Insurance Corporation of Belize Ltd v Kahtal Resorts International Ltd

• Jurisdiction: Caribbean States
• Judge: Burgess J,Rajnauth-Lee J,Jamadar J,Barrow J,Saunders P
• Judgment Date: 01 March 2024
• Docket Number: CCJ Appeal No BZCV2023/004
• Court: Caribbean Court of Justice

BETWEEN

Insurance Corporation of Belize Limited

Appellant

and

Kahtal Resorts International Limited

Respondent

[2024] CCJ 5 (AJ) BZ

Before:

Mr Justice Saunders, President

Mme Justice Rajnauth-Lee

Mr Justice Barrow

Mr Justice Burgess

Mr Justice Jamadar

CCJ Appeal No BZCV2023/004

BZ Civil Appeal No 1 of 2021

IN THE CARIBBEAN COURT OF JUSTICE

APPELLATE JURISDICTION

ON APPEAL FROM THE COURT OF APPEAL OF BELIZE

Contract — Construction — Marine Insurance — Interpretation of commercial contracts — Application of exclusion clauses — Contra proferentem rule — Natural and ordinary meaning of words — Specialised definition of words — Respondent vessel damaged by thunderstorm — Insurance contract between parties contained exclusion clause against coverage when vessel in commission is moored — Whether vessel moored within meaning of exclusion clause — Meaning of ‘moored’ and ‘docked’.

Cases referred to:

A-G v Wright [1897] 2 QB 318; Alletta, The and Company, The [1965] 2 Lloyd's Rep 479; Apsara Restaurants (Barbados) Ltd v Guardian General Insurance Ltd [2024] CCJ 3 (AJ) BB; Association of British Travel Agents Ltd v British Airways Plc [2000] 2 All ER (Comm) 204; Beaufort Developments (NI) Ltd v Gilbert Ash Ltd [1999] 1 AC 266; Bhasin v Hrynew [2014] 3 SCR 494; Blairmont Rice Investments Inc v Kayman Sankar Co Ltd [2021] CCJ 7 (AJ) GY, [2021] 5 LRC 433; Buller v Harrison (1777) 2 Cowp 565, 98 ER 1243; Carter v Boehm (1766) 3 Burr 1905, 97 ER 1162; Caye International Bank Ltd v Rosemore International Corp [2023] CCJ 4 (AJ) BZ; Cornish v Accident Insurance Co (1889) 23 QBD 453; Cozens v Brutus [1973] AC 854; Dart Harbour and Navigation Authority v Secretary of State for Transport, Local Government and the Regions [2003] 2 Lloyd's Rep 607; Dairy Containers Ltd v Tasman Orient Line CV [2005] 1 WLR 215; Evans v Godber [1974] 1 WLR 1317; General Assurance Society Ltd v Chandmull Jain (1966) 3 SCR 500; Homburg Houtimport BV v Agrosin Private Ltd [2004] 1 AC 715; Housen v Nikolaisen [2002] 2 SCR 235; Impact Funding Solutions Ltd v Barrington Support Services Ltd [2017] AC 73; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589; Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; Johnson v American Home Assurance Co (1998) 192 CLR 266; Lexi Holdings plc v Stainforth [2006] EWCA Civ 988; Lighthouse Reef Resort Ltd v Regent Insurance Co BZ 2005 SC 25 (CARILAW), (31 May 2005); Liverpool and North Wales Steamship Co Ltd v Mersey Trading Co Ltd [1908] 2 Ch 460; Manchester College v Trafford (1678) 2 Show 31, 89 ER 774; McGraddie v McGraddie [2013] 1 WLR 2477; McMahons Tavern Pty Ltd v Suncorp Metway Insurance Ltd [2004] SASC 237; Moore v British Waterways Board [2013] Ch 488; Morley v United Friendly Insurance Plc [1993] 1 WLR 996; Oxonica Energy Ltd v Neuftec Ltd [2008] EWHC 2127; Persimmon Homes Ltd v Ove Arup & Partners Ltd 172 Con LR 1; Rainy Sky SA v Kookmin Bank [2012] 1 All ER 1137; Robertson v French [1803-13] All ER Rep 350; Sandy Lane Hotel Co Ltd v Cato [2022] CCJ 8 (AJ) BB; Sinochem International Oil (London) Co Ltd v Mobil Sales and Supply Corp [2000] 1 Lloyd's Rep 339; Sushilaben Indravadan Gandhi v New India Assurance Co (2021) 7 SCC 151; Taberna Europe CDO II plc v Selskabet AF1 [2017] QB 633; United Insurance Co Ltd v Pushpalaya Printers (2004) 3 SCR 631; Wood v Capita Insurance Services Ltd [2017] AC 1173.

Legislation referred to:

Belize - Port Authority Act, CAP 233; United Kingdom - Marine Insurance Act 1906.

Other sources referred to:

Beale H (ed), Chitty on Contracts (30th edn, Sweet & Maxwell 2008) vol 1; Bennett H, ‘The Marine Insurance Act 1906: Reflections of a Centenary’ (2006) 18 SAcLJ 669; Birds J, Lynch B and Paul S, MacGillivray on Insurance Law (13th edn, Sweet & Maxwell 2015); Coke's Commentary on Littleton (1628); Cserne P, ‘Policy Considerations in Contract Interpretation: the Contra Proferentem Rule from a Comparative Law and Economics Perspective’ (Hungarian Association for Law and Economics, No 5, Working Papers 2007); Dear I C B and Kemp P, Oxford Companion to Ships and the Sea (2nd edn, Oxford University Press 2006); Garner B (ed), Black's Law Dictionary (8th edn, Thomson West 2004); Gilman J and others, Arnould Law of Marine Insurance and Average (20th edn, Sweet and Maxwell 2021); Halsbury's Laws of England (5th edn, 2023) vol 60; Hawkins J M and Allen R (eds), The Oxford Encyclopedic English Dictionary (Oxford University Press 1991); Hinz E R, The Complete Book of Anchoring and Mooring (rev 2nd edn, Cornell Maritime Press 2009); Lamart N, ‘Certainty v Equity: A Case for Reform of the Duty of Utmost Good Faith?’ (2018) 32 A&NZ Mar LJ 59; Ocean Magazine, ‘Keeping it Shipshape with Maritime Insurance’ (Vaarzon-Morel Maritime Lawyers, 19 May 2017) < https://vaarzonmorelsolicitors.com.au/keeping-shipshape-maritime-insurance/> accessed 7 January 2024; ‘Online Etymology Dictionary’ (11 December 2020) < https://www.etymonline.com/word/dock> accessed 4 February 2024; Port Authority of Trinidad and Tobago, ‘Glossary of Maritime Terms’ < https://www.patnt.com/content/Glossary_of_Maritime_Terms.pdf> accessed 4 February 2024;

Ravi O N, ‘The Contractual Interpretation Rule - Contra Proferentem: It's Relevance in Modern Law’ (2020) 2 CMR Univ J Contemp Legal Aff 112; Walcott L A, Commonwealth Caribbean Insurance Law (Routledge-Cavenish 2019); Yalim A N K, Interpretation and Gap Filling in International Commercial Contracts (Intersentia 2019); Zimmermann R, The Law of Obligations: Roman Foundations of the Civilian Tradition (Oxford University Press, 1996).

Appearances

Mr Darrell S Bradley, Ms Julie-Ann Ellis-Bradley and Ms Kimberly Wallace for the Appellant

Ms Magali Marin Young SC and Mr Allister Tre Jenkins for the Respondent

Burgess J ( Rajnauth-Lee J concurring)

Concurring: Jamadar J

Dissenting: Barrow J ( Saunders P concurring)

Burgess J

Introduction

1 This is an appeal from the Court of Appeal of Belize. The Respondent, Kahtal Resorts International Ltd claimed before the High Court indemnity from the Appellant, Insurance Corporation of Belize Ltd, for damage sustained by the Respondent's marine vessel, a parasailing boat, as a result of a thunderstorm. The marine vessel sunk while docked afloat at Tom's Boatyard, San Pedro, Ambergris Caye, Belize, and it sustained damage having been submerged in water. The Appellant denied liability based on an exclusion clause in the terms of the policy of insurance exempting the Appellant's liability for: ‘Loss and or damage while vessel is moored unless such loss damage results from collision with another vessel’.

2 In the High Court, the trial judge found in favour of the Appellant that, based on the interpretation of the word ‘moored’ in the exclusion clause, the policy applied to limit liability to indemnify the Respondent for the damage suffered. The Respondent thereafter appealed successfully to the Court of Appeal. The Appellant has now filed an appeal of the decision of the Court of Appeal before this Court.

Factual Background

3 The Respondent owned a parasailing boat called ‘Cast Away Flyer’ which was insured by the Appellant under a written insurance policy. The policy is contained in 12 pages with the first page being the cover letter. Pages 2 to 3 contain the section on ‘Definitions Used in this Policy.’ It is to be noted here that nowhere in the definition section is there any definition of ‘in dock’ or ‘moored.’

4 After the definition section on page 3 there are agreements as to coverage changes, policy continuing post the death of insured person, cancellation and renewal rights, and concealment and fraud.

5 Page 4 is entitled ‘Section 1 Coverage: Your Property, Property Insured’ and reads in the relevant parts:

We insure your vessel, machinery and equipment as described on the declaration page.

PERIL INSURED

We will pay for Direct Physical Loss or Damage to the property from any external cause, subject to the exclusions and conditions of this policy IN COMMISSION AND LAID UP The vessel is covered subject to the provisions of this Insurance: 1) While in commission at sea or inland water or in port, docks, marinas, on way, pontoons, or at a place of storage ashore,

2) While laid up out of commission, including lifting or hauling and launching, while being moved in shipyard or marina, dismantling, fitting out, over hauling, normal maintenance or while under survey.

EXCLUSIONS

No claim shall be allowed in respect of:

1. Outboard motor dropping off or falling overboard.

2. Wear and tear, marring, scratching; gradual deterioration; inherent vice; rust; corrosion; mold; wet and dry rot.

3. Personal effects. 4. Consumable stores; fishing gear …

15. Loss and or damage while vessel is moored unless such loss damage results from collision with another vessel. …

22. No claim shall be allowed in respect of loss or damage to the vessel or liability to any third party or any salvage services caused by or arising from the vessel being stranded, sunk, swamped, immersed or breaking adrift, while left moored or anchored unattended off an exposed beach or shore.

6 Page 5 of the policy contained a section dealing with ‘Additional Coverage.’ Pages 6 to 8 has ‘Section 1 Conditions’ and pages 8 to 9 have ‘Section II Passenger Liability Third Party Liability.’ Page 9 has ‘Section II Conditions.’ Lastly, page 10 has a Declaration by the Appellant's Insurance company and page 11 contains the Certificate of Insurance.

7 On the night of 19 April 2019, there was a thunderstorm which caused the vessel to sink while it was docked afloat at Tom's Boatyard in San Pedro Town, Ambergris Caye, Belize. While docked, the vessel was tied to the dock at Tom's Boatyard. At the time of the damage to the vessel, it was insured under the policy for the total sum of BZD100,000.

8 When the Respondent...