{"id":120,"date":"2018-05-22T00:00:00","date_gmt":"2018-05-21T23:00:00","guid":{"rendered":"https:\/\/fenchurchlaw.hostingsystems.co.uk\/sg\/blog\/2018\/05\/22\/wheeldon-brothers-waste-limited-v-millennium-insurance-company-limited\/"},"modified":"2024-08-21T17:02:12","modified_gmt":"2024-08-21T16:02:12","slug":"wheeldon-brothers-waste-limited-v-millennium-insurance-company-limited","status":"publish","type":"post","link":"https:\/\/fenchurchlaw.com\/en-sg\/wheeldon-brothers-waste-limited-v-millennium-insurance-company-limited\/","title":{"rendered":"Wheeldon Brothers Waste Limited v Millennium Insurance Company Limited"},"content":{"rendered":"

In this recent pro-policyholder decision, the Court examined the construction of Conditions Precedent and Warranties. Here, the insurer attempted, rather opportunistically, to import a meaning to these terms which was far more onerous than the common sense approach adopted by the policyholder and ultimately endorsed by the Court. <\/strong><\/p>\n

Wheeldon Brothers Waste Limited (\u2018Wheeldon\u2019) owned a waste processing plant (\u2018the Plant\u2019) situated in Ramsbottom. The Plant received a number of combustible and non-combustible wastes, and, via a number of separation processes, produced a fuel known as ‘Solid Recovered Fuel.\u2019<\/p>\n

Wheeldon had a policy of insurance (\u2018the Policy\u2019) with Millennium Insurance Company (\u2018Millennium\u2019), who provided cover against the risk of fire.<\/p>\n

In June 2014, a major fire occurred at the Plant, which was believed to have been caused by the collapse of a bearing on a conveyor. Prior to the fire, Millennium had appointed a surveyor to undertake a risk assessment, which led to the issuing of \u201cContract Endorsement No 1\u201d (\u2018CE1\u2019). CE1 required compliance with a number of Risk Requirements, each of which was incorporated into the Policy as a condition precedent to liability.<\/p>\n

Millennium refused to indemnify Wheeldon following the fire, relying upon the following grounds (\u2018the Grounds\u2019):<\/p>\n

    \n
  1. A failure to comply with the Risk Requirement relating to the storage of Combustible Materials at least six metres from any fixed plant or machinery (\u2018the Storage Condition);<\/li>\n
  2. A breach of warranty requiring the removal of combustible materials at the close of business each day (\u2018the Combustible Materials Warranty\u2019);<\/li>\n
  3. A breach of the condition relating to the maintenance of machinery (\u2018the Maintenance Condition\u2019);<\/li>\n
  4. A breach of the condition relating to housekeeping (\u2018the Housekeeping Condition\u2019).<\/li>\n<\/ol>\n

    Wheeldon issued proceedings against Millennium.<\/p>\n

    Before addressing the Grounds, the Judge was first required to make a finding on the cause of the fire.<\/p>\n

    Millennium asserted that the fire was caused by heat or fragments leaving \u2018the housing of the bearing\u2019, causing the usual materials that drop through the machine to catch and burn. Wheeldon, however, argued that the fire was the result of smouldering, which was caused by combustible materials falling through a \u2018gap\u2019 in the housing of the conveyor, which had been created by the failed bearing.<\/p>\n

    The Judge rejected Millennium\u2019s explanation. The available photographs and CCTV stills showed no evidence of the material they referred to, and the presence of burn marks (on which Millennium placed huge emphasis) was inconclusive.<\/p>\n

      \n
    1. The Storage Condition<\/u><\/strong><\/li>\n<\/ol>\n

       <\/p>\n

      The Judge approached the issue of whether there had been a breach by dealing with the following questions:<\/p>\n