swarb.co.uk - law index
These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.
Insurance - From: 1990 To: 1990
This page lists 4 cases, and was prepared on 08 August 2015.
T M Noten BV -v- Harding [1990] Lloyd's Rep 283
1990
CA
Slade LJ, LawtonLJ
Insurance
Bingham LJ wasasked as to what was meant by the proximate cause of an accident at sea, and said: "Unchallenged and unchallengeable authority shows that this is a question to be answered applying the common sense of a business or seafaring man."
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Youell -v- Bland Welch & Co Ltd (No 1); QBD 1990 - [1990] 2 Lloyd's Rep 423
Motor Oil Hellas (Corinth) Refineries SA -v- Shipping Corporation of India ('The Kanchenjunga'); HL 1990 - Times, 19 February 1990; [1990] CLY 4077; [1990] 1 Lloyd's Rep 391
Socony Mobil Oil Co Inc and others -v- West of England Ship Owners Mutual Insurance Association Ltd (the "Padri Island") (No 2); Firma CF-Trade SA -v- Newcastle Protection and Indemnity Association (the 'Fanti') [1991] 2 AC 1; Gazette, 25 July 1990; [1990] 2 Lloyds Rep 191
14 Jun 1990
HL
Lord Brandon, Lord Goff of Chieveley
Insurance, Arbitration
The House was asked as to the effect of section 1(3) of the 1930 Act on policies including 'pay or be paid' clauses. Held: The central question was whether the condition of prior payment was rendered of no effect by section 1(3) of the Act of 1930. It is well established that an indemnity is enforceable by way of action for unliquidated damages.
Lord Goff: "It is evident that certain of the judges in the courts below . . were much affected by what they perceived to be the unfortunate consequences which would follow if the cargo owners were denied a direct action against the clubs. Indeed Stuart-Smith LJ went so far as to say that, if the argument of the clubs were to prevail, any liability insurer could drive a coach and horses through the Act by the simple device of incorporating a pay to be paid clause in the policy. To my mind, this statement both exaggerates the danger and ignores the policy underlying the Act of 1930 . . In his judgment, Bingham LJ, . . summarised in eight points his general approach to the construction of the Act. With that admirable summary I respectfully agree. In it, he stressed that the primary purpose of the Act was to remedy the injustice highlighted in particular in In re Harrington Motor Co Ltd, Ex parte Chaplin [1928] 1 Ch 105, in which it was held that payment by an insurance company to an insolvent insured of a sum due under a liability policy, fell to be distributed among the creditors of the insured, of whom the injured party was only one: see Bradley v Eagle Star Insurance Co Ltd [1989] AC 957, per Lord Brandon of Oakbrook. He also stressed that under the Act there were to be transferred to the third party only such rights as the insured had under the contract of insurance, subject always to section 1(3) of the Act which in effect prevented contracting out of the statutory transfer. This being the statutory scheme, it is very difficult to see how it could be said that a condition of prior payment would drive a coach and horses through the Act; for the Act was not directed to giving the third party greater rights than the insured had under the contract of insurance. . . ." and
"The agreement to arbitrate is one which regulates the means by which the transferred right is to be enforced against the Club. As such, it is inevitable that such an agreement must be treated as transferred to the statutory transferee as part of, or as inseparably connected with, the member's right against the Club under the rules in respect of the relevant liability."
Lord Brandon of Oakbrook said that on the ordinary and natural construction of the 'pay to be paid' provisions of the clubs' rules payment by the members of the cargo owners was a condition precedent to payment by the clubs to the members and that there was no principle of equity which enabled those express provisions to be disregarded or overridden. Furthermore, the 'pay to be paid' provision by the terms of the contract of insurance made between the members and the clubs did not purport, either directly or indirectly, to avoid those contracts or to alter the parties' rights under them upon the members being ordered to be wound up, so as to render those provisions to that extent of no effect under s.1(3) of the Third Parties (Rights against Insurers) Act 1930.
Third Parties (Rights Against Insurers) Act 1930 1(3)
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