Society of Lloyd's v Noel




(Transcript: Smith Bernal)




31 MARCH 2000




The Applicant appeared in person; C Smith for the Respondent







EVANS LJ: 1. This is an application for permission to appeal against a judgment given by Cresswell J in the Commercial Court on 12 May 1999. The action was by the Society of Lloyd's as claimant against Sally Noel as defendant in respect of the premium which it is alleged she owes in respect of the Equitas reinsurance scheme. The sum claimed is 13,047 plus interest.


2. Cresswell J gave summary judgment in favour of the claimants. The application for permission to appeal is based on a number of grounds, which can be immediately divided into two. The first ground, which I will call "the contractual ground", is that Mrs Noel submits the judge was wrong to hold that she was bound by virtue of the contract which she made with Lloyd's on 1 January 1979. The second and following grounds are concerned with much more general matters, involving what I will call almost the whole gamut of the issues that have arisen with regard to the Lloyd's Equitas Scheme and which have already been before the courts on a number of occasions. Suffice it to say that, so far as those other matters are concerned, there have been two major judgments of this court which have held in favour of Lloyd's that the Equitas premiums are recoverable.


3. Taking first the contractual issue, the claim is made on the basis that by a contract dated 31 August 1978, Mrs Noel agreed to be bound at all times by, quoting from Clause 1(c)(v):


The Insurance Companies Acts 1958-1967 and/or all other statutory provisions for the time being in force affecting underwriting members of Lloyd's and with all requirements and regulations prescribed by Lloyd's."


4. The claim as pleaded, and as described by the judge, was:


on the basis that she had expressly agreed that she would be bound by the provisions of the Lloyd's Acts 1871 to 1982."


That is self-evidently a contradictory proposition. She cannot have agreed in 1979 to be bound by the provisions of the Lloyd's Act 1982, unless that result comes about by reason of the reference in Clause 1(c)(v) to:


statutory provisions for the time being in force,"


or unless, as Mr Smith submits, the membership and constitution of Lloyd's was such that Mrs Noel was agreeing to be bound by whatever statutory provisions might take effect with regard to Lloyd's membership from time to time.


5. The position is that that particular issue has never been decided by the courts. It may or may not have been encompassed by the judgment of Tuckey J in the case of the Society of Lloyd's v Daly, judgment unreported, 27 January 1998. The part of that judgment which is expressly relevant is on the penultimate page, where a Mr MacBrien took the point that he had signed only an earlier form of undertaking. The learned judge held that his earlier contract was governed by English law, as were the later contracts. That was not in terms a decision as to the scope of the earlier contract in relation to the later statutory provisions.


6. It seems to me that Mrs Noel should have permission to appeal on this issue, which has not been decided by the courts and which was assumed in Lloyd's favour both in the Lloyd's claim in this action and Cresswell J's judgment.


7. I should add by way of explanation that there was a suggestion that Mrs Noel had signed a later agency agreement in July 1986. She disputed that, and Lloyd's accept that she never did sign that later agreement. Their case therefore depends on her earlier contract.


8. It seems to me that Mrs Noel should have permission to appeal from the judgment on that contractual issue. I, for my part, would adjourn to the Full Court which hears that appeal the consideration of her many remaining grounds of appeal which raise what I have called the general Lloyd's issues. It will then be for that court, if so advised, to give permission for some or all of those further points to be raised. I would not encourage Mrs Noel to consider that there is any real likelihood that the court will do so. It seems to me, however, that in fairness to her the matter should be reserved. On the other hand, it should be made abundantly clear, not least to those acting for Lloyd's, that the only issue raised on the projected appeal will be the contract issue, and that it will only be necessary for costs to be incurred in relation to that issue. Whether or not any further issue should subsequently become the subject of an appeal will be entirely a matter for the court which hears the appeal.


9. For those reasons, I would grant the application to that extent and adjourn all other issues to the court which hears the appeal.





TURNER J: 10. I agree.



Application granted.



Financial Recovery Department, Society of Lloyd's