The court was asked whether compliance with a clause in the insurance contract was a condition precedent. There was also a question whether the insured could rely on facts arising after the making of their claim.
Held: If a clause does not set out the time limit by which compliance is required, the insured must comply (a) within a reasonable time and (b) in any event before proceedings are issued,
Slesser LJ said: ‘During the hearing before the arbitrator it was for the first time relied upon by the insurance company that the claimant had failed to give the respondents any information which was reasonably required with respect to two banking accounts of his mother which had been used and controlled by the claimant for the purpose of his business and that large sums of money accruing to the claimant had been paid by him into the accounts and large sums drawn out of the accounts by him for the purposes of his business.
At the arbitration, in the course of the cross-examination of the claimant, the claimant, for the first time, offered to give, and did give, full information as to these two banking accounts, but the learned arbitrator finds that until the accounts were so produced the respondents were not in possession of sufficient information to enable them to allege that the claimant’s failure to give information in respect of the said accounts was a breach of condition 4 of the policy.’
. . And ‘In these circumstances, even if the requirement of information in condition 4 be not a condition precedent, but merely a condition that the insurance company need not pay until the information required in condition 4 is provided, the appellant fails because he cannot say that such information was in fact given before the claim was made, and therefore it becomes to my mind unnecessary in this case to determine whether the failure to comply with condition 4 as to information was a failure to satisfy a condition precedent. For myself, I would wish to keep open that question. Had the phrase at the end of condition 4 been ‘no claim under this policy shall ‘be payable until the terms of this condition have been ‘complied with’ instead of the word ‘unless,’ the case would have resembled that of Weir v. Northern Counties of England Insurance Co. (I), where it was held that such words did not constitute a condition precedent but only a requirement to be satisfied before a liability to pay arose, but it may well be said that here the word ‘unless’ has no such temporal limitation.
In the result I think this appeal should fail, not upon the ground that condition 4 is a condition precedent, but upon the ground of the claimant’s failure to give necessary information before a claim was made by him, which failure the appellant through his own act in the circumstances of this case is unable to excuse.’
MacKinnon LJ said: ‘But in truth the more formidable argument for the respondents does not depend on the last sentence of condition 4. They say that the promise in the body of the policy is ‘subject to the conditions which, so far as the nature of ‘them permits shall be deemed to be conditions precedent to ‘the right of the insured to recover.’ In condition 4 there is the provision that ‘the insured shall give all such information as ‘shall reasonably be required.’ The nature of this requirement does permit compliance with it to be a condition precedent to the right of the insured to recover. It is found by the arbitrator that it has not been complied with. There has therefore been a breach of a condition precedent to the right of recovery.’ and ‘None the less I am driven to the conclusion that the stipulation that the insured shall give all such information as may be reasonably required is one whose nature permits it to be a condition precedent to the right of the assured to recover, and that the presence of the last sentence in condition 4 does not by any ambiguity alter that nature or invalidate that conclusion.’
Slesser, MacKinnon LJJ
[1939] 1 KB 294, [1938] 4 All ER 289
England and Wales
Cited by:
Cited – Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd CA 6-Feb-2006
The deceased had come into contact with asbestos when working on building sites for more than one contractor. The claimant here sought contribution from the defendants for the damages it had paid to his estate. The issue was as to liability on . .
Cited – Shinedean Ltd v Alldown Demolition (London) Ltd and Another CA 20-Jun-2006
The second defendant insurers appealed a finding of liability, saying that the insured had failed to provide its documents within a reasonable time in order to meet a condition to that effect in its terms. The documents had not been provided for . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 11 December 2021; Ref: scu.238334
