Ace European Group Ltd & Ors v Chartis Insurance UK Ltd

Where damage may have resulted from competing causes, the court must decide which explanation is more probable on the evidence. Rejecting one improbable theory does not automatically establish the other; the judge must still be satisfied that the preferred theory is correct on the balance of probabilities. [1985] 1 W.L.R 948 and [2008] EWCA Civ 424 were applied.

An appeal cannot be used to build a new evidential case from late-disclosed material whose provenance and significance were not tested at trial, particularly where it was not put to the opposing expert.

Insurers who had indemnified the assured under an Erection All Risks policy sought an indemnity or contribution from marine insurers. The policies included a 50/50 clause where the timing of damage could not be established. Cracking in economiser welds had been discovered after construction, and the central issue was whether the damage occurred during road transport, within the marine cover, or at the construction site, within the Erection All Risks cover.

Popplewell J found for the claimant insurers. Chartis appealed, challenging the evidence concerning missing packing, road conditions and the alleged resonant vibration. The appeal required the court to decide whether the trial judge’s causal findings were open to him and whether the appellant could rely on photographic material disclosed shortly before trial but not properly put to the opposing expert.

1. Disposition. The appeal was dismissed unanimously. Longmore LJ delivered the leading judgment, Moses LJ agreed with his reasons and Ward LJ agreed.
2. Photographic evidence. The appellant had not securely proved which economiser blocks were shown in the photographs or whether the relevant gaps had been adequately packed. The photographs had been disclosed late, their provenance and metadata had not been properly established, and the appellant’s detailed interpretation had not been put to the respondents’ expert. It was therefore impermissible to develop that case for the first time in closing submissions or on appeal. The Court of Appeal was not in the same evidential position as the trial judge.
3. Substantive evidence. The trial judge was entitled to rely on the manufacturing process, the varying lengths of packing strips, uneven packing thickness and photographic features supporting the possibility of missing packing. He was also entitled to find that the rough urban roads, the possible deterioration of the motorway surface and the rumble strip could have generated sufficient vibration. The evidence did not require a finding that road-transport damage was impossible merely because the required response was said to be narrowband.
4. Competing causal theories. The judge had correctly directed himself in accordance with Popi M and Ide v ATB Sales Ltd. Rejecting wind excitation did not itself establish road transport as the cause. The judge had to be satisfied that road transport was more likely than not to have caused the damage. He reached that conclusion, and it was open to him on the evidence.
5. Procedural observation. Moses LJ considered that the trial judge could have invoked the overriding objective and excluded the late photographic evidence pursuant to Civil Procedure Rules CPR 32.1(2). That observation was not necessary to the dismissal of the appeal.

• Court of Appeal (Civil Division): Chartis’s appeal was dismissed in [2013] EWCA Civ 224.
• High Court of Justice, Queen’s Bench Division, Commercial Court: Popplewell J found for the claimant insurers on the issue of when the economiser damage occurred.