Isabel Hitching KC secures unanimous Court of Appeal dismissal of appeal in World War II bomb damage coverage case.
The Court of Appeal has unanimously dismissed an appeal by the University of Exeter (‘Exeter’) against the decision of HHJ Bird sitting as a Deputy of the High Court. It held that the Judge had correctly found that an insurance policy issued by Allianz Insurance Plc (‘Allianz’) did not respond to damage to Exeter’s student halls of accommodation caused by the controlled detonation of a World War II bomb.
The facts
Allianz issued an insurance policy to Exeter covering damage to property unless excluded. The War Exclusion clause excluded damage ‘occasioned by war’.
During the term of the policy a 1000kg high explosive bomb dropped by German forces during World War II was discovered on land adjacent to Exeter’s campus. A safety cordon was promptly established and halls of residence falling within it were evacuated.
The Explosive Ordnance Disposal Team determined that the condition of the bomb (due to age, rusting, and uncertainty as to whether it was booby trapped) meant that it could not safely be removed from the site for controlled explosion. The post incident report disclosed by the Ministry of Defence noted that “the only realistic course open to the team” was to detonate the bomb on site in a controlled explosion adopting safety measures designed to reduce, as far as possible, the consequences of such an explosion. The operation was described in the report as “successful” and Exeter did not criticise it in court. No-one was injured but some damage, which the report stated was “unfortunate, but unavoidable”, was caused to Exeter’s halls of residence.
The scope of the dispute
The parties agreed that the dropping of the bomb was an act of war for the purposes of the War Exclusion Clause. They also agreed that ‘occasioned by’ specified a proximate cause test.
Allianz argued at trial that the dropping of the bomb was the sole proximate cause of the damage, or alternatively that it was a proximate cause concurrent with the controlled detonation. Allianz submitted that it would succeed in either case because the Policy contained the usual rule that if there are concurrent proximate causes, one an insured peril and the other excluded, the exclusion applies (see Wayne Tank and Pump v Employers Liability Assurance Corp. [1974] QB 57 cited at para.174 of FCA v Arch [2021] UKSC 1 and para 27)
Exeter argued the opposite, that the controlled detonation was the sole proximate cause of the damage, or alternatively that it was a proximate cause concurrent with the controlled detonation. Exeter submitted that it would succeed in either case because the Policy ousted the Wayne Tank rule.
The first instance judgment [2023] EWHC 630
The Judge upheld each of Allianz’s arguments. He held that the dropping of the bomb was the sole proximate cause, alternatively a proximate cause concurrent with and of approximately equal efficiency to the controlled detonation and that, as a matter of interpretation, the Policy did not oust the Wayne Tank rule.
Court of Appeal judgment [2023] EWCA Civ 1484
Coulson LJ, in a judgment with which Lewison LJ and Snowden LJ agreed, held that the Judge had been correct to hold that the dropping of the bomb and the controlled detonation were concurrent proximate causes of approximately equal efficacy. Exeter had chosen not to appeal the Judge’s finding that, as a matter of contractual interpretation, the Policy excluded the Wayne Tank rule. It therefore followed that the Policy did not respond to the loss and the appeal must fail.
The Court further noted that Exeter had invited the Judge to make a finding that the dropping of the bomb and controlled detonation were concurrent causes as its alternative case at first instance and held that ‘there was some force in [Allianz’s] forensic point that … it was a bit much for [Exeter] to argue that no reasonable judge could have reached such a conclusion’.
The Court of Appeal therefore held that it was not necessary to consider the Judge’s alternative finding that the dropping of the bomb was the sole proximate cause of the damage.
Isabel Hitching KC appeared at first instance and on appeal, instructed by DAC Beachcroft LLP.
