Markel Capital Ltd v Gothaer Allgemeine Versicherung AG & Anor

Summary judgment is inappropriate where the evidence leaves a real prospect that a factual issue will be resolved at trial, particularly where oral evidence may assist. Contractual wording identifying insured parties as acting “as per” an intermediary does not, without more, make the intermediary’s knowledge the insured parties’ knowledge for a condition precedent. Nor does that wording alone establish ostensible authority to receive notice. The contractual meaning must be assessed in the context of the agreement as a whole. Whether the intermediary in fact acquired relevant knowledge as the insured parties’ agent remains a separate factual question.

The claimant reinsurer sought summary judgment on its claim for a declaration that it was not liable under a proportional reinsurance contract. The reinsureds counterclaimed and brought Part 20 proceedings against their broker.

The claimant relied on a Claims Co-operation Clause, said to be a condition precedent to liability. It argued that the clause had been agreed as part of the contract and that knowledge acquired by VOV GmbH, which acted for the reinsureds in connection with the pool business and placement, triggered the notification obligation. The court had to decide whether those issues could be determined summarily.

1. Summary judgment. The applicant had to show that the opposing party had no real prospect of success. A real prospect was more than fanciful or merely arguable. The court declined to determine summarily whether the Claims Co-operation Clause had been agreed as a term of the reinsurance contract. Although there were substantial points supporting the claimant’s case, the evidence also supported the possibility that the clause had been agreed for different reinsurance risks and mistakenly included in the relevant documentation. Oral evidence from relevant witnesses might assist the trial judge.
2. Construction of the reinsurance contract. The description of the reinsureds as “Gothaer Versicherungsbank VVaG and Kontinentale Versicherungs-AG as per VOV GmbH” did not operate as a definition of “Reinsured” applicable wherever that term appeared. Such a construction was inconsistent with provisions under which the reinsureds, rather than VOV, were to be indemnified. Nor did the wording mean that the reinsureds could act only through VOV. That interpretation would produce commercially and practically untenable consequences, including that knowledge held by the reinsureds themselves might not trigger the clause.
3. Agency and ostensible authority. The wording did not establish that VOV’s knowledge was contractually to be treated as the reinsureds’ knowledge. It also did not establish ostensible authority to receive relevant information on their behalf. In addition, there was no evidence that the claimant relied on any representation conveyed by the description of the reinsureds. The question whether VOV in fact acquired relevant knowledge in its capacity as the reinsureds’ agent remained open and was not suitable for summary determination.
4. The court therefore declined summary judgment for the claimant on the claim or any issue, and consequently declined summary judgment for the reinsureds against Bloemers. The court invited submissions on the consequential order, including the proper meaning and effect of the description of the reinsured.