Various Eateries Trading Ltd (formerly known as Strada Trading Ltd) v Allianz Insurance Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Males,Lord Justice Newey,Sir Julian Flaux C |
| Judgment Date | 16 January 2023 |
| Neutral Citation | [2024] EWCA Civ 10 |
| Year | 2024 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-000079 & CA-2023-000081 |
[2024] EWCA Civ 10
Sir Julian Flaux
(CHANCELLOR OF THE HIGH COURT)
Lord Justice Newey
and
Lord Justice Males
Case No: CA-2023-000079 & CA-2023-000081
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Butcher
Royal Courts of Justice
Strand, London, WC2A 2LL
Charles Dougherty KC & Timothy Killen (instructed by DAC Beachcroft LLP) for the Appellant
Leigh-Ann Mulcahy KC & Simon Paul (instructed by Mishcon de Reya LLP) for the Respondent
Hearing dates: 28 & 29 November 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Tuesday 16 th January 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
The claimant, Various Eateries Trading Ltd (“VE”), is the operator of a chain of Italian restaurants. It was insured against business interruption loss by a policy on the Marsh Resilience Form by the defendant insurer (“Allianz”). VE claims to have suffered business interruption loss amounting to more than £16 million as a result of reduced trade in, and then the closure of, its restaurants during the Covid-19 pandemic. That claim gave rise to a number of preliminary issues relating to the coverage provided by the policy which were tried before Mr Justice Butcher.
Many of the issues decided by the judge are not the subject of any appeal. Of those which are, the principal issue concerns the effect of an aggregation clause in the policy providing for aggregation of losses “that arise from, are attributable to or are in connection with a single occurrence”. Allianz contends that VE's losses arise in connection with a single occurrence, namely the initial outbreak of Covid-19 in Wuhan in the People's Republic of China, with the consequence that its liability is limited to £2.5 million.
Mr Justice Butcher rejected that contention. Although he was prepared to accept that the initial human infection(s) in Wuhan could be described as a single occurrence with a sufficient causal connection to satisfy the requirements of the aggregation clause, he held that this was too remote from VE's losses to be regarded as relevant. However, he did accept that the UK Government's decision made on 16 th March 2020 to instruct people to avoid social venues and the instructions given on that date to that effect did amount to a relevant single occurrence, as did the enforced closure of restaurants from 20 th March 2020. So too did the implementation from 24 th September 2020 of early closing and other restrictions on restaurants. The judge did not accept that there were separate occurrences when measures were renewed, immaterially changed or relaxed. VE contended that if there was any aggregation, it should be applied separately to each insured location, but the judge did not agree.
The trial was one of three preliminary issues trials concerning policies on the Marsh Resilience Form, which were heard in sequence, with all three judgments handed down on the same day. The other judgments were Stonegate Pub Co Ltd v MS Amlin Corporate Member [2022] EWHC 2548 (Comm), [2023] Bus LR 28 and Greggs Plc v Zurich Insurance Plc [2022] EWHC 2545 (Comm). The judge granted permission to appeal on some issues in all three actions, but the Stonegate and Greggs actions have now settled. In the VE action, there are appeals with the permission of the judge by both parties.
VE and its business
VE is a company in the Various Eateries Plc group. The group purchased the Strada portfolio of 43 restaurant sites on 22 September 2014. From around 2015 most of the existing Strada sites were disposed of or converted into new “concepts”. At the material time, VE operated ten relevant insured venues in London and South-East England. These were:
(1) Coppa Club locations at Sonning, Streatley, Maidenhead, Henley-on-Thames, Brighton and Tower Bridge. Coppa Club is a multi-use, all-day concept, providing a clubhouse which customers identify as their own. In residential areas outside London, the format is for a full-service clubhouse. That is the format, for example, in Sonning and Streatley. Larger city centre locations, such as Tower Bridge, adopt a club and brasserie format. In cities and high streets some venues adopt a high street hub format, typically including a restaurant, bar, café and workspace. This was the format at Henley, Maidenhead and Brighton.
(2) A Tavolino restaurant at Bankside (also called Riverside). This brand was directed to providing high quality Italian food at mid-market prices.
(3) Two Strada sites, Southbank (Royal Festival Hall) and Dockside (St Katherine Dock). These are Italian casual dining restaurants.
(4) An Above and Below venue in Marylebone High Street, called 31 Below, which has an all-day menu, full-service bar and downstairs lounge area and workspace.
VE contends that these venues were affected by the pandemic in various ways, initially as a result of reduced customer footfall and subsequently as a result of restrictions introduced to deal with the pandemic. The judge did not (and was not asked to) make any findings about this. He recorded that VE's case, among other things, is that:
(1) 31 Below stayed closed from 20 March 2020 until 1 October 2020, as it was heavily reliant on high street traffic and lacked outdoor capacity;
(2) Riverside and Dockside were disproportionately affected by travel and “stay-at-home”' restrictions;
(3) Coppa Streatley and Coppa Sonning had large event or private dining spaces which could not be used to capacity due to restrictions on gatherings and weddings; and
(4) social distancing requirements had impacts which differed from venue to venue.
VE's pleaded case is that its restaurants began to suffer from the effect of Covid-19 no later than 27 th February 2020, as a result of the reluctance of tourists to travel and of customers to eat out, even before the Government issued any instructions or introduced legal restrictions.
The facts
The trial was conducted on the basis of an agreed chronology, together with expert evidence. In the light of that evidence the judge made the following (among other) findings at [87]:
(1) SARS-CoV-2 was probably introduced into the human population at the Huanan Market in Wuhan.
(2) The “ultimate source” of the pandemic in the UK and globally was the outbreak of SARS-CoV-2 in Wuhan, China in late 2019.
(3) There must have been an initial introduction of SARS-CoV-2 into England. It was “reasonably unlikely” that this occurred before 1 st January 2020, but “highly likely” that there was transmission of the virus within the UK at around or slightly before 23 rd–28 th January 2020. (On 30 th January 2020 the World Health Organisation declared the outbreak of Covid-19 a “Public Health Emergency of International Concern”; on the following day the Chief Medical Officer for England confirmed that two patients had tested positive for Covid-19 in England; the first death in England of a person who had tested positive for Covid-19 was recorded on 2 nd March 2020).
(4) The MRCA (most recent common ancestor) of all available SARS-CoV-2 genome sequences was a virus in a cell in a particular infected host, and that infection (i) probably existed around November/December 2019; (ii) was probably an infection in an intermediate host animal, not in a human; and (iii) was probably located in the Huanan Market.
(5) To a very high degree of certainty, SARS-CoV-2 cases of COVID-19 in England/UK were not linked by a continuous chain of infection to the initial introduction in England/UK. Very large numbers of introductions seeded multiple independent transmission lineages in the UK. There were at least 1179 introductions, each of which was genetically distinct and created an onward chain of transmission in the UK.
On 16 th March 2020 the Government published guidance on social distancing and updated stay at home guidance for households with possible coronavirus infection. The public was advised, among other things, to work from home where possible, to avoid large gatherings and gatherings in smaller public places such as restaurants and bars, and to avoid gatherings with friends and family. On the same day the Prime Minister made a statement in which he said that drastic action was needed, including the avoidance of pubs, clubs, theatres and other social venues.
The Prime Minister made a further statement on 20 th March 2020, announcing that cafés, pubs, bars and restaurants were being told to close that night as soon as they reasonably could and not to open the following day. This was followed on 21 st March 2020 by the Health Protection (Coronavirus, Business Closure) (England) Regulations 2020 which provided for businesses including restaurants to close and remain closed for six months. The Regulations provided for periodic reviews of the need for these restrictions by the Secretary of State. Restaurants were only permitted to reopen on 4 th July 2020. However, further restrictions were introduced with effect from 24 th September 2020, a few days before the expiry of the Period of Insurance under the policy, followed by a three-tiered system introduced on 14 th October 2020 and a second lockdown from 5 th November 2020.
The approach to questions of construction
The issues with which we have to deal on this appeal are issues of construction of the policy. The approach to be adopted when deciding such issues was described by the Supreme Court in Financial Conduct Authority v Arch Insurance (UK) Ltd [2021] UKSC 1, [2021] AC 649:
“77. … In any event, the overriding...
To continue reading
Request your trial
-
Gatwick Investment Ltd & Others v Liberty Mutual Insurance & others
...the parties. 107 The Various Eateries appeal was heard, and decided by the Court of Appeal in a judgment delivered on 16 January 2024: [2024] EWCA Civ 10. The court upheld the judgment of Butcher J. The Various Eateries judgment of Butcher J had not been significantly relied upon by either......