PAN ATLANTIC INSURANCE COMPANY LTD AND ANOTHER V PINE TOP INSURANCE COMPANY LTD

(1993) 2 Re LR 119

Court of Appeal

Before Sir Donald Nicholls V-C, Lord Justice Farquharson and Lord Justice Steyn

Non-disclosure - Misrepresentation - Fair presentation -Renewal of casualty excess of loss treaty for 1982 - Earlier years’ records - Whether long record, including years 1977-79, provided by broker and available to reinsurers’ underwriter - Risk broked to concentrate underwriter’s mind on short record covering years 1980-1981 - Whether prudent underwriter would have wanted to see long record - Whether doctrine of waiver defeated any reliance on non-disclosure.

Affirmation - Non-disclosure/misrepresentation defence by reinsurers - Whether reinsurers invoked or asserted contractual right - Whether reinsurers had requisite knowledge of matters on which they could rely - Whether reinsurers entitled to period of time to consider whether or not to avoid - Whether that should include inquiries of witnesses on other side - Whether reinsurers acted in way only consistent with intention not to treat contract as at an end.

Non-disclosure - Additional losses - Applicability of errors and omissions clause to precontractual material misrepresentation - Whether additional losses should have been known to reassured and communicated to broker - Whether additional losses material to contract should have been disclosed when final presentation took place - Whether reinsurers had affirmed contract or were estopped from reliance on non-disclosure - Effect of knowledge through loss borderaux.