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Wati v Queensland Insurance Ltd [2005] FJHC 711; HBC385.2003 (31 May 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

ACTION NO. HBC385 OF 2003

BETWEEN

BIJMA WATI
PLAINTIFF

AND

QUEENSLAND INSURANCE LIMITED
DEFENDANT

Mr. S.K. Ram for the Plaintiff
Mr. T. Tuitoga for the Defendant

Date of Hearing: 17 May 2005
Date of Judgment: 31 May 2005

INTERIM JUDGMENT OF FINNIGAN J.

This is a motor vehicle injury (Third Party) insurance claim. The Plaintiff was a passenger in a privately owned van, registered as a vehicle for private usage, and was injured. She took proceedings in negligence against the owner and driver of the vehicle in the Magistrates Court at Ba and recovered $11,000. The Defendant took no interest in the proceedings and has not paid her. She seeks to recover the money from the Defendant's Third Party insurer.

The crucial point of the case is contained in paragraph 12.1 of the Plaintiff's affidavit in support of her summons. There she says that on the journey in question, "I paid a sum of $2.00 (Two dollars) to the driver of the vehicle Mr. Sanjeet Kumar for transporting me from Ba Town to Lautoka Town". The insurance company, the Defendant before this Court, has refused the claim as being outside the terms of the Defendant before this Court, has refused the claim as being outside the terms of the vehicle's Third Party policy. The Third Party policy covers the owner and the vehicle for use of the vehicle as a private car, which is defined in the policy (at Item No. 1) as:

A motor car which is used solely

(a) for social, domestic or pleasure purposes, or

(b) by the owner, being an individual, for his own carriage in relation to his profession, business or calling, provided that profession, business or calling is not that of a commercial traveller or travelling salesman, or an insurance agent, inspector or assessor or an indent or manufacturer's agent.

"Exclusions"

The Policy goes on to say:

(3) This Policy does not cover any liability in respect of any occurrence which happens when the motor vehicle is being used for any purpose other than those for which premium has been paid as stated in paragraph 5 above.

The relevant part of paragraph 3 is the passage I have set out immediately above, i.e. the definition of a car as being a motor car (which includes a van) being used solely for social, domestic or pleasure purposes. The Policy states further under the heading "Conditions":

1. The person insured shall not case the motor vehicle nor shall the owner permit or suffer any person to use such motor vehicle

(a)............

(b)...........

(c) to carry passengers for the hire or reward or in pursuance of a contract of employment in contravention of the licence issued for the vehicle described herein.

The Defendant's case is that the van owner was using it to carry a passenger for hire or reward AND was using it in contravention of its licence.

The Plaintiff's case is that the Policy contravenes the Motor Vehicles (Third Party Insurance) Act, Cap. 177. Mr. Ram's finely crafted submission relies on the long title to that Act which is "an Act to make provision for compulsory insurance against Third Party risks arising out of the use of motor vehicles". It relies then on Section 2(1) of the Act which defines a passenger vehicle as meaning "a motor vehicle used for carrying passengers for hire or reward whether on an isolated occasion or otherwise"; and finally, on Section 6(1) which states that in order to comply with the provisions of the Act a Policy of insurance must be a Policy which "(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 vehicle", with the explicit proviso that

(a) such policy shall not be required to cover-

(i)...........

(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 claims arise; or

(iii).........

(iv).........

(c) such policy shall not be required to cover liability in excess of $4,000 for any claim made by or in respect of any passenger in the motor vehicle to which the policy relates or in excess of $40.000 for all claims made by or in respect of such passengers....

Mr. Ram's submission is that the policy, by creating a class of "private car" has reduced the class "passenger vehicle", and that the exclusion of passenger cover for paying passengers in private cars is a failure to comply with the statutory provision for passengers in passenger vehicles. He submits that the policy definition; which relates to the classification of the vehicle for registration purposes, is not recognized by the Act. In his submission the van in this case clearly falls within the definition of "passenger vehicle" in the Act (see above); and that the Act requires the policy to extend cover to the van in this case. This in his submission requires the policy to cover the Plaintiff who was a passenger for hire or reward (see Section 6(1), proviso (a)(ii) above), and in other words, the Plaintiff is excluded from the exclusion.

Mr. Tuitoga's reply is that while providing coverage for the van, the policy prohibits use of the van as a "passenger vehicle" as defined in the Act- He submits that, put simply, the policy specifies that it will not cover passengers if they are fare paying passengers. He relied on the only decided authority that was cited to me during the hearing, Wyatt v. Guildhall Insurance Co. Ltd. [1937] All ER 792.

That case at first seems generally on all fours with the present case. There the court decided by interpreting the policy that it did not cover the case of a car (or van) which was being used to convey people far payment from one place to another where the owner took the opportunity of making a little money by carrying somebody else. It held that the use of the car to carry a passenger who paid a fare was not within the policy. Then, obiter and for completeness; it interpreted the relevant English statute and held that the statute did not require the owner to he indemnified for claims by fare paying passengers unless he habitually carried fare paying passengers.

We now come to the fine point. Mr. Ram submits I should distinguish that case because the words of the proviso in the English statute (which I have not cited) that allowed exemption from cover were "except in the case of a vehicle in which passengers are carried for hire or reward.....". The Fijian statute lie submits has specifically gone past that point and specified a "passenger vehicle" and defined such a vehicle as being one "used for carrying passengers for hire or reward whether on an isolated occasion or otherwise", and has excluded those vehicles from the exemption so that they must carry insurance for passengers whether fare-paying or not.

At the moment it seems I must conclude that Mr. Ram's submission is correct. It seems to me that in Fiji the situation of private vehicles carry fare paying passengers is intended by the legislature to attract compulsory Third Party cover. It is not difficult to justify this, because one can readily accept that as a matter of social policy the legislature has provided that all persons at risk of injury from the operation of motor vehicles should have protection, paid for and bought from approved insurance companies.

Clearly however this is a far-reaching finding in social policy, I would be surprised if the matter has not been litigated before in Fiji and I have as yet acquired no experience in this area of law. I shall therefore delay issuing final judgment in this matter until Counsel for both parties have had the opportunity of further submissions. Rather than state a question, I invite the submissions to address generally my tentative conclusion above, that the Motor vehicles (Third Party Insurance) Act, Cap 177 requires Third Party insurers to provide cover for all passengers carried for hire or reward in passenger vehicles, even if they are registered as private vehicles, even if they are registered as private vehicles for domestic use.

I shall deliver final judgment in the last week of June so I invite Counsel to lodge their submissions with the Court by 4pm on Wednesday 22 June 2005.

D. D. Finnigan
JUDGE