SUNDERLAND MARINE MUTUAL INSURANCE CO LTD V WISEMAN

[2007] EWHC 1460 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Langley, 22 June 2007

Insurance (marine) – Jurisdiction – Assured domiciled in Scotland, insurers domiciled in England – Insurers paying claim and then discovering that claim involved a fraudulent conspiracy – Action to recover policy moneys – Whether English or Scottish courts had jurisdiction – Civil Jurisdiction and Judgments Act 1982, schedule 4

The defendant, who was domiciled in Scotland, insured his fishing vessel with a mutual insurer domiciled in England. The policy was in the sum of £584,750 and was governed by English law. The vessel became a total loss on 16 October 1994. The claim was paid by the insurer in January 1995, £518,750 to the mortgagee bank and £66,000 to the defendant. In 2004 the defendant confessed that he had been involved in a conspiracy under which the vessel had been deliberately scuttled. The insurer sought to recover from the defendant and his two co-conspirators the sums paid, alleging that there had been fraudulent misrepresentations in documents signed by them in Scotland and given to the insurer in England. The insurer asserted that the claim had been paid by cheque which was subsequently paid into the defendant’s bank account in Scotland. The issue was whether the English or Scottish courts had jurisdiction over the claim. Under the jurisdictional rules operative as between England and Scotland as set out in the Civil Jurisdiction and Judgments Act 1982, Schedule 4, in tort cases the defendant could be sued in “the place where the harmful event occurred” (the same wording as art 5(3) of the Brussels Regulation 2001). Langley J, applying the settled English principle, held that in the case of a misrepresentation the harmful event occurred where the misrepresentation was made and not where it was relied upon. Accordingly the tort rule did not apply, and the defendant was to be sued in Scotland as the place of his domicile.