Stork Technology v First Capital: Notice Provision as Condition Precedent in Insurance Policy

Stork Technology Services Asia Pte Ltd (formerly known as Eastburn Stork Pte Ltd) sued First Capital Insurance Ltd in the High Court of Singapore, seeking declarations that Stork had complied with its obligations under a public liability insurance policy and that First Capital was liable to indemnify Stork for damages related to Suit No 1523 of 2002. The court, Lai Siu Chiu J presiding, dismissed Stork's originating summons, holding that Stork's breach of the notice provision, a condition precedent to liability, entitled First Capital to repudiate the policy.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Originating Summons dismissed with costs to the defendant.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Stork Technology sued First Capital for indemnity under a public liability policy. The court held that the notice provision was a condition precedent, and First Capital could repudiate liability.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Stork Technology Services Asia Pte Ltd (formerly known as Eastburn Stork Pte Ltd)PlaintiffCorporationClaim DismissedLostDevadason Letchamanan
First Capital Insurance LtdDefendantCorporationJudgment for DefendantWonAnthony Wee, Elaine Tay

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuJudgeYes

4. Counsels

Counsel NameOrganization
Devadason LetchamananSteven Lee Dason & Khoo
Anthony WeeRajah & Tann
Elaine TayRajah & Tann

4. Facts

  1. The plaintiff was insured by the defendant under a public liability insurance policy.
  2. The policy contained a notice provision requiring the insured to immediately notify the insurer of any occurrence that may give rise to a claim.
  3. The plaintiff received a letter from solicitors representing the owners of a vessel, giving notice of a catastrophic failure of a slip joint.
  4. The plaintiff did not immediately notify the defendant of the letter.
  5. The plaintiff was subsequently served with papers for pre-action interrogatories and notified the defendant six days later.
  6. The defendant repudiated liability, arguing that the plaintiff had failed to comply with the notice provision.
  7. The notice provision was a condition precedent to liability under the policy.

5. Formal Citations

  1. Stork Technology Services Asia Pte Ltd (formerly known as Eastburn Stork Pte Ltd) v First Capital Insurance Ltd, OS 1720/2005, [2006] SGHC 101

6. Timeline

DateEvent
Stork Technology Services Asia Pte Ltd and Cooper Cameron (Singapore) Pte Ltd overhauled the Telescoping Joint.
Stork Technology Services Asia Pte Ltd and Cooper Cameron (Singapore) Pte Ltd overhauled the Telescoping Joint.
Public liability insurance policy issued to Eastburn Stork Pte Ltd.
Insurance policy period commenced.
Fracture of a slip joint on board the vessel Energy Searcher.
Insurance policy period ended.
Stephenson Harwood wrote to Cameron demanding admission of liability for the failed standby slip joint.
Stephenson Harwood sent a letter to Stork Technology Services Asia Pte Ltd regarding the failure of the Telescoping Joint.
Stork Technology Services Asia Pte Ltd was served with papers for Originating Summons No 1255 of 2002 for pre-action interrogatories.
Stork Technology Services Asia Pte Ltd gave notice to Zurich Insurance (Singapore) Pte Ltd by fax and forwarded a copy of the interrogatories application.
Stork Technology Services Asia Pte Ltd forwarded the same set of papers to First Capital Insurance Ltd and informed them of Stephenson Harwood’s letter.
First Capital Insurance Ltd sent a fax to Stork Technology Services Asia Pte Ltd, acknowledging receipt of the interrogatories application and advising that they were not on risk.
The interrogatories application was disposed of.
Writ of summons for the Suit issued.
First Capital Insurance Ltd acquired the business of Winterthur Insurance (Far East) Pte Ltd.
Writ of summons for the Suit served on the plaintiff’s solicitors.
Subramanian wrote to McLarens seeking confirmation that Zurich would indemnify the plaintiff under the relevant insurance policy.
Stork Technology Services Asia Pte Ltd received a reply from Zurich through McLarens stating they were not at risk.
Subramanian wrote to First Capital Insurance Ltd to inform it of Zurich’s position.
Lee replied on First Capital Insurance Ltd’s behalf and requested copies of the cause papers and forwarded a liability claim form.
Subramanian completed the form and returned it to First Capital Insurance Ltd.
Copies of all the documents First Capital Insurance Ltd had requested were sent.
Subramanian wrote to First Capital Insurance Ltd seeking a response.
Rajah & Tann sent a fax to M&N, the plaintiff’s solicitors, repudiating liability on First Capital Insurance Ltd’s behalf.
M&N replied to Rajah & Tann disputing the denial of liability.
Rajah & Tann clarified that the plaintiff was informed of a potential claim in July 2002 when HHP wrote to the plaintiff for discovery of certain documents.
M&N finally provided Rajah & Tann with a copy of Stephenson Harwood’s letter.
Ang J delivered the main judgment in the Suit.
The OS was issued.
Ang J delivered the supplemental judgment.
The Court of Appeal delivered judgment.
Judgment reserved.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court held that the plaintiff breached the notice provision, which was a condition precedent to the defendant's liability.
    • Category: Substantive
    • Sub-Issues:
      • Failure to comply with condition precedent
    • Related Cases:
      • [2005] 4 SLR 417
      • [2006] SGCA 20
  2. Interpretation of Contractual Terms
    • Outcome: The court interpreted 'may give rise to a claim' as a 'possibility' rather than a 'probability'.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of 'immediately'
      • Interpretation of 'may give rise to a claim'
  3. Waiver
    • Outcome: The court held that the defendant did not waive the plaintiff's breach of the notice provision.
    • Category: Substantive

8. Remedies Sought

  1. Declaration that the plaintiff had discharged its responsibilities under the insurance policy
  2. Declaration that the defendant had waived any breaches of the notice requirement
  3. Declaration that the defendant is liable to indemnify the plaintiff
  4. Damages payable under the policy

9. Cause of Actions

  • Breach of Contract
  • Declaration of Indemnity

10. Practice Areas

  • Insurance Litigation
  • Commercial Litigation

11. Industries

  • Oil and Gas
  • Insurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Jet Holding Ltd v Cooper Cameron (Singapore) Pte LtdHigh CourtYes[2005] 4 SLR 417SingaporeCited for the findings of fact and liability in the underlying suit.
Jet Holding Ltd v Cooper Cameron (Singapore) Pte LtdHigh CourtYes[2006] SGHC 20SingaporeCited for the award of costs and disbursements in the underlying suit.
Jet Holding Ltd v Cooper Cameron (Singapore) Pte LtdCourt of AppealYes[2006] SGCA 20SingaporeCited for the Court of Appeal's decision on the appeals arising from the main and supplemental judgments.
The Vainqueur JoséN/AYes[1979] 1 Lloyd’s Rep 557N/ACited to support the argument that there is a distinction between 'claims under this policy' and a claim made by third parties which would lead to a 'claim under this policy'.
Kathirvelu v Pacific & Orient Insurance Co Sdn BhdN/AYes[1990] 3 MLJ 312MalaysiaCited to support the argument that the judgment of whether an occurrence may or may not give rise to a claim under the Policy vested in the plaintiff as the insured.
Chiu Teng Construction Co Pte Ltd v The Hartford Insurance Company (Singapore) LtdHigh CourtYes[2001] SGHC 119SingaporeCited to support the proposition that a 'claim' is made when a demand or a request for payment is made.
Federal Insurance Co v Nakano Singapore (Pte) LtdCourt of AppealYes[1992] 1 SLR 390SingaporeCited to support the proposition that a 'claim' is made when a demand or a request for payment is made.
Divcon International (HK) Pte Ltd v Union des Assurances de Paris-IARDHigh CourtYes[1998] SGHC 241SingaporeCited to support the proposition that a 'claim' is made when a demand or a request for payment is made.
Tan Thuan Seng v UMBC Insurans Sdn BhdHigh CourtYes[1998] 1 SLR 887SingaporeCited for the principle that the burden to prove a breach of a condition lay with the party making the assertion.
Bond Air Services Ld v HillN/AYes[1955] 2 QB 417England and WalesCited for the principle that the burden to prove a breach of a condition lay with the party making the assertion.
Stoneham v The Ocean, Railway, and General Accident Insurance CompanyN/AYes(1887) 19 QBD 237England and WalesCited for the principle that policies should be construed strictly against the insurers and the contra proferentum rule applied.
Farrell v Federated Employers Insurance Association LtdN/AYes[1970] 1 WLR 498England and WalesCited for the principle that when a term was stipulated to be a condition precedent in an insurance policy, the insurer was under no liability under the policy until such a term was duly complied with by the insured.
Pioneer Concrete (UK) Ltd v National Employers Mutual General Insurance Association LtdN/AYes[1985] 1 Lloyd’s Rep 274England and WalesCited for the principle that there was no need for the insurer to have suffered prejudice before the insurer could rely on the breach of a notice provision which was a condition precedent.
Barratt Bros (Taxis) Ltd v DaviesN/AYes[1966] 1 WLR 1334England and WalesCited in Farrell's case and distinguished on its facts.
Motor and General Insurance Co Ltd v PavyPrivy CouncilYes[1994] 1 WLR 462N/ACited for the principle of strict compliance with the notice provision in insurance policies.
Pilkington United Kingdom Ltd v CGU Insurance plcN/AYes[2005] 1 All ER (Comm) 283England and WalesCited for the principle of strict compliance with the notice provision in insurance policies.
McInerney v SchultzSupreme Court of South AustraliaYes(1981) 28 SASR 542AustraliaCited for the principle of strict compliance with the notice provision in insurance policies.
Wickman Machine Tool Sales Ltd v L Schuler AGN/AYes[1972] 1 WLR 840England and WalesCited for the three meanings of the word 'condition'.
L Schuler AG v Wickman Machine Tool Sales LtdHouse of LordsYes[1974] AC 235England and WalesCited for the presumption that where the word 'condition' is used in a legal document, there is a presumption that it is used in its sense as a 'term of art'.
Putra Perdana Construction Sdn Bhd v AMI Insurance BhdN/AYes[2005] 2 MLJ 123MalaysiaCited for the principle that for waiver to apply, the plaintiff had to prove that the defendant had full knowledge of the breaches.
Banning v WrightHouse of LordsYes[1972] 1 WLR 972England and WalesCited for the principle that for waiver to apply, the plaintiff had to prove that the defendant had full knowledge of the breaches.
In re an Arbitration between Coleman’s Depositories, Limited and The Life and Health Assurance AssociationN/AYes[1907] 2 KB 798England and WalesCited for the definition of 'immediately' to mean 'with all reasonable speed considering the circumstances of the case'.
Fercometal SARL v Mediterranean Shipping Co SAHouse of LordsYes[1989] AC 788England and WalesCited for the proposition that where a party wrongfully repudiated his contractual obligations in anticipation of the time for their performance, the other party could either affirm the contract by treating it as still in force or accept the repudiation and treat the contract as discharged.
Marcoux v The Halifax Fire Insurance CompanyN/AYes[1948] SCR 278CanadaCited to support the viewpoint that a notice prejudice rule like the notice provision is specifically put into insurance policies to protect the insurer, not the insured.
Glenburn Dairy Ltd v Canadian General Insurance CoN/AYes[1953] 4 DLR 33CanadaCited to support the viewpoint that it is for the insurer, not the insured, to determine the issue of liability, in the giving of notice.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Notice provision
  • Condition precedent
  • Public liability insurance policy
  • Repudiation of liability
  • Waiver
  • Occurrence
  • Claim
  • Indemnity
  • Interrogatories application
  • Telescoping Joint

15.2 Keywords

  • insurance
  • notice provision
  • condition precedent
  • liability
  • Stork Technology
  • First Capital Insurance
  • Singapore
  • High Court
  • contract
  • indemnity

16. Subjects

  • Insurance
  • Contract Law
  • Civil Procedure

17. Areas of Law

  • Contract Law
  • Insurance Law