Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Facts
The plaintiff sued one of the underwriting members of Lloyd's under a Lloyd's policy of insurance against burglary, housebreaking and theft dated 1 May 1919. During the currency of the policy the premises were broken into and about £475 worth of the plaintiff's goods were stolen.
The policy contained a warranty that the premises are always occupied.
The plaintiff and his wife were the only persons resident on the premises. On the day of the burglary, 22 June, the plaintiff was away partly on business and his wife spent the afternoon at a garden party and fete, where he later joined her, and they spent the evening there. The shop and premises were left unattended between 2.30 p.m. and 11.30 p.m., except for an interval at about seven o'clock when the plaintiff returned to change his clothes.
The whole defence was that the warranty had been broken.
Issue
What did the warranty mean, and had it been broken?
Held — first, on construction
If the warranty meant, as the underwriter contended, that the premises were never to be left unattended and that there must be continuous attendance on them, there had undoubtedly been a breach — the plaintiff and his wife were both absent for some hours.
But that was not the meaning. Roche J. held that the warranty meant that the premises are to be used, continuously and without interruption, for occupation — that is, as a residence, and not merely as a lock-up shop left unoccupied after business hours.
Held — second, on ambiguity
Even if the warranty did not bear that meaning, the language was very ambiguous, and it is a well-known principle of insurance law that if the language of a clause drawn by a party himself for his own protection is ambiguous it must be construed against him; and that if the words of a warranty in a policy are ambiguous they must be construed against the underwriter who inserted the warranty for his own protection.
The defence therefore failed and judgment was given for the plaintiff with costs.
Held — third, the answer to the commercial objection
The underwriter argued that on this construction the warranty gave him very little protection. Roche J. disagreed. If the premises are used for residential as well as business purposes, a thief would never know at what moment the occupier might return from a temporary absence and disturb his operations. It is that kind of occupation which the warranty requires and which had been secured.
He added the drafting lesson: the underwriter had not stipulated for the continuous presence of someone on the premises, which he could have done by providing that the premises were never to be left unattended.
Why the case is worth its space
It is the counterweight to the warranty sections of the Marine Insurance Act. Section 35(3) makes a warranty a condition which must be exactly complied with, whether material to the risk or not, and s. 36(2) refuses the defence that the breach was cured before loss. That is a brutal rule and the court cannot soften its effect.
What the court can do — and what Simmonds v. Cockell does — is control the warranty's meaning. That is the general technique of insurance law and it should be stated as such in an answer.
Reconciling it with *Vikram Greentech*
There is no conflict. Strict construction governs the definition of the risk: you cannot read into the policy property that was never in it. Contra proferentem governs ambiguity in a clause the insurer drafted for his own protection. The order of operations matters: read the words first, and reach for contra proferentem only if two readings genuinely survive.