Sugar Hut Group & Ors v A J Insurance
2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE EDER
Areas of Law
- Insurance Law
- Tort Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
The case involves a fire at the Sugar Hut Club, leading to extensive damages and a period of 49 weeks of non-operation. After failing to recover claims from insurers due to nondisclosure and breach of warranties, the claimants sued their insurance broker AJI for negligence. AJI admitted partial negligence and agreed to pay 65% of the damages. The court determined the business interruption losses with a 20% uplift to turnover, rejected the claim for accountants' fees due to insufficient evidence, and awarded interest at 5% p.a. simple on the damages.
Mr Justice Eder:
Introduction
These proceedings arise out of a serious fire on 13 September 2009 at the well-known nightclub, the Sugar Hut Club in Brentwood, Essex. The fire destroyed one wing of the Club and all of the office areas. There was also extensive water, extinguishing and carbon damage. The Club was effectively unusable for a period of some 49 weeks until it eventually reopened on 25 August 2010. During that period repairs and reinstatements were carried out. The capacity of the Club was increased by minor changes to the design. It is common ground that the time taken for the repair works was reasonable.
The first claimant is the ultimate holding company of the Sugar Hut Group and promotes and organises the Group from offices on the same premises as the Club in Brentwood. It is owned by Mr Michael Norcross. At the time of the fire, the other claimants were companies in the Sugar Hut Group and the trading companies for Sugar Hut Clubs in Brentwood, Fulham, Basildon and Hertford respectively. A new trading company, Brentwood Sugar Hut Village Ltd was created for the Brentwood Club in June 2010 shortly before the Club reopened.
The defendant, AJI, was an insurance broking partnership which procured the claimants’ insurance cover in March 2009. The claimants claimed against their insurers under the insurance policy arranged by AJI. In the event, the insurers purported to avoid the policy, so the claimants sued them in Action 2010 Folio 68. There was a trial of liability in the Commercial Court in October 2010 before Burton J. The judge dismissed the claimants’ claims on the grounds that there had been nondisclosure before inception of the insurance policy and because there had been breaches of warranties under the policy. The judge awarded the insurers their costs on the standard basis.
The claimants then commenced these proceedings against AJI on the basis that the grounds on which they had been held by Burton J to have no right under the policy were attributable to the negligence/breach of duty of AJI. AJI admitted certain allegations of negligence but denied others and also resisted the claimants’ claim on the basis of causation and contributory negligence. These differences on liability are now academic because shortly before the trial of liability AJI conceded liability on the terms set out in a consent order which provided, in effect, that AJI would pay an agreed 65% of the claimants’ losses. The consent order was expressed to be without