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Court of Appeal upholds insurers’ breach of warranty argument in residential let home insurance policy

Ashfaq v International Insurance Company of Hannover Plc [2017] EWCA Civ 327

In a judgment handed down on 12 May 2017, the Court of Appeal (Flaux, Briggs and McFarlane LJJ) dismissed an appeal by the claimant against the award of summary judgment obtained by his insurers in a fire insurance claim.

The claimant owned a house which was let out to students. Following a serious fire at the property, he claimed on his insurance. The insurers declined the claim on grounds of material non-disclosure of a pending prosecution, and breach of a basis of contract warranty. The judge at first instance granted the insurers’ application for summary judgment.

On appeal, the claimant argued that he was a consumer and entitled to the protection afforded to him by the Unfair Terms in Consumer Contracts Regulations 1999 and ICOBS. The Court of Appeal dismissed the appeal, holding that the claimant had adduced no evidence to suggest that he was acting as a consumer when letting out the property. An application for residential let property insurance, where part of the cover was for loss of rent, was not an application for ordinary domestic house insurance.

The Court of Appeal relied on the provisions of ICOBS which suggest that a person taking out a buy-to-let mortgage would be treated as a commercial customer for the purpose of ICOBS. Similar guidance would apply where there was a different mortgage, but where the purpose of the mortgage was to protect property which was let out. It was “neither here nor there” that the person may have had other commercial or professional interests which were unrelated to property letting.

Richard Sage acted for the respondent insurer.

A copy of the judgment can be found here.


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