J A Chapman & Company Ltd v Kadirga Denizcilik ve Ticaret as
| Jurisdiction | England & Wales |
| Judge | Waller,Chadwick L JJ,Sir Brian Neill |
| Judgment Date | 05 March 1998 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 March 1998 |
Court of Appeal
Before Lord Justice Waller, Lord Justice Chadwick and Sir Brian Neill
Insurance - premiums not paid by maritime broker to insurer - rule that broker can recover premiums from assured applicable
The usual rule in maritime insurance recognised in section 53(1) of the Marine Insurance Act 1906 that a broker could recover premiums earned from an assured, even if he had not paid them to the insurer, was not to be displaced unless the court was satisfied that the parties clearly intended otherwise.
The Court of Appeal so stated, inter alia, in a reserved judgment when dismissing an appeal by Kadirga Denizcilik Ve Ticaret AS and three Turkish shipowners against a decision of Mr Justice Thomas on April 8, 1997 entering summary judgment against them for the balance of claims made by J A Chapman & Co Ltd.
The owners had instructed Chapman & Co, who were insurance brokers, to effect marine insurance. Chapman made claims in respect of premiums payable under the insurance policies.
The question on appeal was whether Chapman, as opposed to the insurers, had the right to recover the premiums even if the premiums had not been and might never be paid, at least in full by Chapman to the insurers.
Section 53 of the 1906 Act provides:
"(1) Unless otherwise agreed, where a marine policy is effected on behalf of the assured by a broker, the broker is directly responsible to the insurer for the premium, and the insurer is directly responsible to the assured for the amount which may be payable in respect of losses, or in respect of returnable premium."
Mr Michael Coburn for Kadirga; Mr Julian Flaux, QC and Mr Gavin Geary for Chapman.
SIR BRIAN NEILL said that it was accepted that in general it was the broker and not the insurer who had the right to recover premiums earned from the assured.
Moreover, as a general rule the broker could recover premiums even if he had not yet paid them to the insurer. Custom and practice was placed on a statutory footing by the Marine Insurance Act 1906.
The shipowners argued that the general practice recognised by section 53(1) of the 1906 Act did not apply because on the proper construction of the
policies it was "otherwise agreed". In particular, they relied on the payment of premium warranty contained in the policies.
It was true that section 53(1) of the 1906 Act did not deal...
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Goshawk Dedicated Ltd and Others v Tyser & Company Ltd and Another
... ... Thus in Chapman v Kadirga Demicille ve Ticaret [1998] IRLR 377 Sir Brian Neil suggested ... ...
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Heath Lambert Ltd v Sociedad de Corretaje de Seguros and another
...would have been liable to the re-assured for any losses under the policy. It is also common ground (as it was in Chapman & Co Ltd v Kadirga Denizcilik Ve Ticaret [1998] Lloyd's Rep Insurance and Reinsurance 377 at 385) that 'unless otherwise agreed' it is the general rule in these circumsta......
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Heath Lambert Ltd v Sociedad de Corretaje de Seguros
...for the second appellant. The following cases were referred to in the judgment: Chapman (JA) & Co Ltd v Kadirga Denizcilik ve Ticaret AS [1998] CLC 860. Power v Butcher (1829) 10 Br & 329; 109 ER 472. Prentis Donegan & Partners Ltd v Leeds & Leeds Co Inc [1998] CLC 1132. Shee v ClarksonENR ......