SOCIETY OF LLOYD'S v SALLY ROSEMARY NOEL (2001)

[2001] EWCA Civ 521

CA (Simon Brown LJ V-P, Brooke LJ, Robert Walker LJ) 30/3/2001

CIVIL PROCEDURE - INSURANCE

UNDERWRITERS : LLOYDS NAMES : SUMMARY JUDGMENT : NO TRIABLE DEFENCE : ELECTED UNDERWRITERS : RESIGNATIONS : REMAINING OPEN YEAR LIABILITIES : EQUITAS : TEST CASES : RECONSTRUCTION AND RENEWAL SETTLEMENTS : LLOYDS ACT 1982 : PLEADED CLAIMS : WRONGLY PLEADED CASES : UNDERTAKINGS : APPLICATION PROCEEDED ON INCORRECT BASIS

An appeal against summary judgment was allowed because the application against the appellant Lloyd's name proceeded on a wrongly-pleaded case.

Appeal by Sally Rosemary Noel ('N') from the order of Cresswell J made on 12 May 1999 giving summary judgment against her on the basis that her defence to the claim made by The Society of Lloyd's ('Lloyds') was bound to fail. N was elected as an underwriter member of Lloyd's in January 1979 and resigned in 1986. Although she ceased to be an underwriting member in December 1986, the effective date of her resignation from Lloyd's was postponed because not all of her accounts had been closed. N was one of the names who declined to accept the settlement offer made to her as part of Reconstruction and Renewal of the Lloyd's Market (see Society of Lloyd's v Fraser, unreported). As part of Reconstruction and Renewal, N's remaining open year liabilities were reinsured by Equitas Reinsurance Ltd ('Equitas'). N failed to pay her Equitas premiums and Lloyd's issued a writ against her in 1996. In 1997 and 1998, a number of 'test' cases were heard by the Commercial Court and subsequently the Court of Appeal (see Society of Lloyd's v Leighs & Ors (1997) CLR 759, Society of Lloyd's v Fraser Ors (1998) CLC 1630, and Society of Lloyd's v Daly (1998)). The intention of those cases was to determine whether the defences raised by any of the defaulting names had merit, and in particular, to consider the vires of Reconstruction and Renewal. Lloyd's was successful in those proceedings and accordingly set about pursuing applications for summary judgment against defendant names, of which N was one, although not a party to the test cases. Summary judgment was ordered against N by Cresswell J on the basis that in light of the authorities (Leighs, Fraser and Daly), N had no triable defence to the claim against her. This was an appeal from that decision. N argued, inter alia, that the only undertaking she made to Lloyd's was in 1979 when she became an elected member, and that she was not bound by the Lloyd's Act 1982, nor by Reconstruction and Renewal, because she did not sign the settlement offer. Accordingly, N argued, her situation was different from those names in the test cases.

HELD: (1) The claim that was pleaded was, in essence, a stock claim. It was essentially the same claim as was pleaded in the test cases. N's situation, however, was not the same as in those cases because she had not signed the undertaking to be bound by the 1982 Act and settlement. (2) It appeared that Cresswell J had approached the matter on the basis that the claim pleaded was correct in the sense that N had signed the undertaking. He accordingly applied the test cases, in particular, he followed the decision of Tuckey J in Fraser, where a Mr O'Brien, a defendant to that action, was found to be bound by the 1982 Act, byelaws made under it and the settlement. (3) The decision of Tuckey J in Fraser did not, however, deal with the position of a name who had not signed the undertaking. (4) The case against N as presented on 12 May 1999 should not have lead to summary judgment against her. It could not be said that she had no triable defence. The case against her was wrongly pleaded, and the application for summary judgment proceeded on an incorrect basis, namely, that she had signed the undertaking.

Appeal allowed.

N appeared in person. Richard Jacobs QC and Christopher Smith instructed by Lloyd's for the respondent.

LTL 30/3/2001 EXTEMPORE (Unreported elsewhere)

Document No. AC9900158