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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Bate v Aviva Insurance UK Ltd  EWHC 1687 (Comm) (17 June 2013)
Cite as:  EWHC 1687 (Comm)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| ALAN BATE
|- and -
|AVIVA INSURANCE UK LIMITED
Graham Eklund QC and Nicholas Broomfield (instructed by Greenwoods) for the Defendant
Hearing dates: 12 to 22 March and 10 May 2013
Crown Copyright ©
Judge Mackie QC :
The Policies in outline
The Long House and the surrounding buildings
"To all intents and purposes Alan stated that the Stables was a test property; the remainder of the development would only be undertaken by Parthenon if that had sold…
At some point in the Autumn of 2004, I recall having a discussion with Alan about Parthenon's asking prices. In my view due to the downturn in the housing market they were now too high so I suggested that to sell the properties the price would need to be reduced. His reaction was to say that at a reduced price there would be no profit in the development for Parthenon…In around September 2004, Parthenon instructed us to cease marketing the properties as development was no longer proceeding…Alan then purchased the completed Stables dwelling in his own name and told us to market it through our To Let register."
Mr Bate and his background
"The materiality of an uncommunicated fact may be so obvious that it is unnecessary to call any expert evidence to establish this point…where, however, the court is unsure of the materiality of a given fact, it is usual to call expert evidence from persons engaged in the insurance business in order to assist the court in making its decision."
( paragraphs 17-042 – 3)
Although the starting point is that the proposer has an independent obligation to disclose all material facts, the form and extent of questions put on the proposal form may limit the extent of the duty of disclosure. The test in each case is whether on a true construction of the proposal form a reasonable person would think that the insurer had restricted his right to receive all material information and consented to the omission of the particular information in issue. Synergy Health (UK) Limited v CGU and others  EWHC 2583 (Comm), at para 16).If an insurer fails to put questions on all material matters, or puts them in an unclear way, he runs the risk of the contention that failure to ask the questions prevents him from relying on non-disclosure afterwards: Zurich General Accident and Liability Company v Morrison and others  2 KB 53 at p. 64.
The Insurance Conduct of Business Sourcebook ("ICOB")
ICOB 7.3.1. "An insurer must carry out claims handling promptly and fairly."
ICOB 7.3.6. "An insurer must not…unreasonably reject a claim made by a customer,…except where there is evidence of fraud, refuse to meet a claim by a retail customer on the grounds…of non-disclosure of a fact material to the risk that the retail customer who took out the policy could not reasonably be expected to have disclosed;…of misrepresentation of a fact material to the risk, unless the misrepresentation is negligent and …in the case of a general insurance contract, of a breach of warranty or condition, unless the circumstances of the claim are connected with the breach; …"
Insurance policies for the Long House - matters agreed or not much in dispute.
"(iii) Long House, The Stables, Long Lane, Dobcross…is a let property. The property is newly constructed (brick & tile/slate roof);
(xii) 04/04 Building contractor caused fire damage at previous address after cutting through an electricity cable - £50,000 (building contractor found not to have adequate commercial cover so insd attempting to persue [sic] through previous insurer –claim outstanding."
Insurance of the Long House and outbuildings by Aviva from 31 March 2005.
"(xi) April 2004 building contractor caused fire damage at previous address after cutting through an electricity cable causing £50,000 damage"
Summary of the Defences
Did the Aviva policies cover the Coach House?
Aviva's claims of misrepresentation and non disclosure...
The 2004 proposal for The Stables and Radnor Drive
The 2005 proposal for cover of the Long House.
"Q. If you had been told that he had an office in his garage where he worked part-time from home as a loss assessor, you would have written the policy on the same terms?
A. If that is the only thing that was disclosed with nothing else, yes, I believe so."
Ms Hubbard said:
"Q. If the facts were…that two or three doors away, Mr Bate was simply carrying out clerical work, that wouldn't be a matter of concern to you would it?
"It is a matter of some importance in this case that these works to the Long House were expressly notified to Rebecca McGruther of H&L. It is also important to note that Ms McGruther appears either to have kept no record of that notification, or alternatively H&L lost the relevant file note. It is clear that notification was given because Mr Cockerton recorded this in his letter to Mr Bate of 9th February 2006:
"I have also told them of your need to carry out maintenance work to areas of the roof resulting from damage due to the resent [sic] high winds. Whilst the scaffolding is in place you intend to install some new flashings and updated Velux roof lights and alter some rooms to create disabled living accommodation for your invalid brother. The cost of the scaffolding and the work will exceed the permitted policy limit of £10,000 as this roofing work necessitates your complying with Heath and Safety requirements.
I have confirmed that there will be no Building Regulation Controlled structural alterations or "hot work" involved, however I have requested that they revert to me if they need any further information."
Ms McGruther did not take up the offer of reverting for further information. Mr Cockerton also made a hand-written record on his copy of the letter:
Called Rebecca McGruther @ H&Leofelis
> Advised of maintenance works over £10k & reason which she confirmed acceptable and noted her file."
It is extraordinary to note that Aviva persists in arguing (Opening para 59) that notice of building works was not given."
The evidence of the witnesses other than Mr Bate and Mr Cockerton
Mr Bate and Mr Cockerton - Letters of 4 April 2005
"Q: I think I should give the opportunity for you to deal with it. It think one of the things that Mr Eklund's side may say is – they haven't said it, but since you are here, I think you should have an opportunity to deal with it.
Q: One of the things that they may say is that your dealings in relation to this letter and to the February note have in some ways been less than straightforward.
Q: Would you like to say anything about that?
A: No, there is nothing else I wish to add."
Other allegations of dishonesty made against Mr Bate.
The expert witnesses
Estoppel and Waiver