Oaxaca Limited t/a Wahaca v QIC Europe Limited

Summary judgment may determine a construction issue where the issue is sufficiently clear, even if permission to appeal is required and related appellate proceedings are pending. It should not determine coverage where liability and loss depend on unresolved factual, evidential and expert issues.

For an interim payment under CPR r 25.7(1)(c), the claimant must satisfy the court, on the balance of probabilities, that it would obtain judgment for a substantial sum at trial. It is insufficient that success or recovery appears likely. The court must also assess the likely amount of the final judgment and limit the payment to a reasonable proportion of it.

Oaxaca Limited and Flat Iron Steak Limited brought business interruption claims against QIC Europe Limited under materially identical commercial combined policies. They relied principally on non-damage and denial of access extensions arising from governmental restrictions imposed during the Covid-19 pandemic.

The claimants sought summary judgment on construction and coverage issues, declarations of cover, and an interim payment. The construction issue concerned whether the denial of access wording required a local or localised danger or disturbance in the immediate vicinity of the insured premises. The coverage application also required determination of loss, danger, causation and evidential issues.

1. Construction issue. Summary judgment was granted on the construction issue, with permission to appeal. The issue was realistically closed at first instance by the approach reaffirmed in Liberty Mutual and the causation approach addressed in Corbin & King and London International Exhibition Centre v Royal & Sun Alliance. The Court of Appeal was due to consider the issue in related proceedings, making an expedited appeal appropriate.
2. Coverage issue. Summary judgment on coverage was refused. The evidence did not permit confidence as to the existence or amount of recoverable loss. Matters requiring trial included the meaning and application of immediate vicinity, whether danger included threatened future cases, the calculation of insured loss under the policy, the effect of Coronavirus Job Retention Scheme recoveries, permanent closures, and the evidential reliability of the FCA Calculator and Covid-19 tracking material. The possibility of zero recovery was realistic rather than fanciful on the material before the court.
3. The court noted the guidance in Hewes v West Hertfordshire Hospitals NHS Trust that summary judgment will usually be inappropriate before a trial substantially dependent on expert evidence, unless the experts have engaged with the issues.
4. Interim payment. The application failed. Under CPR r 25.7(1)(c), applying FII Group Litigation v Revenue and Customs Commissioners (No 2) and the approval of that approach in Buttar Construction Ltd v Arshdeep, the court had to be satisfied on the balance of probabilities that the claimants would actually succeed at trial and obtain judgment for a substantial amount. A merely likely outcome was insufficient. Since the court was not satisfied that loss and liability would be established, gateway (c) was not met. Gateway (b) also failed because no judgment had been obtained. The court therefore could not assess the likely final judgment or order a payment under CPR r 25.7(4).

First-instance decision. Summary judgment was granted on the construction issue only, with permission to appeal. The applications for summary judgment on coverage and for an interim payment were refused.