Wooldridge v Canelhas Comercio Importacao E Exportacao Ltda

A standard-form insurance term such as Robbery must be construed through the eyes of an ordinary commercial person, by reference to the clause and policy as a whole and their objectively ascertained purpose. A holdup or robbery limit directed at the extra risk of violence or threats to persons at insured premises applies when that risk materialises there. It does not apply merely because an owner or employee, placed under duress elsewhere, attends the premises and removes property, even if the property is stolen through that person’s unwilling agency. Detailed examination of domestic or foreign criminal-law definitions is inappropriate where the policy uses the concept commercially. The appeal was dismissed.

The respondent, a Brazilian wholesale jeweller, claimed under a Lloyd’s Jewellers Block Policy for emeralds removed from its premises after its managing director was kidnapped and threatened with harm to his family. He attended the premises and, with staff assistance, removed the emeralds for the kidnappers.

On an application for summary judgment, Moore-Bick J held that the policy’s Outside Limit did not apply and that the Holdup or Robbery Limit was inapplicable. The present appeal concerned only the latter conclusion. The central issue was whether the loss was loss by robbery within the meaning of that special condition.

The Court unanimously dismissed the appeal. Lord Justice Mance gave the leading judgment; Lord Justice Thorpe and Mr Justice Munby agreed.

1. The policy was governed by English law, but terms such as Robbery were not to be given a technical English or Brazilian criminal-law meaning. They were to be understood as ordinary commercial men would understand them: Algemeene Bankvereeniging v Langton (1935) 51 Ll.L.R. 275. The clause had to be construed as part of the policy as a whole, by reference to the meaning conveyed to a reasonable person with the relevant background knowledge and to the objectively ascertained aim and purpose of the standard wording: Investors Compensation Scheme Ltd v West Bromwich B.S. [1998] 1 WLR 896; Prenn v Simmonds [1971] 1 WLR 1381; and Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989.
2. The Holdup or Robbery Limit was triggered by loss or damage to property, by robbery, when the premises were open for business or the insured or an employee other than security personnel was present or attending. Reading the special conditions together showed that the clause addressed the additional risk of violence or threats to the insured’s controlling personalities or employees at the premises.
3. The clause did not address threats or duress imposed elsewhere which caused a person later to attend the premises and remove goods. Here, the threats concerned the managing director’s family and were made away from the premises. Neither he nor the employees at the premises were threatened with violence. Their conduct resulted from human and moral pressure, and the removal did not depend on the premises being open or on staff awareness. The theft therefore did not constitute loss by robbery within the clause, even assuming that the gang acted through the managing director’s unwilling agency.
4. The court noted, without deciding, that the result might differ if force or threats directed at employees at the premises were necessary to overcome their opposition. Any ambiguity-based construction against the underwriters was likewise unnecessary because the clause was not ambiguous: Dodson v Dodson [2001] 1 Ll.R. 520.

Appeal dismissed. The respondent was awarded the agreed appeal costs of £12,070, payable within fourteen days.

1. Court of Appeal (Civil Division): The appeal was dismissed on 26 July 2004. [2004] EWCA Civ 984.
2. Queen’s Bench Division (Commercial Court): Moore-Bick J determined on summary judgment that the Holdup or Robbery Limit did not apply, while leaving misrepresentation and non-disclosure issues for trial. [2004] EWHC 643 (Comm.).