NEW WORLD HARBOURVIEW HOTEL CO LTD AND OTHERS v. ACE INSURANCE LTD AND OTHERS

NEW WORLD HARBOURVIEW HOTEL CO LTD AND OTHERS v. ACE INSURANCE LTD AND OTHERS

On proper construction of the policies SARS became a notifiable disease on 27 March 2003 (date it was made mandatorily notifiable under Cap.141); coverage under clause 14.5 therefore commenced on 27 March 2003 (subject to the 5-day time excess); where businesses did not cease the Loss Period is limited to 180 days; Standard Revenue is calculated including pre-27 March 2003 effects as defined by clause 13.4; the policies are composite so the HK$100,000 claims preparation cost limit applies to each plaintiff separately.

Citation
NEW WORLD HARBOURVIEW HOTEL CO LTD AND OTHERS v. ACE INSURANCE LTD AND OTHERS
Parties
1st Plaintiff: NEW WORLD HARBOURVIEW HOTEL COMPANY LIMITED; 2nd Plaintiff: THE DYNASTY CLUB LIMITED; 3rd Plaintiff: ISLAND GYM COMPANY LIMITED (formerly known as Island Sauna Company Limited); 4th Plaintiff: GRAND HYATT HONG KONG COMPANY LIMITED; 5th Plaintiff: URBAN PARKING LIMITED; 6th Plaintiff: POLYTOWN COMPANY LIMITED; 7th Plaintiff: HONG KONG ISLAND DEVELOPMENTS LIMITED; 8th Plaintiff: NEW WORLD HOTEL COMPANY LIMITED; 9th Plaintiff: HONG KONG NEW WORLD DEPARTMENT STORE COMPANY LIMITED; 10th Plaintiff: KIU LOK SERVICE MANAGEMENT COMPANY LIMITED; 1st Defendant: ACE INSURANCE LIMITED; 2nd Defendant: AXA GENERAL INSURANCE (HONG KONG) LIMITED; 3rd Defendant: FALCON INSURANCE COMPANY (HONG KONG) LIMITED; 4th Defendant: LIBERTY INTERNATIONAL INSURANCE LTD.; 5th Defendant: TUGU INSURANCE COMPANY LIMITED; 6th Defendant: XL INSURANCE COMPANY LIMITED (formerly known as XL Winterthur International Insurance Company Limited)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
8 April 2010
Case Number
HCA46/2007
Procedural Posture
Insurance Dispute (business Interruption) / Judgment on Preliminary Issues (court of First Instance)
Outcome
Judgment on preliminary issues: SARS became notifiable on 27 March 2003; coverage under the policies commences 27 March 2003 (subject to 5-day waiting period); Loss Period for businesses that did not cease is 180 days; Standard Revenue includes pre-27 March 2003 effects per clause 13.4; claims preparation costs...
Legal Topics
Business Interruption, Policy Interpretation, Notifiable Disease, Loss Period, Claims Preparation Costs, Composite Versus Joint Insurance, Standard Revenue Calculation, Time Excess/waiting Period
Source Language
EN
Insurance Law Contract Law Commercial Law Civil Procedure Business Interruption Policy Interpretation Notifiable Disease Loss Period +4 more

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Parties

NEW WORLD HARBOURVIEW HOTEL COMPANY LIMITED

1st Plaintiff

THE DYNASTY CLUB LIMITED

2nd Plaintiff

ISLAND GYM COMPANY LIMITED (formerly known as Island Sauna Company Limited)

3rd Plaintiff

GRAND HYATT HONG KONG COMPANY LIMITED

4th Plaintiff

URBAN PARKING LIMITED

5th Plaintiff

POLYTOWN COMPANY LIMITED

6th Plaintiff

HONG KONG ISLAND DEVELOPMENTS LIMITED

7th Plaintiff

NEW WORLD HOTEL COMPANY LIMITED

8th Plaintiff

HONG KONG NEW WORLD DEPARTMENT STORE COMPANY LIMITED

9th Plaintiff

KIU LOK SERVICE MANAGEMENT COMPANY LIMITED

10th Plaintiff

ACE INSURANCE LIMITED

1st Defendant

AXA GENERAL INSURANCE (HONG KONG) LIMITED

2nd Defendant

FALCON INSURANCE COMPANY (HONG KONG) LIMITED

3rd Defendant

LIBERTY INTERNATIONAL INSURANCE LTD.

4th Defendant

TUGU INSURANCE COMPANY LIMITED

5th Defendant

XL INSURANCE COMPANY LIMITED (formerly known as XL Winterthur International Insurance Company Limited)

6th Defendant

Procedural Posture

Insurance Dispute (business Interruption) / Judgment on Preliminary Issues (court of First Instance)

Legal Issues

  1. 1 When did SARS become a 'notifiable human infectious or contagious disease' for the purpose of clause 14.5?
  2. 2 When did coverage commence under clause 14.5?
  3. 3 How to determine Loss Period under clause 13.2 where businesses did not cease operations?

Ratio Decidendi

On proper construction of the policies SARS became a notifiable disease on 27 March 2003 (date it was made mandatorily notifiable under Cap.141); coverage under clause 14.5 therefore commenced on 27 March 2003 (subject to the 5-day time excess); where businesses did not cease the Loss Period is limited to 180 days; Standard Revenue is calculated including pre-27 March 2003 effects as defined by clause 13.4; the policies are composite so the HK$100,000 claims preparation cost limit applies to each plaintiff separately.

Court Disposition

Judgment on preliminary issues: SARS became notifiable on 27 March 2003; coverage under the policies commences 27 March 2003 (subject to 5-day waiting period); Loss Period for businesses that did not cease is 180 days; Standard Revenue includes pre-27 March 2003 effects per clause 13.4; claims preparation costs...

Orders

  • Order Nisi that Defendants are to have 80% of their costs as against the Plaintiffs; costs to be taxed if not agreed
  • Costs are not to be 'in any event'