The first defendant, Alldown was engaged to carry out certain demolition and excavation works for the claimant, Shinedean’s premises. The excavation works caused the wall of an adjoining property to collapse. Alldown notified its Insurer, AXA of the collapsed wall in September 2002.

Shinedean paid the owner of the adjoining property a substantial sum in settlement and then obtained a default judgment against Alldown for damages to be assessed. AXA refused to indemnify Alldown under the relevant insurance policy. The policy obliged Alldown to provide all necessary information and assistance to AXA, but contained no express time limit for the provision of information. Although some limited documents had been provided by June 2003, AXA considered that Alldown had failed to provide all necessary documentation and was therefore in breach of a condition precedent in the policy. AXA was joined as a party to the proceedings.

The trial judge held that it was an implied condition of the policy that documentation should be provided within a reasonable time. He also decided that a significant amount of information had not been provided to AXA until some two and a half years or more after the collapse of the wall. However the judge decided there was no breach of the reasonable time obligation because one of the tests for judging reasonableness was prejudice to the insurer, and since the insurer in the present case had suffered no prejudice, Alldown’s claim would succeed. AXA appealed.

Is the question of whether AXA had been prejudiced relevant to deciding what was a reasonable time for compliance?