1. www.hawkins.biz The Sugar Hut Group A judgement involving the interpretation of warranties Andrew Moncrieff

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3. Chronology 3 Feb 2009 The Sugar Hut Companies went into administration because of financial difficulties and new Companies with similar names were started to take over the businesses.

4. www.hawkins.biz Chronology 3 Feb 2009 The Sugar Hut Companies went into administration because of financial difficulties and new Companies with similar names are started to take over the businesses. Sugar Hut Brentwood Ltd became Brentwood Sugar Hut Sugar Hut Fulham Ltd became Fulham Sugar Hut Newplex Trading Ltd (Basildon) trading as Sky Bar Sports Arena became Basildon Sky Bar Ltd

5. www.hawkins.biz 17 March 2009 Broker informed that cover might not be renewed 21 March 2009 Cover expires and is taken over by new insurer who gave a £1000 discount

6. www.hawkins.biz 17 March 2009 Broker informed that cover might not be renewed 21 March 2009 Cover expires and is taken over by new insurer who gave a £1000 discount It was not disclosed that: The old companies had gone into administration because of financial difficulty New companies had been formed rather than just changing the names

7. www.hawkins.biz 16-19 June 2009 Surveys were carried out of the premises by a surveyor instructed by the insurer

8. www.hawkins.biz 16-19 June 2009 Surveys are carried out of premises by surveyor instructed by insurer 13 September 2009 Fire at Brentwood premises 27 November 2009 Claim declined

9. www.hawkins.biz The Judge was not impressed by the Claimants’ arguments in trying to excuse the non-disclosure. Had the facts been disclosed, insurers would have made further enquiries and might not have agreed cover at all.

10. www.hawkins.biz The Judge was not impressed by the claimant’s arguments in trying to excuse the non-disclosure. Had the facts been disclosed, insurers would have made further enquiries and might not have agreed cover at all. He was took note of : The £1000 discount the insurer was persuaded to give The failure of the insured to give evidence regarding his reply had he been asked for further details by insurers.

11. www.hawkins.biz The Breaches of Warranty None was connected in any way to the fire Kitchen extraction duct Inspection Construction

12. www.hawkins.biz The Breaches of Warranty None was connected in any way to the fire Kitchen extraction duct Inspection Construction Alarm Not central station

13. www.hawkins.biz The Breaches of Warranty None was connected in any way to the fire Kitchen extraction duct Failed to make regular inspections Defective in construction Alarm Was not connected to a central station Waste bins Were not made of non-combustible materials

14. www.hawkins.biz ‘A warranty……is a condition which must be exactly complied with, whether it be material to the risk or not.’

15. www.hawkins.biz Is it a true warranty or a suspensory condition?

16. www.hawkins.biz Is it a true warranty or a suspensory condition? The use of the word ‘Warranty’ is a good start but is not conclusive

17. www.hawkins.biz Is it a true warranty or a suspensory condition? The use of the word ‘Warranty’ is a good start but is not conclusive A true warranty will be associated with a state of affairs

18. www.hawkins.biz Is it a true warranty or a suspensory condition? The use of the word ‘Warranty’ is a good start but is not conclusive A true warranty will be associated with a state of affairs It can be considered a suspensory condition if a deadline is involved

19. www.hawkins.biz The kitchen extraction duct issue “extraction ducts will be checked at least once every six months by a specialist contractor” The last inspection was 6 months before the fire

20. www.hawkins.biz The kitchen extraction duct issue “extraction ducts will be checked at least once every six months by a specialist contractor” The last inspection was more than 6 months before the fire Would have accepted it as a suspensory condition but that made no difference because it had still not been inspected at the time of the fire

21. www.hawkins.biz “exhaust ducting will be kept securely fixed and free from contact with combustible material”

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23. “exhaust ducting will be kept securely fixed and free from contact with combustible material” Agreed to have been in contact over 114 mm ‘De-minimis’ argument – rejected

24. www.hawkins.biz “exhaust ducting will be kept securely fixed and free from contact with combustible material” Agreed to have been in contact over 114 mm ‘De-minimis’ argument – rejected Important protection and a true warranty Impressed that the conditions were less stringent than the LPC which requires 150 mm clearance

25. www.hawkins.biz With four premises all covered under one policy, a breach at one affected the cover at all four

26. www.hawkins.biz The Burglar Alarm Issue The policy required a “NACOSS central monitoring station alarm to be installed and operational”. The alarm at Brentwood was designed to ring a telephone number of an employee. It was not directed to an alarm monitoring centre or the Police. It didn’t even ring the employee.

27. www.hawkins.biz The Burglar Alarm Issue The policy required a “NACOSS central monitoring station alarm to be installed and operational”. The alarm at Brentwood was designed to ring a telephone number of an employee. It was not directed to an alarm monitoring centre or the Police. Accepted that the alarm did not conform and that this affected the risk. Accepted that it was a True Warranty.

28. www.hawkins.biz The Wheelie Bin Issue Waste should be stored in: “non-combustible lidded and lockable containers or metal skips kept within designated areas.”

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30. In fact they were stored in HdPE which, while hard to light is organic (plastic) and will eventually burn Insurer’s surveyor did not identify the bins as being of the wrong type. The Claimant sought to use this as a waiver of the Warranty, which the Judge rejected

31. www.hawkins.biz In fact they were stored in HdPE which, while hard to light is organic and will burn Insurer’s surveyor did not identify the bins as being of the wrong type. The Claimant sought to use this as a waiver of the Warranty, which the Judge rejected Judged the Claimant not to be in breach because if insurers had wanted metal bins they should have said so

32. www.hawkins.biz SUMMARY Is it a true warranty or a suspensory condition? Calling it a warranty does not necessarily make it so With four premises under one policy, a breach at one affected the cover at all four A survey does not necessarily excuse the insured from breaches of warranty Wording in warranties must be consistent and precise. Keep the conditions within industry standards.

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