Kelway v Guardian Insurance Ltd

Where a marine insurance policy covers a vessel while laid up only as specified in its schedule, the specified berth and manner of lay-up define the scope of cover. A vessel deliberately placed in a half-tide slipway for work, awaiting later movement to a mud berth, is not covered merely because it remains within the same port. Wording permitting shifting to or from the lay-up berth regulates the limited period of shifting; it does not create blanket cover while the vessel remains stationary. An insured is bound by policy terms received through the broker and cannot rely on a failure to press for a copy to escape those terms.

Jonathan Kelway claimed the insured value and related costs after his yacht, Inheritance, was damaged by extreme weather while afloat and moored alongside a tug in a half-tide slipway in the Medway.

The Central London County Court dismissed the claim on 14 July 2000 and ordered the claimant to pay seven-eighths of the defendant’s costs. Permission to appeal was refused. On an earlier oral application, Rix LJ advised that any appeal would require amendment to include a further defence based on alleged misrepresentation of the claimant’s claims history.

The claimant applied out of time for an extension, permission to appeal and amendment. The central issue was whether the yacht was within the policy’s laid-up cover when the casualty occurred.

The Court of Appeal unanimously dismissed the claimant’s applications with costs. The appeal on Ground 4 had no realistic prospect of success.

1. Scope of cover. The policy defined the vessel’s insured states as “in commission” and “laid up out of commission”. The schedule specified lay-up from 1 October to 1 April in a mud berth on the River Medway. That specification formed part of the policy and limited laid-up cover to the stated place and manner of lay-up.
2. At the time of the casualty, Inheritance was not in commission because it was not available for the owner’s immediate use. It was not laid up out of commission within the schedule because it was in a half-tide slipway rather than a mud berth. Nor was it docking, undocking or otherwise within the specified additional activities. The judge’s construction of the policy was correct.
3. Shifting. The words limiting movement to the port or place where the vessel was laid up delimited cover for shifting. They did not define the general scope of laid-up cover. Permission to shift in tow or otherwise to or from the lay-up berth was not a blanket licence covering the vessel while stationary. Although brief interruptions during an actual shifting operation could fall within the provision, deliberately placing the yacht in the slipway for work for two weeks or more before a later move was not shifting in the ordinary or commercial sense.
4. Policy terms and broker. The finding that the claimant received the schedule and policy terms was open to the evidence. In any event, he could not take advantage of his failure to press his brokers for a copy. Lambeth Fenchurch’s dual role did not turn the policy into a bare all-risks policy; in this transaction it acted as the claimant’s broker.
5. Because Ground 4 was unanswerable, it was unnecessary to consider Ground 1, the other defences, or the respondent’s proposed cross-appeal. The order was: applications dismissed with costs, with £500 paid out of court to the defendant’s solicitors.

• Court of Appeal (Civil Division): The claimant’s applications for an extension of time, permission to appeal and amendment of the notice of appeal were dismissed with costs. The court considered Ground 4 unanswerable.
• Central London County Court (Business List): His Honour Judge Hallgarten QC dismissed the claim on 14 July 2000 and ordered the claimant to pay seven-eighths of the defendant’s costs. Permission to appeal was refused.
• Earlier permission application: Rix LJ adjourned the claimant’s oral application and indicated that an appeal would require amendment to include Ground 1.