Greene Wood & McLean v Templeton Insurance Ltd

On an application to set aside permission to serve proceedings out of the jurisdiction, the merits threshold is the same as on an application for summary judgment: the claim must raise a serious issue to be tried.

A contractual term is implied only where it is necessary to give the contract business efficacy or would have been obvious to both parties. A claimant’s commercial preference for an additional contractual remedy does not satisfy that test.

A claim under the Civil Liability (Contribution) Act 1978 may be in respect of a contract even where the claimant is not a party to it and the claim is not brought under it. The connection may be remote, provided the claim relates to or is connected with the contract.

The claimant solicitors sought damages from the defendant insurer under an alleged agreement concerning after-the-event insurance arranged for miners. They also claimed a contribution or indemnity under the Civil Liability (Contribution) Act 1978.

Permission had previously been granted to serve the claim out of the jurisdiction. The defendant applied to set that order aside, alleging inadequate disclosure and contending that the claims had no reasonable prospects of success.

The issues were whether the alleged contractual term was properly implied, whether the contribution claim fell within CPR 6.20(5), whether England was the proper place for the claim, and whether there had been material non-disclosure.

1. Disposition. The application was dismissed. Permission to serve out was maintained, but restricted to the claim under the Civil Liability (Contribution) Act 1978.
2. Contract claim. Applying the summary-judgment threshold stated in MRG (Japan) Limited v Engelhard Metals Japan Limited [2003] EWHC 3418 (Comm), the contractual claim had to raise a serious issue to be tried. The pleaded arrangement arguably authorised the claimant to enter insurance contracts with the miners, but it was unarguable that the arrangement necessarily included a term enforceable by the claimant requiring the insurer to meet the miners’ valid policy claims.
3. The insurer’s agreement that the miners would have enforceable rights under the policy made the arrangement work. A parallel right for the claimant was neither necessary nor obvious. If such a right was desired, it required express provision. The contract claim therefore had no real or reasonable prospect of success.
4. Contribution claim. The court followed Albon v Naza Motor Trading [2007] 1 Lloyd’s Rep. 297 in giving “in respect of a contract” its ordinary and natural meaning: a claim relating to or connected with a contract. The connection need not be with a contract between claimant and defendant. The contribution claim therefore fell within CPR 6.20(5), notwithstanding that it was not brought under the insurance contract.
5. Applying the questions identified in Royal Brompton NHS Trust v Hammond [2002] 1 WLR 1397, there was at least an arguable case that the miners had suffered the same financial loss, and that both claimant and insurer were liable in respect of it. The contribution claim accordingly raised a serious issue to be tried. Bovis Construction v Commercial Union [2001] 1 Lloyd’s Rep. 416 was arguably distinguishable.
6. Jurisdiction and disclosure. England was a proper place for the contribution claim because the costs liability, related arbitration and governing law supplied a real connection with England. Applying MRG (Japan) Limited v Engelhard Metals Japan Limited, the alleged non-disclosures were not material in the strict sense relevant to the ex parte application.