Overseas Union Insurance Ltd and Others v Incorporated General Insurance Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PARKER,LORD JUSTICE STUART-SMITH,LORD JUSTICE MANN |
| Judgment Date | 11 December 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J1125-5 |
| Docket Number | 91/1108 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 December 1991 |
[1991] EWCA Civ J1125-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(Mr. Justice Gatehouse)
Royal Courts of Justice
Lord Justice Parker
Lord Justice Stuart-smith
and
Lord Justice Mann
91/1108
MR. PETER GOLDSMITH QC and MR. DAVID RAILTON (instructed by Messrs Stephenson Harwood) appeared on behalf of the Appellants (Plaintiffs).
MR. ANTHONY CLARKE QC and MR. SIMON RAINEY (instructed by Messrs Clyde & Co.) appeared on behalf of the Respondents (Defendants).
By Writ dated the 6th April 1988, the seven plaintiffs instituted proceedings against the defendants, a South African insurance company, for monies allegedly due under five reinsurance contracts. The seven plaintiffs are seven insurance companies, members of what is known as the Accolade Pool and comprise two Singapore companies, three Finnish companies, an Icelandic company and a Cayman Islands company. Two of them are in liquidation. The Accolade Pool comprises some eleven members.
Neither the defendants nor any save one, of the plaintiffs was at any material time authorised under section 3 of the Insurance Companies Act 1974 to carry on in Great Britain insurance business of any of the classes specified in section 1 of that Act. One plaintiff was at material times so authorised in respect of certain classes of such business. It is said that a substantial number of the underlying insurances were within the authorisation.
On the 28th April 1988 on the ex parte application of the plaintiffs, Hirst J. granted leave to issue a concurrent writ and serve a sealed copy on the defendants at their address in Johannesburg.
The defendants, having been duly served with the concurrent writ issued pursuant to that order, applied by summons, dated the 2nd September 1988 and issued under Order 12 rule 8 of the Rules of the Supreme Court, for the discharge of the order of Hirst J and for certain other relief including a declaration that the court had no jurisdiction over the defendant in respect of the subject matter of the claim.
On the 13th March 1989, Gatehouse J. (1) ordered that the order of Hirst J and the issue and service of the current writ be set aside; (2) granted the declaration sought; (3) refused leave to appeal but extended the validity of the original writ until the hearing of any application to this court for leave to appeal provided that such an application was pursued with reasonable diligence.
On the 21st December 1989, Staughton L.J. on a paper application granted leave to appeal and extended the validity of the original writ until the hearing of the appeal. His reasons were "it appears to me that the plaintiffs have a good arguable case despite lack of particularity and infringement of the Insurance Companies Acts (if any).
Pursuant to that leave the plaintiffs now appeal to this court.
The writ, specially indorsed with points of claim, alleged that five reinsurance contracts had been made between the plaintiffs acting through Accolade Underwriting Agency Ltd. (AUA) and the defendants, and that the defendants had failed to pay amounts due to the plaintiffs under such contracts. The contracts were identified by description and period and the defendants percentage liability in respect of the insured risks was stated. In a Schedule to the points of claim the broker, the cover note reference and the amount allegedly due from the defendants was stated in respect of each of the five contracts. The total amounts allegedly due were £210,528.39, U.S.$583,390.66 and Can.$18,132.24.
In support of this application for leave under Order 11 r.1 the plaintiffs filed the affidavit of one Fleming, a solicitor's clerk in the employment of the plaintiffs' solicitors, Holman Fenwick and Willan. That affidavit alleged that each of the plaintiffs had given AUA, a Guernsey based company, authority to accept insurance and reinsurance business on its behalf and to place reinsurance contracts protecting the risks accepted. It also alleged that Accolade Underwriting Managers Ltd. (AUM), a London based company, at all material times acted as agents for AUA in the placing of reinsurance contracts protecting the risks accepted by AUA.
Paragraph 5 of the affidavit identified the five contracts the subject of the claim and exhibited, inter alia, the relevant cover notes. In each case the reinsured were described as companies underwritten for by Accolade Underwriting Agencies.
Paragraph 6 asserted an express or implied term of the five contracts that premiums and claims should be paid in London, and paragraph 7 that demands for payment had been made without any satisfactory answers.
Thereafter the deponent verified the cause of action and stated that the grounds upon which leave was sought were—
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(i) contracts made by or through an agent trading or residing within the jurisdiction (0. 11 r.1(d) (ii)).
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(ii) contracts by implication governed by English law. (0. 11 r.1(d)(iii)).
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(iii) breaches within the jurisdiction of contracts made within or without the jurisdiction (0. 11 r.1(e)).
In my view there was, on the basis of the writ and affidavit in support, sufficient ground for the original ex parte order to be made.
On the application under Order 12 rule 8, there was a considerable body of further evidence on both sides and before us further evidence was by leave admitted.
In broad terms the defendants' case before the judge and before us fell under the following two heads.
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1. The plaintiffs have not established to the required standard of proof either that their claim falls within any of the heads of rule 1 relied upon, or the merits of their claim.
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2. England is not the appropriate forum.
Within each of those heads a number of issues arise. Under the first head the first question is "what is the standard of proof?
The judge held that, as to merits, the court must, if it is to allow the service to stand, reach a provisional conclusion on the material before it that the plaintiffs will probably win but that on the question whether the claim falls within one or more of the paragraphs of Order 11 r.1 the plaintiff has a more difficult task. He must then show a strong probability that his case does so fall.
For the first of those conclusions he relied upon Attock Cement Co. Ltd. v. Romanian Bank of Foreign Trade [1989] 1 WLR 1147 and for the second on that case and, principally, Atlantic Underwriting Agencies v. Companie di Assicurazioni di Milano [1979] 2 LI 240 and Metal Und Rohstoff A.G. v. Donaldson Luften and Jennrett Inc. [1989] 3 WLR 563.
In the Attock Cement Company case a Romanian contractor had agreed to build a cement plant for the plaintiffs. The contract was expressly governed by English law. In accordance with that contract the defendants had issued to the plaintiffs a performance bond which contained no term as to governing law or jurisdiction. The plaintiffs terminated the contract for alleged breach and sought to recover from the defendants on the bond. The defendants refused to pay. The plaintiffs' case was that there was an express oral collateral agreement that the bond was governed by English law and in the alternative that the bond was by implication governed by English law. It was on this basis that they originally obtained leave to serve out. The defendants successfully applied, under Order 12 rule 8, to set aside service and the plaintiffs appealed to this court. This court was not concerned with the merits of the claim on the bond but only with the question whether on either of the two grounds the case fell within Order 11 r.1.
The essence of the judgment of Staughton L.J. with which the Vice-Chancellor and Woolf L.J. agreed appears in the following passages:
"I conclude that where there is a disputed question of fact which is essential to the application of RSC Order 11 rule 1 the judge must reach a provisional or tentative conclusion that the plaintiff is probably right upon it before he allows service to stand. The nettle must be grasped, and that is what I take to be meant by a good arguable case…. It is unnecessary to decide whether some additional burden should as Lord Tucker suggests be laid on a plaintiff who invokes Order 11 r.1 on some ground which will not, if leave is granted, arise for re-examination at the trial.
…My provisional or tentative conclusion is thus that an oral agreement for proper law and jurisdiction is not made out. Of course that conclusion is based only on the written evidence presently before us and is open to reviews in the proceedings elsewhere…
…I do not find there to be a good arguable case, at this stage that the performance bond was by implication governed by English law."
It is clear from these passages that the court was not at all considering the merits of the claim on the bond as such, but was solely concerned whether the plaintiffs had made out their case that the bond was expressly or by implication governed by English law.
Before passing from the case I should draw attention to the following further passage in the...
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