R Fur Company Ltd v Bossom
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SELLERS,LORD JUSTICE PEARCE |
| Judgment Date | 14 November 1958 |
| Judgment citation (vLex) | [1958] EWCA Civ J1114-3 |
| Court | Court of Appeal |
| Date | 14 November 1958 |
[1958] EWCA Civ J1114-3
In The Supreme Court of Judicature
Court of Appeal
The Master of The Rolls
(Lord Evershed),
Lord Justice Sellers and
Lord Justice Pearce.
Mr. CONSTANTINE GALLOP. Q.C. and Mr. PHILIP GOODRNDAY (instructed by Messrs. Adler & Adler) appeared on behalf of the Appellants (Plaintiffs).
Mr. A.P. MARSHALL. Q.C., Mr. RODGER WINN and Mr. D, HOLLIS (instructed by Messrs. Chamberlain & Co.) appeared on behalf of the Respondent (Defendant).
This was an action upon a policy of insurance. The claim was stated in the specially indorsed Writ (issued in January, 1957) so far as material in the following terms: "On or about 23rd August 1956 a quantity of furs and/or skins was stolen from the Plaintiffs place of business at 190 Upper Thames Street London E.C.4 and has not since been recovered. The total cost price of the said goods was £8,540. 13s. 10d. The said sum included goods to the following value held by the Plaintiffs in trust as follows…." Then: "Particulars of how the said respective sums are made up have been delivered by or on behalf of the Plaintiffs to the assessors…." The policy was one dated in January, 1956, and was what may be described as a Lloyd's All-risks policy. The claim was to recover under it in respect of the alleged theft of furs.
The defense to that claim consisted of putting the Plaintiffs to strict proof of the allegation. I shall refer again to this matter of the form of the defense, and also, a little later, to an amendment which was later made and which raised another and quite different answer. But I must first state that the claim of the Plaintiffs - which was challenged in the way I have stated - narrowed itself, as the events proved and in accordance with the evidence given, to an allegation that these furs were stolen, after the premises had been broken into and entered, between the hours of 8.50 a. m. and 9.20 a. m. on the 23rd August, 1956. Of course, having regard to the time of the alleged breaking and entering and the felony, it is not correct to speak of it as a "burglary"; but throughout the case, as a matter of convenience, the alleged breaking and entering and stealing has been called a burglary - and I have no doubt that I shall slip into a similar appellation.
I will now refer to the amendment to the Defense which, as I have indicated, was made very late in the day, in fact on the 8th October, 1957. It was to this effect. It was alleged and indeed it was admitted that in the year 1933 one Wax-Man (who held more than 50 per cent, of the shares in the company and was one of its two directors at the material date) had been convicted of receiving stolen goods, namely, furs; and that that fact had never been disclosed to the defendant insurers "hen making the contract which, as we all know, is one uberrimae, fidei. It was therefore said that the Defendants were entitled to repudiate (a-s they did repudiate, altogether) the policy.
There was evidence before the learned Judge to the effect that if the underwriters had been informed of this conviction of Mr. Waxman's they would not have insured the risk at all. During the course of the argument I referred and referred I think in somewhat strong terms to the evidence given by one witness, a Mr. Cranmer. It was proved that Mr. Freeman the only other director - did not himself know of this conviction. I say "proved" because Mr. Freeman so swore; and it is quite clear from the Judgment that the Judge accepted that fact. Nevertheless, the learned Judge held that in the circumstances of this case the Plaintiff company must be treated as if it had known of this conviction and had failed to disclose it, being a material matter of fact in the making of the contract; and that therefore the Defendants were entitled (as they claimed) to repudiate the contract.
We have not, in the course of the argument, gone into all the evidence, particularly the evidence about the materiality of this conviction. We were only referred to the somewhat extreme view (and I use, I think, not at all an exaggerated word) of Mr. Cranmer. It was pointed out that after all Mr. Freeman was in full charge of the company's affairs and that he did not know of this crime. It was also pointed out, with some force, that, though receiving stolen goods is plainly a very serious crime, the penalty imposed on Mr. Waxman consisted of his being bound over for two years in the sum of £20. Furthermore, it occurred a quarter of a century ago. However that may be, the question whether a company (which of course is itself a persona ficta) must be taken to have known something must depend on the particular facts of the particular case; and I think it equally clear that the question whether it is the duty of a director to disclose to his company that is, to his other directors a natter of fact such as a conviction, must again depend on the particular facts of the particular case. However, it is not necessary that I should express any opinion upon this amendment of the Defense: I do not do so; and propose, therefore, to say no more about it.
There was also raised the question whether the learned Judge should be taken as having found in his Judgment affirmatively that the Plaintiff company (and more particularly Mr. Freeman) was guilty of disposing of these furs and, having done so, putting forward a dishonest claim. The language of the learned Judge which gave rise to this point is to be found at the bottom of page 33 of the transcript, where, after stating that he thought the burglary had not taken place and was (to use his language) "highly improbable", he went on to say: "However, in case some different views as to the burden of proof ought to be taken, it seems right to add a finding on a different basis. Has it been proved by the evidence in this action as between these parties that the alleged burglary did not take place? in my judgment it has been so proved".
At this point I may dispose of one suggestion which was made on the Appellants' side. It was said: This was an all-risks policy; and let it be assumed that the Judge did not find that the burglary (and I am using this word) took place (as was said) between 8.50 and 9.20 a. m., but at some other time, still it is covered. Nay; they said it is even covered if it was established that the thief was Mr. Freeman himself or one of the other servants of the company, Mr. Waxman and a Miss Hoar. As regards that suggestion, it is sufficient if I say that that is not a matter that was ever pleaded, and it was quite inconsistent with any case made on the Plaintiffs' part. In my judgment it could not possibly be sustained. However, I return to the question: Did this passage which I have read amount to a finding that the burglary was committed by the Plaintiff Company or someone in its employ? it was said that if it did, there was RQ sufficient evidence to support it; that it was therefore a wrong finding; and that it disabled the whole Judgment.
Now I have no doubt whatever that insurers, having a claim of this kind made against them, are entitled to say, by way of defense, "Prove the case strictly: we require it to be strictly proved". It was argued by Mr. Gallop and also by Mr. Goodenday: if such is the nature of the substantial defense made, then, if the Plaintiffs succeed in establishing a prima facie case, the onus in some way shifts to the Defendants, who, if they desire to persist in the defense, must then allege and prove affirmatively some answer to the case which has been prima facie established, and they must therefore, by pleading, give proper notice of what that answer is. Mr. Gallop indeed put the case even more strongly, contending that the issue in this case really was, on the pleadings, and upon analysis, "Was it more probable that a fraud had been committed against the Defendants than not?"
I must say without any qualification that I think both those propositions are erroneous. I think that a defendant whether he is an underwriter or any other kind of defendant is entitled to say, by way of defense, 'I require this case to be strictly proved, and admit nothing". Where such is the defense, the onus remains throughout upon the plaintiffs to establish the case they are alleging. Where such is the form of the pleading, it is not only not obligatory upon the defendants but it is not even permissible for them to proceed to put forward some affirmative case which they have not pleaded or alleged; and it is not, therefore, right that they should by cross-examination of the Plaintiffs or otherwise suggest such an affirmative case. The Defendants are acting correctly if they follow the course adopted in this case that is, so to challenge, at each point, and by proper evidence, where it is admissible, and by cross-examination, & he case which the plaintiffs seek to make good. The result, where such is the form of the defense and of the issues raised, is no doubt such that the judges will watch carefully that defendants, first, do not attempt, by evidence or cross-examination, to establish some affirmative case of which no proper notice has been given by way of pleading to the other side; and second, do not attempt to lead evidence solely directed to the credit of witnesses.
So much, Mr. Marshall naturally and very properly admitted; and he also conceded that in practice no doubt sometimes the line is often a little narrow between evidence which is properly directed to challenging the evidence of the plaintiff upon some relevant issue, and evidence which may, upon analysis, turn out to be no more than direct evidence to credit. In that connection, particular reference in the argument before us was made to the evidence of a gentleman from the North called Bigodly. I asked Mr. Gallop and Mr. Goodenday if it was their case,...
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