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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION
CIVIL ACTION NO. HBC0173 OF 2003L
BETWEEN:
GOVIND SAMI
Plaintiff
AND:
DOMINION INSURANCE LIMITED
Defendant
Counsel for the Plaintiff: Mr. S. Nandan
Counsel for the Defendant: Mr. A.K. Narayan
Date of Hearing: 5 April 2004
Date of Judgment: 26 April 2004
JUDGMENT
APPLICATION
The plaintiff, by Originating Summons, seeks an order that the defendant pay the sum of Sixty Six Thousand, Six Hundred and Ten Dollars ($66,610.00) pursuant to a judgment of the court of 3rd October 2002, upon the basis that the defendant was the third party insurer of the judgment debtor to those proceedings.
BACKGROUND
The plaintiff seeks as against the defendant the satisfaction of the judgment obtained by the plaintiff in Civil Action No. 349 of 1997. In that action the plaintiff proceeded against Karl Francis O’Brien as the driver of motor vehicle registration No. BV 174 and Seru Serevi as the alleged owner of that vehicle. Action was brought to recover damages for personal injuries sustained by the plaintiff in a motor vehicle accident. The plaintiff was driving his motor vehicle registered No. BS 260 at Nabou on 15th October 1994.
The matter was heard by Gates J. on 22nd February 2001 at Lautoka. The action was uncontested and judgment was delivered on 3rd October 2002 where the plaintiff was awarded the sum of Sixty Six Thousand, Six Hundred and Sixty One Dollars ($66,661.00) inclusive of costs.
The defendant as a compulsory third party insurer had issued a compulsory third party motor insurance policy under the Motor Vehicles (Third Party) Insurance Act [Cap. 177] with respect to motor vehicle No. BV 174 and that policy was not due to expire until 12th September 1995.
On 14th October 1994, Seru Serevi traded that motor vehicle (BV 174) to Asco Motors and took delivery of another motor vehicle registered No. CK 795 from Asco Motors.
There was no transfer of the compulsory third party motor insurance policy at the time of trade-in and whilst the transfer form with the respect to the vehicle registration was executed by Seru Serevi. The transfer was not registered at the time the accident occurred and accordingly the records of the Land Transport Authority record Seru Serevi as the registered owner of the vehicle at the time of the accident occurred on 15th October 1994.
The plaintiff makes its claim relying on section 11 of the Motor Vehicles (Third Party) Insurance Act (Cap. 177) together with the provisions of section 19(8) of the Traffic Act (Cap. 176) as to the legislative provisions see later. The defendant resists the claim on the basis that Seru Serevi had no insurable interest in vehicle registered No. BV 174 at the time of the accident and is therefore not entitled to the benefit and the provisions of the compulsory third party insurance policy and further that the compulsory third party insurance lapsed on the sale by trade-in of the vehicle BV 174 to Asco Motors by Seru Serevi and also that Seru Serevi was in fact not the owner of the vehicle at the relevant time and that the presumption created by the provisions of section 19(8) of the Land Transfer Act therefore rebutted.
LEGISLATIVE PROVISIONS
Motor Vehicles (Third Party) Insurance (Act)
Section 11(1) of that Act provides that: -
"If, after a certificate of insurance has been delivered under the provisions of subsection (4) of section 6 to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under the provisions of paragraph (b) of subsection (1) of section 6, being a liability covered by the terms of the policy, is obtained against any person insured by the policy, then, notwithstanding that the insurance company may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurance company shall, subject to the provisions of this section, pay to the persons entitled to the benefit of such judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable by virtue of any written law in respect of interest on that sum.”
Section 11(2) sets forth various conditions precedent with respect to the liability created by section 11(1).
The defendant does not rely upon these conditions precedent merely on the fact that Seru Serevi had no insurable interest at the time of the accident and that the policy had lapsed on the sale by trade-in of the vehicle, registered No. BV 174.
Section 6(1) of the Motor Vehicles (Third Party) Insurance Act provides: -
“(1) In order to comply with the provisions of this Act, a policy of insurance must be a policy which –
(a) is issued by an approved insurance company;
(b) insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle:
Provided that –
(a) such policy shall not be required to cover –
- (i) liability solely arising by virtue of the provisions of the Workmen’s Compensation Act; or
- (ii) save in the case of a passenger carried for hire or reward in a passenger vehicle or where persons are carried by reason of or in pursuance of a contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting on to or alighting from the motor vehicle at the time of the occurrence of the event out of which the claim arise; or
- (iii) liability in respect of the death of or injury to a relative of the person using the vehicle at the time of the occurrence of the event out of which the claim arises, or to a person living with the person so using the vehicle as a member of his family; in this paragraph “relative” means a relative whose degree of relationship is not more remote than the fourth;
- (iv) any contractual liability;
(b) .............”
Section 19(8) of the Traffic Act [Cap. 176] relevantly provides: -
“The person in whose name a motor vehicle is registered shall, unless the contrary be proved, be deemed to be the owner of such motor vehicle.”
THE INSURANCE POLICY
The certificate of insurance with respect to the subject vehicle has not been produced to the court as it is apparently not available. The defendant has produced without objection a certificate of insurance said to be in terms identical to that issued with respect to the subject vehicle. That certificate contains on it the following:
Make ...............................................Body Type.................................................
Engine No........................Chassis No.....................Registered No. .....................
.................................................................................and to terminate at 4 p.m.on
.......................................................................................................................
Provided that the person driving holds a licence permitting him to drive a motor vehicle for every purpose for which the use of the above motor vehicle is limited under paragraph 5 below or at any time within the period of thirty days immediately prior to the time of driving has held such a licence and is not disqualified for obtaining such a licence.
6. AMOUNT OF PREMIUM PAID FOR ISSUE OF POLICY - $.........
Attached to the certificate is the schedule, which details classes of vehicles.
From this it would appear that the policy relates to a particular motor vehicle and a particular owner and it is limited as to the persons who might drive the vehicle and the uses to which the vehicle might be put.
Whilst the evidence in this matter is indeed very limited from both the plaintiff and defendant’s positions it would appear from the evidence that Seru Serevi traded-in the motor vehicle registered No. BV 174 to Asco Motors and purchased motor vehicle registered No. CK 795. This transaction appears to have been completed on 14th October 1994. The details of the transaction and not apparent from the evidence, however, there is nothing before me to indicate that the transaction was anything other than completed on 14th October 1994.
This being so it would appear that the motor vehicle, the subject of the certificate of insurance was owned by Asco Motors at the time the accident occurred on 15th October 1994. At that time, it is also apparent from the evidence that the vehicle was being driven by Karl Francis O’Brien who is described as being a sales representative of Asco Motors.
At the time of the transaction, about 1600 hours on 14th October 1994, Seru Serevi handed to Mr. O’Brien the transfer form with respect to the registration of motor vehicle No. BV 174.
The defendant submits that at the time of the accident, Seru Serevi had no insurable interest in the motor vehicle as he had the divested himself of that interest at 1600 hours the previous day.
It is further submitted by the defendant that an insurable interest is a requisite of a motor vehicle third party insurance policy.
As was pointed out by Stuart J. in Raj Kumari v Q.B.E. Insurance Co. Limited – 24 F.L.R. 182: -
“Since the policy purports to have been issued under Motor Vehicle (Third Party Insurance) Ordinance which is now properly referred to as an Act, and since the plaintiff relies upon that Act in this action, it now becomes necessary to consider the terms of that stature. It was passed by the Legislative Council of Fiji while Fiji was yet a British Colony, in 1954, and was obviously based upon the British legislation designed to make provision for compulsory insurance against third party risks arising out of the use of motor vehicles. The scheme of the act was that it became a criminal offence for any person to use or cause or permit to be used a motor vehicle unless there was in force in relation to the use of that motor vehicle such a policy of insurance in respect of third party risks as complied with the statute. I think that the first point to be noted is that what was required was a policy of insurance which complied with statute. The punishment for contravention of this requirement was a fine or imprisonment or both, and what was more important, and a far more serious penalty to a user of a motor vehicle, he was to be disqualified from driving for at least twelve months unless a court for special reasons thought fit to order otherwise. Then the statute proceeded to deal with the policies of insurance. Section 6(1) provided that the policy was to be issued by an approved insurance company – that is one approved by the Minister for the purposes of the statute – and subsection (b) of section 6(1) provides that the policy is to insure –
Such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle.
Then there is a proviso which excepts four matters which are not required to be covered...
Subsection (3) is as follows:
An approved insurance company issuing a policy of insurance under this section shall be liable indemnify the person/or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes or persons.”
As stated above the policy of insurance is, in my opinion, with respect to a particular motor vehicle as that motor vehicle is described in some detail in the policy document and as is also detailed above with respect to a named person being the owner of that vehicle.
In Rogerson v Scottish Automobile & General Insurance Co. Ltd (1931) All E.R. 606 Lord Buckmaster at p. 607 said: -
“That he would have been entitled to indemnity had the car that he was driving at the time of the accident been the car that was insured is beyond dispute, but the insurers say that their liability had ceased because the car which had been the subject of the original insurance was no longer in the assured’s possession. In order to see if that contention is right it is necessary to examine what the terms of the policy were. The policy begins with the schedule setting out all details with regard to the car, and then it effects a series of insurances with regard to different classes of matters. These were (a) as regards claims made by the public; (b) as regards the car itself; (c) as regards its motor-house, and (d) as regards personal accident; in addition to which there was, by virtue of an endorsement, a further insurance effected under the Employers’ Liability Act or the Workmen’s Compensation Act in favour of the driver of the car.”
At p.608 His Lordship said: -
“But if it be assumed that the original car be sold and another car taken in its place, the result would be, if the assured’s contention were correct, that it might be possible to shift the insurance from car to car during the whole period of twelve months for which the policy runs, and that although there is no express limitation on the nature of the car that may be regarded as a substitute.
I do not, for a moment, believe that that was the intention of this policy, and, although no one disputes that it must be strictly construed against the insurers, even when so strictly construed, in order to make the provisions reasonable it is impossible to give it the meaning for which the assured contends.”
In Tattersall v Drysdale [1935] All E.R. Rep. 112 at p. 115 Goddard J. said: -
“I think that both in the Court of Appeal and the House of Lords the decisive factor was that the subject-matter of the insurance was the specified car, and that, as the assured had parted with it, he no longer was interested in the policy. The true view, in my judgment, is that the policy insures the assured in respect of the ownership and user of a particular car, the premium being calculated, as was found in Rogerson’s Case, partly on value and partly on horse-power. It gives the assured by the extension clause a privilege or further protection while using another car temporarily, but it is the scheduled car which is always the subject to be insurance.”
I am of the view that the policy of insurance in this instance was, as is described above a policy with respect to a particular motor vehicle and a particular person as the owner. On parting with ownership of the motor vehicle, the policy ceased to have any effect and lapsed.
The plaintiff submits that by virtue of the operation of section 19(8) of the Traffic Act that the owner “of the vehicle was Seru Serevi” as he was still recorded as the owner in the records of the Land Transport Authority. The section, which is set out above, shows that the presumption established by it is rebuttal. As is detailed above, the evidence before me is that the disposal of the vehicle by Seru Serevi was effected at about 1400 hours on 14th October 1994. There is nothing in the evidence to suggest that this disposal was in any way conditional or anything other than final. He at that time took delivery of his new motor vehicle from Mr. Karl Francis O’Brien on behalf of the Asco Motors and Mr. O’Brien took delivery and possession of the subject motor vehicle.
Having found that the policy is at an end on the transfer of ownership and having found the ownership was in fact passed unconditionally on 14th October 1994, it is unnecessary to consider the submissions as to whether Mr. O’Brien was driving with the consent of Seru Serevi.
The court was referred to the recent decision of the Supreme Court of Fiji in Dominion Insurance Company Limited v Kay Lynette Bamforth and Others, CBV 0005 of 2002S – unreported 24th October 2003 where it is said at page 10: -
“Section 11(1) of the Act imposes a statutory liability on the Insurer to pay the sum of a relevant judgment against a person insured to the person in whose favour the judgment has been awarded. That liability is extra-contractual although necessarily conditioned upon the existence of a policy of insurance. It is important therefore, when looking to the provisions of section 11(2), to bear in mind that the section is concerned with the imposition and the conditions of the imposition of a special statutory liability. It is not concerned with the plaintiff’s cause of action against the insured person which arises at common law. Nor is it concerned with an insured person’s right of indemnity under the policy.
Subsection 11(2) sets the boundaries of this special statutory liability by setting out the conditions under which “No sum shall be payable by an approved insurance company under the provisions of subjection (1).” There is no relevant leeway of choice in these words. They define the boundaries of the liability imposed by Section 11(1) by reference to various circumstances in which “No sum shall be payable” under that subjection.”
In my opinion it is unnecessary to consider further the issues considered by the Supreme Court, as on the finding made above that there is in fact no policy of insurance current at the time of the accident, it is unnecessary to look at the provisions of Section 11 and to consider whether the conditions precedent to the liability imposed by section 11(1) have been met.
Accordingly, the plaintiff’s claim must fail.
The Orders of the Court are: -
JOHN CONNORS
JUDGE
AT LAUTOKA
26 APRIL 2004
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