McAlpine (Alfred) Plc v BAI (Run-Off) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WALLER,LORD JUSTICE BUXTON,LORD JUSTICE PETER GIBSON |
| Judgment Date | 11 February 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0211-1 |
| Docket Number | Case No: QBCMF/98/0692/A3 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 February 2000 |
[2000] EWCA Civ J0211-1
Lord Justice Peter Gibson
Lord Justice Waller and
Lord Justice Buxton
Case No: QBCMF/98/0692/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
Mr. Justice Coleman
QUEEN'S BENCH DIVISION COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Richard Lynagh Q.C. and Mr. Jonathan Woods (instructed by Messrs CMS Cameron McKenna of London for the Respondent)
Mr. Ronald Walker Q.C. (instructed by Messrs Mackrell Turner Garrett of London for the Appellant)
Friday, 11th February 2000
This is an appeal from the judgment of Colman J given on 5 May 1998. He gave judgment against the defendants (BAI). The issue before him, and the issue on the appeal, relates to a condition in a policy of insurance requiring the insured to give notice of any occurrence which may give rise to a claim "as soon as possible … in writing, with full details". BAI submitted before the judge that the condition was a condition precedent, and that failure to comply relieved the insurer from any liability. Alternatively they submitted that the failure to comply amounted to a breach of the insured's duty of good faith or amounted to a repudiation of the contract of insurance, and that the insurers avoided the contract or accepted such repudiation and that on that basis there was no liability under the policy.
The plaintiffs (McAlpine) submitted that if there was a failure to comply with the condition that simply gave rise to a right to damages, and that BAI had failed to establish any such claim.
Colman J preferred the arguments of McAlpine. BAI appeal against that judgment. By a Supplemental skeleton argument they did however make clear that they did not seek to disturb the judge's finding that the condition did not constitute a condition precedent.
The History
On 1 May 1991 a workman called Mr O'Malley was seriously injured. He was working on the cementing of a bridge over the A23 when he fell some distance to the ground. He alleged that the guard-rail was too high, and that there was thus a gap between the rail and the shuttering which was unsafe and through which he fell. The allegation thus was that there was a breach of the Construction (Working Places) Regulations 1966. There was some suggestion that Mr O'Malley might have suffered an epileptic fit which caused him to fall.
Mr O'Malley was employed by one Harry Moss who was responsible for the concreting pursuant to a sub-contract with RC Construction Ltd.("RCCL"). RCCL was a sub-contractor of McAlpine, and it was McAlpine who had erected the scaffolding, and it was thus Moss and McAlpine who were in breach of the relevant regulations.
Loss adjusters acting for insurers for McAlpine investigated the accident taking various statements, which appear in our bundle from 151 to 178. RCCL did not notify their insurers after the incident. It was the adjusters acting for McAlpine or their insurers, (Toplis UK) who notified RCCL of a possible claim by McAlpine by letter dated 13 January 1992 advising RCCL to notify their insurers (BAI) if they had not already done so. By this date RCCL had in fact ceased to trade. However the letter of 13 January was passed to Gibbs Hartley Cooper Ltd (Gibbs Hartley) who were the insurance brokers acting for RCCL in terminating their insurance as from the date RCCL ceased to trade, 11 November 1991 (see pages 101 and 104). According to documents in our bundle, on 12 February 1992 Gibbs Hartley forwarded full particulars of a "new" claim from RCCL, relating to the O'Malley accident, to BAI, but the judge found, and there has been no appeal from the finding, that this letter was never received by BAI.
RCCL ultimately went into liquidation on 11 March 1992.
On 13 May 1992 Toplis UK (McAlpine adjusters) sent a reminder to RCCL stating that they had still not heard from RCCL's insurers; followed by a further reminder on 20 May 1992. That led to Toplis UK contacting Gibbs Hartley direct by letter dated 28 May 1992, and to Gibbs Hartley writing to BAI enclosing "further" correspondence by letter dated 4 June 1992. At the same time Gibbs Hartley requested from RCCL "the fully completed claim form".
BAI's response to Gibbs Hartley was to recognise that RCCL was in liquidation, but to ask Gibbs Hartley to endeavour to obtain from RCCL a full report and relevant documents (page 117); to request details of the main contractors, and details of the contract between RCCL and Moss. They also wished to know why it was only now that the accident had been reported to them. The response from Gibbs Hartley was that their letter of 4 June requesting a report had been returned and that they felt there was nothing further that they could do. By letter dated 25 June 1992, BAI accordingly informed Toplis UK that they regretted that they were unable to obtain a report, and stated "thus it would seem that there has been a breach of policy condition". The letter continued "we can therefore only suggest you pursue this matter via their liquidators." Solicitors for McAlpine's insurers then pursued the matter by letter dated 30 June 1992 and received the response from BAI by letter of 20 July 1992 that due to breach of policy conditions they were unable to indemnify their insured.
No attempt was made at this time by anyone to contact the liquidators of RCCL.
On 7 January 1994 O'Malley issued proceedings against Moss and McAlpine.
Solicitors acting for McAlpine and their insurers pursued BAI again by letter of 23 June 1994, but received the response by letter dated 30 June 1994 "apart from advising our insured would seem to be in breach of policy conditions, we do not feel that we are required to give you more details".
By letter dated 22 December 1994 again those acting on behalf of McAlpine spelt out to BAI the likely course proceedings would take and asked for details of the breach of policy conditions. By their response dated 10 January 1995 BAI made clear they were relying on the breach of the condition "requiring notification as soon as possible in writing with full details". That condition provided as follows:—
"In the event of any occurrence which may give rise to a claim under this Policy, the insured shall, as soon as possible, give notice thereof to the Company, in writing, with full details and as far as practicable there shall not be any alteration or repair until the Company have had an opportunity of inspecting."
I would pause here just to comment. First, BAI had by June 1992 received notification in writing. The judge doubted however whether it could be said they had received full details (see page 7 penultimate paragraph), and there is no appeal against that finding. What they had received was a copy of the 13 January 1992 letter. That letter certainly gave some details. One suspects that BAI's real concern was that they had not been notified of the incident "as soon as possible". On any view sufficient details were made available for BAI to take some action. Second, although BAI had not received "full details", BAI made no attempt to approach the liquidators of RCCL in order to obtain those details. In my view it is not right to say that RCCL had ceased to exist as the judge held. They were in liquidation, and it would not have been impossible for the liquidators to supply fuller details or arrange for them to be supplied. Thirdly, BAI were never interested in taking any part in the proceedings by virtue of which they could if they had so desired obtained much fuller details than those with which they had been provided. They wished to stand on their rights as they saw them to rely on RCCL's breach of the condition. Fourthly, although it is pleaded that at some stage BAI "accepted a repudiation" by RCCL, there does not seem to have been any communication by BAI to RCCL's liquidators to the effect either that a failure to provide details within some specified point in time would be treated as a repudiation of the contract or at least as founding a right to reject the claim, nor that the non-compliance with condition 1(a) was being treated as a repudiation of the contract of insurance or as a right to reject the claim.
The remaining history is that McAlpine served third party proceedings on RCCL on 11 April 1995. Mr O'Malley accepted a payment into court on 21 February 1996, and judgment was obtained against RCCL on 20 May 1996 for £243,000 and costs.
Thereafter on 13 May 1997 McAlpine commenced these proceedings under the Third Parties (Rights against Insurers) Act 1930. BAI rightly submit that McAlpine can be in no better position as assignees than RCCL. On that basis BAI maintain that by virtue of the breach of condition 1 (a) by RCCL, BAI have no liability.
The Law
As the judge commented, the law as to the effect of notice clauses of this nature is remarkably unsettled. But at least on one point there was no argument before us because there was no challenge to the judge's finding that condition 1(a) was not a condition precedent.
Once that point is disposed of, the question is what remains, having regard to the fact that at least by the time these proceedings had been commenced BAI did have full details of the incident from McAlpine.
If BAI could establish a repudiation of the contract of insurance or a failure to act in good faith, and establish that they accepted that repudiation or avoided the contract, then they would be entitled to resist liability. This is their pleaded case.
As to breach of good faith, I am at present not absolutely clear...
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