QUEENS BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
| JAMES BUDGETT SUGARS LIMITED|| Claimant|
|- and -|
|NORWICH UNION INSURANCE LIMITED||Defendant|
Mr. Robert Moxon Browne Q.C. and Miss Alison Green (instructed by Gouldens) for the defendant
Crown Copyright ©
Pursuant to the Practice Statement issued by the Master of the Rolls on 9th July 1990 I hereby certify that the attached text records my judgment in this matter and direct that no further record or transcript of the same need be made.
Mr Justice Moore-Bick:
Damage means physical damage
Property means material property
. . . . . . . . . . . . . . . . . . . .
Section One – Public and Products Liability
In the Event of accidental
1. Personal Injury
2. loss of or Damage to Property
3. obstruction trespass nuisance or interference with any right of way air light or water or other easement
which arises in connection with the Business and which occurs during the Period of Insurance and within the Territorial Limits
In respect of such an Event the Company will provide indemnity against
1. legal liability for compensation up to the Limit of Indemnity
2. Costs and Expenses”
“The company will indemnify the Insured against all sums which the Insured shall become legally liable to pay in respect of death, bodily injury, illness, loss or damage happening . . . . . . . . during the period of insurance and caused by goods . . . . . . . . sold . . . . altered . . . . . or treated in the course of the Business . . . . . . . .” (emphasis added).
“Commercial Union will indemnify the Insured against
a. all sums which the Insured shall become legally liable to pay for compensation and claimants’ costs and expenses in respect of any Occurrence to which this Cover applies . . . . . . . .
. . . . . . . . . . . .
3. Products Liability
. . . . . . . . . . .
b. Loss of or physical damage to physical property . . . . . . . . caused by any commodity article or thing supplied installed erected repaired altered or treated by the Insured . . . . . . . . ” (emphasis added).
“the phrase “in respect of” carries with it a requirement that the liability relate to the identified Occurrence. It is not sufficient that it should simply have had some connection with the Occurrence”.
“The effect of the decision of the judge to treat the words “in respect of the Occurrence” as meaning no more than “in connection with the same causes of action as gave rise to the liability for the Occurrence” transforms this cover from a products liability cover to a policy covering general contractual liabilities. A products liability policy in which the cover provided is defined in words such as those used in the present policy is confined to liability for physical consequences caused by the commodity or article supplied. The liability of the assured in damages will have to be expressed in terms of money but that liability must be in respect of the consequences of the physical loss or damage to physical property (or some personal – “bodily” – injury). Provided that the commodity or article supplied has caused the physical consequence, the compensation payable by the assured to the third party will include, and the liability of the insurer to indemnify the assured will extend to, the totality of the loss which the third party is entitled to recover from the assured by way of damages in respect of that physical consequence. Thus, if a defective article supplied by the assured causes bodily injury to the third party disabling him or, for example, causes his premises to be destroyed by fire, the third party will be entitled to recover from the assured the full value of what he has lost which will, in the two examples I have given, include compensation for future loss of earnings. They are part of what the third party has lost as a consequence of the physical loss or injury and they are accordingly part of the liability of the assured in respect of that physical consequence.
Items 3 and 4 in the claim of Newbrite were not of such a character. They relate to the future non-performance of obligations of Rexodan towards Newbrite. They do not relate to any quantification of the loss which Newbrite suffered as a result of the relevant physical Occurrence, the staining of the cartons in which Newbrite packed the first 80 tons delivered. In my judgment the Judge’s decision in favour of Rexodan on Items 3 and 4 was clearly wrong and cannot stand.”
“The Company will provide indemnity against
1. legal liability for compensation in respect of such an Event up to the Limit of Indemnity . . . . .”
“In the Event of accidental . . . . . . Damage to Property the Company will provide indemnity against legal liability for compensation up to the Limit of Indemnity”.
That is, in effect, how Mr. Siberry suggests the provision should be read.