Super Chem Products Ltd v American Life and General Insurance Company Ltd and Others
| Jurisdiction | UK Non-devolved |
| Judge | Lord Steyn |
| Judgment Date | 12 January 2004 |
| Neutral Citation | [2004] UKPC 2 |
| Court | Privy Council |
| Docket Number | Appeal No. 68 of 2002 |
| Date | 12 January 2004 |
and Others
[2004] UKPC 2
Present at the hearing:-
Lord Bingham of Cornhill
Lord Steyn
Lord Hope of Craighead
Lord Rodger of Earlsferry
Sir Kenneth Keith
Privy Council
[Delivered by Lord Steyn]
The Insurance Policies.
The appellant, Super Chem Products Limited, carried on the business of manufacturing detergents, shampoos, disinfectants, adhesives and other chemically based products at its business premises at Plaisance Park, Pointe-a-Pierre, Trinidad. In 1990 it had 193 employees. The respondents agreed to insure the appellant, in respect of the business premises at Plaisance Park, under the terms of two Collective Fire and Special Perils Insurance Policies namely: (a) Policy No. P-2190/S ("the stock policy"), which provided cover against loss and damage to stocks and stores at the premises; (b) Policy No. P-2138/S ("the consequential loss policy"), which provided cover against business interruption and other losses consequent upon the loss of, or damage to, stocks and stores at the premises. In addition the buildings and equipment were insured to a value of TT$7,500,000 under policy number F21763 ("the buildings and equipment policy"). The latter policy is, however, not directly relevant to the issues on the appeal.
The claims.
On 3 April 1990 a fire occurred at the premises. It destroyed large parts of the insured's factory, stock and equipment, and offices. Claims were presented under both the stock and the consequential loss policies. By a letter dated 11 October 1991 the insurers denied liability for the claims. On 19 September 1991 the insured had commenced proceedings against the insurers under the stock policy. On 18 March 1992 the insured started further proceedings against the insurers under the consequential loss policy. Both writs claimed indemnity for sums allegedly due under the two policies. The insurers disputed liability under both policies. The two actions were subsequently consolidated.
The terms of the policies.
The material provisions of the stock policy were as follows:
" Condition 11:
On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company, and shall within 15 days after the loss or damage, or such further time as the Company may in writing allow in that behalf, deliver to the Company
(a) a claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles or items of property damaged or destroyed, and of the amount of the loss or damage thereto respectively, having regard to their value at the time of the loss or damage, not including profit of any kind.
(b) particulars of all other insurance, if any.
The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specifications, books, vouchers, invoices, duplicates or copies thereof, documents, proofs and information with respect to the claim and the origin and cause of the fire and circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this Policy shall be payable unless the terms of this Condition have been complied with.
Condition 13:
If the claim be in any respect fraudulent, … or, if the claim be made and rejected and an action or suit be not commenced within three months after such rejection … all benefit under this Policy shall be forfeited.
Condition 19:
In no case whatever shall the Company be liable for any loss or damage after the expiration of twelve months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration."
The relevant provisions of the consequential loss policy were as follows:
" Condition 4:
On the happening of any Damage in consequence of which a claim is or may be made under this Policy, the Insured shall forthwith give notice thereof in writing to the first named of the insurers and shall with due diligence do and concur in doing and permit to be done all things which may be reasonably practicable to minimise or check any interruption of or interference with the business or to avoid or diminish the loss, and in the event of a claim being made under this Policy shall, not later than thirty days after the expiry of the Indemnity Period or within such further time as the Insurers may in writing allow, at his own expense deliver to the Insurers in writing a statement setting forth particulars of his claim, together with details of all other Insurances covering the Damage or any part of it or consequential loss of any kind resulting therefrom. The Insured shall at his own expense also produce and furnish to the Insurers such books of account and other business books, vouchers, invoices, balance sheets, and other documents, proofs, information, explanation and other evidence as may reasonably be required by the Insurers for the purpose of investigating or verifying the claim together with (if demanded) a statutory declaration of the truth of the claim and of any matters connected therewith. No claim under this Policy shall be payable unless the terms of this condition have been complied with and in the event of non-compliance therewith in any respect, any payment on account of the claim already made shall be re-paid to the insurers forthwith.
Condition 5:
If the claim be in any respect fraudulent, … or, if the claim be made and rejected and an action or suit be not commenced within three months after such rejection … all benefit under this Policy shall be forfeited."
The defences.
The insurers denied liability inter alia on the following grounds: (1) The fire was caused by arson of, or with the connivance or complicity of, the insured. (2) Both actions had been commenced out of time in as much as: (i) The stock policy action had not been brought within 12 months of the happening of the loss or damage as required by condition 19 of the stock policy. (ii) They had not complied with the 30 days' notice provision under condition 4 of the consequential loss policy. Further the consequential loss policy action had not been brought within 3 months of the rejection of the claim under condition 5. (3) There were a number of breaches of the claims co-operation provisions of the two policies. Specifically the insurers alleged failures to provide documentation and information which had reasonably been requested of the insured by the insurers, in breach of condition 11 of the stock policy and condition 4 of the consequential loss policy, due compliance with such conditions being alleged to be a condition precedent to liability under the policies.
The insured's reply.
By its reply, and by submissions at trial, with particular reference to the limitation and claims co-operation defences, the insured contended that: (1) Once the insurers had alleged that the claims were fraudulent, they could no longer rely on any conditions in the policies dealing with matters of limitation or claims co-operation. The insurers' conduct in alleging fraud amounted to a repudiation of the contracts of insurance and precluded any reliance on any conditions precedent to liability. This argument raised what was described as the Jureidini point, that being a contention based on the speech of Viscount Haldane, LC, in Jureidini v National British and Irish Millers Insurance Company Limited [1915] AC 499, at 505. (2) Although the insured admitted that the action on the stock policy had not been brought within 12 months of the happening of the loss and damage for the purposes of condition 19 of the stock policy, it was alleged there had been a waiver of the insurers' right to rely on a limitation defence, or an estoppel precluding any such reliance. (3) Although the insured admitted that it had failed to comply with the 30 days' notice provision under Condition 4 of the consequential loss policy and the action on the consequential loss policy had not been brought within 3 months of the rejection of the claim within the meaning of condition 5 of the consequential loss policy, the insured alleged that it had had no knowledge or notice of such limitation conditions and that therefore such limitation provisions were not binding on it. In effect the insured alleged that the relevant provision had not been incorporated into the consequential loss policy. (4) Further, the insured alleged a waiver or estoppel precluding reliance on a limitation defence. (5) No arguments of waiver or estoppel were deployed in relation to the alleged breaches of the claims co-operation clauses under either policy. Apart from the Jureidini issue, the insured's case at trial was confined to the factual case that there had been no failure to comply with the obligation to provide the documentation or information reasonably required of it.
Judgment at first instance.
After a trial lasting 79 days Sealey J gave judgment on 29 July 1997. She dismissed the insured's claims under both policies. The outcome was as follows: (1) During the course of the trial the judge had decided that the insurers' unparticularised case of arson could not be entertained. The Court of Appeal dismissed an appeal against this decision. Subsequently the trial judge refused an application to remedy the deficiency by particulars at a late stage in the trial. Accordingly she did not deal with this aspect in her final judgment. (2) The limitation defence under condition 19 of the stock policy succeeded. Sealey J. rejected the...
To continue reading
Request your trial
-
Lexington Insurance Company and Others v Multinacional De Seguros SA
...an end to the contract, the contractual obligations owed by each party under the contract continued, following Super Chem Products Ltd v American Life and General Insurance Co Ltd [2004] 2 AER 358; (b) that the circumstances in which the repudiation has taken place, and the repudiatory word......
-
[1] Thomas Townsend [2] Therese Townsend (now deceased) Appellants/Claimants v Persistence Holdings Ltd Respondent/Defendant
...to each other and a concluded agreement is not a requirement for an estoppel by convention. (Paras 43, 48 and 49) Super Chem Products Ltd. v American Life General Ins Co Ltd. [2004] 2 All ER 358 Per Lord Steyn at paras 21–22 applied HIH Casualty & General Insurance [2002] EWCA Civ. 1235......
-
Diab v Regent Insurance Company Ltd [PC]
...National British and Irish Millers Insurance Co LtdELR[1915] AC 499.Super Chem Products Ltd v American Life and General Insurance Co Ltd[2004] 1 CLC 1041.United Scientific Holdings Ltd v Burnley Borough CouncilELR[1978] AC Insurance Repudiation Waiver Estoppel Notice of claim Duty of good f......
-
Rhooms (Stacy-Ann) (Trading as Trans-Auto) v Insurance Company of the West Indies
...(1951) 2 KB 215. 36 Miss Camille Wignall rejects this argument. She relies on the Privy Council case of Super Chem Products Ltd v American Life and General Insurance Co. Ltd. and others (2004) 2 AER 358 and Seechurn v Ace Insurance SA - NV [2002] EWCA Civ 67. 37 Ruling 38 Clause 12 which s......
-
Reduced Limitation Period In Insurance Policy Enforceable
...are against such construction as evidenced in Super Chem Products Ltd v. American Life and General Insurance Co Ltd & others [2004] 2 All ER 358 (per Lord Steyn). Accordingly, the Court of Appeal held that Possehl's claims were time barred under the contractual limitation, Condition Thi......