Oaxaca Ltd T/A Wahaca v QIC Europe Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cockerill |
| Judgment Date | 19 February 2024 |
| Neutral Citation | [2024] EWHC 394 (Comm) |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000284 |
[2024] EWHC 394 (Comm)
Mrs Justice Cockerill DBE
Case No: CL-2023-000284
CL-2023-000349
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building
Fetter Lane
London
EC4A 1NL
Jeffrey Gruder KC and Mubarak Waseem (instructed by Edwin Coe LLP) for the Claimants
Peter MacDonald Eggers KC and Julia Gibbon (instructed by DWF Law LLP) for the Defendant
Hearing date: 16 February 2024
APPROVED JUDGMENT
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic. This judgment was handed down remotely by the judge and circulated to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Friday 23 February 2024 at 10:30am
INTRODUCTION
This is an application for summary judgment in a pair of Covid-19 business interruption insurance claims in involving two well-known restaurant chains against a single insurer. The application includes the combined claims of Oaxaca Ltd t/a Wahaca (“the Wahaca claim”) and Flat Iron Steak Limited (“the Flat Iron Claim”) against the insurer QIC Europe Limited. There is also an application by the Claimants for an interim payment.
The Wahaca claim (claim no CL-2023-000284) is brought by Oaxaca Ltd T/A Wahaca, the owners of a licensed Mexican restaurant chain operating out of 29 separate premises across England and Wales. Wahaca entered into a contract of insurance described as a “Barbican Protect Commercial Combined Policy (no P03380-1901)” with the Defendant insurer on the Jelf/BLF/v4-2019 Commercial Form of wording for the period 22 October 2019 to 21 October 2020. That policy included business interruption insurance.
The Flat Iron Claim (claim no CL-2023-000349) is brought by Flat Iron Steak Limited, the licensed operators of a chain of steakhouses operating out of 9 premises in London. Flat Iron Steak Limited also entered into a contract of business interruption insurance also described as a “Barbican Protect Commercial Combined Policy (no BP03348–1901)” with the Defendant on identical Jelf/BPL/v4-2019 Commercial Form of wording for the period 16 October 2019 to 15 October 2020.
The Claimants seek an indemnity for interruption to business on their premises as a result of the Covid 19 pandemic. The focus is on non-damage business interruption and denial of access clauses within their policies. The effect of various clauses of this type has been considered by a series of litigation dating from the decisions of the Divisional Court and Supreme Court in Financial Conduct Authority v Arch Insurance (UK) Ltd [2020] EWHC 2448 (Comm) and [2021] UKSC 1. More recently there have been the decisions in Corbin & King Ltd & Ors v AXA Insurance UK Plc [2022] EWHC 409 (Comm), London International Exhibition Centre PLC v Royal & Sun Alliance Insurance PLC and others [2023] EWHC 1481, Gatwick Investment Ltd & Ors v Liberty Mutual Insurance Europe SE [2024] EWHC 124 (Comm) and others to which reference was made in parties' submissions. It is an area where the devil is in the detail.
BACKGROUND
The factual background to these proceedings are regulations and restrictions taken by the UK government in response to outbreak of the global Covid 19 pandemic in this country in 2020. The measures taken in response to the pandemic, including general lockdown and extensive restrictions on public affairs, had significant disruptive impact on the food and hospitality sectors that have been fully canvassed in several judgments, most recently that of Jacobs J in Liberty Mutual [16–48]. In both Particulars of Claim, the ClaimantS plead as interruptions or interferences the following public announcements, restrictions and regulations:
1) The Prime Minister's 16 March 2020 statement instructing the public to avoid pubs, clubs, theatres, and other such social venues;
2) The Prime Minister's 20 March 2020 statement instructing cafes, pubs, bars, and restaurants to close as soon as they reasonably could and not open the following day;
3) The 21 March 2020 Regulations requiring the closure of all the Claimants' premises from 21 March 2020;
4) The 26 March 2020 Regulations requiring that the Claimants' premises remained closed;
5) The July 4 2020 Regulations permitting some of the Claimants' premises to reopen from the 4 July only with the interference of strict social distancing rules, though others remained closed;
6) From 18 September 2020 to 5 November 2020 the interferences caused to each of the Claimants' premises by the “Rule of Six”; and
7) From 24 September 2020 to 5 November 2020 the interferences caused to each of the Claimants' premises by the 10 pm curfew.
The Policy
As noted above, both Wahaca and Flat Iron received BI insurance in a contract on Jelf/BPL/v4–2019 terms.
The relevant terms of the NDDA Clause is as follows:
“This Section extends to include any claim resulting from interruption of or interference with The Business carried on by the Insured at The Premises in consequence of
[…]
(b) action by the Police Authority and/or the Government or any local Government body or any other competent authority following danger or disturbance in the immediate vicinity of The Premises which shall prevent or hinder use of The Premises or access thereto
[…]
Provided that
1 after the application of all other terms, conditions, and provisions of this Section the liability of the Insurer shall not exceed […] (ii) GBP 1,000,000 in respect of (b) above any one loss”. (the ‘Extension’)”.
Issues
The Claimants seek summary judgment on the Scope of Cover issues in the List of Issues and a declaration of coverage under each Policy. This in turn raises two points: the meaning of the Policy and its application to the pleaded facts.
The defined issues on Scope of Cover in the Wahaca Claim are as follows (with the issues in the Flat Iron Claim being materially identical):
1) Was there interruption of and/or interference with the Business carried on by the Claimant at each of the Claimant's premises in consequence of action by the Government and/or any other competent authority following danger or disturbance in the immediate vicinity of each of the Claimant's premises which prevented or hindered use of each of the said premises or access thereto, as a result of the matters pleaded at paragraphs 42(1)-(8) of the Amended Particulars of Claim?
2) If so, did the interruption and/or interference with each of the Claimant's businesses arise in consequence of actions taken by “the Government” or “Other Competent Authority” which prevented or hindered use of each of the said premises or access thereto for the reasons pleaded at paragraph 43 of the Amended Particulars of Claim?
3) Further or alternatively, did the interruption and/or interference with each of the Claimant's businesses arise in consequence of actions taken by “the Police Authority” or “Competent Authority” which prevented or hindered use of each of the Claimant's Premises or access thereto since restrictions set out in the various Regulations were enforceable and enforced by the police and the local authority which was also “the Police Authority” or “Competent Authority” as set out in the Denial of Access cover?
4) Was the use and access of each of the Claimant's Premises prevented or hindered due to a danger in the immediate vicinity of each of the Claimant's premises for the reasons set out at paragraphs 45(1)-(4) of the Amended Particulars of Claim?
5) Alternatively, as the Defendant contends, on the true construction of the Denial of Access cover under the Policy, is a business interruption loss indemnifiable only if there has been a local or localised danger or disturbance in the immediate vicinity of the premises? If so, is the Defendant right to contend that since action by the UK government or any other relevant authority was taken in response to the Covid-19 pandemic, which was a global and nationwide pandemic, and not a local or localised danger or disturbance in the immediate vicinity of the Premises, any business interruption loss resulting therefrom is not indemnifiable under the Denial of Access cover under the Policy?
Issues (2) and (3) were not live. Issues (1) and (5) principally concern the construction of the policy. Issues (1) and (4) involve a factual determination as to whether the Defendant suffered loss, and whether there was a “danger in the immediate vicinity of the premises”' preventing access thereto.
On Issue (5) the Claimants' approach has been recently reaffirmed by this court in Liberty Mutual [131–135], and that the approach to causation in NDDA/DOA clauses taken in Corbin & King was also settled by Jacobs J in LIEC v RSA [177–8]. The Court of Appeal is due to be hearing these debates shortly in the appeal of LIEC v RSA. The debate before me was considerably curtailed by the acceptance by the Defendants that Issue (5) was therefore realistically closed to them pending any review of the authorities by the Court of Appeal. The only real issues were whether I should grant summary judgment on that construction issue to enable it to be appealed with the LIEC case and secondly whether I could grant a wider summary judgment, on the “Coverage Issue” as a whole. On this second issue the question was whether the Claimants could, at this stage and on the material before me, satisfy me that the argument that they had not suffered any loss was “fanciful”.
THE SUMMARY JUDGMENT APPLICATION
The principles of summary judgment were not controversial. We are dealing with the well-known line between “real” and “fanciful”. This was not a case which involved any need to focus closely on that...
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