Defendants’ call for summary judgment dismissed

AC Ward & Son v Catlin (Five) & Others

(Court of Appeal — 10 September 2009)

The claimant, AC Ward & Son, was a victim of a burglary at its warehouse where £450000 worth of stock was stolen and it, therefore, claimed on its insurance. The claimant's insurers and defendants, Catlin, refused to pay. Proceedings were issued.

The defendants applied for summary judgment on the grounds that the claimant's case had no real prospect of succeeding in its claim for indemnity as it had breached two of the warranties in the policy. Therefore, the defendant's liability under the policy was discharged.

The defendant's interpretation of the warranties was that unless an approved alarm system and protective measures were installed and were in full working order when the warehouse was closed, regardless of whether this was known to the claimants, the defendants risks under the policy were discharged.

Lord Justice Etherton stated that the claimants had a reasonable prospect of success on the grounds that the defendants interpretation of the policy was wrong and draconian. He said that the claimant's interpretation of the policy, which was that defects within the knowledge or reasonably capable of being within the knowledge of the claimant would discharge the defendant's risks under the policy, gave a more reasonable commercial meaning to the warranties and was more likely to be intended by the parties.

It was felt that although information which would help interpret the policy was not available at the hearing of the application, this could be expected to be available at trial. Lord Justice Etherton found it was appropriate to give the claimants opportunity to seek and adduce any relevant and admissible factual material for the date of trial which would assist in interpreting the insurance policy.

The construction of the terms in the warranties and their effects could only be determined at trial.

The application was dismissed.

Comment

This decision reinforces the decision in Doncaster Pharmaceuticals v Bolton Pharmaceutical Co 100 2007 in that the court should hesitate about making a final decision without a trial, where reasonable grounds exist for believing that a fuller investigation into the facts would add or alter evidence available to the trial judge and affect the outcome of the case. Lauren Gosnell, BLM Manchester

The following law report contributed by specialist insurance practice Berrymans Lace Mawer (www.blm-law.com) first appeared in Post Magazine on 3 December  2009

Disclaimer: The law report contains information of general interest about current legal issues, it does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. Specialist legal advice should always be sought in any particular case.