McIlroy (Swindon) Ltd & Ors v Rannoch Investments Led & Anor

McIlroy (Swindon) Ltd & Ors v Rannoch Investments Led & Anor

The time-bar clause in General Condition 16 did not extinguish the claimants’ rights because no claim under the policy could arise until Lenihan’s liability to the third parties was established and quantified. The actions were commenced within nine months of that event, and thus were not time-barred. The judge’s contrary construction was wrong and not supported by the authorities.

Parties
Appellant/claimant: William McIlroy (Swindon) Limited; Appellant/claimant: Mackays Stores Limited; Appellant/claimant: Cathedral Works Organisation (Chichester) Limited; Respondent/defendant: Rannoch Investments Limited; Respondent/defendant: Quinn Insurance Limited
Jurisdiction
England and Wales
Judgment Date
18 July 2011
Procedural Posture
Civil Appeal / Appeal From Technology and Construction Court, Preliminary Issue on Time Bar
Outcome
appeal allowed
Legal Topics
Public Liability Insurance, Policy Interpretation, Time Bar Clauses, Third Party Rights Against Insurers
Insurance Law Civil Procedure Public Liability Insurance Policy Interpretation Time Bar Clauses Third Party Rights Against Insurers

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Parties

William McIlroy (Swindon) Limited

Appellant/claimant

Mackays Stores Limited

Appellant/claimant

Cathedral Works Organisation (Chichester) Limited

Appellant/claimant

Rannoch Investments Limited

Respondent/defendant

Quinn Insurance Limited

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From Technology and Construction Court, Preliminary Issue on Time Bar

Legal Issues

  1. 1 Whether the time-bar clause (General Condition 16) in the insurance policy extinguished the claimants’ rights before their liability was established and quantified
  2. 2 Whether the clause was onerous and unusual and if sufficient notice was given to the insured

Ratio Decidendi

The time-bar clause in General Condition 16 did not extinguish the claimants’ rights because no claim under the policy could arise until Lenihan’s liability to the third parties was established and quantified. The actions were commenced within nine months of that event, and thus were not time-barred. The judge’s contrary construction was wrong and not supported by the authorities.

Court Disposition

appeal allowed

Orders

  • Judgment of Edwards-Stuart J set aside
  • Matters remitted for further proceedings as appropriate