Case Law

Question 1

Which case established the test for remoteness in negligence by determining that the defendant is only liable for damage that is a foreseeable consequence of their actions?

Answer 1

The Wagon Mound (No 1) 1961

The defendant’s ship negligently allowed oil to spill into Sydney Harbour, and the oil caught fire, causing damage to the claimant’s property. The court held that the fire was not a foreseeable consequence of the oil spill, so the defendant was not liable.

Question 2

Which case reinforced the ‘thin skull’ rule, meaning that a defendant must take their victim as they find them; if the defendant’s actions cause foreseeable harm, they are liable for the full extent of the injury, even if the injury is more severe due to a pre-existing condition?

Answer 2

Smith v Leech Brain & Co Ltd 1962

The claimant suffered a burn due to the defendant’s negligence, which later triggered cancer, leading to death. The court held that since the burn was a foreseeable consequence of the negligence, the defendant was liable for the ultimate harm.

Question 3

Which case determined the definition of proximate cause as:
“The active efficient cause that sets in motion a chain of events, bringing about a result without the intervention of any force started and working actively from a new and independent source.”

Answer 3

Pawsey v Scottish Union 1907

Question 4

Which case provides a judicial definition of explosion as “an event that was violent, noisy and one which was caused by a very rapid chemical or nuclear reaction or the bursting out of gas or vapour under pressure”.

Answer 4

Commonwealth Smelting v Guardian Royal Exchange (1984)

Question 5

Which case defined a civil commotion defined as “an insurrection of the people for general purposes, not necessarily amounting to a rebellion”

Answer 5

Langdale v Mason, 1780

There needs to be an element of noise to satisfy the inclusion of the word “commotion”.

Question 6

In which case was it said that storm “connotes some sort of violent wind usually accompanied by rain hail or snow. Storm does not mean persistent bad weather, nor does it mean heavy rain or persistent rain on its own”

Answer 6

Oddy v Phoenix Assurance (1966)

Also refer to the later case of S & M Hotels v Legal & General Assurance Society (1972) it was suggested that “a storm must be something more prolonged and widespread than a gust of wind”.

Question 7

In which case was it determined that “a storm must be something more prolonged and widespread than a gust of wind”.

Answer 7

S & M Hotels v Legal & General Assurance Society (1972)

Question 8

Which case defined subsidence as “sinking, that is movement in a downward direction”

Answer 8

Allen & Sons Billposting Ltd. v Drysdale, 1939

Question 9

Which case determined the definition of landslip as a rapid downward movement under the influence of gravity of a mass of rock or earth on a slope

Answer 9

Oddy v Phoenix Assurance 1966

Question 10

In which case did the Judge conclude: A storm means storm and to me it connotes some sort of violent wind usually accompanied by rain, hail or snow. It does not mean persistent bad weather nor does it mean heavy rain or persistent rain by itself. In a narrow or defined period of time, not over a number of months or years

Answer 10

Oddy v Phoenix Assurance 1966

Question 11

Which case confirmed that facts of common knowledge need not be disclosed

Answer 11

Carter v Boehm 1766

This case articulated the principle of uberrima fides (utmost good faith), which became the standard benchmark for disclosure in modern insurance contracts.

Question 12

Definition of storm damage.
Which case stated that storm must be “Something more prolonged and widespread than a gust of wind (over a number of hours or into the following day)”

Answer 12

S&M Hotels Ltd v Legal and General Assurance Society Ltd 1972

Question 13

Definition of storm damage.
Which case stated that storm is “A violent disturbance of the atmosphere manifested by high winds often accompanied by heavy falls of rain, hail or snow, by thunder and lightning and at sea by turbulence of the waves; hence sometimes applied to a heavy fall of rain, hail or snow or to a violent outbreak of thunder & lightning”

Answer 13

Glasgow Training Group (Motor Trade) Ltd v Lombard & Continental plc 1982

Question 14

Definition of storm damage.
In which case was the weather event in question held to constitute a storm by an expert witness from the Meteorological Office. (The case also determined that gutters were not a water pipe within the meaning of ‘bursting or overflowing or water tank, apparatus or pipe’)

Answer 14

William Nimmo & Co Ltd v Russell Construction 1995

Question 15

Which case established the ‘but for’ test for causation, which is applied as a general rule in tort and contract law

Answer 15

Lloyds TSB General Ins Holdings Ltd v Lloyds Bank Group Ins Co Ltd

Question 16

In which case did Coulson J state that insurance policies covering ‘accidental damage’ would not cover events which were inevitable.

Answer 16

Leeds Beckett University v Travelers Insurance Company Ltd

On the facts, the ‘event’ which caused the damage could not be classified as a flood; given the way the building was constructed it was inevitable that the supporting concrete blocks would fail. The damage to the building was, therefore, not accidental damage, and was not covered by the policy.
In the alternative, and assuming that the damage was accidental, Coulson J considered whether the cause of the damage was excluded by the policy. It was held that the blocks had ‘gradually deteriorated’, and that the design was ‘faulty and defective’, and both of these causes meant that the damage (if accidental) was excluded under the policy.

Question 17

Flood definition. Which case determined that gradual seepage does not constitute flood; there must be something large and sudden about the movement of water.

Answer 17

Young v Sun Alliance and London Ins Co 1976

Flood is the escape of water from a natural or artificial watercourse, or inundation from the sea.

Question 18

What was the key principle in Aegis Electrical and Gas Intl Services Co Ltd v Continental Casualty Co (2007)?

Answer 18

Explosion requires “manifest violence and a shattering destruction”

Question 19

In Agapitos v Agnew (2002), what are the 5 distinct circumstances of dishonest conduct by an insured in relation to an insurance claim which could properly be said to be fraudulent?

Answer 19

1. Where the insured has suffered no loss at all or the loss was self-inflicted
2. Where the insured’s loss was less than had been claimed
3. Where the insured believed at the time of the claim that he had suffered a loss but having later discovered there was a lesser or no loss, failed to provide the correct information
4. Where the insured had suffered a loss but suppressed a defence known to him which might have been available to insurers
5. Where the insured has furthered a genuine claim by the use of ‘fraudulent means or devices’

Question 20

What was the key principle established in Ageas Insurance Ltd v Lee Stoodley and Advantage Insurance Co Ltd (2018)

Answer 20

Where a question is clear and straight forward, there is no real prospect of a Court deciding that misrepresentation was careless rather than deliberate or reckless.

In this case the insured understood the question sufficiently to disclose one previous claim, but failed to disclose another

Question 21

What effect of a breach of claims notification condition did Alfred McAlpine plc v BAI (Run-Off) Ltd (2000) clarify?

Answer 21

there is no half-way position that entitles the insurer to avoid the claim but leave the policy intact. The breach of a claims notification condition will rarely be treated as a repudiatory breach of the policy entitling the insurer to avoid the policy.

Question 22

What storm condition was established by Anderson v Norwich Union Fire Ins Society (1977)?

Answer 22

Heavy rain by itself does not amount to a storm

Question 23

What principle relating to fire insurance was determined in Austin v Drew (1815)

Answer 23

Great heat did not consititute a fire as defined by the policy. There can be no fire without actual ignition. (In simple terms, there must be a flame for there to be a fire within the definition of the policy)

The two core requirements are:
1. There must be something on fire that should not be on fire
2. There must be actual ignition.

Question 24

What did Aviva Insurance v Brown (2011) address in relation to dishonesty?

Answer 24

The Court applied Lord Hutton’s test of dishonesty in Twinsectra and found that serious delay by the insurer did not justify a dishonest claim

The test for dishonesty was further refined in Ivey v Genting Casinos UK Ltd (t/a Crockfords Club). (Where a casino refused to pay a gambler’s winnings as he had used a technique known as ‘edge sorting’).

Question 25

In which case did the court hold that the fact one of the company’s directors was the subject of criminal charges in Malaysia was a material circumstance the insured was required to disclose, even though the criminal proceedings were subsequently discontinued?

Answer 25

Berkshire Assets (West London) Ltd v AXA Insurance UK Plc

Question 26

What did Bradford & Bingley plc v Rashid 2006 determine in relation to the Without Prejudice rule?

Answer 26

There must be a dispute capable of being resolved: the seeking of a concession as to payment of an undisputed debt was not covered by the rule.

Question 27

What did Buckinghamshire CC v Moran (1989) determine in relation to the Without Prejudice rule?

Answer 27

A letter that is marked ‘without prejudice’ but which asserts the party’s rights and attempts to argue its case and is not an offer to negotiate is not privileged.

Including the words ‘without prejudice’ doesn’t automatically make that letter privileged.

Question 28

What are the key points of Rylands v Fletcher

Answer 28

Strict liability for non-natural use of land
Not actionable per se; damage must be proven
Defendant is liable notwithstanding the appointment of a competent contractor

Question 29

What are the key points of Cambridge Water Co Ltd v Eastern Counties Leather plc?

Answer 29

A prerequisite of liability is the foreseeability of the defendant of the relevant type of damage in the event of an escape.

Question 30

Parties

What key principle was established in Stockton v Mason and A Edward (Insurance) Ltd

Answer 30

An intermediary may act on behalf of both insurer and insured at different stages of the claim