Welch v Royal Exchange Assurance
| Jurisdiction | England & Wales |
| Date | 1938 |
| Year | 1938 |
| Court | Court of Appeal |
Insurance (Fire) - Policy - Construction - Clause requiring insured on making claim to give information - “All such …. information …. as may reasonably be required” - “No claim …… payable unless …. this condition shall have been complied with” - Information refused before but given during arbitration proceedings - Giving of information whether a condition precedent to insurers' liability.
By the terms of a policy of fire insurance the conditions thereof were, “so far as the nature of them respectively will permit,” to “be deemed to be conditions precedent to the right of the insured to recover.” Condition 4 provided that on making a claim the insured should “give to the corporation all such proofs and information with respect to the claim as may reasonably be required,” and that “No claim under this policy shall be payable unless the terms of this condition shall have been complied with.” A fire occurred on the insured's premises and he claimed to be indemnified under the policy. The insurance corporation repudiated liability, and the dispute was referred to arbitration. The insured used and controlled for the purposes of his business certain bank accounts standing in the name of his mother. The insurance corporation repeatedly, both before and during the arbitration, requested the insured to furnish them with information as to these accounts; but the insured failed to disclose them until he was under cross-examination during the arbitration proceedings:—
Held, by the Court of Appeal (Slesser, MacKinnon and Finlay L.JJ.) that the insured was not entitled to recover any sum in respect of his claim: by Slesser L.J. on the ground that, even if on the true construction of the policy the requirement of information in condition 4 was not a condition precedent, but merely a condition that the insurance corporation need not pay until the information there required was produced, the insured could not say that such information was in fact given before his claim was made; by MacKinnon and Finlay L.JJ. on the ground that on the true construction of the policy that requirement was a condition precedent with which in the circumstances the insured had not complied.
The word “unless” in the condition could not be construed as meaning “until.”
Worsley v. Wood (
APPEAL from the judgment of Branson J. on a special case stated by Sir Walter T. Monckton K.C. as arbitrator.
By a policy dated June 19, 1929, Mr. Henry Welch, hereinafter called the appellant, a motor tyre and accessory manufacturer and merchant, carrying on business at Montpelier Works, Hammersmith, London, W., effected with the Royal Exchange Assurance, hereinafter called the respondents, an insurance against fire of his stock in trade in the said premises for 25,714 l. It was stated on the front of the policy that it was: “Subject to the conditions contained herein or endorsed or otherwise expressed hereon, which conditions shall so far as the nature of them respectively will permit, be deemed to be conditions precedent to the right of the insured to recover hereunder.” Condition 4 provided: “…. The insured shall also give to the corporation all such proofs and information with respect to the claim as may reasonably be required 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.”F1
Conditions 1 and 2 provided that if they were not complied with the policy might be avoided; conditions 5 and 7 provided that in certain events all benefit under the policy should be forfeited; and condition 10 provided that in certain events the claim of the insured might be barred. Condition 11 provided that the parties should refer to arbitration all differences between them arising out of the policy.
There were other concurrent insurances of the same subject-matter.
On November 26, 1934, a fire occured on the premises mentioned in the policy.
On January 31, 1935, the appellant made a claim under the policy for loss or damage by the fire, which the respondents disputed.
The parties thereupon agreed that the matters in dispute between them should be referred to the said arbitrator.
On October 30, 1935, January 3 and 13, December 18, 1936, and January 20, 1937, the parties by their solicitors, or counsel attended before the arbitrator.
On November 9, 1936, the appellant delivered his points of claim in which he claimed the defendants' proportion of a loss of 41,383 l., and on December 2, 1936, the respondents delivered their points of defence, in which they alleged (inter alia) that there had been fraud on the part of the appellant.
On October 5, 1937, the arbitrator made his award in the form of a special case.
Para. 2 of the special case stated that the arbitrator determined that the defence of fraud against the appellant failed.
Para. 4 stated that at the hearing before the arbitrator it was proved or admitted (a) that information about all bank accounts used or controlled by the appellant for the purposes of his business was required by the respondents both before the arbitration and before delivery of their points of defence; (b) that one Mrs. Welch, the mother of the appellant, had two bank accounts, both of which were used or controlled by the appellant for the purpose of his business; (c) and that on being required by the respondents to give information concerning the bank accounts used or controlled by him the appellant failed to give any information in respect thereof.
Para. 5 stated that during the hearing and in the course of the cross-examination of the appellant, he for the first time offered to give and did give full information as to the said two bank accounts; that until these accounts were produced as aforesaid the respondents were not in possession of sufficient information to enable them to allege the appellant's failure to give information in respect of the said accounts as a breach of condition 4 of the policy; and that after the production of the said accounts the respondents on June 1, 1937, obtained the leave of the arbitrator to amend their points of defence.
By their amended points of defence the respondents contended that the appellant's failure to give the information about the accounts when required to do so constituted a breach of condition 4 of the policy and that that breach ought to preclude the appellant from recovering any sum under the policy.
The appellant contended that information as to the said accounts was not reasonably required by the respondents, and he made other contentions the substance of which may be gathered from the decision of the arbitrator in regard to them as stated below.
Para. 8 of the case stated that the arbitrator found as facts: (a) that the information as to the said accounts was reasonably required by the respondents; (b) that the appellant failed to give to the respondents information as to the said accounts when required by the respondents; (c) that the appellant did not fraudulently conceal the said information from the respondents; and (d) that the accounts when disclosed did not contain any material which justified or tended to justify the respondents in repudiating the claim under the policy.
As to the appellant's contentions the arbitrator held that the appellant's failure to give information as to the said accounts when required constituted a breach of condition 4 of the policy even though the accounts when disclosed did not contain any material which justified or tended to justify the repudiation of the claim under the policy; that there had been a breach of condition 4 at the time when the arbitration proceedings began; that that breach constituted a bar to the appellant's right to recover in respect of his claim, and could be relied upon by the respondents so soon as they were permitted to raise the point by amendment of their points of defence; that condition 4 was a condition precedent to the respondent's liability in respect of a claim under the policy; that a breach of the condition disentitled the appellant to recover any sum in respect of his claim under the policy, and that the fact that the respondents were in possession of the required information at the time when they amended their points of defence did not preclude them from relying on the appellant's failure to supply the information at any earlier date as a bar to his right to recover any sum in respect of his claim.
At the request of the parties the arbitrator found that the total amount which the appellant would be entitled to recover from all the insurers if they were liable would be 32,000 l.
For the reasons above-mentioned, however, the arbitrator awarded and determined that the appellant was not entitled to recover any sum in respect of his claim.
BRANSON J. affirmed the decision of the arbitrator: see [
The appellant appealed.
Norman Birkett K.C. and R. E. Borneman for the plaintiff, appellant: Branson J. was wrong in affirming the decision of the arbitrator that the appellant was not entitled to recover any sum in respect of his claim. It is said by the respondents that the appellant is prevented from recovering by reason of his non-compliance with condition 4 of the policy. The latter part of condition 4 provides that the insured shall give to the insurers all such proofs and information with respect to the claim as may reasonably be required; and that no claim under the policy shall be payable unless the terms of the condition have been complied with. The contention is that the appellant failed to comply with that condition because he did not give to the insurers the two bank accounts in question when they were first asked...
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