Direct Travel Insurance v McGewn
| Jurisdiction | England & Wales |
| Judge | Lord Justice Auld,Lord Justice Mummery,Lord Justice Keene |
| Judgment Date | 12 November 2003 |
| Neutral Citation | [2003] EWCA Civ 1606 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B3/2003/0033 |
| Date | 12 November 2003 |
[2003] EWCA Civ 1606
Lord Justice Auld
Lord Justice Mummery and
Lord Justice Keene
Case No: B3/2003/0033
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIS HONOUR JUDGE DARLOW
IN THE BRISTOL COUNTY COURT
Mr. Simon Davenport (instructed by Plexus Law) for the Appellant
Mr. Paul Cadney (instructed by Fussell Wright) for the Respondent
This is an appeal by Direct Travel Insurance ("Direct Travel") from an order of His Hon. Judge Darlow, of 27 th November 2003 in the Bristol County Court that Shirley McGeown, the Respondent, is entitled to a contractual payment of £50,000 under what has been called a "catastrophic injuries clause" of a single trip holiday insurance policy.
The Facts
In October 1998 Mrs. McGeown, a healthy and fit housewife and mother of three, went on holiday to Turkey. Shortly before going, she obtained insurance cover from Direct Travel, which, under section 6 of the policy, entitled her to a lump sum payment of £50,000 in the event of her suffering any one of the consequences for which it provided.
On 28 th October 1998, in the course of the holiday, Mrs. McGeown was involved in a road traffic accident while a passenger on an air transport bus. She suffered serious injuries from which she has made good, but not complete, recovery. Some nine months later, in July 1999, solicitors on her behalf notified Direct Travel of a claim for payment under section 6(3) of the policy in respect of the injuries she had suffered in the accident. Section 6, which was headed "Personal Accident", provided for one of a number of risks covered by the policy. It was in the following terms:
"What each insured person is covered for.
We will pay you or your legal representatives one of the following amounts for accidental bodily injury. The accident must be caused by something external and visible. The accident must be the only cause of you losing your sight, a limb, become permanently disabled or dying within a year of your journey or one-way trip.
1. Death —£25,000
2. Total and permanent loss of sight in one or both eyes or total and permanent loss of use of one or both hands or feet —£50,000
3. A permanent physical disability which prevents you from doing any paid work (if you are not in paid work, we will provide the same cover for any permanent disability which prevents you from doing all your usual activities) —£50,000"
Mrs. McGeown's initial position was that she had suffered such serious injuries that she had been left permanently disabled in a large number of respects, preventing her from undertaking many activities of an intimate, domestic, social and sporting nature, and also rendering her incapable of work. In her solicitors' opening letter to Direct Travel of 9 th July 1999, they stated that she had suffered a broken back which had left her with "a permanent physical disability which prevent[ed] her from doing work or her usual activities", thus entitling her to claim under section 6(3). In a further letter of 7 th December 1999, with which they enclosed a medical report, they reiterated that claim, saying that a full recovery was not anticipated and that she would "continue to suffer from a permanent physical disability which [would] prevent her from doing work or her usual activities".
Direct Action rejected the claim, maintaining that Mrs. McGeown's injuries were not such as to bring her within section 6(3), since she was still able to undertake some work and many of her former usual activities. Mrs. McGeown's solicitors, in an attempt to persuade Direct Travel of the seriousness and wide extent of her overall disability wrote, on 9 th November 2000, describing her condition as follows:
"… Before the accident Mrs. McGeown was a very active, independent and athletic person. She enjoyed walking, swimming, jogging, cycling, ten pin bowling and, in particular, horse riding. She also enjoyed going out with her friends, dancing, entertaining, to the theatre, cinema etc. She did all the housework, went out and did all the shopping and provided as a mother would want to for her children.
Mrs. McGeown prior to the accident was entirely pain free.
Shortly before the accident our client had looked at returning to work. We enclose a copy of a letter … confirming that a position had arisen, but due to the nature of our client's injury she was unable to accept it.
The accident has completely turned Mrs. McGeown's world upside down. She has been unable to return to work. She is unable to participate in any of the activities that she previously enjoyed so much. She is barely able to run a home and provide for her family in the way that any mother would want.
She is in constant chronic pain in her back. She faces the prospect of submitting to further difficult surgery.
Mrs. McGeown is now unable to care for herself hygienically. She cannot clean herself after going to the toilet. She cannot get in to and out of a bath unaided. She cannot wash her hair. She cannot cut her toe nails.
Mrs. McGeown is now incontinent … [and] … relies permanently on medication …"
Mrs. McGeown, in her pleaded case, in reliance on medical reports and witness statements, continued to pitch her case on the basis of the many and serious disabilities she suffered in most aspects of her life. However, at the outset of the trial, the Judge indicated to counsel his understanding, from his reading of the medical reports, of the parties' respective cases. He said that it did not appear to be Mrs. McGeown's case that she could not pursue each and every one of her usual activities and that Direct Travel appeared to accept that she was permanently disabled so as to prevent her from carrying out at least one of those activities, namely horse riding. On counsel for both parties agreeing with that understanding, he expressed the view that the outcome of the case would depend on his construction of the policy, not on a consideration of the evidence as to the extent of the activities she could no longer pursue as a consequence of her disability. He said that, therefore, unless either party sought to adduce oral evidence, he would not require it. In the light of that indication, neither counsel sought to call oral evidence.
The Issue
Accordingly, Mr. Paul Cadney, who appeared for Mrs. McGeown and appears for her again on this appeal, relied on a much narrower factual case than that pleaded. As she had not been in paid work at the time of her accident, he based her claim on the second and alternative limb of section 6(3), which, he said, entitled her to recover if she was unable to pursue "all [her] usual activities" in the sense of being unable to do any one or more them. Mr. Simon Davenport, who appeared for Direct Travel and also appears for it on this appeal, submitted that those words should be interpreted in the context of section 6 as a whole, which was clearly aimed at providing a one-off payment for major disability radically affecting the insured's whole way of life, not just preventing her from following one or more of her usual pre-accident activities. This is how the Judge characterised the respective cases in concluding from them at the beginning of his analysis that the provision was ambiguous:
"… In my judgment, the clause is clearly ambiguous because if Mrs. McGeown was asked the question in the context of this case, 'Does your disability prevent you from doing all your usual activities?', she could reasonably and perfectly properly reply in one of two ways.
It might elicit the response: 'No, it doesn't. Whilst I can no longer ride a horse or lift and carry to the extent and in the manner I did before the accident, I am still able to carry out some, or even (the insurers would say) many of my usual activities'. …
The second answer could be diametrically opposite: 'Yes, it does. I am now prevented from doing all those things I was previously able to do'.
In the former … the insured would be using the word 'all' as being synonymous with 'each and every one of' her activities. In the latter, she would be using the word 'all' to mean an entirety, a cohesive and indivisible whole amongst a spectrum of usual activities that comprised her everyday lifestyle."
The Judgment
From the starting point that the provision was ambiguous, the Judge said that it should be construed contra proferentem, that is, against Direct Travel, because "[i]f the insurers choose to put forward a clause that is ambiguous, they cannot be heard to complain when the court interprets it in favour of the insured". In approaching his task in that way, he rejected the absurdities that could flow from factual extremes of the respective arguments —an insured recovering £50,000 because of inability to follow just one just of his pre-accident usual activities, however inconsequential, or the insurer successfully resisting recovery to a severely disabled claimant because he could still pursue one such activity. He also rejected the "purposive" approach for which Direct Travel contended, namely that section 6 as a whole was directed to providing a substantial lump sum payment for injury causing permanent and catastrophic disability. He did so because there were no words of that sort in...
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