Sunderland Marine Mutual Insurance Company Ltd v Wiseman (The "Seaward Quest")
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE LANGLEY |
| Judgment Date | 22 June 2007 |
| Neutral Citation | [2007] EWHC 1460 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2006/1163 |
| Date | 22 June 2007 |
[2007] EWHC 1460 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN's BENCH DIVISION
COMMERCIAL COURT
The Honourable Mr Justice Langley
Case No: 2006/1163
Mr Jonathan Chambers (instructed by Andrew M Jackson) for the Claimant
Mr Graeme McPherson (instructed by Abrahams Dresden) for the 2 nd Defendant
Mr Socrates Papadopoulos (instructed by Dawsons) for the 3 rd Defendant
Hearing date: 15 June 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Hon. Mr Justice Langley:
Introduction
This is a dispute over jurisdiction. The choice is between England and Scotland. The Claimant says England. The Second and Third Defendants say Scotland. They seek declarations that this court has no jurisdiction over the claim. Alternatively they seek a stay on the basis of forum non conveniens. The First Defendant has taken no steps in the proceedings. The Claimant has applied for a default judgment against him under C.P.R. Part 12.3.
The Claimant is a mutual insurance company specialising in the insurance of fishing vessels. At the relevant time its registered and business office was in Sunderland.
The Defendants are and were at the relevant time domiciled in Scotland where they live and where the proceedings were served upon them without permission to serve out of the jurisdiction purportedly pursuant to Schedule 4 to the Civil Jurisdiction and Judgments Act 1982 (“The 1982 Act”) and CPR 6.19.
The First Defendant is currently serving a prison sentence of 32 months in Dundee prison. That sentence was imposed on his admission of the conduct alleged against him in the present claim.
The Background Facts
The First Defendant was the owner and Master of the MFV Seaward Quest (“the vessel”). He was also the assured under a Hull and Machinery Risks policy effective from midnight on 31 December 1993 until midnight on 31 December 1994 agreed by the Claimant. The cover for a total loss was £584,750. The policy was expressly subject to English Law. The vessel was mortgaged to the Bank of Scotland.
The Second Defendant is the First Defendant's brother. He was a crew member and a Mate on the vessel. The Third Defendant was a crew member of and a Second Engineer on the vessel.
The vessel sank and was lost on 16 October 1994 at or near the Otter Bank, 60 miles west of Shetland and outside territorial waters.
The Claimant alleges that the three Defendants conspired to and did scuttle the vessel by opening the seacocks and did so in order to make a fraudulent claim on the insurance. The allegation is founded on a confession made by the First Defendant which came to the Claimant's attention in June 2004 and later led to his sentence of imprisonment at the Peterhead Sheriff Court imposed on 30 November 2006. In his confession, the First Defendant implicated the other Defendants. They each deny any involvement in any scuttling of the vessel. In about January 1995, after investigating the claim, the Claimant had paid £518,750 to the Bank of Scotland and the balance of the policy monies (£66,000) to the First Defendant.
The Claims against the Second and Third Defendants
It is alleged in the Particulars of Claim that “on a date and/or dates prior to 16 October 1994“the Defendants “agreed and conspired…to deliberately sink the vessel at sea in order to claim monies under the contract of insurance.” That conspiracy, if such it was, plainly occurred in Scotland.
Under the heading “The Fraudulent Insurance Claim” paragraphs 18 to 20 of the Particulars of Claim (so far as relevant) allege:
“18. Shortly after the sinking of the vessel, the Claimant investigated the sinking of the vessel and took written statements from each member of the crew on the vessel including signed witness statements each dated 19 th October 1994 from the First, Second and Third Defendants.
…
19. Each of the First to Third Defendants knowingly and fraudulently misrepresented to the Claimant that the vessel had flooded and sunk accidentally.
20. Such misrepresentations were material to the Claimant's decision as to whether or not to indemnify the First Defendant under the policy of insurance and were intended by the First to Third Defendants to be relied upon and were relied upon by the Claimant in deciding whether to indemnify the First Defendant under the contract of insurance.”
The statements referred to were taken and signed in Scotland. The Claimant appointed solicitors and surveyors in Aberdeen to investigate the loss and assist with the statements. Mr Sowerby, then a Senior Claims Adjuster employed by the Claimant and resident in Durham, assisted with the interviews. The loss had been notified by telephone from Scotland from the First Defendant's agents to Sunderland on 17 October 1994. The evidence suggests that no claim form was ever prepared or submitted but Mr Sowerby prepared a detailed file note recommending to the Senior Claims Manager that the claim be paid.
Under the heading “The Liability of the Second and Third Defendant” paragraphs 26 to 29 of the Particulars of Claim allege:
“26. The Second and Third Defendants' owed duties to the Claimant in the tort of negligence and/or the tort of deceit and/or in the tort of conspiracy to use unlawful means and/or the tort of conspiracy to injure:—
1) Not to conspire with the First Defendant to deliberately sink the vessel and thereafter to assist the First Defendant in making a claim for an indemnity against the Claimant in respect of the losses thereby resulting.
2) Not to assist the First Defendant to deliberately sink the vessel and thereafter to fraudulently claim insurance monies under the contract of insurance;
3) Not to fraudulently and/or deceitfully and/or deliberately misrepresent to the Claimant that the vessel had been sunk accidentally when it had in fact been scuttled;
4) Not to knowingly assist the First Defendant in wrongfully and/or fraudulently obtaining monies from the Claimant under the policy of insurance.
27. In breach of such duties and/or fraudulently and/or deceitfully in their witness statements each dated 19 th October 1994 each of the Second and Third Defendants made and signed such statements
1) Knowing such statements to be false or being reckless as to whether such statements were false; and
2) Intending such statements to be acted upon by the Claimant in determining whether to indemnify the First Defendant in respect of the loss of the vessel.
28. Such statements influenced the Claimant to indemnify the First Defendant in respect of the loss of the vessel.
29. In the premises the Second and/or Third Defendants are each, jointly with the First Defendant, liable to repay the Claimant all monies paid by the Claimant to the First Defendant under the contract of insurance and/or for a similar sum in damages in tort and/or in restitution.”
Faced with Mr McPherson's submission on behalf of the Second Defendant that the claim in restitution could not even arguably be the subject of English jurisdiction and therefore the Claim Form could not in any event validly have been served out of the jurisdiction under C.P.R 6.19, Mr Chambers, for the Claimant, said that the restitution claim was abandoned. The hearing proceeded on that basis but without prejudice to further consideration of the question should it prove material.
Payment of the Insurance Claim
There is no evidence as to how the payment of the claim was made apart from that which I have already stated (paragraph 8). Mr Chambers said in answer to the Court that Bank of Scotland may have been paid by bank transfer or cheque and the First Defendant was probably paid by cheque. He said the Claimant's bank account was in England and the relevant branch of the Bank of Scotland was in Scotland. This is hardly satisfactory in a case in which the Claimant's primary submission is that English jurisdiction is to be founded largely on the fact that payment was authorised in and made from England. It is even less satisfactory when the Third Defendant had, by his solicitor's letter dated 24 May 2007, and in his witness statement dated 11 June, raised the very point that there was no evidence to show from or to where payment was made and done so both before and after the Claimant's evidence was served.
Other Evidence
There is other material evidence directed to the issue of forum non conveniens. It is addressed later in that context. The one comment I would make here is that whilst the Third Defendant suggests this claim could be conducted significantly (50%) cheaper in Scotland the Claimant refutes that and puts forward a difference of only about 10%. As ever, the probability is likely to be somewhere between the two but the Claimant's evidence is more detailed and researched and I therefore accept that the difference is not likely to be of the nature put forward by the Third Defendant but much closer to that suggested by the Claimant.
The Legislation
Schedule 4 to the 1982 Act determines the jurisdiction of the Courts of the constituent parts of the United Kingdom.
Rule 1 of Schedule 4 to the 1982 Act provides that:
“Subject to the Rules of this Schedule, persons domiciled in a part of the United Kingdom shall be sued in the courts of that part.”
That is the basic rule. It looks to the domicile (as defined) of the person to be sued, not of the Claimant.
Rule 2 of the Schedule provides for “special jurisdiction”:
“Persons domiciled in a part of the United Kingdom may be sued in the courts of another part...
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