Civil Engineering Reference
In-Depth Information
plaintiff. The plaintiff brought an action claiming that the defendants were in breach
of their obligations under clause 15.
Held:
The claim must fail.
HODSON LJ: We must deal separately with the question who is to be insured, though it falls for
consideration on the question of certainty; but, so far as the other matters are concerned, we
agree with the learned judge that there is no uncertainty as to the risk to be covered by insur-
ance. That which was to be insured against was the legal liability to adjoining owners arising
out of the subsidence or collapse of the premises. It would be wholly wrong in our judgment
to say, in the words of Lord Wright, that the language used was so obscure and so incapable
of any definite or precise meaning that the court is unable to attribute to the parties any
particular contractual intention.
The only real difficulty which arises is as to the determination of the question who is to be
covered by insurance, but the court ought not to be deterred by any difficulty of interpretation
which can fairly be surmounted. Looking first at condition 14 of the contract dealing with (a)
injury to persons, (b) injury to property, the contractors are bound to indemnify the building
owner against loss in the circumstances therein set out. When one comes to condition 15, the
contractors are thereby required to effect insurance or cause any sub-contractor to do so as
may be specifically required by the bill of quantities. This condition prima facie refers to the
indemnity required by condition 14, for it is introduced by the words 'without prejudice to
his liability to indemnify the employer under clause 14 hereof ', which indicates plainly that
the indemnity is to stand independently of the insurance and that the contractors cannot claim
to have fulfilled their obligation under the indemnity clause in respect of injury to persons or
property by effecting a policy or policies of insurance or causing any sub-contractor to do so.
These policies and their premium receipts must be produced as and when required by the
architect. Loss or damage by fire is dealt with in clause 15(b)[A], and there, in contrast to
the policies referred to in clause 15(a), the contractors must insure in the joint names of the
building owner and themselves with a company or companies approved by the architect, and
the contractors are obliged to deposit (not only produce when required) the policies and
premium receipts with the architect. It would thus appear that there is a contrast between
policies in which the contractors are insuring themselves, no doubt for the additional security
of the building owner, and cases where the contractors are insuring in the joint names of the
owner and themselves. Thus, when the contract requires the building owner (described in the
contract as the employer) to be insured by the contractors, it is expressly so provided. Further,
it would appear appropriate in cases where the insurance is for the benefit of the building
owner to require approval by his architect and deposit of the policy of insurance with him.
Condition 25, which deals with fluctuations, refers also to the burden of insurance falling on
the contractors under the heading of expenses, including the cost of employer's liability and
third-party insurance, and lends support to the contention of the contractors that these are
among the specific insurances contemplated by condition 15(a) of the contract. These con-
siderations derived from the conditions in the main contract are persuasive to suggest that the
insurances specifically required by the bill of quantities will be found to be insurances effected
by the contractors for themselves and not for the building owner.
When one turns to the bill of quantities itself, nothing is found to lead to a contrary conclu-
sion. In construing the obligation beginning with the words 'The contractor shall insure', one
looks at the whole list of matters in respect of which they have to insure or make payments,
and nothing is found in that list pointing to an obligation to insure anyone else but themselves.
