In this decision, the Court of Appeal upheld an earlier decision of the High Court in dismissing proceedings brought by the Plaintiff, challenging his Insurers’ decision to withdraw storm cover, on the basis there was misrepresentation by the Plaintiff at policy inception.
The Plaintiff was a farmer who brought proceedings against his Broker and his Insurer. The Plaintiff’s policy of insurance provided cover in respect of farming activities and farm buildings (the “Policy”). Following a storm, the Plaintiff claimed damage that was caused to two sheds on his land and proceeded to make a claim on the Policy. Following an inspection by a loss adjuster for Insurers, it transpired the buildings were older, and of a different construction to what Insurers understood them to be when issuing the Policy.
Insurers declined the claim on this basis, together with the fact the claim was made outside the time limit prescribed by the Policy. Insurers did not repudiate cover, but dealt with the claim on the same basis as it would have done had the correct information been provided at inception, withdrawing storm cover retrospectively and refunding a pro rata share of the premium.
The Plaintiff then issued proceedings claiming that he was entitled to payment in respect of the damaged sheds, an order for specific performance of the Policy or damages in lieu and damages for inter alia, loss, inconvenience etc. The Plaintiff maintained any error was due to the actions of his Broker when the proposal form was being completed. The High Court concluded on the balance of probabilities, having considered the evidence, that the Plaintiff was responsible for the provision of the inaccurate information
as regards the date of construction of the sheds, and not his Broker as he had maintained. The Court found the Plaintiff had also omitted to advise his Broker of the error following his receipt of the proposal form and the Policy and therefore his Insurers were entitled to withdraw the storm cover on the basis of the misrepresentation at policy inception.
The Court of Appeal upheld the decision of the High Court, noting they felt the evidence of the Plaintiff was inconsistent and lacked credibility. This evidence was contrasted with the evidence of the Broker, which was found to be sensible and supported by undisputed evidence. The Court found there was ample evidence upon which the High Court could conclude that the Broker could not be held in any way responsible for the misrepresentation at issue. The Court found Insurers were entitled to repudiate the Policy when discovery of the misrepresentation was made, but that they had very reasonably elected to withdraw cover in respect of the sheds only.
While not in effect at the time of this decision, The Consumer Insurance Contracts Act 2019 now places a greater onus on Insurers at policy inception, and the new regime whereby consumers must only answer the specific questions put to them by Insurers means that Insurers must ensure they ask all those pertinent questions that may elicit an answer which may influence the cover provided, while striking the balance of ensuring an endless list of questions are not put to consumers at inception.
