Talbot Underwriting Ltd v Nausch Hogan & Murray Inc. (The Jascon 5)
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE COOKE,Mr. Justice Cooke |
| Judgment Date | 31 October 2005 |
| Neutral Citation | [2005] EWHC 2359 (Comm) |
| Docket Number | Case No: 2004/911 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 31 October 2005 |
[2005] EWHC 2359 (Comm)
Mr. Justice Cooke
Case No: 2004/911
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Gavin Kealey Q.C. & Charles Kimmins (instructed by Russell Ridley & Co.) for the Claimant
Peter MacDonald Eggers (instructed by Eversheds) for the Defendant
Hearing dates: 19 th, 20 th & 21 st October 2005
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.
Index
Introduction…………………………………………………………………Page 3
The Issues……………………………………………………………………Page 12
Associated and interrelated Companies and/or Joint Venture………….Page 13
Additional Assured………………………………………………………….Page 15
Undisclosed Principal……………………………………………………….Page 19
Issue 2…………………………………………………………………………Page 23
The non-disclosure Issue……………………………………………………Page 23
Issue 7…………………………………………………………………………Page 31
D – The no loss Issue…………………………………………………………Page 33
Sembawang's loss…………………………………………………………….Page 33
CPL's loss…………………………………………………………………….Page 37
E – The Delay Issue…………………………………………………………..Page 38
Conclusion…………………………………………………………………….Page 39
The Hon.
Introduction
The parties agreed and the Court ordered, on 29 th July 2005, that there be a trial of preliminary issues by reference to the parties' contentions as set out in their respective statements of case, on the basis of specified documents, agreed assumed facts and the facts admitted in the statements of case, all without prejudice to other issues raised by those statements of case.
For the purposes of this judgment I shall refer to the Claimants as the London Insurers, to the Defendants as NHM, to the London placing brokers as NMB and to the Shipyard responsible for outfitting the pipe laying barge, the Jascon 5, as Sembawang. The London Insurers sue in the capacity of assignees of the causes of action of CPL (an admitted assured which gave instructions to NHM as its brokers) and of Sembawang (the ship repairers who, through the agency of CPL sought to obtain insurance via NHM), in contract and tort. They make no claim in their capacity as Insurers.
The assumed facts are as follows: —
"1. The vessel Jascon 5 ("the vessel") was an offshore pipelay construction barge, which was owned by CPL. CPL was part of the Sea Trucks group of companies.
The vessel was built in China.
3. In March 2003, the vessel was towed from China to Sembawang's Shipyard in Singapore, where the completion, outfitting, commissioning and testing of the vessel was to take place. The said work was commenced in March 2003 and was to be carried out pursuant to the Completion Contract entered into between CPL and Sembawang on 5th October 2002 (Appendix 1). The only legal relationship between Sembawang and CPL and/or Sea Trucks was constituted by the Completion Contract and the fact that Sembawang was undertaking works in respect of the vessel at its shipyard.
4. In May 2003, NHM was instructed by Mr Roomans of CPL, Sea Trucks and Roomans Eneli Flynn Brokers Ltd to place a builders' all risks policy in respect of the vessel, which policy was to include Sembawang as a co-assured.
5. Mr Roomans, CPL and Sea Trucks were authorised by Sembawang and intended to place builders' all risks insurance on behalf of Sembawang and to include Sembawang as a co-assured.
6. The vessel was insured with a final contract value of US$70,800,000. The risk was placed in London (to the extent of an order of 40%), in Norway (35%) and Russia (25%).
7. The London insurers (for their 40% order) subscribed to the Builders' Risks Policy (Appendix 2) in respect of the vessel on various dates between 21st and 27th May 2003 respectively. The risk in London was placed by Newman Martin & Buchan ("NMB") on the instructions of NHM.
8. At all material times, Sea Trucks and CPL intended to include Sembawang as a co-assured under the Builders' Risks Policy as required by the Completion Contract.
9. The Claimants contend that, unless the contrary can be said by reason of the terms of the Builders' Risks Policy, NMB did not entertain an intention that Sembawang would be covered as a co-assured under the Builders' Risks Policy.
10. NHM contends that NMB intended that Sembawang would be covered as a co-assured under the Builders' Risks Policy.
11. Unless the contrary can be said by reason of the terms of the Builders' Risks Policy, the London insurers were not notified that Sembawang was intended to be a co-assured under the Builders' Risks Policy until after 14th October 2003.
12. The Claimants contend that, unless the contrary can be said by reason of the terms of the Builders' Risks Policy, the London insurers (at the time of or after their agreement to the Builders' Risks Policy) did not entertain an intention that, or specifically agree that, Sembawang would be covered as a co-assured.
13. NHM contends that, by reason of the terms of the Builders' Risks Policy, the London insurers intended or agreed that Sembawang would be covered as a co-assured.
14. On 14th October 2003, during the period covered by the Builders' Risks Policy, the vessel sustained flooding in various compartments, including the generator room, whilst the vessel was being refloated after drydocking at Sembawang's Shipyard.
15. Sembawang incurred expense by way of the cost of repair of the vessel.
16. Sembawang has not acknowledged liability, nor has been held liable, to incur the said expense.
17. Sembawang made a claim upon the London insurers under the Builders' Risks Policy, in respect of the London market's order of 40%, but the claim was refused by the London insurers on the ground that Sembawang was not an assured under the Builders' Risks Policy.
18. The London insurers did not avoid the Builders' Risks Policy."
The specified documents referred to are as follows:—
i) The Sembawang Completion and Outfitting Contract dated 5 th October 2002. (The Sembawang contract).
ii) The Builders' Risk Policy (The Slip Policy).
iii) The Settlement Agreement dated 28 th April 2004 between CPL and Sembawang.
iv) The Assignment Agreement dated 26 th July 2004.
v) Steege Kingston's 3 rd report dated 20 th May 2004.
The issues to be determined are:—
"(A) Co-assured issue
1. Was Sembawang a co-assured under the Builders' Risks Policy on the grounds set out in sub-paragraph 7(7) of the Amended Defence and Counterclaim?
2. Was Sembawang a beneficiary of a trust in respect of the London insurers' promise of an indemnity under the Builders' Risks Policy as alleged in paragraph 7(8) of the Amended Defence and Counterclaim?
(B) The Non-disclosure issue
3. Assuming the relevant facts which may be relied on by the Claimants in support of their allegation of non-disclosure of the circumstances alleged in paragraph 6(d) and/or paragraph 7 of the Amended Reply and Defence to Counterclaim,
(1) Was CPL and/or Sea Trucks obliged, as a matter of law, to disclose the said circumstances?
(2) Did the London insurers, by reason of the terms of the Builders' Risks Policy, waive disclosure of the said circumstances?
4. If the London insurers were entitled to avoid the Builders' Risks Policy as alleged in paragraph 6(d) and/or paragraph 7 of the Amended Reply and Defence to Counterclaim, did the London insurers lose the entitlement to avoid by reason of (a) their entering into the Assignment Agreement dated 26th July 2004 with CPL, Sea Trucks and Sembawang and/or (b) their commencement of the proceedings and/or the service of statements of case herein?
5. Is there a real prospect that the London insurers would succeed in their allegation that they would have avoided the Builders' Risks Policy if they were entitled to avoid the Policy by reason of non-disclosure of the matters alleged in paragraph 6(d) and/or paragraph 7 of the Amended Reply and Defence to Counterclaim?
6. If the Court answered "yes" to question 1 above but only on the grounds set out in paragraph 7(7)(b)(iii) of the Amended Defence and Counterclaim or if the Court answered "yes" to question 2 above, would it be irrelevant to the claim against NHM if the London insurers were entitled to avoid, and would have avoided, the Builders' Risks Policy as alleged in paragraph 6(d) and/or paragraph 7 of the Amended Reply and Defence to Counterclaim?
(C) Para. 13(6), 15 and 21A of the Re-Amended Particulars of Claim
7. Is there a real prospect that the London insurers would succeed in their claim for damages on the grounds that NHM failed to place the Builders' Risks Policy which expressly named Sembawang as a co-assured and/or to ensure that Sembawang was identified as a co-assured on the face of the Builders' Risks Policy with sufficient or any clarity?
(D) The No Loss issue
8. Did Sembawang suffer no loss as a result of any alleged breach of duty on the part of NHM on any of the grounds set out in paragraph 9(1) of the Amended Defence and Counterclaim?
9. Did CPL suffer no loss (by way of a liability to Sembawang for breach of clause 15.12 of the Completion Contract) as a result of any alleged breach of duty on the part of NHM on the grounds set out in paragraph 16C of the Amended Defence and Counterclaim?
(E) The Delay issue
10. Is there a real prospect that the London Insurers will succeed in their claim for items L and/or M referred to in Steege Kingston's third report dated 20th May 2004, or are they excluded from cover under the Builders' Risks Policy pursuant to section 55(2)(b) of the Marine Insurance Act 1906?"
Issues 5, 7 and 10 are effectively summary judgment points taken by NHM and evidence was permitted in relation to these issues with the result...
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