David Frederick Cuckow v AXA Insurance UK Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ritchie |
| Judgment Date | 28 March 2023 |
| Neutral Citation | [2023] EWHC 701 (KB) |
| Docket Number | APPEAL REF: QB 2021 007 |
| Court | King's Bench Division |
[2023] EWHC 701 (KB)
Mr Justice Ritchie
APPEAL REF: QB 2021 007
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ON APPEAL FROM
THE COUNTY COURT AT KINGSTON-UPON-HULL
CLAIM NO F09YM920
John McDonnell KC and Richard Bowles, (instructed by SSB Law Solicitors) for the Appellant/Claimant
Leigh-Ann Mulcahy KC and Christopher Knowles, (instructed by Kennedys) for the Respondent /Defendant
Hearing date: 16 th March 2023
APPROVED JUDGMENT
The background
This is an appeal from a judgment of HHJ Richardson dated 1.2.2021 after the trial of a claim for indemnity by the Claimant against the Defendant insurer under the Third Party (Rights Against Insurers) Act 1930 (the 1930 Act).
The Claimant entered a written contract with a company called Mark Group Limited (“MGL”) for the installation of cavity wall insulation (CWI) at his house in September 2012, after MGL or their agents or contractors had carried out a suitability survey. Hereafter I will call the contract and survey the “C&S documents”.
Damp emerged in 2014 which the Claimant blamed on the CWI. MGL went into liquidation in October 2015 and Deloitte LLP (“Deloittes”) were appointed as administrators. Deloittes failed, over the next 3 years, to identify and retain the Claimant's C&S documents and when the Claimant sent his letter of claim in October 2018 the documents were (allegedly) not in Deloittes' possession, power or control. AXA UK Plc (“AXA”) insured MGL and were notified of the claim, so they asked Deloittes for the C&S documents because they considered that they were entitled to do so under the terms of the insurance policies which they had written for MGL's liabilities. Deloittes failed to hand them over or even to look for them. AXA then declined indemnity. The Claimant then sued MGL and obtained judgment.
Having obtained judgment, the Claimant sued AXA under the 1930 Act. The Judge dismissed the claim. The Judge construed the key clauses in the insurance policy: the Claims Notification Condition and the Claims Procedure Condition (“the Conditions”) in a way that resulted in the conclusion that Deloittes (acting for MGL) were in breach by failing to supply the C&S documents to AXA after a reasonable request had been sent.
By a notice of appeal dated 24.3.2021 the Appellant seeks to overturn the judgment. There were 4 grounds of appeal served with the Notice of Appeal. Ground 1 was that the Judge did not construe the terms of the insurance policy correctly. The Appellant asserted that the Judge focussed on the reasonableness of the requests (wrongly) and should have focussed on whether the requests were breached. It was submitted that Deloittes only had to hand over documents which they had in their possession or power at the date of the request. They did not have the C&S documents so they were not in breach. Ground 2 was in the alternative and to the effect that if the Judge's construction was correct, and the loss or disposal of the C&S documents could lead to a breach of the policy terms, on the proper construction of the policy, in 2018 there was no breach because there was no finding of Guilty Disposal (defined as intentional, reckless or negligent disposal) and/or Deloittes had no Knowledge of Importance (defined in para. 11 below) about the documents. Ground 3 was a finesse of the Ground 2 assertion that Deloittes' did not have the requisite Knowledge of Importance at the time when the documents were disposed of. Ground 4 was another extension of ground 2, Ground 2 asserting that Deloittes did not have Knowledge of Importance because of the Judge's findings of fact.
Permission to appeal was granted for all four Grounds by Lambert J on 26.1.2022.
The Appeal was listed for hearing in late 2022 but adjourned due to the ill health of the Appellant's leading barrister. A second skeleton was served by the Appellant further finessing the submissions on the Grounds and answering the Respondent's skeleton. Then, in early 2023, the appeal was adjourned again for the same reason. The Appellant filed and served a third skeleton argument 2 weeks before the hearing (whilst never amending or applying for permission to amend his Grounds of Appeal). In the third skeleton he relied on S.2 of the 1930 Act to aid in the construction of the Conditions (I shall define these below) in the policy. Further the Appellant asserted that the Conditions were not conditions precedent in law. Further still, the Appellant sought to amend Ground 2 to withdraw the concession that negligence was sufficient for Guilty Disposal, now asserting that only intention or recklessness would have been sufficient. I granted permission for the Appellant to rely on the third skeleton a matter of 2 weeks before the appeal hearing. Any application for permission to amend the Grounds themselves remained unissued and outstanding for the appeal hearing.
The Respondent submits that this Court should uphold the Judge's rulings in law.
There is no appeal against the Judge's findings of fact.
Bundles and evidence
I had before me the following bundles: an original appeal bundle, a supplementary bundle and an authorities bundle. Recently the Court received an updated appeal bundle and an updated supplementary bundle, then a bundle of skeleton arguments and finally a further bundle of authorities.
Definitions
I define the words “Knowledge of Importance” as the actual or constructive knowledge of MGL/Deloittes that the C&S documents and the information therein would be important to AXA's effective handling of their defence against any future claim which might be brought by the Claimant and AXA's ability to claim a contribution or indemnity against any sub-contractors or materials suppliers, so AXA would reasonably want to request MGL/Deloittes to provide them.
I define “Guilty Disposal” by MGL/Deloittes as causing or permitting of the loss or disposal of the C&S documents and the information therein with the requisite mental state: intention, recklessness or fault-based carelessness, at a time when they also had Knowledge of Importance.
The issues in this appeal
The issues on this appeal were as follows.
Substantive issues
Did MGL breach the Conditions in its insurance policy in November 2018? This depended on the proper construction in fact and in law, of the policy. This involved consideration of whether:
(1) The information in the documents existed at the time of the request;
(2) MGL/Deloittes had Knowledge of Importance when the documents were lost or disposed of;
(3) MGL/Deloittes effected a Guilty Disposal of the C&S documents;
(4) The request for the C&S documents to be produced was reasonable; and
(5) The Conditions were properly characterised as “conditions precedent” entitling AXA to refuse indemnity or were they merely written conditions entitling AXA to claim for damages for any loss they could prove.
Procedural issues
The procedural issue was whether the Appellant should be permitted to raise new points and/or amend the Grounds of Appeal to pursue arguments not made in the Court below. The Appellant submitted he should be permitted, on appeal, to advance the following arguments which were either not advanced at the trial or were conceded at the trial by the Claimant.
(1) The Conditions were not conditions precedent.
(2) The 1930 Act assists in the construction of the Conditions.
(3) That MGL's knowledge at the date when the C&S documents were lost or disposed of was not Knowledge of Importance such that they were in breach of the Conditions (for various reasons).
(4) That Guilty Knowledge had to be proved by AXA before they could establish breach of the Conditions.
(5) That negligence was not sufficient to establish Guilty Disposal and hence breach, only intentional or reckless disposal would be sufficient.
Chronology of facts
The facts found by the Judge are not in dispute so I can set them out here in chronological order.
Before the request for the C&S document
In September 2012 the Claimant agreed with MGL to install CWI and signed a written contract. At para. 17 of the Judgment the Judge listed the directors of MGL as Chris Brazendale; Nathan Snowden-Merrills; William Rumble and Steve Crow. MGL “employed” (the Judge's words) technical sales advisers who carried out a suitability survey of the Claimant's house before the contract. It was not clear whether the use of the word “employed” was strict or whether MGL used subcontractors. The CWI work was paid for or subsidised by the UK Government. It was installed on the 13th of September 2012 at the Claimant's house. The Claimant was given a guarantee which he retained. The Claimant did not retain copies of the contract or the survey.
MGL entered into a policy of insurance with AXA on the 31st of March 2011 and that policy was renewed annually until it went into administration.
The Claimant noticed damp in his house in 2014 but does not appear to have done anything about it. The Judge made no findings of fact in relation to when this occurred but counsel for AXA informed me of this being in 2014, according to the Claimant's skeleton in the trial below.
Before October 2015 MGL started to receive claims in relation to defective CWI work.
In 2014 MGL had recorded a gross profit of £96.5 million and a net profit of £40 million. They had more than 1,000 employees. On the 7th of October 2015 MGL were placed into administration. Three partners of Deloittes were appointed as administrators and the team consisted in total of 12 staff, one of whom was Joe Barry.
On the 14th of October 2015 Deloittes agreed to sell part of MGL's business to Billsave UK Ltd, a new company set up by the same four directors of MGL set out above. Billsave were given by...
To continue reading
Request your trial