Nyimba Investments Limited v Nico Insurance Zambia Limited (Appeal 30 of 2016) [2017] ZMSC 32 (31 March 2017)

Selected Judgment No.12 of 2017 P.366 IN THE SUPREME COURT OF ZAMBIA (cid:9) HOLDEN AT KABWE (cid:9) SCZ/8/150/2016 Appeal No. 130/2016 (Civil Jurisdiction) B ETWEEN: NYIMBA INVESTMENTS LIMITED APPELLANT AND NICO INSURANCE ZAMBIA LIMITED RESPONDENT Coram: (cid:9) Malila, Kajimanga and Mutuna, JJS On Pt November, 2016 and 31st March, 2017 For the Appellant: Mr. M. Mutemwa, SC of Messrs Mutemwa 86 Company with Mr. M. Chipanzhya of Messrs Inambao, Chipanzhya 8s Company. For the Respondent: (cid:9) Mr. K. Kamfwa of Messrs Wilson and Cornhill JUDGMENT Malila, JS, delivered the Judgment of the Court Cases referred to: Galaunia Farms Limited v National Milling Company Limited [2002] ZR 135. Salomon v. Salomon & Co. Ltd. (1887) AC 22. Macaura v. Northern Assurance Company Ltd. [1925] AC 619. Luceana v. Craufurd [1802] 3 Bos & Pul. 75 (Exchequer Chamber). Derry v. Peek (1889) LR 14 App Cos 337 (cid:9) (cid:9) J2 Carter v. Boehm (1766) Burr 1905. Rozanes v. Bowen (1928) 32 Lloyd's Rep. 96. Simwanza Namposhya v. Zambia State Insurance Corporation Limited SCJ No. 1 of 2010. P. 367 Orakpo v. Barclay Insurance Services (1999) LRLR 443. Buchman v. Attorney-General ((1993/ 4) ZR 131. Mususu Kalenga Building Limited v. Richman's Money Lender's Enterprises (1999) ZR 27. Premesh Bhai Magan Pale v. Rephidim Institute Limited (2011) 1 ZR 134. The Kanchenjunga (1990) 1 Lloyds Rep. 391. Le Cras v. Hughes (1782) 99 Eng. Rep. 549. Lowry v. Bourdieu (1780) 2 Doug 468. Sharpe v. Sphere Drake Insurance Ltd. (1992) 2 Lloyd's Rep 501. Cepheus Shipping Corporation v. Guardian Royal Assurance Plc (The 'Capricorn') (1995) 1 Lloyd's Rep. 662 at 641. Lloyd v. Fleming (1872) 2 LR QB 299. Wilson v. Jones [1865-66] LR 2Ex. 139. Michell v. Scottish Eagle Insurable Co. Ltd. (1997) SLT 793. Cowan v. Jeffrey Associates (1999) SLT 757. Mark Rowland v. Semi Inns (1986) QB 211. Western Trading Ltd. V. Great Lakes Reinsurance (UK) Plc [2015] Feasey v. Sun Life Assurance Company [2003] 2 ALLER (Comm) 587. Constitution Insurance Company of Canada v. Kosmopoulos [1987] 34 DLR (4th) 208. Guarantee Company of North America v. Agna-Land Exploration Limited [1965] 54 DLR (2nd) 29. Hayes Milford Mutual Fire Insurance Company 49 NE 754 [1898] (Supreme Court of Massachusetts). Smith v. Royal Insurance Company 5 F. Supp 439 [1993] (Californian). Scarola v. Insurance Corporation of North America 31 NY (214)411 [1972] (New York). Studio Frames Limited v. The Standard Fire Ins. Co. 483 F 3d 239, 245 (4th Cir. 2007). Refrigerated Trucking (Pty) Limited v. Zive [1996] 2 SA 361 (T). Pan Atlantic Insurance Co. v. Pine Top Insurance Co. Ltd. (1994) 1ALLER 581. IWLR 573. J3 P. 368 Drake Insurance Plc. v. Provident Insurance Plc. (2003) EW C Civ. 82. Norwich Union Insurance Ltd. v. Meisels (2006) E WI-IC 2811; (2007) 1 Lloyds' Rep. 1R 69 (QBD). Synergy Heath (UK) Ltd. v. CGU Insurance Plc (t/ a Norwich Union) and Others (2010) EWHC 2583. Assicurazioni Generaliss PA v. Arab Insurance Group (2003) Other works referred to: Section 33 of the Lands and Deeds Registry Act Cap 87of the Laws of Zambia. Halsbury's Laws of England, vol. 25(4t1 edition) paragraph 607. Life Assurance Act, 1774. Gaming Act, 1845. Australian Law Reform Commission (ALRC) Insurance Contracts Report 20 (1982). Insurance Contracts (Report No. 20)11982] Ch.5. Australian Insurance Contracts Act, [1984] section 16. LS Sealy and RJA Hooley, Commercial Law, Texts, Cases and Materials, (4th ed), (Oxford University Press, London, 2009). Bell, Principles (10th ed.) s.461. Chitty on Contracts Vol. II Specific Contracts, 27th Ed. Paragraph 39-02. Law Reform Commission of Ireland, Consultative Paper on Insurable Contracts published December 2011. This appeal elicits a cognisable controversy of jurisprudential moment. It in a way reignites the debate as to when this court, as the apex court, may depart from established, persuasive foreign judgments such as those of the J4 P. 369 former House of Lords (now Supreme Court of the United Kingdom). The dispute which culminated in the appeal emerged when, having honoured part of the appellant insured's claim, the respondent insurer repudiated the balance of the appellant's claim for US$320,483.00 in respect of business interruption resulting in loss of rental income on a property insured under an Asset All Risk Policy. The material facts are largely uncontroverted. A compendious narration of those facts is as follows. The respondent is a registered insurance company engaged in the provision of insurance services in Zambia. The appellant is a limited liability company engaged in, among other things, trading and letting out property on lease. The latter took out an All Risk Insurance Policy with the former. That insurance policy (number P/10/9001/902/10/63), was for the period 15th October, 2010 to 14th October, 2011. It was effected through an insurance broker called AON Zambia Limited. It covered the P. 370 insured, which was the appellant itself, and all the appellant's group companies trading in Zambia. In terms of the policy, the risk insured against extended to "all real and personal property of every kind, nature and description (including improvements and betterments) including but not limited to buildings, plant, machinery, equipment, contents and stock owned, acquired, used or intended for use by the insured, including property in the care, custody or control of third parties." The policy furthermore covered business interruptions and/or loss of gross profit and/or loss of gross earnings including increased cost of working, additional increased cost of working, extra expenses, rental value, standing charges, contingent business interruptions, etc. On the 12th September, 2011 a fire gutted the property known as Stand No. 6980, Katanga Road, Heavy Industrial Area, Lusaka. We shall in this judgment refer to that property as the 'insured property'. At the time of the fire, the titleholders J6 P. 371 to the insured property were Gulam Ahmed Adam Patel and Ayyub Adam Patel who traded under a business name called `Nyimba Filling Station and Supermarket' which was an unincorporated entity organised under the Registration of Business Names Act, Chapter 389 of the Laws of Zambia. The duo were also the shareholders in the appellant company. The insured property had at the material time been leased to Zambia Leaf Tobacco Limited under a tenancy agreement which reflected Gulam Ahmed and Ayyub Adam Patel, Trading as Nyimba Filling Station as the landlord/owner. Consequent to the fire damage as alluded to, the appellant submitted two claims to the respondent insurers as follows: A claim in respect of material damage to the insured property. This claim, which was in the sum of US$503,781.00, was settled by the respondent. A claim for US$320,483.00 in respect of business interruption. This claim was rejected by the respondent and hence the action in the lower court. J7 P. 372 The respondent's refusal to honour the latter claim was premised on the observation and recommendation of an independent loss adjustor engaged by the respondent to verify the claim. It was in the process of verifying that claim that the independent loss adjustor discovered that the insured property was, as a matter of fact, not registered in the name of the appellant, but those of Gulam Ahmed Adam Patel and Ayyub Adam Patel as joint tenants and, therefore, that the appellant company lacked insurable interest in that property. On this basis, the respondent, not only repudiated the appellant's claim on account of want of insurable interest on the part of the appellant, but also intimated a desire to recover the sum of US$503,781.00 already paid out under the policy for material damage which policy, to the best of the respondent's understanding, was non-existent. Disconsolate with this turn of events, the appellant commenced proceedings in the High Court, claiming the sum of US$320,483.00 or the Kwacha equivalent, being the sum due as indemnity for business interruption and/or loss of income J9 P. 374 As regards the respondent's counter-claim for the sum of USS503,781.00 or the Kwacha equivalent therefor, which the respondent alleged was wrongly paid to the appellant under a false representation or deceit, the learned High Court judge held that the appellant made a representation that it owned the insured property when it did not in fact do so and further that the appellant's misrepresentation was fraudulent rendering the insurance void and the claim on the policy untenable. The net result was that the insured property was not, in truth, insured with the respondent as it neither belonged to the appellant nor any of its group companies trading in Zambia. The learned judge held that the respondent was accordingly entitled to succeed on its counter-claim of USS503,781.00. She entered judgment accordingly. The court also awarded the respondent interest at the current Bank of Zambia lending rate and costs. It is against this judgment that the appellant has now appealed. Four grounds of appeal have been formulated thus: J10 P. 375 "1. That the court below erred both in law and fact when it held that the appellant had neither an insurable interest in the property nor was the property insured with the respondent because it did not belong to any of the appellant's Group Companies trading in Zambia when the insurance proposal and subsequent insurance policy expressly provided for and related to all other premises owned occupied or used by the insured for the purpose of the business anywhere in Zambia. That the court below erred both in law and fact when it held that the nature of the misrepresentation the appellant engaged in was fraudulent rendering the claim itself fraudulent when the appellant was the insured, all the insurance premiums were paid by the appellant to the respondent, all the acknowledgements for the said premiums were made to the appellant by the respondent, all the rental invoices to the appellant's tenants were issued by the appellant and all the payments of the rentals by the tenants were made to the appellant and thereby ordered that the sum of US$503,781.00 be paid back to the respondent with interest thereon. That the findings of fact of the court below were contrary to and against the material respects of the totality of the weight of the evidence herein and thereby allowed the counter-claim herein in error [sic!]. J10 P. 375 "1. That the court below erred both in law and fact when it held that the appellant had neither an insurable interest in the property nor was the property insured with the respondent because it did not belong to any of the appellant's Group Companies trading in Zambia when the insurance proposal and subsequent insurance policy expressly provided for and related to all other premises owned occupied or used by the insured for the purpose of the business anywhere in Zambia. That the court below erred both in law and fact when it held that the nature of the misrepresentation the appellant engaged in was fraudulent rendering the claim itself fraudulent when the appellant was the insured, all the insurance premiums were paid by the appellant to the respondent, all the acknowledgements for the said premiums were made to the appellant by the respondent, all the rental invoices to the appellant's tenants were issued by the appellant and all the payments of the rentals by the tenants were made to the appellant and thereby ordered that the sum of US$503,781.00 be paid back to the respondent with interest thereon. That the findings of fact of the court below were contrary to and against the material respects of the totality of the weight of the evidence herein and thereby allowed the counter-claim herein in error [sic!]. P. 376 4. (cid:9) That the court below fell into error when it failed and/or neglected to consider the efficacy of the doctrine of waiver or estoppel in insurance law and thereby dismissed the appellant's claim." At the hearing of the appeal, Mr. Mutemwa SC, learned counsel for the appellant, intimated that he would rely on the heads of argument which were filed on the 19th of July, 2016 as well as the heads of argument in reply filed on the 19th of October, 2016. In those heads of argument, the learned counsel went to great lengths in giving the background facts as well as the definition of an insurance contract. In regard to the first ground of appeal, namely, whether or not the appellant had insurable interest in the property, the learned counsel focused on the proposal form and the policy document, arguing that these were clear and unambiguous. He referred to the quotation slip in which the proposer was described as Nyimba Investments Limited and/or subsidiary and/or associated and/or affiliated companies for their respective rights and interests and the location of the insured J12 P. 377 assets as all other premises owned or occupied or used by the insured for the purpose of business anywhere in Zambia. It was counsel's fervid submission that a valid insurance contract existed between the appellant and respondent and that the appellant had made full disclosure of all material facts. It was further contended that the concept of insurable interest as determined by the trial judge based on the single issue of the ownership of the subject premises was a gross misdirection and was an attempt to subtract from or vary the terms of the contract. The learned counsel further argued that the parties freely and voluntarily entered into the contract on the terms agreed upon and, therefore, that such contract ought to be respected. Various case authorities on the subject of freedom of contract and the effect of embodying a contract into a written document, were cited. It was counsel's prayer that ground one of the appeal be upheld. In regard to ground two, it was contended that the trial court was wrong in law and fact when it held that the appellant had made a misrepresentation at the time of entering into the J13 P. 378 contract of insurance and thus rendering the claim itself fraudulent. Counsel submitted that in the present case there was no fraudulent misrepresentation, or at all. The gist of the submission by counsel on this ground was that given what the appellant and its shareholders had agreed to effect, namely, a transfer of the insured property to the appellant, the appellant was not guilty of concealment of material information relevant to the contract of insurance, nor did it engage in any misrepresentation; that the contract of insurance was, therefore, valid and binding. Counsel prayed that we uphold ground two of the appeal. In regard to ground three, the contention of the learned counsel for the appellant was simply that the findings of fact of the court below were contrary to, and against, the totality of the weight of evidence and, therefore, allowing the counter-claim was a misdirection. In support of that submission the learned counsel repeated the appellant's arguments in respect of grounds one and two. We were implored to uphold ground three of the appeal. P. 379 Under ground four, it was contended that the trial court fell into error when it neglected to consider the efficacy of the doctrine of waiver or estoppeled in insurance law, when it dismissed the appellant's claim. Here, the argument by counsel for the appellant was simply that where the insurer, knowing of facts which would give a right to repudiate a claim on account of breach of warranty, misrepresentation or non- disclosure, accepts and continues to accept premiums, he will be held to have waived the breach and will be estopped by his conduct from setting up the breach as a defence. We were referred to the case Of Galaunia Farms Limited v National Milling Company Limited', where it was held by the High Court that the basis of estoppel is to stop a man who so conducts himself as to lead another into believing that a certain state of affairs exists, from departing from the position he has represented. In the present case, according to the learned counsel, the evidence on record shows that by its quotation slip and insurance quotation, and subsequent insurance policy, the respondent had represented to the appellant that he had insured all other premises owned, occupied or used by the P. 380 insured who, in terms of the policy, is the appellant and its group companies, for the purpose of business anywhere in Zambia against fire and other perils. In orally supplementing the written submissions, Mr. Mutemwa SC, referred us to the document in the record of appeal, being a resolution of the members of Nyimba Investments Limited passed on 1st April, 2010, resolving that Gulam Ahmed Adam Patel and Ayyum Adam Patel, as joint tenants and beneficial owners of Stand No. 6980 Katanga Road, Lusaka, shall transfer their interest in that property to Nyimba Investments Limited as a capital contribution to the said company. That resolution was filed at the Patents and Companies Registration office about a year later on the 8th of April, 2011. Mr. Mutemwa Sc, accused the trial judge of having ignored or failed to refer to that resolution even though it was produced before her in evidence. He contended that had the trial judge interrogated this resolution, she would have understood the context in which the appellant referred to itself as the owner of the insured property. J16 P. 381 Mr. Mutemwa SC, also referred us to section 33 of the Lands and Deeds Registry Act, Chapter 187 of the Laws of Zambia, which states that: tia certificate of title is conclusive evidence of ownership." He submitted that, that section does not preclude a person determining a claim of an interest in a property from looking at anything else that would evince ownership. He also referred us to the learned authors of Halsburys Laws of England, vol. 25 (4th ed) paragraph 607 which reads as follows: "The precise nature, extent or value of the insurable interest in a contract of insurance is irrelevant. An equitable or beneficial interest of any kind is as effective for this purpose as a legal interest. Interest is not restricted to ownership; it may arise under a contract relating to the subject matter or it may be founded upon lawful possession." The learned State Counsel further quoted from page 612 of the same authority which states as follows: "... A purchaser of a property under a contract of sale has an insurable interest in the property derived from the contract, which arises as soon as the contract is made." P. 382 The second point made by Mr. Mutemwa SC, in augmenting the written heads of argument, was that the insurance contract shows that the appellant acquired an interest in the insured property. We were referred, in this regard, to the quotation slip in the record of appeal, more specifically to the description of the premises, which included all premises owned, occupied or used by the insured for the purposes of the business situated in the Republic of Zambia. According to Mr. Mutemwa SC, the property was leased out by the appellant even before title was changed. We were referred to the lease agreement in the record of appeal. More significantly, Mr. Mutemwa SC, referred us to the letter in the record of appeal in which the title holder of the property, namely, the two Patels trading as Nyimba Filling Station and Supermarket, wrote to the tenant, Zambia Leaf Tobacco, indicating the change of name of the landlord from Nyimba Filling Station and Supermarket to Nyimba Investments Limited and effective 1st April, 2010. The learned State Counsel emphasized that the insurance contract referred to three J18 P. 383 different things namely, ownership, occupation and use and, therefore, that any of these could in themselves found insurable interest. Mr. Chipanzhya, co-counsel for the appellant, also reiterated the written submissions filed as well as the oral ones made by Mr. Mutemwa SC. He emphasized the issue of premiums, arguing that these were duly paid by the insured and accepted by the insurer who could not now resile from the contract that was consummated by the respondent's receipt of those premiums. Mr. Kamfwa, learned counsel for the respondent, countered these submissions. He equally relied on the heads of argument which he filed in response. In those heads of argument he submitted that the learned trial judge made a correct finding of fact that the insured under the Asset All Risks Insurance Policy was Nyimba Investments Limited and all group companies trading in Zambia and that at the time of the claim the insured property was held in the name of the two PateIs. We were referred to the case of Salomon v. Salomon & co. J19 P. 384 Ltd2 on separate legal personality. Mr. Karnfwa also cited the case of Macaura v. Northern Assurance Co. IA& for the submission that a shareholder in a company has no insurable interest. Counsel also referred to Luceana v. Craufurd4. According to the appellant's counsel, the learned trial judge correctly applied the law to the facts before her on insurable interest and can, therefore, not be faulted. We were urged to dismiss ground one of the appeal. As regards ground two of the appeal, counsel for the respondent supported the trial court in its holding that the nature of the misrepresentation the appellant engaged in was fraudulent thus rendering the claim itself fraudulent. Black's Law Dictionary, 8th Edition was adverted to on the definition of 'fraudulent misrepresentation'. Counsel quoted from page 1022 as follows: "a false statement that is known to be false or is made recklessly without knowing or caring whether it is true or false and is intended to induce a party to detrimentally rely on it." J20 P. 385 Counsel also referred to the case of Derry v. Peeks where fraudulent misrepresentation was defined in similar lines as in Black's Law Dictionary. It was submitted that given that at the time of the insurance in question and the time of lodging the claim the appellant purported to be the owner of the property when in fact not, there was misrepresentation of the state of affairs which misrepresentation was fraudulent. The learned counsel cited and quoted passages from the cases of carter v. Boehms and Rozanes v. Bowen7, in both of which it was pointed out that the special facts upon which the contingent chance is to be computed, lies most commonly in the knowledge of the insured only and therefore, the assured has a duty to make full disclosure to the underwriter even without being asked of all material circumstances. The learned counsel referred us to numerous other authorities including Simwanza Namposhya v. Zambia State Insurance Corporations, Chitty on Contracts Vol. II Specific Contracts, 27th Ed. Paragraph 39-02 and the case of Orakpo v. Barclay Insurance Services% on the consequence of fraudulent misrepresentation on contracts of insurance. Counsel beseeched us to dismiss ground two of the appeal. P. 386 In regard to ground three, the learned counsel for the respondent maintained that the lower court's findings were neither contrary to nor against the material evidence before the court. He made the short point that there is no basis to overturn the lower court's findings given the evidence available before it which it duly took into account. Counsel fervidly prayed that we dismiss ground three of the appeal. Under ground four, it was contended that the trial court was right not to consider the issue of waiver or estoppel as this was not pleaded. Counsel submitted that it is now settled law that an issue not raised in the trial court cannot be raised on appeal. To buttress that argument, he referred us to the cases of Buchman v. Attorney-Generalo, Mususu Kalenga Building Limited v. Richman's Money Lender's Enterprises" and Premesh Bhai Magan Pale v. Rephidim Institute Limited". In the alternative, counsel submitted that for waiver and estoppel to be applied in an insurance contract, there must be evidence that there was a valid contract of insurance concerning the subject matter in respect of which the claim has J22 P. 387 been made. He cited as authority for this submission, the case of The Kanchenjungan and quoted a passage by Lord Goff, before submitting that the respondent in the present case was not dealing with procedural issues relating to insurance claims, but the substantive question whether the subject was insured or not. In his view, there was no insurance covering the subject matter of the appeal. The learned counsel was convinced that ground four of the appeal had no merit and ought to be dismissed. In his supplementary oral arguments, Mr. Kamfwa pointed out that the resolutions of the company, a copy of which was on the record, did not transfer ownership of the property to the appellant. The intention contained in that resolution had to be actualised in order for ownership to be transferred. This was clear, according to Mr. Kamfwa, from the use in the resolution of the expression 'shall transfer.' The second point made by Mr. Kamfwa in supplementing his written heads of argument was that the court below did not ignore the resolution as contended by the learned counsel for J23 P. 388 the appellant. He pointed out that the trial judge did in fact take into account the said resolution in her judgment when she stated that the intention-expressed in the resolution was not communicated to the respondent. He contended that mere possession of the property by the appellant did not constitute acquisition of insurable interest. The learned counsel also explained that the policy in issue covered risk location and that only property taken to those premises were covered. Finally, in dispelling the estoppel argument, he submitted that the question was one of ownership and not premiums. We are grateful to counsel for the parties for their lucid submissions. We must state, however, that given the manner in which the law on insurable interest has developed over the years, as we shall explain it later in this judgment, and a corpus juris that has developed reflecting the transformative cast of the law, it is quite clear to us that the authorities cited by the able counsel for the parties in support of the parties' respective positions, as well as those relied upon by the learned trial judge to rationalize her judgment, came short in vital respects and J24 P. 389 are, but minimally useful in determining the real issues in this appeal. Before us are three critical questions. The first has to do with insurable interest. The issue is not whether or not insurable interest is necessary for a policy of insurance to be valid in this country. That insurable interest is presently the sine qua non for a valid policy of insurance in Zambia is beyond peradventure. The issue, as we see it, involves the determination of what constitutes insurable interest. Is insurable interest co-extensive with legal or equitable ownership of the subject matter of insurance? In other words, what relationship between the insured and the subject of insurance will produce insurable interest? Was the claim in the present case being asserted by the proper insured? We pause to point out that authorities are divided on this question. One view holds that there ought to be a legal relationship or property interest which a court of law or equity will recognize and enforce. Another view subscribes to the factual expectation theory, under which an insurable interest J25 P. 390 exists when a person profits by the continued existence of a thing and would suffer some loss or detriment by its destruction, whether or not he has any legal interest in it. We shall revert to these two theories shortly. The second issue relates to the duty of the insured to disclose truthfully all material facts regarding the intended insurance. The question is not whether or not an insured is under a duty of utmost good faith to disclose material facts, and an obligation to avoid active or passive misrepresentation of facts when they enter into an insurance contract. That is an indefatigable requirement in insurance law. The contention is whether, in the present case, the fact that a property owned by the two Patels, was insured by the appellant as its own, constituted misrepresentation and therefore, amounted to a breach of the duty of utmost good faith. Put simply, was the statement by the appellant in the proposal form that it was the sole owner of the property insured, when the same was still in the name of the two Patels, a misrepresentation and a breach of a warranty? J26 P. 391 The third issue concerns waiver and estoppel. Can an insurer who, well knowing that it is entitled on the fact to decline to insure the risk or to repudiate a claim on account of a breach of warranty or misrepresentation, accepts and continues to accept premiums from the insured, be precluded from pleading breach of warranty or misrepresentation? Given the centrality of the doctrine of insurable interest to the determination of the present appeal, and considering also the rather tangled manner in which the law has developed in this area through both case and statute, we think it apropos that we give a more focused appraisal of that principle to include some historical background, however cursory. As we understand it, the policy behind the requirement of insurable interest was, to prohibit people from insuring lives of third parties or assets with which they had a tenuous or no real connection, as a form of speculation, in the hope of profiting from their deaths or destruction. In other words, the requirement is intended to prevent the taking out of insurance policies as a form of gambling speculations. J27 P. 392 English case law as, we are able to discern through cases such as Le Cras v. Hughes14, seem to suggest that the requirement for insurable interest existed before statutory intervention. In Lowry v. Bourdieuls for example, money was lent to a ship's captain by the claimants. They then took out an insurance policy which would compensate them if the ship failed to arrive. It was held that the policy was a wager and therefore void. Lord Mansfield stated that: "It was a hedge. But they had no interest; for, if the ship had been lost and the underwriters had paid, still the plaintiff would have been entitled to recover the amount of the bond." Subsequent statutory developments aimed at countering fraud, gambling and criminal destruction of lives and property, occurred. We are cognizant of the fact that in England, notable early Acts passed to deal with the issue of gaming as a socially and morally destructive activity include the Marine Insurance Act, 1745, the Life Assurance Act 1774, and the Gaming Act 1845. These Acts in a way codified the policy against gambling speculation. It is this policy against wagering which proved to be the decisive factor in the leading House of Lords decision in P. 393 Luceana v. Craufurd4 alluded to by counsel for the respondent. In that case, the House of Lords set out a classic definition of insurable interest with Lord Eldon delivering the leading opinion (at 321) describing it as: "[a] right in the property, or a right derivable out of some contract about property, which in either case may be lost upon some contingency affecting the possession or enjoyment of the party." This was seemingly a well defined and pointed definition of insurable interest. As against this narrow test in which the insured should show a legal or equitable interest in the insured property or a right under a contract, Justice Lawrence, in the same case, formulated a broader test. He put his view thus: "To be interested in the preservation of a thing is to be so circumstanced with respect to it as to have benefit from its existence, prejudice from its destruction." This broader test as formulated looked beyond the legal relationship between the insured and the property. It does not require an insurer to own traditional forms of property interests to create an insurable interest. It is concerned with the likely J29 P. 394 events. According to Justice Lawrence, the expectation of benefit or loss must arise "according to ordinary and probable course of things." Flowing from the reasoning of Lord Eldon in Luceana v. Craufurd4, the case of Macaura v. Northern Assurance3, also alluded to by counsel for the respondent, was decided. The facts of that case are pretty familiar to any lawyer trained in English legal principles. The House of Lords confirmed that a shareholder has no insurable interest in property owned by the company in which he holds shares. Before Macaura3, authorities appear divided over the question of insurable interest. Some notable decisions were passed which expressed support for the factual expectancy theory as propounded by Lord Lawrence in Luceana v. Craufurd4. In Lloyd v. Fleming18 , for example, Blackburn J observed that: "This subject-matter [of insurance] need not be strictly a property in either the ship, goods, or freight; for, as has long been said, [he has interest] if a man is so situated with respect to them that he will receive benefit from their arriving safely at the end of the adventure, or sustain loss in consequent of their not arriving." J 30 P. 395 In Wilson v. Jones19 a shareholder took out insurance on property owned by the company - a telegraphic cable. The policy extended to every risk and contingency "attending the conveyance and successful laying of the cable." The court found that the policy was not on the cable but on the shareholder's interest in the successful completion of the project to lay the cable. The court accordingly held that he had insurable interest and allowed the claim. After Macaura3, in a number of cases where insurable interest is directly in issue, Luceana v. Craufurd4 and Macaura3 itself continue to represent the statement of the law. Thus in the Scottish case of Michell v. Scottish Eagle Insurable Co. Ltd20, Michell had entered into partnership with his son but had insured the partnership premises in his own name. Applying the Macaura3 principle, the outer House held that Michell lacked an insurable interest. Equally in Cowan v. Jeffrey Associates= the issue was whether a director and sole shareholder of a company had insurable interest in the insured premises. Lord J31 P. 396 Hamilton felt obliged to follow Macaura3 observing that, while it was an English authority and not, therefore, technically binding on him, nevertheless, it was highly persuasive. In his view the adoption of factual expectancy would require either legislative intervention or the House of Lords reversing itself. We must state that a similar feeling resonates with us as we decide this appeal. It is worthy of note that although Lord Eldon. gave the leading opinion in Luceana v. Craufure, subsequently, courts have referred to Mr. Justice Lawrence's view with approval. The courts have inched towards a 'factual expectation' test which now appears from a wealth of decided cases, to represent the current direction of the law. This makes the determination of this appeal further from being a fait accompli. LS Sealy and RJA Hooley, the learned authors of Commercial Law, Texts, Cases and Materials, commenting on the Macaura3 case observed as follows: J32 P. 397 "The strict approach of the House of Lords in this case has attracted some criticism in recent times, and indeed, it has not been followed in some Commonwealth decisions. In this country, too, there are signs that the courts now take a broader view; if a person has a 'factual expectation' that he may suffer consequential loss following a fire or other insured peril which damage property owned by someone else, he may be regarded as having a sufficient interest to insure against the risk. For example, a sub-contract in a building contract may have such an interest in the works as a whole because he could lose the opportunity to complete his contract Petrofina (UK) Limited v. Magnaload Limitedl 1 [1948] QB 127." It seems to us that the expanded view of insurable interest given by Lord Lawrence has come to be accepted by English courts, at every level below the House of Lords. For example in Sharpe v. Sphere Drake Insurance Ltd16, Sharpe took out insurance on a yacht owned by his company of which he was the sole shareholder. He was given full use of the yacht by two powers of attorney, granted to him by the company. Colman J distinguished Macaura3 and held that the right to use the yacht was a valuable benefit, and the power of attorney founded a sufficient legal interest. The sole shareholder in a company, J33 therefore, possessed insurable interest in the yatch purchased P. 398 by the company. In Cepheus Shipping Corporation v. Guardian Royal Assurance Plc (The `Capricorn117, Mance J made the point that insistence on insurable interest in the manner Lord Eldon articulated it 200 years ago in Luceana v. Craufurd4, defeats the reasonable expectations of the parties since: ".... the present policy is not on its face one which the parties made for other than ordinary business reasons; it does not bear the hallmarks of wagering or the like. If underwriters make a contract in deliberate terms which covers their assured in respect of a specific situation, a court is likely to hesitate before accepting a defence of lack of insurable interest. In Mark Rowland v. Berni Inns22, a tenancy agreement required the lessor to insure the premises against fire and to use the proceeds of insurance to rebuild. The tenant contributed to the premium and was relieved of the duty to repair in the event of fire damage. The Court of Appeal held that the insured, who had paid out on the policy following a fire, could not recover against the tenant. The tenant was not J34 P. 399 mentioned in the policy, but it was clear from the terms of the lease that the insurance was effected on his behalf. In his judgment Kerr L J ignored Lord Eldon's definition of insurable interest and explicity adopted what he termed the 'classic' definition of insurable interest given by Lawrence J in Luceana v. Craufurd4. In the English High Court decision of Western Trading Ltd. v. Great Lakes Reinsurance (UK) P1c23, whose facts are superficially similar to the present case, one of the issues that fell to be determined was whether the claimant (Western) had sufficient insurable interest in the damaged properties. Western, which was named in the policy as the insured, did not own the properties. Rather it was a company through which the owner (Mr. Singh) managed and operated his property portfolio. The court held that Western did have a sufficient insurable interest. In reaching this conclusion, the court took into consideration the fact that Western paid rent to Mr. Singh, managed the properties on a day-to-day basis, was responsible for their upkeep, dealt with insurance matters, paid the rates, granted P. 400 leases to subtenants, and ultimately had to account to Mr. Singh. There was no question of any improper advantage being obtained by the insured. In 2003 the English Court of Appeal in Feasey v. Sun Life Assurance Company24 had occasion to review the concept of insurable interest in the modern context upon re-examining case law of the last 200 years since Luceana v Craufurd4 on the subject. In that case, Club Steamship Mutual, insured its members against liability claims brought by employees and others who were injured on board their members' vessels. Steamship Mutual approached a Lloyd's syndicate to reinsure the risk, but the syndicate suggested another form of policy, which was more favourably treated under Lloyd's risk codes. The result was that Steamship Mutual took out a first party personal accident policy, whereby the syndicate agreed to pay a fixed sum to Steamship Mutual for each death or disablement aboard their members' vessels. This in turn was reinsured by Sun Life Assurance Company. Later, when a dispute arose, it was alleged that Steamship Mutual did not have insurable interest in the lives it had insured. J36 P. 401 Waller L J, who gave the leading majority judgment, found that Steamship Mutual did have sufficient insurable interest. The court held that insurable interest should be interpreted broadly. Lord Justice Waller commented that even in property insurance cases, "something less than a legal or equitable or even a pecuniary interest has been thought to be sufficient." We have also had occasion to review the position obtaining regarding insurable interest in other jurisdictions. A comparative analysis of jurisprudence from apex courts in jurisdictions outside the United Kingdom is relevant in illuminating the shift from the narrow formulation, by Lord Eldon, of insurable interest. In Canada, Australia, the United States of America and South Africa, a pragmatic approach has been adopted in response to the perceived social and commercial benefits which widespread insurance offers. The reasoning in Luceana and Craufurd4 and in Macaura14 has been rejected, principally on the basis that an overly technical determination of the insurable interest requirement has the potential to defeat the reasonable commercial expectation of the J37 P. 402 parties. In its place the courts have substituted factual expectation as articulated by Lord Lawrence in Luceana v. Craufurd4, as the determinative test. Thus in Constitution Insurance Company of Canada v. Kosmopoulos25 the facts of which closely resemble Macaura3, the Supreme Court of Canada, which had previously followed the restrictive Lord Eldon formulation in such cases as Guarantee Company of North America v. Agna- Land Exploration Limited26, overruled this approach. Wilson J, delivering judgment for the majority, took the view that the definition of insurable interest was ripe for fundamental re- examination: "if the application of a rule leads to harsh justice, the proper course to follow is to examine the rule itself rather than affirm it and attempt to ameliorate its effects on a case by case basis." In our view, Wilson J's, analysis in that case reflects a shift in emphasis from Lord Eldon's concerns, which led to a narrow definition of insurable interest, to a view that recognizes the economic and social benefits of insurance, and therefore, a broader conception of insurable interest. This is consistent with J38 P. 403 the position taken by the English courts in the cases we have alluded to. In Australia, Lord Eldon's approach has also been jettisoned. The Australian Law Reform Commission (ALRC), in its Report Insurance Contracts (Report No. 20, at para 120), concluded that Lawrence J's, formulation: "would allow more flexibility to insurers and to the insuring public, without in any way prompting gaming and wagering in the form of insurance or addition to the risk of destruction of the property insured." The ALRC, therefore, proposed legislative reform to provide that: "where an insured is economically disadvantaged by damage to or destruction of the insured property, the insurer should not be relieved of liability by reason only that the insured did not have a legal or equitable interest in the property." This recommendation was given statutory effect in the Insurance Contract Act 1984. Thus, an insurable interest is by section 16 of that Act not required in Australia. J39 P. 404 In the United States, although early case law had followed Luceana v. Craufurd4 and the Lord Eldon's narrow formulation of insurable interest, the view that most States have now adopted is that economic interest is the determinative test. (See for example, Hayes Milford Mutual Fire Insurance Company27; Smith v. Royal Insurance Company28; and Scarola v. Insurance Corporation of North America29. In Studio Frames Limited v. The Standard Fire Ins. Co.30 the court held that an insurable interest may simply arise from "possession, enjoyment, or profits of the property." In its report published in December 2011, the Law Reform Commission of Ireland in its consultation Paper on Insurance Contracts, (Law Reform Commission of Ireland, Consultative Paper on Insurable Contracts published December 2011) made the following conclusion (paragraph E 2.58 &, 2.59): The Commission considers that the narrow test for an insurable interest, advocated by the UK House of Lords in the Luceane case in 1802 and in the Macaura" case in 1925, is no longer acceptable. In any event, Macaura" itself has never been endorsed in Ireland. The dicta of Brett MR in Stock v. Inglis J40 P. 405 sets out, in the view of the Commission, a compelling argument against a legal or equitable interest test being deployed: "in my opinion it is the duty of a court always to lean in favour of insurable interest, if possible, for it seems to me that after underwriters have received the premium, the objection that there was no insurable interest is often, as nearly as possible, a technical objection, and one which has no real merit , certainly not as between the assured and the insurer." After making these observations, the Commission ended its recommendation on a rather potentious note as follows: .... the Commission has concluded that legislation should provide that an otherwise valid insurance claim cannot be rejected by the insurer solely because the insured lacks an insurable interest as it has been traditionally defined, that is, a legal or equitable relationship between the insured and the subject matter of the insurance contract. The Commission has also concluded that insurable interest should, in the interest of certainty, be more broadly defined in legislation as an interest that subsists when a person may benefit from the continued existence or safekeeping of the subject matter of the insurance or may be prejudiced by its loss, and that this definition would apply both to non life and to life insurance." In South Africa, the judiciary has adopted an economic interest test. In Refrigerated Trucking (Pty) Limited v. Ziveal a Transvaal Court has provided a broad economic interest test. P. 406 Following earlier South African authorities that appeared to reject a legal or equitable interest approach with the judges upholding a contract even though the claimant has 'neither a jus in re nor a jus in rem to the thing insured.' In that case the court held that: "an insurable interest is an economic interest which relates to the risk which a person runs in respect of a thing which, if damaged or destroyed will cause him to suffer an economic loss or in respect of an event, which if it happens will likewise cause him to suffer an economic loss. It does not matter whether he personally has rights in respect of that article, or whether the event happens to him personally, or whether the rights are those of someone to whom he stands in such a relationship that, despite the fact that he has no personal right in respect of the article, or that the event does not affect him personally, he will nevertheless be worse off if the object is damaged or destroyed or the event happens." This exposition of the law invariably helps us in resolving the issue of insurable interest that confronts us in this appeal. As the artist Bob Dylan famously observed, you don't need the weatherman to know in which direction the wind blows. From the various dicta we have reviewed, the better position of the law on insurable interest is to us quite clear. The insurable J42 P. 407 interest requirement does not necessarily require an insured to own the insured property outright. A less direct interest is enough. For example, it may be enough that the insured is in possession of the property, or simply that it would suffer loss if the property were to be damaged. In other words, there may be insurable interest if the insured has 'something to lose' - and it is recognized that the 'something' may be hard to quantify. Yet, the House of Lords' decision in Luceana v. Craufurd4 remains the orthodox position until such time as that position is reversed. Are we therefore liable to follow that decision? What is, in any event, clear to us is that determination of insurable interest should depend on a careful reading of the contract of insurance in each case. We have thus perused carefully the insurance quotation and the Insurance Policy in the present case. As has already been alluded to, under the insurance quotation, the proposer was "Nyimba Investment Limited and/for subsidiary and/or associated and/or affiliated companies for their respective rights and interest." J43 P. 408 We have also considered whether the partnership of Gulam Ahmed Adam Patel and Ayyub Patel trading as Nyimba Filling Station and Supermarket could fall within the definition of a subsidiary/associated or affiliated company to Nyimba Investments. There is no doubt whatsoever that there was a symbiotic relationship between the firm or business name Nyimba Filling Station and Supermarket and the appellant. The owner/partners in the former were shareholders in the latter company. Used very loosely, the term "subsidiary associated or affiliated company" could well cover a business entity like Nyimba Filling Station and Supermarket that had common ownership with the appellant. Taking a strictly technical view of the term 'company' however, leaves no room for the inclusion of the business name, Nyimba Filling Station and Supermarket, in the definition of the proposer or insured in the policy. Nyimba Filling Station and Supermarket was not a company strict° senso and could, therefore, not be viewed as a 'subsidiary, affiliated or associated company' of the appellant. P. 409 Moving on to the policy document itself, we note that under Section A - Material Damage, the 'Property Insured' is defined as: "[a] all tangible property belonging to or ceased to or hired by the insured or held in trust or on commission for which they are responsible or for which they have undertaken to arrange insurance...." This provision in our view helps us to understand what constituted insurable interest in the insured property. Our understanding of this provision is that the appellant was entitled to insure, and by logical and necessary implication, had insurable interest in all tangible property belonging to or leased to or hired by the insured or held in trust or commission for which they are responsible for or for which they have undertaken to arrange insurance (emphasis ours). It is clear to us from this provision that the insurer intended to take up insurance risk from the appellant in respect of property which was not owned by the appellant. J45 P. 410 The background to the appellant's claim to ownership of the insured property was explained in the defence to the counter-claim and amplified by the appellant's witness, Paul Bwalya, in his evidence at trial. As State Counsel Mutemwa explained in his submissions, there is a context in which the appellant referred to itself as the owner of the insured property. That context, far from being one envisaged by Lord Eldon in Luceana v. Craufurd4, is anchored in the expec tation theory. The circumstances surrounding the conclusion of the insurance policy in the present case are not disputed. The title holders of the insured property were the shareholders in the insured company. They had given the clearest indication of their intention to transfer the insured property to the appellant as their capital contribution to the appellant. To this effect a resolution of the company was passed. A letter to the tenants of the insured property advising them of the change of landlords was written. The appellant collected rentals from the tenant of the premises and deducted the relevant taxes and remitted it to Zambia Revenue Authority. It managed the insured property on J46 P.411 the understanding that it was the owner of the property. But above all, and as the pleadings well show, the appellant arranged insurance for the insured property as is clear from all the insurance documents on record particularly the debit notes and receipts. This brings the appellant within the contemplation of insurable interest under the definition of "property insured" in the policy document as we have quoted it above. For a number of reasons, we are disinclined to follow the decisions in Luceana v. Craufurc114 and in Macaura v. Northern Assurance3. First, they are English decisions that are not, in any case, binding on this court. Their persuasive value is readily acknowledged and yet, the extent to which they have been criticized is remarkable. Second, they were decided two hundred years ago in the case of Luceana v. Craufurd4, and nearly a century ago in the case of macaura4 under circumstances that no longer hold sway in today's insurance industry. The policy behind the law then has significantly changed. The definition of insurable interest has been P. 412 expanded significantly to meet the needs of a developing insurance market. Third, the line of case authorities both in England and outside England that have discarded the decision of the House of Lords is overwhelming and the justification for departure from that decision incredibly convincing. While authorities of apex courts in England will remain persuasive on this court, we shall not apply them without consideration of the circumstances in which they were decided. In the modern commercial world, property insurance is generally sought to secure indemnification and, as Wilson J, pointed out in Constitutional Insurance Company of Canada v. Kosmopolous25, it is more socially beneficial to encourage widespread insurance than to restrict it. There seems, therefore, no convincing reason in this context for interfering with freedom of contract and, in particular, for not requiring insurers to meet liabilities under contracts which they have freely entered into and for which they have received premiums. J48 P. 413 Having regard to all the circumstances in which the appellant came to regard itself as the owner of the insured property, as clarified by the learned State Counsel for the appellant, and as we have set it out earlier on in this judgment, we are persuaded by the line of authorities that follow the reasonable expectancy theory as propounded by Lord Lawrence in the Luceane case. We believe this is an appropriate case in which to depart from a decision of the apex English Court for all the reasons we have given. We hold accordingly that the appellant in this case had insurable interest in the insured property notwithstanding that it had no legal tide registered in its name at the time of insurance. Ground one of the appeal therefore succeeds. In relation to the second issue concerning the need for the insured to provide to the insurer full and accurate information at the time of seeking insurance, the law as we articulated it in Simwanza Namposhya v. Zambia State Insurance Corporation Limited8 is Still good. Insurance contracts are contracts of utmost good faith. Each party to the contract should not only J49 P. 414 disclose all the relevant information truthfully, but should also refrain from misleading the other party to the contract. Lord Mansfield in Carter v. Boehmo, to which Mr. Kamfwa alluded in his submissions, explained the duty of good faith as extending into the realm of non disclosure as well as misrepresentation. He stated that: "the reason for the rule which obliges parties to disclose is to prevent fraud and to encourage good faith. It is adopted to such facts as vary the nature of the contract, which one privately knows, and the other is ignorant of and has no reason to suspect." Where it can be shown that the insured provided false information to the insurer, or withheld vital information from the insurer, the insurer would be entitled to repudiate the policy and refuse to pay any claim arising from it. In the present case the learned trial judge, in holding that the respondent was entitled to decline to honour the appellant's claim, stated at J8 as follows: "I agree therefore with the defendant's position that the nature of the misrepresentation the plaintiff engaged in was fraudulent, rendering the claim itself fraudulent. Clearly the MO P. 415 plaintiff knew or ought to have known that the subject property in respect of which the claim was made and paid did not belong to the plaintiff or any of its Group Companies trading in Zambia but proceeded to misrepresent the facts in the claim." The learned trial judge categorized the misrepresentation as fraudulent and disallowed the appellant's claim on that basis. The approach adopted by the learned trial judge is that an untrue statement made by an insured is a misrepresentation - a fraudulent misrepresentation at that, which should justify repudiation of a claim. We do not accept such a simplified approach which in the circumstances is clearly assailable. Derry v. Peek5 still remains instructive in determining whether a misrepresentation is fraudulent or not. Yet, the learned judge did not bother to consider whether the ingredients of fraud as articulated in that leading authority were present in the case before her. It is of course not every untrue representation which is fraudulent. Where, as in the present case, specific questions contained in a proposal form are put to the insured, and they are answered incorrectly, this does not necessarily amount to a fraudulent misrepresentation and should not, ipso facto, entitle J51 P. 416 the insurer to avoid the policy. In our view, a false answer per se will not necessarily justify avoidance of the policy in every case. The law pertaining to insurance as it applies in this country on the issue of misrepresentation must take into account at least two tests: first, the materiality test and, second, the inducement test. As regards the first of these, a misrepresentation must be material, that is to say it should influence a prudent insurer in deciding first whether or not to take up the risk and second, the premium to be fixed for such risk. A representation must weigh on the critical decision to insure or not to insure, and if to insure, on what terms. In the landmark case of Pan Atlantic Insurance Co. Ltd. v. Pine Top Insurance Co. Ltd.32, the House of Lords held that: tta material circumstance is one that would have an effect on the mind of a prudent insurer in assessing the risk and it is not necessary that it would have a decisive effect on the insurer's acceptance of the risk or on the amount of premium charged. Before an insurer may avoid a contract for misrepresentation of a material circumstance it has to show that it was induced by the misrepresentation to enter into the policy on the relevant terms." J52 P. 417 What this comes to, in our view, is this: the insurer must show that either the proposer appreciated that the fact in question would have significance, or assuming that the proposer did not have that appreciation, a reasonable person making the proposal and possessed with factual knowledge by the actual proposer would think that fact to be material to the insurer. The test for materiality is thus an objective one made by reference to the attitude of a hypothetical prudent insurer. In Synergy Heath (UK) Ltd. v. CGU Insurance Plc (t/a Norwich Union) and Others35, the insured informed its insurance company some four months before renewal of its policy, that it was installing an intruder alarm. Due to administrative errors the alarm was not installed and a major fire occurred. The court held that, by failing to correct its material representation, the insured had impliedly repeated the misrepresentation on renewal. However, on the facts, the insurance company had not been induced by the misrepresentation to renew the policy and so could not avoid it. J53 P. 418 In addition to materiality test, the insurer will only be entitled to avoid a policy if they can show that they were induced by the non-disclosure or misrepresentation by the insured, to enter into contract. The inducement test, was also adopted by the House of Lords in the 1994 case Of Pan Atlantic Insurance Co. v. Pine Top Insurance Co.32, to which we have already referred. The law on inducement was however most lucidly summarized by Clerk L J in Assicurazioni Generaliss PA v. Arab Insurance Group36 as follows: In order to be entitled to avoid a contract of insurance, an insurer must prove on the balance of probabilities that he was induced into the contract by a material non-disclosure or misrepresentation. There is no presumption of law that an insurer is induced to enter into a contract by a material non- disclosure or misrepresentation. The facts may, however, be such that it is to be inferred that the particular insurer was so induced even in the absence of him. J55 P. 420 respondent to enter into the contracts of insurance? On the facts as presented to the trial court, can it be said that the decision whether or not the respondent was to accept to cover the risk dependent on who the registered owner of the insured property was? Could it likewise be said that the terms of the policy were influenced by the actual ownership of the insured property? These are the considerations that should, at the very least, have exercised the mind of the learned trial judge before she concluded that the misrepresentations were fraudulent and sufficient to justify repudiation of the claim. A perusal of the evidence tendered in the lower court does not show that the respondent, as insurer attempted even in a small way to show that the appellant's misstatement was material or that it induced them to enter into the policy of insurance. We have already quoted the definition of the insurer and the risk covered in the policy. Both are fairly broad in their coverage. The insured included the appellant and all its group companies - whoever they were. They were not specified. The J56 P. 421 policy covered all real and personal property of every kind and description intended for use by the insured including property in the care, custody or control of third parties. From this wording alone, we cannot but conclude that actual ownership of the property was not material to the policy of insurance. The respondent was not induced to enter into the policy merely because the appellant represented incorrectly that it was the owner of the insured property. Applying the materiality and inducement tests in the manner we have articulated them to the judgment of the trial court, the appellant's grievance seems to us to be a correct criticism of the lower court's judgment. The respondent's rejection of the appellant's claim cannot, therefore, be sustained as the respondent did not satisfy both the materiality and the inducement test. We uphold ground two of the appeal accordingly. In view of our holding that the appellant had insurable interest, broadly defined, in the insured property and that it did not breach its duty of utmost good faith towards the J57 P. 422 respondent, it follows that the issue in ground three; whether or not the court was wrong to allow the counter-claim, has been determined. The judge should not have allowed the counter- claim since the appellant's insurable claim in its entirety should have, for reasons we have given, been honoured by the insured. Ground three is bound to succeed also. Likewise, ground four of the appeal has been rendered moot notwithstanding any jurisprudential significance it may have. The issue of estoppel which the appellant was pressing through ground four does not arise, given our finding that the respondent was bound to honour the claim. In sum, we hold that this appeal succeeds. The appellant is entitled to have their claim on the all Risk Insurance Policy No. P/10/9001/902/10/63 honoured by the respondent in full in accordance with its terms. We note in passing that while the claim in respect of material damage to the insured property was adjusted on recommendation of the Loss Adjustor from US$798,776.00 to US$503,781.00 which was in fact paid, no similar adjustment was advised by the Loss Adjustor in regard J58 P. 423 to the sum of US $320,483.00 in respect of business interruptions, nor had that sum been contested in any way by the insurer as not being the sum insured. The appellant shall therefore be entitled to recover the withheld portion of the sum insured together with interest at LIBOR or 6% per annum, whichever is the less, from 13th September 2013 being the date of the writ to the date of judgment; thereafter at short term bank deposit rate till payment. We also award costs to the appellant, to be taxed in default of agreement. ALILA, SC SUPREME COURT JUDGE C. RAW NGA SUPREME COURT JUDGE K. M TUNA SUP ME(COYIRT JUDGE