Margate Theatre Royal Trust Ltd v White (t/a AI Moleing Services) & Anor [2005] EWHC 2171 (TCC) (06 October 2005)

Neutral Citation Number: [2005] EWHC 2171 (TCC) Case No: HT-04-283PRIVATE  IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION TECHNOLOGY and CONSTRUCTION COURT Court 10 St. Dunstan's House London, E. C.4 6th October 2005 B e f o r e : HIS HONOUR JUDGE PETER COULSON QC ____________________ MARGATE THEATRE ROYAL TRUST LIMITED Claimant - and - PATRICK WHITE (t/a AI MOLEING SERVICES) -and- AXA INSURANCE UK PLC Defendant/Part 20 Claimant Part 20 Defendant ____________________ MR. BEN QUINEY (instructed by Messrs. Girlings, Canterbury) appeared for the Part 20Claimant MR. MICHAEL DAVIE (instructed by Messrs. Keoghs) appeared for the Part 20 Defendant ____________________ HTML VERSION OF JUDGMENT ____________________ Crown Copyright © Judgment On Part 20 Claim His Honour Judge Peter Coulson QC: Introduction By a claim form issued on 16 th September 2004, Margate Theatre Royal Trust Ltd. ("the Trust") claim damages against the First Defendant, Mr. Patrick White, trading as A1 Moleing Services, arising out of a flood at the theatre on 3 rd April 2003. The flood was due to the failure of a universal joint in the fire main that serves the stage drencher system installed at the theatre in case of fire. The failure of the universal joint was said by the Trust to be due to Mr. White's breach of contract in failing properly to carry out work to that part of the main in November 1997. The Trust's claim is denied by Mr. White and, amongst other things, he alleges that the claim is statute barred. On 14 th February 2005 Mr. White issued Part 20 proceedings against AXA Insurance UK plc ("AXA"), the Part 20 Defendant. It is Mr. White's case in the Part 20 proceedings that he had a contract of insurance with AXA which covered him for the consequences of the flood at the theatre and that AXA had wrongly declined to accept liability for that claim. By his order of 26 th May 2005 His Honour Judge David Wilcox directed that the Part 20 claim be heard as a preliminary issue in advance of the claim brought by the Trust against Mr. White. The trial of the Part 20 claim was heard before me on 4 th and 5 th October 2005. Accordingly, this judgment is concerned solely with the Part 20 claim. Background In the late 1990s Mr. White traded under two different names. Under the name Arrow he carried out "drain jetting and pipe cleaning". Under the name Moleing Services (later changed to A1 Moleing Services) he carried out "ground works and pipe moleing." On 15 th November 1997 Mr. White provided an estimate to the Trust to carry out limited works to the fire main at the theatre. The estimate read as follows: "I am pleased to submit the following estimate. To cut in a two inch crutch cock and bleed-off valve on the existing two inch galvanised pipe. The total cost of materials and labour will be £365.21. There is a two year guarantee on all pipe work laid by us. If you have any queries please contact us." At the bottom of this estimate there were the printed words: "P. White (CABWI Qualified) Water, Gas and Electrical Services Laid. All Plumbing Undertaken." The work involved the cutting out of the existing valve which served as the termination point of the fire main and its replacement with a new bleed valve and stop tap. Mr. White in cross-examination agreed that this was "a specialist type of plumbing". That is consistent with the Points of Claim and the Defence in the main action, which also referred to the work as plumbing work. I also accept the evidence from Mr. White and his expert, Mr. Simpson, that the replacement valve marked the termination point of the fire main itself and that the pipe system beyond could be regarded as the internal plumbing system for the theatre. On 7 th September 2000 Mr. White, trading as Moleing Services, obtained public liability and employer's liability cover through brokers, Liability Direct, from a Lloyd's syndicate for the period 7 th September 2000 to 6 th September 2001. The business of Mr. White, trading as Moleing Services, was described in the policy as "ground work and pipe moleing" On 30 th August 2001 Mr. White, trading as Arrow, obtained public liability and employer's liability cover through Liability Direct from the Lloyd's syndicate for the period of 30 th August 2001 to 29 th August 2002. The business of Mr. White trading as Arrow was described in the policy as "drain jetting and pipe cleaning". A week later, on 7 th September 2001, Mr. White, trading as Moleing Services, obtained public liability and employer's liability through Liability Direct, again from the Lloyd's syndicate for the period from 7 th September 2001 to 6 th September 2002. Again, just as in the previous year, the business was described as "ground work and pipe moleing". The premium on this occasion was just over £800. When Mr. White trading as Moleing Services came to renew his insurance in August 2002 Liability Direct sent him a quotation for a premium that was in excess of £4,000. The reasons for this very large increase in the premium were not explained, although it is clear that the Lloyd's syndicate who had insured Mr White's business were no longer in the market and another insurer had to be found. It seems more likely than not that Mr. White spoke to somebody at Liability Direct at the end of August or the beginning of September 2002 about the size of this premium. A few days later Liability Direct provided him with another quotation, this time from Axa, in the much lower sum of £1,055. Mr. White, not unnaturally, accepted that. It is clear that, although Mr. White did not know it, the premium of £1,055 was calculated by reference to AXA's category D (ground workers) and that if Mr. White's business had been categorised as a plumbing business, it would have been classified under category E, which required a higher premium. This information was set out in a table called the Venture Plus document which was used by Liability Direct to calculate AXA premiums. A cover note was issued by Liability Direct on 12 th September for the period from 11 th September 2002 to 10 th September 2003, and Mr. White paid the premium by credit card on 13 th September 2002. On the same day Mr. White completed a proposal form. The proposal form which he signed included the following words: "In completing this proposal you must disclose all material facts, i.e. those which an insurer would regard as likely to influence the assessment or acceptance of the risk. Failure to do so could invalidate the insurance. If you are in doubt as to what facts are material you should for your own protection disclose them." The formal insurance contract documents were issued by AXA on 29 th November 2002 and were sent to Mr. White on 5 th December 2002. This was therefore the relevant contract of insurance in place when the flood occurred, so it was to AXA that Mr. White made his subsequent claim. It is therefore necessary to consider the contract of insurance in a little more detail. The Contract of Insurance The contract of insurance was made up of two documents, the policy terms and the schedule. The policy terms defined the business as: "those activities specified in the schedule." The public liability cover was explained in these terms: "In the event of accidental (a) injury to any person; (b) loss or damage to property; (c) obstruction, trespass, nuisance or interference with any right of way, air, light or water or other easement; (d) wrongful arrest, detention, imprisonment or eviction of any person or invasion of the right of privacy; occurring within the territorial limits during the period of insurance and in connection with the business we will indemnify you in respect of all sums which you shall be legally liable to pay as damages in respect of such event provided that we shall not be liable for any amount exceeding the limit of indemnity. We will in addition pay costs and expenses." In addition, the policy terms included some general conditions. General condition (h) provided: "Misrepresentation This insurance shall be voidable if there has been misrepresentation, mis-description or non-disclosure of any material fact." That provision, amongst other factors, is relied on by AXA in declining cover to Mr. White. The schedule identified the insured as "Mr. Patrick White t/a Moleing Services". It described the business as "Ground Work and Pipe Moleing". That of course was exactly the same description of Mr. White's business as had been set out on his previous two policies with other insurers: see paragraphs 7 and 9 above. Later Events Following the flood at the theatre a claim was intimated against Mr. White and he in turn made a claim against AXA. His claim letter dated 16 th May 2003 was on notepaper entitled "Moleing Services" with the words "Trenchless Technology" underneath the title. After a lengthy delay, on 28 th July 2004 AXA rejected the claim. Their reasons for rejection read as follows: "Given the nature of the work undertaken by you which has led to the claim being pursued by the Margate Theatre Royal there is no cover under your policy for any liability that may be established against you by the Theatre. The activities undertaken by you fall outside the activities specified in the schedule of your policy." Mr. White was understandably unhappy with the rejection of his claim and he took the matter to the Financial Ombudsman. On 14 th January 2005 Miss Sally Pearce upheld AXA's rejection. She said: "The policy wording states that cover for Public Liability is only provided where damage occurs in connection with the Business which is defined as including the activities of ground work and pipe moleing. It is therefore my view that as this cover is only provided for the activities of ground work and pipe moleing, there is no cover provided for claims arising from other work. It therefore seems to me that the firm's position in refusing to deal with this claim is not unreasonable." It is fair to say that the Ombudsman's report assumes, without really dealing with the detail of the issue at all, that the work performed by Mr White at the Margate Theatre could not be ground work and pipe moleing. The Issues Counsel very helpfully agreed the issues which I have to decide. They are as follows. 1. What was the type of work carried out by Mr. White at the Margate Theatre in November 1997? 2. What is the ordinary and natural meaning of the words "ground work and pipe moleing?" 3. Is there a special/technical meaning to be ascribed to the words "ground work and pipe moleing" which is different from or affects in any way the ordinary and natural meaning identified above? 4. Did the parties (in the telephone conversation between Mr. White and Miss Thomas) ascribe a meaning to the words "ground work and pipe moleing" which was different from or affecting in any way the ordinary natural meaning identified above? 5. Are AXA estopped as a result of the telephone conversation between Mr. White and Miss Thomas from asserting that the words "ground work and pipe moleing" did not include the type of work carried out by Mr. White at the Margate Theatre in November 1997? 6. In the light of the answers to issues 1 to 5 above was the work carried out by Mr. White at the Margate Theatre in November 1997 covered by the description "ground work and pipe moleing"? Although I deal with each of those issues below I should say that in truth the issues between the parties were of narrow compass. AXA contended that the work which was the subject of complaint by the Margate Theatre was specialist plumbing work and fell outside the definition of Mr. White's business referred to above. Their primary case was that ground work and pipe moleing did not include unnecessary or incidental work such as the fitting of termination connections of the sort that failed at the Margate Theatre. Even if they were wrong about that they contended, as a secondary case, that since the work at the Margate Theatre was not part of a wider package of tunnel boring or pipe laying in any event, it could not be covered by the words in the policy. Mr. White's case on the other hand was that ground work and pipe moleing can include not only the boring of the tunnel and the laying of the pipes but also the installation and connection of the water supply, and that the work at the Margate Theatre was similar to the sort of final termination/connection work that he would habitually carry out as part of his pipe moleing function. It is right to point out that the definition proferred by Mr. White of what work was included in the words "ground work and pipe moleing" was not entirely clear. His statement at paragraph 6 gave one rather lengthy definition but in his evidence he said that at least part of it was wrong. Mr. Quiney's helpful written opening offered a slightly different definition of the words. At paragraph 17 he said this: "Mr. White contends that this phrase includes the following matters: 17.1 Boring or 'moleing' operations including boring holes under roads and using such holes to provide services (such as water or gas) to domestic and commercial properties. This may include the use of thrust boring. Pipe work is then installed. 17.2 The pipe work then is to be connected to the rest of the relevant system, such as a domestic water system. He carries out this work himself as part of a contract. This would generally require general plumbing work in the sense that the pipes have to be physically connected to the system. Such work generally does not require work on the system itself. For example, connecting a domestic property will not require internal work to the services. This is to be distinguished from typical plumbing such as a household having to have a drain unblocked or a hot water pipe mended. 17.3 Installing water mains and connecting them to properties. This includes general plumbing work in the sense described above. 17.4 General pipe work including the installation of gas mains, electrical cabling, ducting and reinstating it again. Again this will require work to connect such services." In his closing submissions Mr. Quiney confirmed to me that this remained Mr. White's case as to what, for these purposes, was included in the expression "ground work and pipe moleing". Issue 1: What was the type of work carried out by Mr. White at the Margate Theatre in November 1997? I have touched on this point at paragraphs 5 and 6 above. The work was a specialist plumbing activity involving the replacement of an old termination valve on the fire main in the Margate Theatre with a new bleed valve and stop tap. On the evidence which I heard, and to which I refer in greater detail in paragraphs 37 to 41, below there can be no doubt that the work was similar or equivalent to the work that a pipe moler might do when, having bored the tunnel and laid the pipes for water services, he connected up the water main. The installation of the termination valve was the last element of such work. This work was also work that a commercial or specialist plumber might do. The question for me is whether this work was within the definition of Mr. White's business in the contract of insurance. I therefore turn to the issues on that topic. Issue 2: What is the ordinary and natural meaning of the words 'Ground Work and Pipe Moleing'? In my judgment, in the context of construction or civil engineering projects, "ground work" has a clear and obvious meaning. It means work in or on the ground, usually excavations in the ground for foundations, pipes, cables and the like. Likewise in my view "pipe moleing" is not a difficult concept in the context of construction and civil engineering work. It means the boring of a tunnel or hole in the ground (which does not require a trench or any kind of disturbance of the ground surface) and the laying of pipe through that tunnel on its completion. The boring of a tunnel is akin to the action of a mole below ground and I note that, just to make that point crystal clear, Mr. White has a drawing of a mole on his notepaper. Both sides agree that, although the above defines Mr. White's core business, it is not a definitive list of the items of work that he would habitually carry out. There would, on any view, be other elements of work covered by the words "ground work and pipe moleing". Mr. Davie, on behalf of AXA, limited those elements to work necessary for the carrying out of ground work and pipe moleing. He said that everything else was additional to and therefore outside that definition. Mr. Quiney, on behalf of Mr. White, said that they included not only those works which were necessary but also those works which were effectively incidental to the carrying out of ground work and pipe moleing. He said that the definition included everything that might be done by somebody carrying out ground work and pipe moleing. On this apparently subtle difference much may turn. In my judgment the works covered by the policy would include the works necessary for and incidental to the carrying out of ground work and pipe moleing. In other words, it would cover works which were a necessary part of ground working and pipe moleing and would also cover those works that might be carried out as part of ground work and pipe moleing. There are a number of reasons for that conclusion. First, the description of the business in the policy is naturally brief. It cannot spell out every element of the work that would or might be carried out by Mr. White in the course of his business. To expect the policy to include a cumbersome and laborious list of every element of work that a specialist contractor might perform would be regarded by commercial men as plain silly. It is therefore common sense to conclude that the description in the policy is a shorthand, an umbrella title, which indicates the core business and covers the work necessary for and incidental to that business. Such a finding is of course in line with the general rules of construction outlined by Lord Hoffmann in ICS v. West Bromwich Building Society [1998] 1 WLR 896 , particularly rules 4 and 5 at p. 913. Secondly, the insurance cover is in respect of loss or damage to property occurring 'in connection with' the business of ground work and pipe moleing. The phrase 'in connection with' is, I believe, to be construed widely. Contrary to Mr. Davie's submission, I do not believe that it is limited to loss or damage 'arising out of' the business. I believe ít is wider than that and would cover work incidental to the business. There is, I consider, some support for that approach in Ashville Investments v. Elmer Contractors Ltd . [1988] 3 WLR 867. Balcombe LJ held that claims for rectification and misrepresentation did not 'arise under' the contract but could be referred to the arbitrator by reference to the arbitration clause because they arose 'in connection with' the contract. At page 881 he said: "On the other hand simply as a matter of the words used which are of the widest import I can see no reason why both these disputes as to mistake leading to rectification and as to misrepresentation or mistake leading to damages should not in each case be a dispute as to 'any matter or thing of whatsoever nature arising … in connection with' the contract. As on any question of construction the issue is incapable of much elaboration. It is a matter of how the words strike the reader." I accept, of course, that the arbitration clause in that case was different to the policy wording here. I also agree respectfully with Balcombe LJ that questions of construction are largely a matter of impression. In the present case, however, I also consider that the words "in connection with" are "of the widest import" and would therefore cover loss or damage occurring in respect of work both necessary for and incidental to ground work and pipe moleing. Thirdly, I accept the principle relied on by Mr. Quiney that, in Lord Mansfield's words, "every underwriter is presumed to be acquainted with the practice of the trade he insures and that whether it is established [practice] or not": Noble v. Kennaway (1780) 2 Doug 511, at 513. Thus AXA, through the agency of Liability Direct, must be deemed to know what work was necessary for and incidental to ground work and pipe moleing, whether or not it was all spelled out in the policy. For all these reasons therefore I conclude that the definition of 'the business' in the contract of insurance must include work necessary for and incidental to ground work and pipe moleing. What work was necessary for or incidental to ground work and pipe moleing is then a matter for expert evidence. Both experts agreed that in order to answer this question it would be necessary for the court to receive assistance from those who were involved in the trade and who knew this part of the construction industry. I accept that. Issue 3: Is there a special/technical meaning to be ascribed to the words 'Ground Work' and 'Pipe Moleing' which is different from or affects in any way the ordinary and natural meaning identified above? Both sides called expert evidence on this issue. I consider that much of that evidence was irrelevant and some of it was probably inadmissible. However, on the key issue, namely the question of what work was necessary for or incidental to the business of ground work and pipe moleing I find that the evidence was not only helpful but agreed. Mr. Simpson, the expert relied on by Mr White, said that pipe moleing usually involved not only the laying of pipes but also, for water services, the installation and connection of the water main up to the first termination point in the building in question. Thus, he said, the work done by Mr. White at the Margate Theatre was the precise equivalent of the last element of the work usually done by a pipe moler. In cross-examination he accepted that some pipe molers did not perform this connecting element of the work. To summarise lengthy passages in his evidence, he was simply saying that some pipe molers did and some did not carry out this work, depending on their expertise. Mr. Highfield, AXA's expert, gave broadly similar evidence. The only real difference was that in his view it was more common than not for pipe molers not to do the connection work. He accepted that some pipe molers did regularly provide this service. I regard some of Mr. Highfield's answers on this topic in cross-examination to be of particular importance. He was not questioned on this point just once. Mr. Quiney fairly put to him a series of questions designed to demonstrate that Mr. White's work at the Margate Theatre was work that a pipe moler would often carry out in the normal course of his business and that it was effectively incidental to that core business. Mr. Highfield accepted these propositions without any real qualification. Some of the relevant exchanges in the evidence were as follows. "Q: A pipe moler will include termination work? A: It depends. Maybe, maybe not. Q: The capping and the termination work would not be excluded from the definition of pipe moleing? A: No, it may very well not be excluded …. Q: Pipe moleing does include capping and termination? A: With some companies, not others. Q: It is included by what the trade means by pipe moleing? A: It can be included … Q: A person who does pipe moleing and capping and construction, he would be a pipe moler? A: That is quite likely to be the case … Q: Just because a pipe moler did that one type of work, i.e. he just did the termination element, that would still mean that he was a pipe moler? A: That could well be the case. Q: The trade does not distinguish between a pipe moler and a plumber? A: That might be the case. The trade does not really rely on that sort of distinction." Mr. Highfield was shown the drawings which identified in pictorial form the work that Mr. White had carried out at Margate Theatre. Mr. Highfield's evidence about that work was as follows: "Q: These are the sorts of activities that a pipe moler would undertake? A: Certain pipe molers can provide these services, as possibly Mr. White does. Q: You would still describe it as pipe moleing? A: Yes. Q: It falls within that description? A: Yes. Q: It is still described as pipe moleing by the trade? A: Yes." There were then some questions on the basis that, using a Venn diagram as an analogy, this work would be in two intersecting circles, representing both pipe moleing and plumbing. Mr. Highfield accepted that: "Q: It would be the sort of work that the pipe moler would do, the work at the theatre? A: Yes. Q: And a plumber? A: Yes. Q: So this work could be done by a pipe moler or by a commercial plumber? A: Yes. Q: It is more likely than not, is it not, that it would be done by a pipe moler? A: It is probably, yes. The connection side is an add-on. Q: But it is still pipe moleing? A: Yes, you could still call it that." Essentially Mr. Highfield was saying that the connection/termination work carried out at the Margate Theatre may not be a necessary part of pipe moleing -- he used the expression "add-on" -- but that it was certainly incidental to pipe moleing and was work that sometimes, perhaps often, would be carried out by a pipe moler. "Yes", he said about the very work which caused the flood and triggered this claim, "you could still call it pipe moleing". Accordingly, I regard the expert evidence on this point as unequivocal. The connection/termination work that Mr. Work carried out at the Margate Theatre in November 1997 was work which a pipe moler could and in some instances would carry out as part of or incidental to his core business. The evidence therefore demonstrated that this work was incidental to the business of ground work and pipe moleing and was covered by the contract of insurance. Before leaving the question of the technical evidence I should deal with a point properly raised by Mr. Davie in his final submissions. He said that a special meaning could only be given to words if "they have acquired a special meaning by force of long usage in a particular trade or business … ." ( MacGillivray On Insurance Law , tenth edition, paragraph 11-12). He said that there was no evidence that the words "ground work and pipe moleing" had acquired a special meaning by force of long usage or at all. He said that technical evidence in respect of words in a contract of insurance such as this was rarely appropriate. Whilst I understand, and indeed respectfully agree with, that general submission, as I have already indicated during the course of argument, I do not believe that it is relevant to the particular issue with which the technical evidence in this case was concerned. By the close of the evidence in this case I do not believe that anybody was really saying that the words "ground work and pipe moleing" had a special meaning. All the witnesses effectively agreed that there was no magic in those words. However, they also all agreed that technical evidence was required to explain what the construction industry would regard as work necessary for or incidental to the business of ground work and pipe moleing. Mr. Highfield, AXA's expert, expressly agreed with that. Thus, expert evidence was adduced by both parties. As I have demonstrated, it was largely agreed on the key issue. It is therefore only right that I should have regard to such evidence in trying to arrive at a common sense conclusion as to what was included in the words "ground work and pipe moleing". Issue 4: Did the parties (in the telephone conversation between Mr. White and Miss Thomas) ascribe a meaning to the words "Ground Work and Pipe Moleing" which was different from or affects in any way the ordinary and natural meaning identified above? It was an additional element of Mr. White's case that he explained in detail to Miss Thomas at Liability Direct on the telephone in September 2002 what was involved in his business and that as a result she suggested 'Ground Work and Pipe Moleing' as the relevant description of the business. I reject that part of his case in its entirety. First, I have no doubt that, had there been a telephone conversation between them, Miss Thomas would have made a note of it on Liability Direct's computerised database. She was plainly efficient and knowledgeable about the work that she did and I was quite satisfied that if there had been such a conversation she would have noted it up, as she said she would have done. There was, of course, no such note. Secondly, Miss Thomas could not and would not have suggested 'Ground Work and Pipe Moleing' as the correct category for Mr. White's business. It was not a category in the AXA Venture Plus document used to calculate the premium. Moreover, as I have pointed out, it was precisely the same description of Mr. White's business which had been used by the Lloyd's syndicate who had insured Mr. White in the preceding two years. It appears therefore that that definition had been settled on long before Miss Thomas had any dealings with Mr. White. I have already found that in all probability there was a conversation between Mr. White and somebody at Liability Direct (not Miss Thomas) in early September following the high original quote for that year's premium, but it does not follow that, in that conversation, there was any detailed explanation of the nature of Mr. White's business. That was not his pleaded case and that was not the evidence in his first statement. It is also not borne out by the later events since, although the eventual premium was reduced from that first quoted, it was still higher than the premium that Mr. White had had to pay to the Lloyd's syndicate. That does not suggest to me that the premium was altered because of a detailed explanation of Mr. White's business and/or some change in the perception of what that business involved. On the contrary, it seems clear that the premium was simply calculated by reference to the ground work category at section D of the Venture Plus document. For all these reasons therefore, I dismiss the separate case as to construction based on the alleged telephone call. For the avoidance of doubt, I should also say that, in my view, no criticism of any sort can attach to Miss Thomas, who plainly did what she had to do in an entirely proper fashion. In 2002 she was renewing insurance where the description of the business was already in place. She had no reason to query it. The business had not changed over the two years since Mr. White had first taken out insurance. No one can say whether the individual at Liability Direct who first dealt with Mr. White in 2000 had misunderstood the full ramifications of the definition that he used. But, even if that was the case, it plainly was not the fault of Miss Thomas. Issue 5: Are AXA estopped as a result of the telephone conversation between Mr. White and Miss Thomas from asserting that the words "Ground Work and Pipe Moleing" did not include the type of work carried out by Mr. White at the Margate Theatre in November 1997? There are no grounds for an estoppel because I have found that the alleged telephone conversation simply did not occur. It is therefore unnecessary for me to deal with that point further. Issue 6: In the light of the Answers to Issues 1-5 above, was the work carried out by Mr. White at the Margate Theatre in November 1997 covered by the description "Ground Work and Pipe Moleing"? The answer to this question is Yes. The work that was carried out at Margate Theatre in November 1997 was the same or the equivalent to the work of termination/ connection which Mr. Highfield expressly accepted was work that a pipe moler could and sometimes would carry out in the ordinary course of his business. It was work which at the very least was incidental to pipe moleing. It was work done by some, but not all, engaged in that trade. AXA complain that this result would mean that Mr. White would get insurance cover for plumbing work when he had not paid the premium for plumbing, which was, according to the Venture Plus document, category E work with a higher premium. There are, I believe, two complete answers to that. First, Mr. White did not know that plumbing was in a different category with a higher premium, so he can hardly be criticised if that is the effect of the description of his business in Axa's contract. As I have pointed out, he never saw the Venture Plus document. Secondly, it does not follow that category E was the correct category in any event. Many specialist contractors in the construction industry do work that is capable of being described under a number of different categories in the Venture Plus document. It is up to the insurer to decide which the appropriate category is. I accept, as Miss Thomas indicated, that very often the approach would be to go with the higher risk trade, but that may well depend on how much of that higher risk trade the contractor actually does. Frequency of performance has got to be at least one factor in deciding what the right category is. Accordingly, it seems to me that, even if there had been full discussion either in 2000 or 2002, Liability Direct may still have decided that the right category was category D, which was, on any view, Mr. White's main business. The final point raised by AXA, and noted in paragraph 21 above, was the argument that even if the termination/connection work done at the Margate Theatre was incidental to Mr. White's business of ground work and pipe moleing, the actual work done did not fall within the definition of the business in any event, since it was not preceded by any boring or pipe laying. That is effectively arguing that a particular task or element of work might be covered by the definition in the contract of insurance if it was carried out as part of other works, but not if it was carried out on its own. Mr. Davie put this argument with some skill, but he could not disguise its basic unattractiveness. I reject it for a variety of reasons, and it is only necessary to identify two here. First, this would be an extraordinary approach to adopt to the construction of a document of this sort, and plainly contrary to business common sense. It cannot be right that a particular element of work would either be covered or not covered by a contract of insurance depending on the circumstances in which it was performed. That would mean that the same item of work might be covered on a Monday but, when repeated on a different site on Tuesday, might fall outside the contract. That would be an absurd result. Secondly, as I have already indicated, the carrying out of the work at the Margate Theatre, in isolation from any other boring or pipe laying work, was the subject of Mr. Highfield's cross-examination. It was fairly put to him that he should consider that element of work in isolation and should deal with whether or not it could be described as pipe moleing. As I have said, he expressly accepted that, even in isolation, it could be described as pipe moleing. That is the second reason why the final point advanced by AXA must also fail. For all these reasons therefore, and in particular due to my acceptance of the evidence given by AXA's own expert, Mr Highfield, I find that the work carried out at Margate Theatre was covered by the terms of Mr. White's contract of insurance with AXA. I do not consider, on the facts as I have set them out, that Mr. White failed to disclose relevant information, and I find that he was not in breach of the contract of insurance. Therefore AXA were wrong to decline to meet the claim made by the Trust on the grounds set out in their letter of 28 th July 2004. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII