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Shore Buses Ltd v Queensland Insurance (Fiji) Ltd [2004] FJHC 305; HBC0475j.2002s (31 August 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC 475 OF 2002

Between:

SHORE BUSES LIMITED
Plaintiff

-v-

QUEENSLAND INSURANCE (FIJI) LIMITED
Defendant

Mr. H. Nagin for the Plaintiff
Mr. F. Haniff for the Defendant

JUDGMENT

By originating summons dated 25 November 2002, Shore Buses Limited (the ‘plaintiff’) is seeking the following declaration and order against Queensland Insurance (Fiji) Limited (the ‘defendant’):

1. “A declaration that the Defendant is liable to indemnify the Plaintiff under the Defendant’s Comprehensive Motor Vehicle Insurance Policy No. 0075543 over its bus registration No. CP433 for passenger risk liability up to a maximum of $100,000 in respect of each claim arising out of a road accident.

2. An Order that Defendant do indemnify the Plaintiff against the interlocutory judgment entered against the Plaintiff in Civil Action Nos. 206 of 1997 and 207 of 1997 at the High Court, Suva and against all damages assessed thereunder and all costs to the limit of $100,000 in each case.”

The plaintiff has filed an affidavit in support of the summons sworn by Jasper Singh (‘Mr. Singh’), the Manager of the Plaintiff Company. An affidavit in Reply has been filed by John Hunt, the General Manager of the defendant Company. This was followed by an Affidavit in reply from Mr. Singh.

As ordered, both counsel filed written submissions for Court’s consideration.

A. BACKGROUND FACTS:

The plaintiff’s counsel Mr. Nagin has stated clearly the background facts in his written submission as stated hereunder:

“The Plaintiff operates a Bus service and was at all material times the registered proprietor of Motor Vehicle CP433 for which a comprehensive insurance cover was carried by the Defendant. The Comprehensive Policy No. 0075543 also had a passenger liability extension limited to $100,000.00.

During the currency of the said Insurance Policy Bus CP433 was involved in an accident and some of the passengers received injuries. The Plaintiff’s driver appears to have lost control of the Bus CP433 and the Bus overturned. The driver was convicted for dangerous driving by the Suva Magistrate’s Court and fined a sum of $100.00.

The Plaintiff was subsequently served with Writs of Summons in High Court Civil Action Nos. 206 of 1997, 207 of 1997, 254 of 1998, 255 of 1998 and 257 of 1998. These writs were filed by persons who were passengers in Bus CP433 and received injuries in the said accident. In Civil Action Nos. 206 of 1997 and 207 of 1997 interlocutory judgments were entered against the Plaintiff with damages to be assessed.”

The accident took place at Walu Bay on 3 May 1996 when several passengers travelling in the bus sustained injuries and have filed separate actions for negligence against the plaintiff. Some of the injured passengers in the bus had sought damages in the abovementioned actions.

B. THE ISSUE

By originating summons the plaintiff is now seeking to be indemnified by the defendant in terms of section 6 of the Policy according to its interpretation.

The defendant maintains that section 6 is restricted to the sum of $10,000.00 to all claims in one accident.

The answer to the question asked in the summons depends upon the true construction of the said section 6 of the Policy in relation to the agreed facts.

C. PLAINTIFF’S CONTENTION

Mr. Nagin submits that section 6 of the Policy does not either apply to restrict the sum of $100,000.00 to all claims in one accident ‘nor does it apply to passengers’.

He says that the defendant’s argument that the liability is limited to $100,000.00 ‘does not make much sense’ when one looks at the Compulsory Third Party Policy where each passenger is covered for $4000.00. He says that when the Bus Company “purchases additional cover under the Comprehensive Policy it seeks to extend cover of $4,000.00 for each passenger to $100,000.00 for each passenger.”

Counsel cites authorities to say that the plain and ordinary meaning of the policy must be given effect to (vide New India Insurance Company Limited v Shambhu Prasad FCA Civil Appeal No. 0010 of 1998). He further submits that if there is genuine ambiguity then using the ‘contra proferentem’ rule, that ambiguity must be resolved in favour of the insured (New India Insurance Company Limited v D. Gokal & Company Limited FCA Civil Appeal No. ABU0035 of 2001S). This was a case where the insurance company was required under the passenger liability extension of the comprehensive Policy (like the present case) to indemnify the ‘insured’ in relation to a personal injury claim by a passenger in the vehicle.

Mr. Nagin submits that the case law referred to by Mr. Haniff in his submissions have no application to this case.

Counsel maintains that in the light of the authorities in this case ‘each injury to a passenger was a separate accident arising from a separate event but arising from one originating cause. Even if section 6 of the Policy applied (but it is strongly submitted that it does not) the limitation there does not limit the Defendant’s liability to an aggregate of $100,000.00 but to $100,000.00 to each passenger.’

He says that each policy needs to be construed on its own wording. For the above reasons he submits that the defendant should indemnify the plaintiff in respect of all the claims for personal injury arising out of the accident on 3 May 1996 involving Bus CP433 to the maximum of $100,000.00 in respect of each claim.

D. DEFENDANT’S CONTENTION

The defendant submits that the injury to each passenger in the bus constituted ‘an accident’. Injuries to several passengers constituted a ‘series of accidents arising from one event, that is, the overturning of the bus on its side.

Therefore, counsel says that the defendant is only liable to a maximum of $100,000.00 in respect of the injuries caused to the passengers of bus Registration No. CP433 arising out of the accident.

He submits that the total of any liability of the insurer to indemnify the plaintiff in respect of all claims in respect of or arising out of injuries suffered by the passengers by reason of the bus overturning to its side is limited to $100,000.00.

E. DETERMINATION OF THE ISSUE

There is a very narrow but an important issue for the Court’s determination. It is the interpretation of section 6 of Policy No. 0075543 which is in question in this case.

(i) Relevant provisions in the Policy

The said section 6 under the caption ‘Your Legal Liability (Personal and Property) and Law Costs’ reads as follows:

“6. If as a result of an accident caused by or in connection with the use of your vehicle, or a caravan or trailer which it is towing, you are held to be legally responsible for injury, or damage to property of another, Q.I. will pay those damages.

Q.I. will also pay all Law Costs, charges and expenses incurred by you with our written agreement or which you may be ordered to pay, provided that any legal action is defended with our written agreement.

Q.I. will not pay damages for any injury sustained by any relative or friend who lives with you, or with whom you live, nor any employee of yours, nor any person driving the vehicle or entering or leaving the vehicle nor being carried as a passenger.

Q.I. will not pay for damage to property owned by you, in your custody or control, or which you are transporting.

This section does not protect you against liability for which a Third Party Insurance policy is required in accordance with the Motor Vehicles (Third Party Insurance) Act 1966. It will protect you for any amounts in excess of the amount insured by the Third Party Insurance policy.

The maximum amount Q.I. will pay under this section for injury or damage to property is limited to $30,000 in relation to any one accident or series of accidents arising from the one event.”

In regard to ‘Passenger Risk’ the following appears to and forms part of the Policy:

It is understood and agreed that, notwithstanding anything contained therein to the contrary and subject to the Limit of Indemnity stated in the Schedule, the indemnity granted under Item 6 of the Section “What You Are Covered For” of this Policy extends to cover the insured’s liability at law for death or injury to persons (other than persons driving or any relative of the Insured or any employee of the Insured) being in or on the vehicle described herein entering into or alight from such vehicles.

But there is the further provision in the Policy in item 11 which expressly states under the caption “Extensions, Exclusion, Limitations, Endorsements and/or Warranties”: “Passenger Risk Liability $100,000, Third Party Property Damage $1,000,000”.

I think that if just one passenger was injured the interpretation of section 6 may not have arisen for the amount on the Policy would perhaps have been sufficient to cover the victim. But because a number of passengers were injured the question for determination is whether the $100,000.00 is limited to all the claims in this one accident or is it up to $100,000.00 for each injured person.

(ii) Objects of personal accident insurance

It is the object of personal accident insurance to provide for payment of a sum of money in the event of the insured sustaining injury. Under ‘Passenger Risks’ in the Policy (as already stated above), it says that the ‘Policy extends to cover the insured’s liability at law for death or injury to persons (other than persons driving or any relative of the Insured or any employee of the Insured) being in or on the vehicle described herein entering into or alight from such vehicles’.

There is no ‘definition’ of the word ‘accident’ in the Policy except what the insurer will pay for ‘accidental damage’ to the vehicle.

It is the defendant’s contention that the maximum amount payable in respect of the ‘an accident’ is $100,000.00 in relation to any one accident or series of accidents arising from the one event.

Mr. Haniff referred the Court to a single Judge’s decision in the Canadian case of Richardson Construction Co v London and Lancashire Guarantee and Accident Co [1939] 2 D.L.R 738 where he says a liability indemnity policy contained a limit of $1,000 ‘for any one accident or series of accidents arising out of the one cause ..’ He says that this clause is similar to the exclusion clause in issue in this case but this is not so.

The facts in Richardson are as follows (as stated by Mr. Haniff):

The Plaintiff was a Construction Company. It entered into a contract with the Corporation of the City of Toronto for the construction of a bridge.

During the construction of the bridge, the Plaintiff drove piles by means of a pile driving machine. Pile-driving operations extending over three months had caused damage to four houses owned by four different people. The four owners alleged, and it was found, that the vibrations resulting from the pile driving had damaged their house.

The issue to be decided was whether the maximum amount the insurer was liable to pay to the four property owners for damage caused by the vibrations was $1,000.00.

There it was held that:

“under an insurance policy limiting insurer’s liability to $1000 “for any one accident or series of accidents arising out of one cause,” insurer was liable for $1000 only, the escape of vibrations over several months being “one cause” for the series of accidents. There was no ambiguity in the clause and hence no ground for application of the rule of construction contra proferentem."

In his judgment Mackay J at 744 said:

“In this case the intention is clear and there is no ambiguity. Hence, if there is an accident in which several persons are injured, the aggregate liability of the insurers is measured by the specified maximum, and the assured has no right to claim a larger indemnity”.

(iii) Rules of construction of Policy

I adopt the following statement of Myers, C.J. in General Accident Fire and Life Assurance Corporation. Limited v. Dowman and Others [1940] N.Z.L.R. 797 Sup. Court at 807):

“A person asking for a “passenger indemnity” would expect a complete indemnity. If he read the overleaf note in the proposal, I think his assumption would be that he was obtaining a complete indemnity, and I see nothing in the passenger-indemnity clause itself to contradict what is said in the overleaf note in the proposal.”

A Policy of insurance is a contractual document. It is the actual language that is used in it must be construed. On this aspect it is stated as follows in Hals. 3rd Ed. Vol. 22 para 401 (page 212):

“The court’s function, when presented with a conflict between the parties as to what the policy means, is to interpret what the parties have in fact said in their contract, not to postulate what the parties, or one or other of them, might have had in his mind when entering into the contract, still less to speculate on the language which might have been used to express this, that, or the other, intention. What the parties have in fact said is comprised in the words they have used; the problem is to ascertain what the words mean (a). It is not the function of the court to make for the parties, by a process of construction, a reasonable contract which they have not made for themselves (b). If the words are clear, precise and unambiguous, effect must be given to them, however unreasonable the result may be (c).”

In Bradburn v The Great Western Railway Company 1 C.L.R. 1874 1 at 2 Bramwell B in his judgment said with reference to the effect of premium one paid to insure said:

In Dalby v. India and London Life Assurance Company (4) it was decided that one who pays premiums for the purpose of insuring himself, pays on the footing that his right to be compensated when the event insured against happens is an equivalent for the premiums he has paid; it is a quid pro quo, larger if he gets it, on the chance that he will never get it at all. That decision is an authority bearing on the present case for the principle laid down in it applies, and shews that the plaintiff is entitled to retain the benefit which he has paid for in addition to the damages which he recovers on account of the defendants’ negligence.

The following statement of Pigott B in his judgment in Bradburn supra at 3 is pertinent when he said that ‘it is not the accident, but his contract, which is the cause of his receiving’ the money:

“The plaintiff is entitled to recover the damages caused to him by the negligence of the defendants, and there is no reason or justice in setting off what the plaintiff has entitled himself to under a contract with third persons, by which he has bargained for the payment of a sum of money in the event of an accident happening to him. He does not receive that sum of money because of the accident, but because he has made a contract providing for the contingency; an accident must occur to entitle him to it, but it is not the accident, but his contract, which is the cause of his receiving it". (emphasis mine)

There is a need for insurers to carefully consider the adequacy of documents to the assured at the time when the contract is made.

The policy of insurance should be construed in accordance with the natural and ordinary meaning of the words and phrases used in it but there are exceptions to this. It is the commonly understood and popular meaning from the perspective of ordinary intelligent person construing the words in a proper way in the light of the relevant circumstances. (Hutton v Watling [1948] Ch 398 at 403).

On interpretation, the following passage from the well known passage from the dissenting judgment of Gibbs J in Australian Broadcasting Commission v Australian Performing Rights Association Limited [1973] HCA 36; (1973) 129 C.L.R. 99 is pertinent:

"It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, even though the construction adopted is not the most obvious, or the most grammatically accurate..”

(iv) Construction of wording of section 6

What construction does one place on the relevant clause in the Policy is the question?

It is not denied by the defendant that there is the passenger extension liability of $100,000.00. But the defendant’s contention is that the $100,000.00 is the maximum in respect of each accident whereas the plaintiff says that it is the maximum in respect of each claim by ‘any passenger’.

The question is not what that intention was on the issue when the insurer issued the Policy, but what is that true meaning of what it said.

We are concerned with the plaintiff which is a ‘bus Company’. It carries passengers in its buses all the time. The likelihood of accidents are there and the plaintiff would naturally take out appropriate insurance for passengers. Apart from common sense, I am sure the parties must have envisaged that more than one passenger is likely to be injured in any accident. If the defendant did not envisage this then it should have. More likely than not that it did bear this in mind and took high premium accordingly.

Therefore on the facts of this case, words and phrases in the Policy need to be construed in the context in which they appear as the terms used can take a different meaning depending on the context in which they appear as in the present case.

In these circumstances Mr. Nagin’s argument seems to have some merit when he said:

“Under the Compulsory Third Party Policy each passenger is covered for $4000. When the Bus Company purchases additional cover under the Comprehensive Policy it seeks to extend the cover of $4,000.00 for each passenger to $100,000 for each passenger.”

In this case if the defendant did not mean to cover each passenger in that amount of $100,000.00 it could and should have said so by appropriate words. It did not do anything of the kind.

Both counsel referred to case law bearing on the issue before me. The case of Richardson (supra) was a Canadian case (single Judge) whereas the case Axa Reinsurance v Field [1996] 3 All E.R. 517 and Candle v Sharp [1995] EWCA Civ 26; [1995] I.R.L.R. 433 are House of Lords and Court of Appeal cases respectively. Mr. Nagin discusses the various terms and words used in these cases and distinguishes Richardson’s case. He came to the conclusion in the present case that each “injury to a passenger was a separate accident arising from a separate event but arising from one originating cause.”

In Richardson (supra) Mackay J referred to Welford’s book Accident Insurance 1st Ed p.476 which discusses the matter as follows:

“Accordingly, if several persons are injured, the aggregate liability of the insurers is not limited to the sum specified in the policy; but they are liable to pay the damages awarded to each person injured, not exceeding in each case, the maximum specified (South Staffordshire Tramways Co. v Sickness & Accident Assurance Association, Limited [1891] UKLawRpKQB 27; [1891] 1 Q.B. 402 C.A.). The policy may, however expressly limit the liability of the insurers to a specified maximum in respect of any accident or series of accidents arising out of one and the same cause, or in respect of any claim or claims arising out of any one accident or occurrences.” (Allen v London Guar & Acc. Co (1912), 28 T.L.R. 254).

In the said Court of Appeal case of South Staffordshire (supra) one of the questions for the Court was “whether the injury caused to each of the persons constituted a separate accident within the meaning of the Policy”.

In that case one of the vehicles specified in the Policy overturned, and thereby caused injuries to about forty persons and the plaintiffs became liable to pay compensation and expenses to the extent of 833l.

There the plaintiffs, tramcar company, effected with the defendants an insurance against “claims for personal injury in respect of accidents caused by vehicles for twelve calendar months from November 24, 1887” to the amount of “1500l. in respect of any one accident but not exceeding in all the sum of 1500l in any one year”. One of the tramcars was overturned and forty persons were injured when the plaintiffs became liable to pay claims to the amount of 833l on the Policy.

There one of the questions for the Court was “whether the injury caused to each of the said persons contributed a separate accident within the meaning of the policy”.

In my view the answer to that question and to the issue before me lies in the judgment of Lord Esher M.R in South Stafforshire (supra – p407) when he said:

These were claims for personal injury, i.e., injury to the person, and each person injured claimed for injuries in respect of an accident to his person caused by a vehicle. If several persons were injured, I think, upon the true construction of this policy, there were several accidents. I agree with the view expressed by Lawrence, J. For these reasons I think that the plaintiffs are entitled to judgment for the larger amount, and therefore the appeal must be allowed.

The view that was expressed by Lawrence J in the Court below and which was also accepted by Lord Esher reads thus:

It is, I think, to be borne in mind that the object of the policy is to provide for the assured an indemnity against claims made upon them for injuries resulting from the negligence of their servants. This being so, I think it more appropriate to hold that the preceding word, “accidents,” is used from the point of view of the several claimants upon the assured for injuries, each of whom claims in respect of a specific accident to himself, and not from that of the insurers, and that therefore “any one accident” means any accident to any one claimant upon the insured. (emphasis mine)

Bowen L.J. said:

“I think that Lawrence J was right in thinking that “accident” meant in the policy the mischief suffered by a person injured to his person or property.”

Further Fry L.J at p408 said:

“I think the word “accident” is there used in the same sense as in the earlier part of the policy, and that the meaning is “in respect of any single injury to person or property accidentally caused.”

Bearing in mind the wording of the relevant clause and the context in which the action was brought (case of vibration) in Richardson, I am of the opinion that it can be distinguished from the case in hand.

I accept the reasoning behind the Court of Appeal decision in Staffordshire (supra) for there also the wording of the relevant clause resembles very closely the words in the instant case.

F. CONTRA PROFERENTEM RULE

Because ‘contra proferentem’ rule has been introduced in the submission by Mr. Nagin I shall deal with this aspect to see if this Rule applies in this case.

Although looking at the facts and circumstances of this case and applying the rule of construction I do not find any ambiguity in the Policy in regard to the issue, nevertheless, lest there be any doubt the maxim ‘verba chartarum fortius accipiuntur contra proferentem’ (called ‘contra proferentem’ rule) comes into play. If it does then, I refer to this hereunder to see how it fits in the circumstances of this case.

This contra proferentem rule permits a court to resolve a genuine ambiguity against an insurer which is the author of the contract in dispute. This rule is only applicable when there is a genuine ambiguity in a policy and therefore reserved for those cases where the meaning of a word or phrase is entirely unclear. (Paper by Michael Quinlan on ‘Insurance Policies Wording and Interpretation – 1-3 August 2003 FLS Convention.

In Richardson (supra at p.744) Mackay J stated as to when contra proferentem should be applied. He said that if the words “$1000.00 for any one accident or series of accidents arising out of one cause” is not free from any ambiguity ‘a construction ‘contra proferentem’ must be applied’. His Lordship then went on to say what he understands contra proferentem to mean, namely:

That if there is any ambiguity in the language used in a policy, it is to be construed more strongly against the party who prepared it, that is, in the majority of cases against the company. A party who proffers an instrument should not be permitted to use ambiguous words in the hope that the other side will understand them in a particular sense and that the Court which has to construe them will give them a different sense and therefore where the words are ambiguous they ought to be construed in that sense in which a prudent and reasonable man on the other side would understand them. It is important with reference to insurance that there should be a tendency to hold for the assured rather than for the company where an ambiguity arises on the face of the policy.

In his book Insurance Law in Australia and New Zealand, Sutton deals with ‘contra proferentem’ rule at p319 (1980). He said that in Provincial Insurance Co. Ltd v Morgan [1933] A.C. 240, 252, Lord Wright referred to the ‘difficulty faced by an assured in fitting together the disjointed parts of the contract of insurance so as to get a true and complete conceptions of what were his rights and duties and what acts on his part might involve a forfeiture of the insurance’.

Framing of Policy

How to frame the ‘policy’ has been very well put thus by Lord St. Leonards in Anderson v Fitzgerald (1853) 411 L.C. 484 at 510-11:

“A policy ought to be so framed that he who runs can read. It ought to be framed with such deliberate care, that no form of expression by which, on the one hand, the party assured can be caught, or by which, on the other, the Company can be cheated, shall be found upon the face of it: nothing ought to be wanting in it, the absence of which may lead to such results. When you consider that such contracts as this are often entered into with men in humble conditions of life, who can but ill understand them, it is clear that they ought not to be framed in a manner to perplex the judgment of the first Judges in the land, and to lead to such differences of opinion among them.”

The need to explain the policy to the assured is very important as stated by His Lordship in Anderson (supra) at p.507 where he spoke of stringent provisions which, “unless they were fully explained to the parties, will lead a vast number of persons to suppose that they have made provision for their families by an insurance on their lives and by payment of perhaps a very considerable portion of their income, when in point of fact from the very commencement, the policy was not worth the paper upon which it was written.”

Insurer’s duty

The insurer’s duty are clearly stated by Sutton (supra at p320) thus:

“Since the insurer has the matter in his own hands, since he frames his own policies and words his own questions, and makes his own stipulations, he must be bound to the exact language used in the contract documents. It is his business to see that precision and clarity are attained and if he fails in this, any ambiguity is resolved by adopting the construction most favourable to the assured in accordance with the maxim ‘verba chartarum fortius accipiuntur contra proferentem’. In other words, the contract of insurance is strictly construed against the person (the insurer) relying on it. If a question is in a proposal or the language of a warranty or the wording of a condition or other term in the policy is ambiguous or obscure or uncertain in application or misleading, it must be construed against the insurer who has drawn the policy and has inserted the question or term for his own protection.”

In a case where it is clear that the relevant provision has only one meaning the clause prevails, but if it is open to two constructions it is for the Court to construe that condition ‘contra proferentem’, that is, in the sense in which a prudent and reasonable assured would understand the words used, (Robinson v Evans Bros. Pty Ltd [1969] VicRp 110; [1969] V.R. 885, 895).

As has been said, the rule exists only “for the purpose of removing a doubt, not for the purpose of creating a doubt or magnifying an ambiguity, when the circumstances of the case raise no difficulty”. [Cornish v Accident Insurance Co. [1889] UKLawRpKQB 136; (1989) 23 QBD 453, 456].

G. CONCLUSION

To conclude, for these reasons and on the authorities I find that the intention in this case is clear and there is no ambiguity. The insurer has not “expressly” limited its liability as submitted by counsel for the defendant. So, in this case where several persons are injured, the liability of the insurer is measured by the specified maximum for each injured passenger and the plaintiff (assured) will have no right to claim a larger indemnity in the case of each injured person.

Although I find there is no ambiguity in the construction of the said section 6 in the policy, but if, I am found to be wrong in that regard, then the document must be construed contra proferentem which means to say against the defendant who put the language of sections 6 in the document upon which it is relying and upon which anybody relies. As was said by Willes J in Fitton v Accidental Death Insurance Co [1864] EngR 591; (1864) 17 CBNS 122 at 135:

‘it is extremely important with reference to insurance, that there should be a tendency rather to hold for the assured then for the company, where any ambiguity arises upon the face of the policy.’

In Simmonds v Cockell [1920] 1 KB 843 at 845 Roche J said:

“It is a well known principle of insurance law that if the language of a warranty in a policy is ambiguous, it must be construed against the underwriter who has drawn the policy and has inserted the warranty for his own protection.”

Although cases have been referred to and interpretation given, the terms and words used are not always identical to those construed in an earlier case or else differ on immaterial details. It has been stated that “authorities may determine principles of construction, but a decision upon one form of words is no authority upon the construction of another form of words.” (Re Coleman’s Depositories Ltd and Life and Health Assurance Ass. [1907] UKLawRpKQB 125; [1907] 2 K.B. 798).

As MacGillivray on Insurance Law 9th Ed (1997) states at p265:

“It must, indeed, be borne in mind that a clause cannot be said to be “precisely similar” to another unless its context is the same. Words are always to be construed in their context, and a difference in context will often afford valid grounds for distinguishing an earlier decision, though it dealt with words which also occur in the policy under consideration.”

Bearing the above statements, Richardson case (supra) and other cases can be distinguished. Earlier cases were dealt with on their particular facts and in the context in which ‘accident’ or ‘accidents’ occurred.

Further to what I have stated hereabove in the construction of policies, it is permissible to imply a term and this is expressed very succinctly by MacGillivray (ibid at 269) thus and it is apt:

“Where a policy does not by its express terms cover a situation which has arisen, it is permissible to imply a term which does cover those facts if either the proper inference from the reading of the policy as a whole is that the parties would have so expressed themselves if they had addressed their minds to the possibility of those particular facts arising, or on the grounds that it was necessary for the business efficacy of the contract. A court will not imply a term into a contract merely because the contract might be considered more reasonable as a result, but no term will be implied unless it is reasonable.”

For the reasons given and the authorities referred to above by me the plaintiff succeeds in its applications to be indemnified by the defendant under the plaintiff’s comprehensive Motor Vehicle Insurance Policy No. 0075543 over its bus registration No. CP433 for passenger risk liability up to a maximum amount of $100,000.00 in respect of each claim arising out of the said road accident on 3 May 1996 as prayed in item (i) of the originating summons.

ORDERS

It is ordered that the defendant indemnify the plaintiff as in item (i) of the originating summons And it is further ordered that the defendant indemnify the plaintiff against the interlocutory judgment entered against the plaintiff in Civil Action Nos. 206/97 and 207/97 at the High Court, Suva and against all damages assessed thereunder and all costs to the limit of $100,00.00 in each case. Costs are awarded against the defendant in the sum of $500.00 to be paid to the plaintiff’s solicitors within 14 days.

D. Pathik
Judge

At Suva
31 August 2004