Barton v Atlantic Insurance Company Ltd

• Jurisdiction: Belize
• Judge: Shanks, J.
• Judgment Date: 07 April 2000
• Date: 07 April 2000
• Court: High Court (Belize)
• Docket Number: 200 of 1994

High Court

Shanks, J.

200 of 1994

Barton

and

Atlantic Insurance Company Limited

Appearances:

Mr. Dean Barrow, S.C. for the plaintiff.

Mr. Denys Barrow, S.C. for the defendant.

Insurance - Marine insurance policy — Claim against insurers for loss of vessel — Vessel incomplete at date of policy — Vessel valued at $60,000 — Wheelhouse subsequently added — Whether there was a material non-disclosure or misrepresentation in relation to the addition of the wheelhouse — Whether the loss was covered by the policy of insurance — Whether the insurers could rely on section 39(5) of the Marine Insurance Act 1906 to avoid liability on the basis that the vessel was unseaworthy — Finding that on the balance of probabilities the plaintiff failed to satisfy the onus on him to prove that he had made the necessary disclosure to the insurers — Finding that notwithstanding, the defendants took steps to affirm the contract and were estopped from relying on the material non-disclosure — Finding that the plaintiff could not recover for loss since they had led no evidence of loss and the policy was not intended to be an all risks policy.

Shanks, J.

1 This is an insurance claim arising from the capsizing of a fishing vessel, the “Sharkey Maru”, on 14 November 1992 about two miles from Mauger Caye. The vessel was owned by the plaintiff and David Mortensen. They acquired the finished 33 foot hull for about $17,000 in Chetumal in early September 1992 and transported it to Corozal where they fitted it out as a fishing vessel, in particular by constructing a wheel-house on it which stood about six feet above the gun whale and was eight feet long. They proposed to use it for commercial shark fishing off the coast of Belize. There is no dispute about the above facts or that the vessel was insured by the Defendant insurers. Almost everything else in the case, which has been argued and presented with characteristic skill and tenacity on both sides, is disputed.

2 The insurance application was made on 16 September, 1992 and I have seen the form signed by the plaintiff. According to him and Mr. Mortensen, when they went to Atlantic's offices in Belize City to obtain insurance, the fitting out work had not begun. However, they told me that they explained to the General Manager, Yolanda Crombie, exactly what they were going to do with the vessel including the intention to put on a wheel-house. They told me they showed her receipts for the items they had already acquired (I was shown one for the hull for about $17,000 and one for a 225 horse power engine for $10,000) and discussed with her in detail the cost of the remainder of the items needed for the fit-out, reaching a value of $60,000. They accepted that Mr. Barton had filled in the application form in the absence of Mrs. Crombie but said that they specifically raised with her whether they should circle “open cockpit” which it was agreed they should as it reflected the then existing position and, although only one engine is mentioned on the application form (mention of another is crossed out) they would be getting another smaller motor too. They were told by Mrs. Crombie that the premium would be $2,237 (which is recorded as such in Mrs. Crombie's writing on the form) and that it could be paid in three installments. She also told them that when they had completed the fit-out they should contact the Manager of Atlantic Bank in Corozal, Celso Ramirez (who, it emerged later in the trial, had originally referred them to the defendant), and he would inspect the boat and take the first installment of the premium. The cover would then commence.

3 Mrs. Crombie's account of the interview was quite different. She denied that she had been told about the wheel-house or that she had played any part in arriving at the $60,000 valuation or that she had in any way approved the circling of “open cockpit.” As far as she was concerned, cover was to take effect immediately but she nevertheless agreed that the first of three installments could be paid at a later date. The plaintiff was reminded that he should make payment a number of times and he later asked whether he could make payment of the first installment to Mr. Ramirez. Mr. Ramirez was instructed simply to collect the money and issue a receipt on behalf of the defendant and to take a photo of the vessel solely for identification purposes for the company's file. There was nothing said at the interview with the plaintiff about Mr. Ramirez carrying out an inspection or cover becoming effective when the inspection had been made.

4 Mrs. Crombie also told me that shortly after 16 September, 1992 she received through her secretary a breakdown of the $60,000 valuation in the application form, in the form of a small piece of paper, which unfortunately was no longer on the file. She told me that the breakdown on the piece of paper was repeated in a fax report she undoubtedly sent to a director of the defendant on 18 September, 1992 as follows:

“$18,000	boat
$17,000	motor
$11,000	import duty
$ 7,000	boat trailer
$ 7,000	radio
$ 60,000”

This breakdown does not reflect the figures which the plaintiff claims to have discussed with Mrs. Crombie, and in cross examination he denied ever having given a value for a boat trailer, and said he did not remember giving these figures for the motor or import duty, though he might have.

5 The insurance documents were then prepared and apparently signed by Mrs. Crombie on 30 September, 1992. The “Schedule” shows the breakdown I mentioned above. It also shows a premium of $2,550 though Mrs. Crombie was unable to explain the difference between this figure and the $2,237 shown on the application form. I also note it states that the vessel is a “PRIVATE PLEASURE VESSEL”, which was clearly wrong and inconsistent with the application form. It states that the period of coverage begins on 16 September, 1992. To the Schedule is attached a document headed “PLEASURE, PASSENGER & FISHING VESSEL POLICY” which contains detailed terms and conditions but no operative insuring clause as one would expect in the main policy document, which would normally refer to the Schedule and incorporate detailed terms and conditions. It was accepted on all sides that something appeared to have gone wrong with the defendant's documents but I was assured by Mrs. Crombie that the two documents I have described were the only documents produced by the defendant at the time (I hope the position has now been reviewed). In any event, there is no dispute that the documents were not provided to the plaintiff.

6 For whatever reason Mr. Ramirez came to visit the finished vessel on a 26 October, 1992 at about 6:00 p.m. It is common ground that the plaintiff gave him a cheque for $873 and he issued a receipt for this...