Contact (Print And Packaging) Ltd v Travelers Insurance Co Ltd, Court of Appeal - Technology and Construction Court, January 23, 2018, [2018] EWHC 83 (TCC)

Resolution Date:January 23, 2018
Issuing Organization:Technology and Construction Court
Actores:Contact (Print And Packaging) Ltd v Travelers Insurance Co Ltd

Neutral Citation Number: [2018] EWHC 83 (TCC)

Case No: C50MA103




Manchester Civil Justice Centre,

1 Bridge Street West, Manchester M60 9DJ

Date: 23 January 2018




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Thomas Plewman QC & Sophie Shaw

(instructed by Squire Patton Boggs (UK) LLP, Manchester M60) for the Claimant

Andrew Miller QC

(instructed by Berwin Leighton Paisner LLP, London EC4) for the Defendant

Hearing dates: 9, 10, 13, 14, 15, 16, 17 November, 6 December 2017

Draft judgment circulated 5 January 2018

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Page 21

His Honour Judge Stephen Davies

His Honour Judge Stephen Davies:


  1. Introduction

  2. This is a claim under a combined insurance policy in which the claimant seeks payment of monies said to be due under the physical damage and business interruption sections of that policy, arising from physical damage to and the failure of a Heidelberg Speedmaster CD 102 - 6LX printing press (``the Press'') at its print production facility in Stockport on 17 April 2013. The claimant claims £824,683.07 in respect of property damage and £434,139 in respect of business interruption. The defendant repudiated the claim in September 2013 on the ground that the claimant had not shown that the failure was due to an insured cause. The defendant has maintained that position and defends the claim on the same basis. The defendant also challenges the quantum of both claims.

  3. The claim was issued in August 2016 and case managed in January 2017 for trial in November 2017. At trial I heard oral evidence over 7 days from: (a) 5 factual witnesses called by the claimant; (b) 8 expert witnesses called by the parties in the fields of printing presses, structural engineering, metallurgy and accountancy. I had the benefit of written closings followed by oral closing submissions on day 8 before reserving this judgment.

  4. The case was very well prepared by the respective solicitors and also very well presented by leading and junior counsel for the claimant, Mr Plewman QC and Ms Shaw, and by leading counsel for the defendant, Mr Miller QC, to all of whom I am extremely grateful.

  5. My conclusions in summary are that: (a) the claimant has established its case on liability; (b) the property damage claim succeeds in full; (c) the business interruption claim succeeds only as to £18,900; (d) the total of £843,583.07 is subject to a £10,000 deductible, with the result that the total amount payable is £833,583.07

  6. My reasons follow in the sections which appear below. I have included a short explanation of all defined terms in the Glossary at the end of this judgment, such as ``the Press'' as in paragraph 1 above. I have also referred to pages of the trial bundle as [A/1/001], where A is the trial bundle, 1 is the divider and 001 is the page number and have referred to the relevant passages of evidence in the transcript as [1/001] meaning page 1 of the transcript for day 1.

  7. The claimant

  8. The claimant was at the time of the incident in April 2013 in business in the print and packaging industry, carrying on that business at a number of sites including factory premises in an industrial estate at Haigh Avenue, Stockport. Through his shareholding in its holding company the claimant is wholly owned and controlled by Mr Philip Smith. He was at the relevant time the chairman of the company, having divested himself of day to day involvement in around 2008 and having appointed a managing director, a Mr Mealyou, to run the business in his place along with the existing management team. He retained a strategic involvement and was not wholly remote from the business, being involved in the important decisions, but he did not have the detailed hands-on knowledge which he would have had when he was managing director. After the incident he instructed a loss assessor known as Mr Noel to deal with the insurance claim and, again, mostly left the detail to Mr Noel and the relevant officers and employees of the company. Again, he retained a strategic involvement and was involved in the major decisions but not in day to day management. The claimant sold its business in November 2015 to a company known as Glossop Carton & Print Limited but excluded the right to bring this claim from that sale.

  9. It is worth making some reference at this point to the criticisms made by Mr Miller as to the scarcity of the claimant's disclosure and the absence of some witnesses who he submitted ought to have been called by the claimant.

  10. As to the former, the evidence is that the claimant operated three principal IT software systems: the first being a business management package designed for the print and packaging sector known as Shuttleworth; the second being a financial package which interfaced with Shuttleworth known as Access and the third being an email package provided by Gmail for both internal and external communications. The systems were run on a number of workstations and desktop computers. Following the business sale the claimant decided, for understandable financial reasons, not to renew the annual operating licences for Shuttleworth or Access. The claimant also failed, for less understandable reasons, to take any steps to investigate the possibility of ensuring continuing access to the relevant historic data for the purposes of this claim, whether from Glossop as the purchaser (by way of access either to the data or to the hardware from which the data was accessible) or from the suppliers of the relevant software. It would appear that the claimant gave no thought at all to the possibility that more relevant documentation might be required than had already been obtained in the event that this claim was pursued. This was despite the fact that the claimant had already instructed its previous solicitors to write a letter of claim to the defendant in September 2014, well before the business sale took place.

  11. When the adequacy of the claimant's disclosure arose, shortly before trial, the claimant discovered that although it would be possible to obtain access to the information from Shuttleworth and Access the time needed to do so would prevent the information from being made available before trial and that it would not now be possible at all so far as the Gmail emails were concerned. Mr Smith said under cross-examination that he did not think that any further information which Shuttleworth or Access might have would take matters any further and neither party pursued that further before me. However, it was clear that Mr Smith had little if any direct or detailed knowledge as to the sources of information which might have been available on Shuttleworth or Access or, indeed, what further relevant emails or attachments might have been available had access to those emails been preserved. In those circumstances the view I take is that where the claimant might reasonably have been expected to provide more documentation in relation to a particular issue but has not done so I should not give it the benefit of the doubt in relation to that issue in circumstances where it has failed to take proper steps to ensure that relevant electronic information was preserved for the purposes of this claim. Whilst I consider that this does apply in relation to documents which would have been of undoubted relevance in relation to quantum, I am not persuaded that there is any realistic likelihood that there are documents relevant to liability which existed and which were not but could have been disclosed had proper steps been taken. The most that the defendant can say is that there might, for example, have been some relevant internal emails recording faults with the Press or some relevant external emails with the maintenance company of a similar nature. In my view however there is no basis from the documentary and oral evidence which the claimant has adduced at trial for me to consider that this is likely to be the case.

  12. As to witnesses, Mr Smith was the only witness called as a present or former officer or employee of Contact itself. He had limited direct knowledge of a number of significant matters relating to liability and quantum and there were several important respects in which he simply referred to what he had been told in circumstances where there was little or no hard evidence as to who had told him what and the reliability of that source. There were a number of witnesses who could have been called by the claimant to give relevant evidence but who were not called. I fully accept the difficulties faced by a company which has sold its business and no longer employs many of the employees who were involved at the time. However there has been no evidence as to what steps were taken by the claimant to locate and obtain statements from any number of potentially relevant witnesses other than what Mr Smith said when asked under cross-examination.

  13. Nonetheless this is not a case where I consider that I must or should draw adverse inferences against the claimant on a particular issue as a result, since it is not a case (unlike Wisniewski v Central Manchester Health Authority [1998] PIQR P324, often cited in such contexts) where it can be said that the claimant knew or ought reasonably to have known that a particular witness had important evidence relating to a significant issue and, hence, ought either to have called that witness or provided an acceptable explanation as to why not. There is no suggestion that the defendant ever notified the claimant that its failure to call one or more specified witnesses to deal with one or more specified issues would result in the defendant making a submission along these lines at trial.

  14. However...

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