Society Of Lloyd's v Noel

Summary judgment should not be granted on a basis that was not properly pleaded or fairly addressed in the evidence and submissions. Earlier appellate decisions which determine other issues do not necessarily preclude a defence raising a distinct point that was not before those courts. Where the first-instance judgment proceeded on an incorrect assumption, the Court of Appeal may set it aside and remit the matter for reconsideration rather than determine a materially different case itself. Fairness remains an important consideration under the Civil Procedure Rules. The court expressed no final view on whether a Lloyd’s member could avoid statutory obligations under the Lloyd’s Act 1982 by declining to sign a later undertaking.

The Society of Lloyd’s obtained summary judgment in the Commercial Court before Cresswell J on 12 May 1999 for £13,047, representing a reinsurance premium under the Equitas contract. Mrs Noel had joined Lloyd’s in 1979 and had signed no post-1982 form of general undertaking. She argued that the claim had wrongly been advanced on the assumption that she had signed such an undertaking.

Cresswell J treated the defence as raising arguments already rejected in Lloyd’s v Leighs & Others and Lloyd’s v Fraser & Others. The Court of Appeal considered whether those decisions had determined Mrs Noel’s distinct contractual point and whether summary judgment could properly be granted on Lloyd’s alternative statutory case.

1. Appeal allowed. The judgment of 12 May 1999 was set aside. Mrs Noel was awarded her costs of the Order 14 application and the appeal.
2. The claim below had been presented on the incorrect basis that Mrs Noel had signed an undertaking expressly binding her to the Lloyd’s Act 1982 and the byelaws made under it. That assumption was plainly wrong because she joined Lloyd’s before the Act and had signed only the earlier undertaking.
3. The earlier decisions in Lloyd’s v Leighs & Others and Lloyd’s v Fraser & Others did not determine the issue whether a member who had never signed the later undertaking was nevertheless bound by the statutory Lloyd’s regime. The short passage in Lloyd’s v Daly & Others did not provide a fully reasoned determination of that issue.
4. Although Lloyd’s advanced an alternative argument that Mrs Noel could not opt out of an Act of Parliament, that case had not been properly pleaded or supported by evidence below. Her continued underwriting after 1982 might raise factual questions concerning knowledge and conduct, but those matters had not formed part of the pleaded case or the evidence supporting summary judgment.
5. It would be unfair for the Court of Appeal to grant summary judgment on the newly formulated case. The matter should, if Lloyd’s wished to pursue it, be put afresh before the Commercial Court, where Mrs Noel would have a proper opportunity to consider and answer the case. The court therefore made no final determination on the strength of Lloyd’s proposed statutory argument.
6. Lord Justice Simon Brown agreed, emphasising that the decision was narrow. He considered Lloyd’s statutory argument very powerful and probably irresistible, but expressly stated that the issue was not being decided.

• Commercial Court: Cresswell J granted summary judgment for the Society of Lloyd’s on 12 May 1999 and declined to set it aside on 28 May 1999.
• Court of Appeal (Civil Division): The appeal was allowed, the judgment of 12 May 1999 was set aside, and costs were awarded to the appellant.