Bradley v Eagle Star Insurance Company Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PURCHAS,LORD JUSTICE STAUGHTON,LORD JUSTICE LLOYD |
| Judgment Date | 25 March 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J0325-7 |
| Date | 25 March 1988 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 88/0287 |
[1988] EWCA Civ J0325-7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Macpherson)
Royal Courts of Justice
Lord Justice Purchas
Lord Justice Lloyd
and
Lord Justice Staughton
88/0287
MR. D. ALLAN (instructed by Messrs John Pickering, Oldham) appeared on behalf of the Appellant/Plaintiff.
MR. S. GRIME, Q.C. (instructed by T. Unsworth, Esq., Manchester) appeared on behalf of the Respondents/Defendants.
I will invite Lord Justice Staughton to deliver the first judgment.
On 26th September 1986 Mrs. Doris Bradley commenced an action by originating summons in the Oldham District Registry. The relief that she sought was an order that the defendants disclose the terms and particulars of all contracts of insurance issued by them to Dart Mill Limited in respect of liability of Dart Mill Limited to its employees for personal injuries sustained by employees at work. The periods of time in respect of which disclosure was sought were from 1933 to 1934, 1940 to 1946 and 1953 until 1970.
The action was for pre-action discovery under section 33(2) of the Supreme Court Act 1981. A question has been raised by Mr. Grime, on behalf of the respondents, as to whether the claim which Mrs. Bradley might bring would be a claim for personal injuries in the terms of that section; but that is not one of the reasons given by the judge, from whom this appeal is brought, for dismissing Mrs. Bradley's claim, and there is no respondents' notice raising it. It is to be noticed that the claim is not brought under section 2(2) of the Third Parties (Rights against Insurers) Act 1930, which also deals with the disclosure of documents by insurers.
The question for the purposes of this appeal is whether Mrs. Bradley has a reasonable prospect of making a successful claim against the defendants. If she has, then discovery should be ordered in the present proceeding, but if she has not, then there should be no order for discovery: see Dunning v. United Liverpool Hospitals' Board of Governors [1973] 2 A.E.R. 454.
On 30th January 1987 Mr. District Registrar Burton granted Mrs. Bradley's application. There was an appeal, and on 9th April 1984 Mr. Justice Macpherson allowed the appeal and dismissed her claim for relief.
Although in point of form this appears to be a minor interlocutory matter, it does in fact depend on a point of law of some substance and it may be of some general importance.
The facts are set out in the affidavit of Mr. Pickering, the solicitor acting for Mrs. Bradley. He says: "2. Mrs. Bradley has told me that she worked at the mill of a company called Dart Mill Limited in Bolton in the cardroom between 1933 and 1934 and from 1940 until 1946, and from 1953 until 1970. In August 1970 she was certified by the Pneumoconiosis Medical Panel to be suffering from byssinosis and the disability was assessed at 30 percent. 3. I have arranged through agents for a search to be made in the Register of Companies and I have been told that Dart Mill Limited was voluntarily wound up and that the company was dissolved in 19 76. 4. I wrote to the Eagle Star Group on 19th September 1984 after I had been informed by the Secretary of Mrs. Bradley's trade union that it was believed that the Eagle Star Group were the insurers of the Federation of Master Cotton Spinners of which the Dart Mill Company was a member and by letter dated 22nd October 1984 the Eagle Star Group informed me that Dart Mill was a member of the Federation of Master Cotton Spinners throughout the periods of Mrs. Bradley's employment."
Mrs. Bradley desires to say that she came to suffer from byssinosis through the negligence or breach of statutory duty of her former employers, Dart Mill Limited.
All that, of course, was a long time ago. It is open to question whether she should now be allowed to pursue her claim under the provisions of the Limitation Act. We do not have to decide that today. What we have to decide is whether she should be prevented from pursuing any claim she may have against the insurers by the fact, which might be described as an accidental circumstance, that her employers were wound up in 1976 and cannot now be restored to the Register; consequently there is now no possibility of her bringing an action against them; it would be struck out.
Mrs. Bradley, if she obtains discovery and it proves rewarding, wishes to proceed against the insurers under the Third Parties (Rights against Insurers) Act 1930. Section 1 of that Act provides:
"1. Where under any contracts of insurance a person (hereinafter referred to as the insured) is insured against liabilities of third parties which he may incur, then—
(a)…..
(b) in the case of the insured being a company, in the event of a winding-up order being made…..
if, either before or after that evenly any such liability as aforesaid is incurred by the insured, his rights against the insurer under the contract in respect of the liability shall, notwithstanding anything in any Act or rule of law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred."
The question whether Mrs. Bradley would succeed against the insurers depends on the provision that if any such liabbility as aforesaid is incurred, her employers' rights against the insurer under the contract in respect of the liability shall be transferred to and vest in her.
Mr. Grime accepts that liability has been incurred, if it be the fact that Mrs. Bradley suffered from byssinosis in consequence of the negligence or breach of duty of her employers. Therefore in the terms of the Act it follows that rights against the insurers, if any, have been transferred. The question is, are there any rights and what are they?
Mr. Allan argues that all the contractual rights under the policy, subject of course to any terms, conditions or limitations in the policy but including the right to sue and recover judgment from the insurers, have been transferred to Mrs. Bradley. Mr. Grime says that Dart Mill Limited did not have such a right and would not have had it until they had been held liable to Mrs. Bradley, either by action or by arbitration, or by agreement between Mrs. Bradley and her employers made presumably with the consent of their insurers. As none of those events have occurred Mr. Grime submits that no such right has been transferred to Mrs. Bradley. He says in a word that all that Dart Mill Limited had was a contingent right to claim from their insurers if and when liability should be established against them by Mrs. Bradley. As that contingency can no longer be fulfilled, the contingent right is of no value to Mrs. Bradley.
It is not immaterial to mention that a similar point arose before me when I was sitting at first instance at the Moot Hall, Newcastle in November 1987 in the case of Docherty v. National Mutual Employers Insurance Co. and The Iron Trades Insurance Co. That was one of a series of cases of people who had suffered from asbestosis. They all sued their employers—sometimes quite a number of employers, because they had been employed in a succession of jobs over the years, involving contact with asbestos. So far as experience goes they were all settled, sometimes for substantial sums amounting to tens of thousands of pounds—all, that is, except Mrs. Docherty's case. Her deceased husband had been employed by two companies in the asbestos field, both of which had since been wound up and struck off the Register. Due to that—which I would again describe as 'an accidental circumstance'—Mrs. Docherty could recover nothing at all. I held that I was bound by the decision of this court in Post Office v. Norwich Union Fire Insurance Society Limited, to hold that her action must fail, and so it was struck out. An application was made on her behalf for leave to proceed by the leapfrog procedure to the House of Lords but, as the defendants would not consent to that, leave could not be given. I do not know whether an appeal to this court is pending from that decision.
Today the point arises not in a substantive action, but on an interlocutory application. That is unfortunate, but it has to be decided. Mr. Allan suggested that we might make an order for discovery, even if a substantive action would be bound to fail on the law as it stands in this court. I do not think that it would be right to do that. Mr. Grime was invited by the court to agree to giving discovery, leaving aside for the time being the merits of the action, so that if the point is to be taken it could be taken in substantive proceedings. He was not prepared to consent to that. He says that the nettle must now be grasped.
I turn to the decision of this court in the Post Office case. There the contractors, A.J.G. Potter & Sons Ltd., whilst digging up the road had damaged a telegraph line belonging to the Post Office to the extent of £839. 10s.3d. The contractors went into liquidation. The Post Office, instead of suing the contractors, sued their insurers direct. No doubt they said to themselves that there would be no difficulty about proving negligence and no difficulty about proving the cost of repairing their damaged telegraphic line, so they might as well save time and proceed forthwith against the insurers. Mr. Justice Donaldson at first instance held that they were entitled to do so, but in this court the action failed. There were two grounds for the decision. The first turned on a particular clause in the contract. That appears from the...
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