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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bedfordshire Police Authority v Constable [2009] EWCA Civ 64 (12 February 2009) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2009/64.html Cite as: [2009] Lloyd's Rep IR 607, [2009] EWCA Civ 64, [2009] 2 All ER (Comm) 200 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
THE HONOURABLE MR JUSTICE WALKER
2008 FOLIO NO. 27
Strand, London, WC2A 2LL |
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B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE HOOPER
and
THE RIGHT HONOURABLE SIR PETER GIBSON
____________________
BEDFORDSHIRE POLICE AUTHORITY |
Respondent |
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- and - |
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CONSTABLE (SUED ON HIS BEHALF & ON BEHALF OF ALL OTHER MEMBERS OF SYNDICATE 386 AT LLOYD'S) |
Appellant |
____________________
WordWave International Limited
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Colin Edelman QC & Mr Andrew Burns (instructed by Eversheds LLP) for the Respondent
Hearing dates : 21st & 22nd January 2009
____________________
Crown Copyright ©
Lord Justice Longmore:
Introduction
The Insurance
"the usual activities of the ASSURED as a Police Authority which is held to include"
and then a number of incidental examples are set out.
"The COMPANY will indemnify the ASSURED in respect of all sums which the ASSURED may become legally liable to pay as damages and claimants' costs and expenses for:
a) accidental Injury to any person (other than an EMPLOYEE if such Injury arises out of and in the course of employment by the ASSURED).
b) accidental DAMAGE to PROPERTY:
i) not belonging to nor in the custody or control of the ASSURED.
ii) not in the custody or control of an EMPLOYEE.
iii) which has been the subject of illegal distraint.
........
d) accidental DAMAGE to buildings including their fixtures and fittings which are leased, hired or rented by the ASSURED but excluding:
i) DAMAGE to their contents.
ii) Liability assumed by the ASSURED under a tenancy or other agreement which would not have attached in the absence of such agreement.
iii) The first £100 of each claim for DAMAGE unless caused by fire or explosion.
occurring within the Geographical Limits during the Period of Insurance arising out of the BUSINESS."
The 1886 Act
"Whereas by law the inhabitants of the hundred or other area in which property is damaged by persons riotously and tumultuously assembled together are liable in certain cases to pay compensation for such damage, and it is expedient to make other provision respecting such compensation and the mode of recovering the same:"
2. - (1.) Where a house, shop, or building in a police area has been injured or destroyed, or the property therein has been injured, stolen, or destroyed, by any persons riotously and tumultuously assembled together, such compensation as herein-after mentioned shall be paid out of the police fund of the area to any person who has sustained loss by such injury, stealing or destruction; but in fixing the amount of such compensation regard shall be had to the conduct of the said person, whether as respects the precautions taken by him or as respects his being a party or accessory to such riotous or tumultuous assembly, or as regards any provocation offered to the persons assembled or otherwise.
(2.) Where any person having sustained such loss as aforesaid has received, by way of insurance or otherwise, any sum to recoup him, in whole or in part, for such loss, the compensation otherwise payable to him under this Act shall, if exceeding such sum, be reduced by the amount thereof, and in any other case shall not be paid to him, and the payer of such sum shall be entitled to compensation under this Act in respect of the sum so paid in like manner as if he had sustained the said loss, and any policy of insurance given by such payer shall continue in force as if he had made no such payment, and where such person was recouped as aforesaid otherwise than by payment of a sum, this enactment shall apply as if the value of such recoupment were a sum paid.
3. (1.) Claims for compensation under this Act shall be made to the compensation authority of the police area in which the injury, stealing, or destruction took place, and such compensation authority shall inquire into the truth thereof, and shall, if satisfied, fix such compensation as appears to them just.
(2.) A Secretary of State may from time to time make, and when made, revoke and vary regulations respecting the time, manner, and conditions within, in, and under which claims for compensation under this Act are to be made, and all claims not made in accordance with such regulations may be excluded. Such regulations may also provide for the particulars to be stated in any claim, and for the verification of any claim, and of any facts incidental thereto, by statutory declarations, production of books, vouchers, and documents, entry of premises, and otherwise, and may also provide for any matter which under this Act can be prescribed, and for the police authority obtaining information and assistance for determining the said claims.
Regulations have been made under sub-section (2) and include the stipulation that any claim for compensation should be made within 14 days of the loss or damage to which it relates.
4. (1.) Where a claim to compensation has been made in accordance with the regulations, and the claimant is aggrieved by the refusal or failure of the compensation authority to fix compensation upon such claim, or by the amount of compensation fixed, he may bring an action against the compensation authority to recover compensation in respect of all or any of the matters mentioned in such claim and to an amount not exceeding that mentioned therein, but if in such action he fails to recover any compensation or an amount exceeding that fixed by the compensation authority, he shall pay the costs of the compensation authority as between solicitor and client.
"persons riotously and tumultuously assembled"
within the wording of the 1886 Act. The claimant said that the word "tumultuously" added nothing to riotously or that, if it did, it should be read disjunctively. Lyell J held that the requirement of "tumultuousness" did add something to the requirement of "riot" and he defined it by saying that the assembly should be of considerable size and an assembly in which the persons taking part indulged in agitated movement. In coming to this conclusion he asked himself the question why victims of riot who had suffered injury or damage to their property were made a special case at a time when victims of crime were not generally compensated for their injuries. He answered it in this way at page 980:-
"If a crowd of people collect in angry and threatening fashion this should become obvious to the local forces of order, and it would then become their duty to prevent the crowd from becoming a riot. This is a duty which has been recognised for centuries, and which until the 19th century was put upon the local administrative area, the hundred or wapentake, or whatever name it might be called; and there was a duty upon them to compensate for damage which was done by persons assembled riotously and tumultuously. The Act of 1886, in fact, did no more than modernise the mode of obtaining compensation and transferred the burden from the inhabitants of the hundred or wapentake to the local police authority. There is nothing secret or furtive about a crowd of people who are acting riotously and tumultuously. It seems to me that the right to compensation from public funds was given because public authority had failed to protect the public who were menaced by a threat which was, or ought to have been, obvious to the forces of law and order as they existed from time to time. In my judgment, the word "tumultuously" was added to "riotously" for the specific reason that it was intended to limit the liability of compensation to cases where the rioters were in such numbers and in such state of agitated commotion, and were generally so acting, that the forces of law and order should have been well aware of the threat which existed, and, if they had done their duty, should have taken steps to prevent the rioters from causing damage."
"I would also like to express my complete agreement with the judgment of Mr Justice Lyell in Dwyer's case."
The arguments
i) the judge had created an unresolved tension in saying on the one hand that the obligation to pay compensation under the 1886 Act was a liability which the parties to the insurance contract would expect to be covered and, on the other, that the reason why the police authority was liable to pay sums "as damages" arose from a notional (and unexpressed) duty to preserve law and order. How could that be in the common contemplation of the parties when even a lawyer would only know it after reading Dwyer and Edmonds (and, if the judge was right, the Statutes of Westminster, the Riot Act of 1714 and the Remedies Against the Hundred (England) Act of 1827, the predecessors of the 1886 Act)?
ii) The words "liable as damages" had a time-honoured history of more than a century starting with the Collision Liability Clause dealing with liability of a shipowner to pay damages to a vessel with which he had collided. Liability damages were not covered under the old Lloyd's form and so a new clause (later incorporated in the Institute Time Clauses) evolved which the courts have interpreted in accordance with a lawyer's understanding of "damages". It did not include a debt; nor did it include a liability to pay expenses nor, indeed, did it include a contractual liability when it was incorporated in a public liability policy. Similarly it did not include a liability to pay compensation under the 1886 Act. It only included a liability in tort. When pressed as to whether that meant that the policy would only respond if the insured could point to a chapter in Clerk and Lindsell on Torts which dealt with the liability concerned, he gave a qualified assent to that suggestion citing the second footnote of the first edition of that noble work (1889) in which, after the authors had done their best to define what a tort is, they stated:-
"The statutory remedy of an action against the police authority of district (sic) in respect of property damaged in riots which has been substituted for the old action against the hundredors stands outside this classification altogether."
Mr Kealey's qualification was merely that one could imagine a foreign liability which might not be the same as a tort in English law but even then it would have at least to be similar.
Approach to Construction
" in any process of construction it is appropriate to take the language of the particular clause as the starting point. It is, however, not in dispute that the words used must be considered in the context of the particular clause as a whole and that the clause must in turn be considered in the context of the policy as a whole, which must in its turn be set in its surrounding circumstances or factual matrix. Moreover, as Lord Hoffmann pointed out in the now well-known case of Investors Compensation Ltd v Hopkin & Sons (a firm), Alford v West Bromwich Building Society, Armitage v West Bromwich Building Society [1998] 1 All ER 98 at 114, [1998] 1 WLR 896 at 912-913 interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, and the meaning of the document is what the parties using the relevant words against the relevant background would reasonably have been understood to mean."
Secondly in Sunport Shipping v Tryg-Baltica International (UK) Ltd [2003] EWCA Civ 12; [2003] 1 Lloyds Rep 138, 145 he said:-
" the court is trying to ascertain the intention of the parties in using the expression deployed in the contract. Where a contract has been professionally drawn, as in the case of the Institute Clauses, the draftsman is certain to have in mind decisions of the courts on earlier editions of the clause. Such decisions are part of the context or background circumstances against which the particular contract falls to be construed. If the draftsman chooses to adopt the same words as previously construed by the courts, it seems to me to be likely that, other things being equal, he intends that the words should continue to have the same meaning."
"Legally liable to pay as damages"
"And it is further agreed that if the ship hereby insured shall come into collision with any other ship or vessel and the assured shall in consequence thereof become liable to pay and shall pay by way of damages to any other person or persons any sum or sums in respect of such collision the undersigned will pay the assured such proportion of three-fourths of such sum or sums so paid as their respective subscriptions hereto bear to the value of the ship hereby insured, provided always that in cases in which the liability of the ship has been contested, or proceedings have been taken to limit liability, with the consent in writing of the undersigned, they will also pay a like proportion of three-fourths of the costs which the assured shall thereby incur, or be compelled to pay; but where both vessels are to blame, then unless the liability of the owners of one or both of such vessels becomes limited by law, claims under this clause shall be settled on the principle of cross-liabilities "
This was followed by a proviso in these terms:-
"Provided always that this clause shall in no case extend to any sum which the assured may become liable to pay or shall pay for removal of obstruction under statutory powers, for injury to harbours, wharves, piers, stages, and similar structures, consequent on such collision; or in respect of the cargo or engagements of the insured vessel or for loss of life or personal injury."
"It seems to me that, certainly so far as it is a matter of coming to a decision upon the evidence of the French lawyers, there is no conception of delict or tort in the cause of action which is given by the French Decree to the pilot boat. It seems to me that the probable theory which underlies the legislation, though it does not matter, when it is a matter of policy of law, what theory underlies the legislation, is that the pilot boat is rendering a service for the benefit of the ship which requires pilotage and, therefore, any damage which the pilot boat may receive in the course of rendering that service is to be regarded as an expense of the pilotage and is to be paid by the ship in just the same way as she would have to pay the pilotage dues, or whatever is the correct expression used in France, as remuneration for the service which the pilot renders."
" the clause does not extend to every pecuniary liability arising in respect of the collision but only to such liabilities as arise by way of damages. The word "damages" is one which to an English lawyer conveys a sufficiently precise meaning. This document is an English contract which falls to be construed according to English law. That does not, of course, mean that in its application to liabilities arising under foreign law (an application which the parties, of course, clearly contemplated as possible) the operation of the clause is to be excluded merely because some liability arising under foreign law as a result of a collision does not precisely coincide with the liability which is recognised in the Courts of this country. Nevertheless it is necessary in my opinion, in construing a document of this kind, to give to the word "damages" its ordinary meaning in English law. "Damages" to an English lawyer imports this idea, that the sums payable by way of damages are sums which fall to be paid by reason of some breach of duty or obligation, whether that duty or obligation is imposed by contract, by the general law, or legislation.
Now, the measure of the duty, of course, will depend upon the particular law. A statute may impose an absolute obligation not to do certain things, and as the result of that the person injured by the doing of such a thing may have a right to damages. That is a question of the measure of the duty. An example which was referred to in the course of the discussion is to be found in the Air Navigation Act, 1920, s.9, sub-s I, under which damages are recoverable from the owner of aircraft who causes damage irrespective of negligence or intention: it is a standard of duty not to do certain things imposed by that statute. Looking at it from another point of view, there are certain classes of liability to make pecuniary payments which clearly fall outside the word "damages". For instance, compensation paid under the Land Clauses Act or a matter of that kind is certainly not damages. Workmen's compensation payments are certainly not damages in the ordinary sense of the word, and in spite of Mr McNair's argument to the contrary I find it quite impossible to suppose that workmen's compensation payments are included in the word "damages" in this clause. The foundation of that class of liability is something entirely different from the foundation of the liability which gives rise to a claim for damages."
So, insurers submit, payments under the 1886 Act are of a similar kind to the payment made by reason of French law in that case and are not recoverable under the terms of the public liability policy in this case.
"Arising out of the business" of the BPA
Conclusion
Lord Justice Hooper:
Sir Peter Gibson: