Pratt v Aigaion Insurance Company SA

A marine insurance warranty requiring an owner or experienced skipper to be on board and in charge “at all times” ordinarily bears its literal meaning. Commercial common sense may qualify that meaning only to the extent necessary to accommodate emergencies or the performance of crewing duties. It does not justify rewriting the warranty so that it applies only while the vessel is underway or working, or so as to produce a more advantageous bargain. The absence of the skipper while ashore for personal reasons therefore breached the warranty and defeated the claim.

The claimant insured his fishing trawler under a policy containing a condition warranting that the owner or the owner’s experienced skipper would be on board and in charge at all times. The vessel caught fire while moored in port after the owner and crew had gone ashore for personal reasons. The insurer declined liability.

The claimant sought a declaration or judgment under Part 8, contending that the wording should be confined to periods when the vessel was underway or working, or at least that a temporary absence ashore should not breach the warranty. The central issue was the proper construction of “at all times” in the context of the policy and the factual background.

1. Construction. The natural and literal meaning of the condition was that the owner or the owner’s experienced skipper had to be on board and in charge at all times. The wording was not ambiguous. The question whether the additional experienced crew member also had to be on board was irrelevant.
2. The factual context showed that the parties knew the vessel was a small trawler with limited accommodation and limited periods at sea. Those matters did not displace wording which was explicit. They were relevant only to the limited qualification required by commercial common sense.
3. The qualification should be confined to circumstances of the kind identified in The Newfoundland Explorer [2006] Lloyd’s Rep IR 704, including emergencies requiring departure from the vessel and absences for the performance of crewing duties or related activities. The court followed the consistent practical approach taken in The Milasan [2000] 2 Lloyd’s Rep 458 and The Newfoundland Explorer.
4. The court applied the warning in Charter Re v Fagan [1997] AC 313 that construction must not substitute a bargain which the court considers more sensible for the bargain the parties made. The owner and crew were ashore for personal reasons, not because of an emergency or crewing duty. A wider qualification would be required to cover that absence.
5. The inconsistency between the warranty and certain standard policy terms did not materially assist the claimant. The claim therefore failed, and judgment was given for the defendant.

First-instance decision. No prior appellate decision is stated in the judgment.