Marine insurance — cargo policy — no presumption of knowledge merely on ground that information is available online
The insured party (“X”) engaged a broker (“B”) to obtain insurance coverage from the insurer (“Y”) concerning shipment of timber. The vessel that carried the timber then sank, the cargo lost. X sued Y to recover the insured amount, and alternatively against B for negligence and breach of contract. Y refused to pay, claiming that the policy was discharged because X breached a clause that “Warranted DWT (deadweight tonnage) not less than 10,000” (the “Warranty”). Y also claimed non-disclosure of the vessel’s DWT by X.
The judge in the lower court found that such information was relatively easy to obtain on the Internet. Judgment was given in favour of X, partly on an inconsistency in the policy, namely, between the coverage of cargo on board the vessel and the Warranty; and that on a proper construction of the policy, it could not be the parties’ intention that it could not take effect purely because the vessel did not fulfil the DWT warranty. It was further held that had Y been able to avoid the policy, B was liable to indemnify X. Y appealed.
Held, allowing the appeal and entering judgment against B, that, inter alia:
The coverage of cargo on board the Vessel and the Warranty were not inconsistent because coverage was provided subject to X giving the Warranty.
The judge’s finding on non-disclosure was wrong and could not support X’s case on Y’s knowledge:
- While an insurer was presumed to know matters of common notoriety or knowledge, and matters which an insurer in an ordinary course of his business ought to know under Section 18 of the Marine Insurance Ordinance (Cap. 329), he was not deemed to know matters simply because he could get them by appropriate enquiry. The ultimate test was whether the insurer had been provided with sufficient information to ensure fair presentation of risk; and
- There was no presumption of knowledge of particular facts concerning particular ships on the part of Y merely on the ground that such facts had been published in the media or specialist media forum targeted at the maritime community.
Obiter: The defence of estoppel or waiver by Y from relying on Warranty only arose if knowledge, either actual or presumed, was established. In any event, it seemed that presumed or imputed knowledge was not enough to constitute waiver by election.