Wayne Tank and Pump Company Ltd v Employers Liability Assurance Corporation Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE CAIRNS,LORD JUSTICE ROSKILL |
| Judgment Date | 07 June 1973 |
| Judgment citation (vLex) | [1973] EWCA Civ J0607-1 |
| Date | 07 June 1973 |
| Court | Court of Appeal (Civil Division) |
[1973] EWCA Civ J0607-1
The Master Of The Rolls (Lord Denning)
Lord Justice Cairns and
Lord Justice Roskill
In The Supreme Court of Judicature
Court of Appeal
Appeal by defendants from judgment of Mr. Justice Mocatta on 17th December 1971.
Revised
Mr. E. M. OGDEN, Q.C., Mr. J. GRIFFITHS, Q. C., and Mr. CHRISTOPHER PURCHAS (instructed by Messrs. Grobel Willey Hargrave & Co.) appeared on behalf of the Appellant Defendants.
Mr. G. LE QUESNE, Q. C., and Mr. A. HAMILTON, Q. C. (instructed by Messrs. Barlow, Lyde and Gilbert) appeared on behalf of the Respondent Plaintiffs.
This is another sequel to a fire which took place on the 5/6th February 1963. An old mill at Bathampton in Somerset went up in flames. It was the subject of a case reported in (1970) 1 Q. B. 447. The owners of the factory, Harbutt's Plasticine Ltd., brought an action for damages against the Wayne Tank company which was installing hew equipment into this old mill. Harbutt's Plasticine said that the fire was due to the negligence in installing the equipment. In their defence the Wayne Tank company relied on an exempting condition. But in this Court it was held, affirming Mr. Justice John Stephenson, that the Wayne Tank Co. had been guilty of a fundamental breach of their contract, and that in consequence they could not rely on the exemption clause. The Wayne Tank company were held liable for the damages, which we were told came to £150,000.
Now the Wayne Tank Company seek to claim indemnity from an insurance company. It appears that the Wayne Tank Company had several insurance policies, each for a different aspect of business. They had an employers' liability policy in res ect of their liability as the employers of their servants. They had a motor vehicle policy in resoect of their motor vehicles on the road. They had a products liability policy in respect of their products which they supplied to customers. They had the polloy with which we are concerned in this case - a public liability policy - which they took out with the Employers Liability Assurance Corporation Ltd. It is on the public liability policy that the Wayne Tank Company now claim that they should be indemnified against the liability which they have been held to be under to the Harbutt's Plasticine Company.
That is not all. In addition the Wayne Tank Company took out one more policy. It may be called a reserve policy or a blanket policy. It covered them for any accidents that were notcovered by the particular policies which I have already mentioned. This blanket reserve policy was issued by an American Company, the Insurance Company of North America. That Insurance Company of North America paid to Wayne Tank or lent them money to the full extent of the loss due to the fire. Now It is using the name of Wayne Tank Company to recover against the Employers Liability "ssurance Corporation Ltd.
Such being the background, the one question is whether the damage due to the fire is cohered by the words of the Public Liability policy issued by the Employers Liability Company. The principal clause contains general words giving cover as follows:-
-"the Company will indemnify the Insured against all sums which the insured shall become legally liable to pay as damages consequent upon.…damage to property as a result of accidents as described in the Schedule"…
Turning to the Schedule, we find: "Description of Accidents. Accidents happening in the course of the Business and causing death injury or damage (a) upon or about the premises at Western Road, Bracknell, Bath (b) elsewhere other than on premises owned or occupied by the Insured."
It is common ground that the fire causing the damage did occur "elsewhere", that is, at Bathampton, and it occurred on the premises of Harbutt's Plasticine which were not "premises owned or occupied by the insured". The fire was an accident coming within these general words. But, in order to escape liability, the insurance company rely on one of the exceptions. It is this:-"The Company will not indemnify the insured in respect of liability
consequent upon…..
(5) death injury or damage caused by the nature or condition of any goods or the containers thereof sold or supplied by or on behalf of the Insured."
In applying the clause, the first question is whether the equipment and apparatus which Wayne Tank supplied and put into the mill were "goods supplied" by the insured. The Judge was inclined to think they were not; but to ny mind clearly they were "goods supplied" by the insured. It is not necessary to decide whether the property had passed, nor whether the Installation had been completed. Suffice it that the equipment and apparatus were goods supplied by the insured.
The next question is whether the damage was caused by the nature or condition of those goods supplied. In short, was the fire caused by the nature or condition of the equipment and apparatus supplied by the wayne Tank Company? The parties have agreed that we can go by the findings in the original case by Mr. Justice Stephenson at the trial, together with the views of the Court of Appeal. On those findings it is plain that there were two causes of this disaster.
First, one cause was the conduct of Wayne Tank in supplying the useless and dangerous material called durapipe coupled with a useless thermostat. That installation was completely unsuitable for the purpose. It was a gross danger, because, when heated up. the durapipe would sag, the wax would escape, and, the whole thing would up in flames.
Second. The second cause was the conduct of the man, Mr. Duncan, the servant of Wayne Tank, in switching on the heating tape and leaving it unattended throughout the night and at a time when the Installation had not been tested.
Those were the two causes of the disaster. The firstcause, namely, the dangerous nature of installation, was plainly within the exception clause. The damage due to it was caused by the nature or condition of the goods supplied by Wayne Tank. Taking that clause alone, the insurance company would be exempt, by reason of the exception clause.
The second cause, namely, the conduct of the man in switching on the heating tank and leaving it unattended all night, was not within the exception clause. Taking the cause alone, the insurance company wojld be liable under the general words and would not be exempted by the exceptions.
So we have the question: what is to happen when there are two causes of the damage - one of which is within the exceptions and the other is not? Up till 1918 there was a strong current of opinion that in insurance cases you looked at the cause which was latest in point of time. The latin maxim was causa proxima non remota spectatur. In English it was that you should look at the proximate cause and not the remote cause. The lawyers used to say that the proximate cause was the immediate cause, that is, the cause which was latest In point of time. See Ionides v. Universal Marine (1863) 14 C. B. N. S. at pa, re 219. As recently as 1918 Mr. Leslie Scott, in arguing the case of Levland Shipping Co. Ltd. v. Norwich Union Fire Insurance Society Ltd. (1918) A. C. 350 at page 351, put forward the proposition that "according to English law, the last cause only must be regarded and the others rejected, although they contributed to the result." That proposition was emphatically rejected by the House. Lord Shaw of Dunfermline said in terms: "To treat proximate cause as if it was the cause which is proximate in time is, as I have said, out of the question. The cause which is truly proximate is that which is proximate in efficiency."Since Leyland's case it has been settled in insurance law that the "cause" of a loss is that which is the effective ordominant cause of the occurrence, or, as it is sometimes pot, that which is in substance the cause, even though it is more remote in point of time, such cause to be determined by common sense, see Gray v. Barr 1971 2 Q. B. at pag 567.
So I would approach this case by asking which of the two causes was the effective or dominant cause? I should have thought that it was the first cause, the dangerous nature of the installation, and thus within the exception. So that the Employers Liability were not liable under this policy.
The Judge was much inclined to hold that it was the dangerous installation which was the dominant cause. out he was dissuaded from that view by Mr. Le Quesne, who argued, with his usual persuasiveness, that the act of the man (in switching on the heating tape)was a novus actus interveniens which was predominant in effectiveness. It was the cause of the fire. It did not co within the exceptions. So the Employers Liability were liable.
I must say that I do not care for this emphasis on novus actus interveniens. It seems to me to be going back to the old and forsaken test of the latest in time. I would reject novus actus. I would ask, as a matter of common sense, what was the effective or dominant cause of the fire? To that question I would answer that it was the dangerous Installation of a pipe which was likely to melt under heat. It seems to me that the conduct of the man in switching on the heating tape was just the trigger - the precipitating ovent - which brought aoout the disaster. There would have been no trouble whatever if the system had been properly designed and installed.
Seeing that the dangerous installation was the dominant cause, it comes within the exceptions and the Employers Liability Company are not liable on this policy.
That is enough to decide the case. But I will assume, for the sake of argument, that I am wrong about this: and that there was not one dominant cause, but two causes...
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