Levers J
IN CHAMBERS IN THE GRAND COURT OF THE CAYMAN ISLANDS BETWEEN: THE PROPRIETORS OF STRATA PLAN 183 (A corporation formed under the laws of the Cayman Islands) Plaintiff AND: ISLAND HERITAGE INSURANCE COMPANY LIMITED Defendant BEFORE: The Honourable Madam Justice Levers Appearances: Mr. Stephen-Hall Jones for the plaintiff Mr. Anthony Akiwumi for the defendant Heard: 14th June 2007 JUDGMENT Levers, J. There are two Summons before me. It has been decided, in view of the contents of the relief requested, that the Defendant’s Summons should be heard first and the Plaintiff’s Summons for Directions heard after the outcome of the Defendant’s Summons is known. The Defendant represented by Mr. Akiwumi of Stuarts asks for the following relief: (1) That Summary Judgment be entered against the Plaintiff; (2) Such further and other relief as Counsel may advise and that this Honourable Court may deem just and appropriate; and (3) That the costs of this application be provided for. The factual background is as follows: The Defendant and the Plaintiff entered into an insurance policy, containing a condition as to liability and the Defendant’s case is that the policy contained a clause mandating that a claim must be notified within 30 days. Mr. Akiwumi submits that this was a condition precedent and is wholly unambiguous from the wording of the policy. Ivan arrived and the Plaintiff suffered considerable damages. In the event, the deadline was extended by insurers from 30 days for another 7 days. It is alleged that the Plaintiff still wholly failed to comply with the condition precedent by not giving notice of the claim until January 2005. Mr. Akiwumi submits that it is settled law that as a consequence the Plaintiff has lost its right to pursue its claim and that Summary Judgment should therefore be granted to the Plaintiff. On the other hand Mr. Stephen Hall-Jones on behalf of the Plaintiff submits that this is an inappropriate procedure to take in the circumstance of this case. That, in fact, it should be taken as a preliminary point of law at the trial for the judge to decide. He also submits that on a careful reading of the clause in question it is ambiguous and fails to satisfy the intention of the Defendant who obviously wishes to say that the Plaintiff must lodge a claim. But that in fact the insurance policy does not contain words to the effect that it must be "a claim". Therefore, he submits that the clause is not unambiguous as submitted by the Defendant. The claims notification provision is set out in Clause 1 and 4 of the Policy. The policy reads: CONDITIONS WHICH APPLY TO THE WHOLE POLICY
YOUR DUTY TO COMPLY WITH POLICY TERMS Without prejudice to our other rights, your observance of the terms of this Policy is a condition precedent to our liability to make payment under this Policy.
CLAIMS Upon the happening of any event likely to give rise to a claim under this Policy You must – (i) immediately notify the police if any property is lost, stolen or maliciously damaged (ii) report in writing to us without unnecessary delay (and in any event within 30 days of the date of the loss) and provide all information and assistance which we may reasonably require The Clause contains sub clauses 3, 4 and 5 which are irrelevant for purposes of this application. The crucial clause, for purposes of this application is 4 (a) (ii). Mr. Akiwumi submits that this is a condition precedent and that common sense dictates that the Clause must mean that "a claim" must be submitted within 30 days. Mr. Hall-Jones submits that the questions that the Court needs to ask itself are: 1. What is the meaning and interpretation of Clauses 1 and 4 of the Policy?
In the circumstances, are the clauses properly to be determined as a "conditioned precedent" to the payment of a claim by the Defendant a breach of which will entitle the Defendant Insurer to deny liability under the Policy?
Can the Plaintiff rely on the existing knowledge of the Insurer as satisfying the reporting requirement in the Policy? Mr. Akiwiumi submits that it is indeed a condition precedent and that it is not unusual on a reading of any insurance law text to have a fixed or reasonable time of the date of the loss within which to submit a claim. He further submits that failure by the assured to comply with the condition precedent prevents the assured from making a claim. He relies on the case of McAlpine v BAI [1998] Lloyds Law Reports Vol. 2, page 694. Affirmed by the Court of Appeal in McAlpine v BAI [2000] 1 Lloyds Law Reports 437 where it was explained as follows: "(iii) As observed in MacGillivray and Parkington, par 10-10, where it is intended that provisions requiring certain action by the assured should be conditions precedent to recovery under the policy it is now generally the practice to insert a term which provides that the due observance and fulfillment by the assured of all the terms, provisions, conditions and endorsements of the policy in so far as they relate to anything to be done or complied with by the assured is to be a condition precedent to any liability of the insurers to make payment under the policy. In Farrell v Federated Employers Insurance Association Ltd., [1970] 2 Lloyd's Rep. 170; [1970] 1 W.L.R. 1400 such a provision was included in a policy containing an occurrence notification clause in the same terms as cl. 1 (a). (iv) In recent times the Courts have not construed notice of claim or occurrence clauses as imposing conditions precedent to the insurers' liability unless either the clause itself was expressed to be a condition precedent or the policy contained a general provision to the effect of that in Farrell v Federated Employers, sup". The distinction Mr. Akiwumi draws is in that case, the Clause did not expressly state it was a condition precedent to the entire insurance policy, whereas the case at hand, it does and therefore, he submits his case is stronger. There is no doubt the Plaintiff did not report the matter until January 2005 and there is equally no doubt that the insurers placed a notification in the newspapers extending the notification of claim for an extra seven days. Mr. Stephen Hall-Jones however says that on a reading of the policy there is no requirement for a claim to be submitted and therefore that in construing it one cannot import the word 'claim' into the clause. That it is incumbent on this court to construe the clause contra proferentem if there is any doubt as to its true meaning and effect. He submits that the clause is poorly drafted and is therefore open to a number of interpretations. In the United Kingdom of course there is legislation which disallows unfair contractual terms. Mr. Akiwumi also submits that in this case the Defendant will suffer prejudice if a claim was allowed because the delay will affect his client's negotiations with their reinsures. Mr. Stephen Hall-Jones submits that the notice can’t expo facto change the terms of the contract. That his client could only claim when and if he suffered a loss. The notification of the happening of the event was an event that was universally known and there was no need for his client to notify the insurer’s of the happening of the event as required by the clause in the Policy. The Law The test for entering summary judgment is contained in Grand Court Rules, Order 14, rule 12 (1) (1) The Court may, upon the application of a party or of its own motion, determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that – (a) such question is suitable for determination without a full trial of the action; and (b) such determination will finally determine (subject only to any possible appeal) the entire cause or matter or any claim or issue therein. (2) Upon such determination the Court may dismiss the cause or matter or make such order or judgment as it thinks just. (3) The Court shall not determine any question under this Order unless the parties have either – (a) had an opportunity of being heard on the question; or (b) consented to an order or judgment on such determination. (4) Nothing in this Order shall limit the powers of this Court under Order 18, rule 19 or any other provision of these Rules. My tasks therefore, at this stage is not to go into the merits of the case but to consider whether the claimant has no real prospect of succeeding on the claim or issue. The burden of proof on an application for summary judgment appears to be settled by E.D. & F Man Liquid Products Ltd v Patel [2003] CPLR page 384. The burden rests on the applicant to prove that the respondent’s case has no real prospect of success which is to be considered having regard to the overriding objective of dealing with the case justly. The question whether there is a real prospect of success is not approached by applying the usual balance of probabilities standard of proof. (See Royal Brompton Hospital NHS Trust v Hammond [2001] BLR 297). In Swain v Hillman [2001] 1 All ER at page 91, Lord Woolfe MR said that the words ‘no real prospects of succeeding’ did not need any amplification as they spoke for themselves. The word ‘real’ directed the court to the need to see whether there was realistic, as opposed to a fanciful, prospect of success. The phrase does not mean 'real substantial' prospect of success. Nor does it mean that summary judgment will be granted only if the claim or defence is 'bound to be dismissed at trial'. The Master of Rolls went on to say that summary judgment applications have to be kept within their proper role. They are not meant to dispense with the need for a trial where there are issues which should be considered at trial. The Plaintiff could have filed evidence to show cause as to why summary judgment should not be granted but it has chosen not to do so and instead depends on the very wording of the Policy. It may well be that based on the law and the authorities quoted to me, if I were the trial judge I would hold in favour of the Defendant. However that is not my role and I remind myself the only question I have to answer on this application is, does the Defendant have a real prospect of success? This case will revolve around the construction of the clauses contained in the insurance policy. Mr. Hall-Jones has quite rightly pointed out that the question whether a clause is a condition precedent to the liability of the insurer is one which has occupied the courts on frequent occasions and he submits that the Plaintiff clearly has a triable issue on the question. In view of the wording of the clause and in view of the fact that this is a point of law or construction that must be argued prior to trial, I am of the opinion that a summary judgment application in the circumstances must fail. I therefore dismiss the application with costs to the Plaintiff to be agreed or taxed. I also hold that this is a preliminary point of law that should be argued prior to trial and that the subsequent directions that are requested of the Court should be in accordance with my ruling. Dated this 22nd day of June 2007 Judge of the Grand Court