent period for which the insurer agrees to accept a renewal premium.”
The “war” exclusion is set out at general exclusion 2 as follows:
“ War ( Not applicable to the Computer, Engineering Machinery Damage, Engineering-Business Interruption, Employers' Liability, Personal Accident, Business Travel, Terrorism, Fidelity Guarantee, Cyber and Directors and Officers Sections) Loss, destruction, damage, death, injury, disablement or liability or any consequential loss occasioned by war, invasion, acts of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection or military or usurped power.”
The structure of the general insuring clause is such that no liability to indemnify in respect of loss occasioned by war ever arises. The exclusions are therefore part of the definition of the scope of the cover, not exemptions from liability for cover which would otherwise exist.
G. Arguments
The parties accept that in order to answer the central question: “was the loss occasioned by war?” I need to consider what the “ proximate cause” of the loss was. The phrase “ proximate cause” has a particular meaning in insurance cases. I deal with that meaning at section H below.
Miss Hitching KC, who appears for the claimant, submits (as her primary case) that the proximate cause of the loss was the dropping of the bomb. That act is accepted to be an act of war and so, if she succeeds in that argument, the claimant is entitled to the relief it seeks. As an alternative position, Miss Hitching submits that the dropping of the bomb was “a” (not “the”) proximate cause of the loss. If she succeeds in that, then even if there are other “proximate causes” the claimant would still succeed. The exclusion (she submits) would apply by operation of the concurrent causes rule (where there are concurrent proximate causes, one insured against the other excluded, the exclusion applies see Wayne Tank and Pump v Employers Liability Assurance Corp. [1974] QB 57 cited at para.174 of FCA v Arch [2021] UKSC 1 and at para.27 of Brian Leighton (Garages) Limited v Allianz [2023] EWCA Civ 8).
Mr Pliener, who appears on behalf of the defendant, submits that the proximate cause of the loss was the deliberate act of the bomb disposal team in detonating the bomb, not the dropping of the bomb. He submits that support for that point can be gleaned from the language used in the policy, the fact that the parties cannot have intended that the policy exemptions would apply to historic wars and the relevance and purpose of the exclusion. He submits that this is not a concurrent...
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When Is A Cause A Proximate Cause?
...clause under a property damage and business interruption policy (the Policy). In Allianz Insurance Plc v The University of Exeter [2023] EWHC 630 (TCC), the High Court held that the insurer was entitled to a declaration that the insured's claim for damage and other losses was not covered by......