Current Law Cases
|
Scope |
Lloyds names; reinsurance premium; contract
clause prohibiting counterclaim or set off; clause did not preclude setting
aside of a statutory demand |
|
Case |
Garrow v Society of Lloyd's |
|
Court |
(CA) Court of Appeal |
|
Jurisdiction |
|
|
Judgment |
October 13, 1999 |
|
Judges |
Robert Walker, L.J.; Brooke, L.J.; Morritt, L.J. |
|
Legislation |
Insolvency Rules 1986 (SI 1986 1925) r.6.5(4) |
|
Reported |
[2000] C.L.C. 241; [1999] B.P.I.R. 885; [2000]
Lloyd's Rep. I.R. 38; (1999) 96(42) L.S.G. 40 |
|
Reference |
Times, October 28, 1999 |
|
Abstract |
SL served a statutory demand on G, a former
Lloyd's name, in respect of his liability to pay a reinsurance premium. G
accepted that the debt was due and owing, but applied to set aside the demand
on the basis that he had a counterclaim for fraudulent misrepresentation for
a commensurate sum. G's application was successful, and the demand was set
aside under the Insolvency Rules 1986 r.6.5(4). SL appealed, relying on v
Leighs [1997] C.L.C. 1398, [1997] C.L.Y. 3149, to contend that cl.5.5 in the
original contract with G precluded any attempt to raise a counterclaim or set
off in respect of the liability. Held, dismissing the appeal, that the clause
did not prevent G from raising the counterclaim. Unlike the situation in Leighs, G did not
dispute his liability for the reinsurance premium but was seeking a
discretionary remedy under r.6.5(4) to set aside the statutory demand. The
clause attempted to preclude any cause of action arising until the liability
had been met in full, and further to prohibit names from issuing proceedings,
"in connection with" their liability to pay the monies due. If it
was assumed that G's application to set aside the statutory demand
constituted the issue of proceedings, it could not be said to be "in
connection with" his liability to meet the premium within the ambit of
cl.5.5(b) if that clause was given a purposive construction in line with the
approach adopted by the court in, Arbuthnott v Fagan [1996] L.R.L.R. 135,
[1996] C.L.Y. 3583. |
|
Subject |
Insurance |
|
Keywords |
Contract terms, Counterclaims, Lloyds Names, Setting
aside, Statutory demands |
|
Counsel |
For G: Charles Purle Q.C. and Lawrence Jones.
For SL: Edward Bannister Q.C. and Lexa Hilliard |
|
Solicitors |
For G: Grower Freeman & Goldberg. For SL: Society of
Lloyd's |
|
Transcript |
CHBKF 99 0597 3 |
|
Cases cited |
Society of LloydÕs v Leighs [1997] C.L.C.
1398, [1996] C.L.Y. 3583, [1997] C.L.Y. 3149 Arbuthnott v Fagan [1996] L.R.L.R. 135, [1996]
C.L.Y. 3583 |