Read the full judgment text of CACV 90/1992 on BabelCite. This Court of Appeal judgment was delivered on 21 October 1992 before Sir Derek Cons VP, Kempster JA, Litton JA.
Insurance law – liability insurance – undisclosed and unnamed principal doctrine – doctrine held by majority to be excluded where proposal and policy show insured contracted as real and only principal – Life Assurance Act 1774 s.2 – whether applicable to indemnity insurance – majority held yes, providing further ground precluding undisclosed principal – Employees' Compensation Ordinance (Cap 282) Part IV – retroactive effect – Part IV held not to apply to accidents predating its commencement on 1 January 1984 – ss.40, 43, 44 – whether Part IV gives employees direct right against any insurer regardless of who took out the policy – held no, only the employer's or principal contractor's insurer is liable – barquentine 'Osprey' lost with all hands in typhoon 'Ellen' on 9 September 1983 – employers Axelson Co Ltd wound up in July 1986 – policy issued to Richstone Industries Co Ltd as agent – Richstone not the employer – personal representatives sought to recover under Third Parties (Rights against Insurers) Ordinance (Cap 273) and Employees' Compensation Ordinance – misrepresentation as to wages estimate – held estimate not reckless and condition 8 of policy envisaged premium adjustment – condition 6 no-admission clause – held insurer could not rely on condition after repudiating liability – insurable interest – Richstone would have had no insurable interest in crew members under s.1 of Life Assurance Act 1774 – appeal dismissed by majority, Litton JA dissenting – defendants to have costs save for costs of multiplied documents in bundles 1 and 2.
Legal issues: Whether Axelson could intervene as undisclosed principal to the insurance policy issued to Richstone · Whether s.2 of the Life Assurance Act 1774 applies to indemnity insurance · Whether the insurer could avoid the policy for misrepresentation of wages estimate · Whether the insurer could rely on condition 6 (no-admission clause) after repudiating liability · Whether Part IV of the Employees' Compensation Ordinance applies retroactively to pre-commencement accidents · Whether Part IV gives employees a direct right against any insurer of their employer's liability
Outcome: Appeal dismissed by majority (Cons VP and Kempster JA); Litton JA dissented and would have allowed the appeal