Pratt v Aigaion Insurance Company SA, Court of Appeal - Admiralty Division, March 14, 2008, [2008] 2 All ER (Comm) 574,[2008] EWHC 489 (Admlty),[2008] 1 CLC 512,[2008] Lloyd's Rep IR 610

Resolution Date:March 14, 2008
Issuing Organization:Admiralty Division
Actores:Pratt v Aigaion Insurance Company SA
 
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CASE NO: 2007 FOLIO 968

Neutral Citation Number: [2008] EWHC 489 (Admlty)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMIRALTY COURT

Date: 14 March 2008

Before:

HIS HONOUR JUDGE MACKIE QC

(Sitting as a Judge of the High Court)

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B E T W E E N:

MR JOHN PRATT

Claimant

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AIGAION INSURANCE COMPANY SA

Defendant

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Mr Michael Nolan (instructed by Hill Dickinson LLP) appeared for the Claimant.

Mr David Bailey QC (instructed by Marine Law Solicitors) appeared for the Defendant.

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JUDGMENTThis is a short point of construction of a clause in a policy of marine insurance brought as a Part 8 claim. It concerns the meaning of ``at all times'' in the context of this case.

Background and Policy wording

The Claimant Mr John Pratt owns the fishing trawler mfv ``RESOLUTE'', a 21 metre steel stern trawler with a gross tonnage of 117 tonnes. Mr Pratt took out a policy of marine insurance with the Defendant Aigaion Insurance Company SA (``Aigaion'') through brokers. The period of cover was for 12 months and ran from 23 June 2006. The insurance value of the vessel was given as £120,000. The living accommodation on the vessel comprises a crew cabin 6 foot by 9 foot and a galley 6 foot by 6 foot.

The policy is apparently in Aigaion's Standard Trawler wording with the following additional express provisions described as ``CONDITIONS''.

``Aigaion's Trawler Wording with the following Endorsements; Endorsement C - Crew Liability for 4 men.

Machinery Damage included subject to Machinery undergoing a full overhaul by manufacturers representative and certified by a qualified marine surveyor.

Warranted Machinery Breakdown is covered for the main engine only, but no cover shall apply following damage as a result of, or caused by, failure of any associated ancillary parts, pumps, generators, writing or peripheral equipment of any kind.

Subject to MCA or appropriate Licences to be held and in force. A copy required for Underwriters files.

Warranted Owner and/or Owner's experienced Skipper on board and in charge at all times and one experienced crew member.

Warranted the vessel is to be maintained to MCA or equivalent authority requirements.

Warranted any piece of Equipment valued in excess of GBP 500 to be specifically declared failing which Underwriters maximum liability will not exceed GBP 500 per item.

Subject to sight of current MCA survey and Ultrasonic thickness Test that has been carried otherwise full Out of Water survey to be carried out prior to attachment and all recommendations to be complied with within the time frame set by surveyor. All survey costs to be for Owners account''.

Facts

The relevant facts should not be much in dispute in a Part 8 claim. There is however extensive material in the bundle including witness statements from Mr John Hulmes, a partner in Hill Dickinson LLP the Claimant's solicitors, Dr Barrie Deas, Chief Executive of the National Federation of Fishermen's Organisations, and Mr Joseph Crewdson of the Defendant's solicitors. Much of this material is irrelevant. As I see it the salient facts are as follows.

The RESOLUTE is based at Fleetwood but in December 2006 was fishing from North Shields for prawns. On 11 December Mr Pratt and his crew of three took the vessel to fish for a day and it returned to North Shields where it was all fast at about 20:00 hours. The crew landed the catch and at 20.30 Mr Pratt went to file the vessel's fishing log sheet at the Fisheries Office. The crew readied the vessel for fishing the next day before one of them, who lived in North Shields, went home and another visited a pub some 200 yards from the vessel. At 22:00 Mr Pratt left the vessel to meet a friend at a café in Tynemouth and a few minutes later the fourth crew member also went to the pub. At about 22.20 Mr Pratt received a telephone call informing him that the vessel was on fire. When he and the crew members returned to the vessel the Fire Brigade was there putting out a fire which was extinguished by about 00:45.

The vessel was inspected by Burgoynes on 15 January. Their report concluded that the fire started in the galley/mess room, but because of the severity of the fire it was not possible to identify the precise location of the seat or the cause with any certainty. Loss by human agency could not be completely ruled out but did not appear the most likely cause. On the evidence available it was plausible that the fire was caused by operation or malfunction of the deep fat fryer or the fridge. The fryer was used by unplugging the fridge and placing the fryer plug in the socket. The fryer's on/off switch was stuck in the on position so temperature was controlled by unplugging it when necessary. As was usual when crew were to return to the vessel for the night the generator was left running while they were ashore.

Mr Pratt obtained quotes for repairs. One estimate was £142,500, the other £135,000 both higher than the £120,000 insured value of the vessel. The insurers declined to pay citing the `at all times' warranty mentioned above.

The dispute between the parties

In essence the Defendant says that the clause means what it says and that it owes no liability because there was no owner or experienced skipper on board and in charge ``at all times'' or specifically at the time of the fire. The Claimant submits that this construction ignores the fact that the clause is obviously directed to periods when the vessel was navigating or working and, if applied literally, would lead to absurd results. It is not how a reasonable person having the background knowledge available to both parties would understand it and it is not how it was understood by...

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