Mattar V Norwich Union Frie Insurance Society Ltd & Anor. (1965)
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The appellant took out a policy of insurance No. 77135823 of the 18th of May, 1960, with the respondents against loss by ‘theft following upon an actual forcible and violent entry or damage by thieves following such entry’ in respect of goods and other property in a shop at 73 Broad Street, Lagos for a sum of £4,000.
The policy is in printed form but to it was attached a sheet of paper called “Documentary Evidence Warranty attached to Policy 77135823” As the case at the trial and the arguments on this appeal turned on the condition in this paper we set them out in full: It is warranted during the currency of this Policy:-
(a). That In the event of a claim for loss arising under this policy, it is warranted by the Assured that he/they will produce Documentary Evidence in English of the amount of value of the stocks held immediately prior to the happening of the loss.
(b). That the Assured keeps and during the whole of the currency of the policy shall keep a complete set of Books, Accounts and Stock Sheets or Stock Books showing a true and accurate record of all business transactions, and stock in hand, and that such Books, Accounts and Stock Sheets or Stock Books shall be locked in a fire-proof safe or removed to another building at night, and at all times when the premises are not actually open for business.
(c). That this Warranty applies separately to each and every business or branch business.
(d). That transfers of goods from one premises to another shall be a business transaction within the meaning of this Warranty.
(e). That it is further Warranted that the said safe shall not contain explosive or other hazardous commodities”.
Clause 9 of the policy incorporated these conditions into the policy.
The facts found at the trial in the High Court are that on the 8th and on the 15th of August, 1960, while the policy of insurance was still in force thieves broke into the appellant’s shop at 73 Broad Street, Lagos and stole a quantity of the goods covered by the insurance.
The appellant alleged in his Statement of Claim (and the respondents denied) that:
“The value or costs of articles or goods stolen on the 8th August, 1960, is £1,401.7s.9d and the value or cost of articles or goods stolen on the 15th August, 1960 is £2,201.13s.2d (total £3,602.0s.11d).” The respondents in their Statement of Defence stated, inter alia:
“8. The Defendants will contend during the trial that the basis of the Plaintiff’s assurance was that he shall keep and post promptly Stocks and Sales books relating to his goods. The said Plaintiff failed to keep such books at all times material to this claim and upon these premises the Defendants will contend that the Plaintiff is not entitled as per his Writ of Summons.”
The learned trial Judge decided that the appellant had failed to observe the conditions attached to the policy, which have been set out, and dismissed the claim. He also decided that although the respondents refused to go to arbitration when called upon by the appellant and as provided by clause 13 of the insurance policy, the appellant’s right to bring the present action was barred since an award by an arbitrator was a condition precedent to the bringing of an action under the policy.
Mr Benson, for the respondents, did not seek to support this latter ground of the judgment and the appeal proceeded solely on the question whether the appellant kept the books required by the policy. Nothing that we may say in this judgment, therefore, should be taken as deciding whether, in view of the arbitration clause In. the policy and the respondents’ refusal to go to arbitration, the appellant could or could not commence this action.
Mr Lardner’s main contention in support of the appeal is that the appellant kept sufficient records to enable the respondents to determine what goods were in the shop; indeed, the respondents did not dispute the accuracy of the computation of the value of the goods stolen based on the invoices, daily sales books and receipts; all that was required was substantial compliance with the policy. He further submitted that the condition that ‘the assured keeps and during the whole of the currency of the policy shall keep a complete set of Books” is so vague that it is not open to the respondents to rely on it.
It is not in dispute that the only books the appellant kept were daily sales books and files concerning invoices and receipts. It is admitted that he did not keep stock books or stock sheets, but Mr Lardner submits that these stock sheets and stock books are not special kinds of books but any records from which the state of the stock in the shop can be determined; the daily sales books, the invoices and the receipts between them provide all the information about the state of the business and the stock in hand and are, in effect, stocks sheets and stock books.
We are quite unable to accept this suggestion. The documents and books to which Mr Lardner refers were in evidence and a witness called for the appellant at the trial said that the appellant was not keeping a proper account of his business and that the daily sales book, the receipts of purchases and invoices in a file were not sufficient to enable him to find out the overall position of the appellant’s business. Whatever view one takes, therefore, of the nature of the books kept by the appellant, it is clear from the evidence of his own witness that they did not show a true and accurate record of all his business transactions.
It is beyond dispute that a stock book is a book which shows the aggregate of goods a trader has in hand. The appellant did not keep any such book and this failure is in breach of the endorsement on his policy.
By clause 9 of the policy the observance and fulfillment by the appellant of the terms and conditions of the policy and any endorsements which may be made thereon shall be a condition precedent to the appellant’s right to recover under the policy. The law on the point is stated in Halsbury’s Laws of England, 3rd edn., Vol. 22, p.226 in the following words- “If a condition is framed in general terms, performance is adequate if is covers the substance of the matter; but, if the condition goes into details, performance must be strictly in accordance with the detail required, and, however burdensome or immaterial they may appear to be, they cannot be disregarded. It is, however, sufficient in such a case if the precise letter of the condition is performed in the most literal sense; the insurers cannot require the assured to go beyond the precise terms of the condition, or complain that a literal performance does not protect them adequately.” In Welch v. Royal Exchange Assurance  4 All E.R. 289 the assured was by a clause in the policy required to give to the insurers “all such proofs and information with respect to the claim as may reasonably be required”.
On the happening of the event the Insurers requested information about certain accounts which the assured failed to give. At the subsequent arbitration the assured gave the required information. The arbitrator found that there was no fraudulent concealment by the insured but that the information as to accounts was reasonably required by the insurers; he further found, and this is important and relevant to the argument put forward by Mr Lardner, that the accounts, when disclosed, did not contain any material which justified, or tended to justify, the respondents in repudiating the claim under the policy.
In an appeal taken from a dismissal of the claim of the assured Mackinnon, L. J., after pointing out that the stipulation that the insured shall give all such information as may be reasonably required is one the nature of which permits it to be a condition precedent to the right of the assured to recover, stated (p. 296)
“The arbitrator has found that the assured ought to have produced these accounts, but that, when produced, they contained in fact nothing which justified, or tended to justify, a refusal to pay his claim. This means that the appellant had an honest claim for a large amount, but by reason of his stupid obstinacy over an immaterial matter, he has enabled the respondents to refuse to pay anything.”
We agree with Mr Benson that the appellant’s failure to keep a stock book or stock sheets during the currency of the insurance policy was fatal to his claim and that it is immaterial that he kept other books or documents.
We are of the opinion that on the evidence before him the learned trial Judge was right in finding that the appellant had not kept the books which he had undertaken to keep and we agree that for that reason the appellant was in breach of the warranty in the policy and could not recover on the policy. His claim was properly dismissed and this appeal therefore fails.
The appeal is dismissed with costs to the respondents assessed at 30 guineas.
Other Citation: (1965) LCN/1261(SC)