IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 099 of 2006

Between:

PADUM LATA
Plaintiff

And :

FIJI PUBLIC TRUSTEE CORPORATION
IOWANE WAQAIRATAVO
Defendants

Before : Master Udit

Counsel :Mr D. Singh for the Plaintiff/Applicant
Ms A. Neelta for the Defendant /Respondent

Date of Hearing: 3rd December, 2007
Date of Ruling : 22nd July, 2008

DECISION
(Ord. 15, Rule 7(6)- Joinder- Public Trustee in place of a defendant (deceased)
(Joinder-Sun Insurance Company Limited – Third Party Insurer-whether can be joined) 

Introduction

[1]	On 27th August, 2007, the Plaintiff filed a Summons under Order 15, Rule 8(1) of the High Court Rules 1988, Section 2(1) of the Law Reform (Miscellaneous) Provisions) (Death and Interest) Act and Inherent Jurisdiction of this Honourable Court inter alia seeking the following orders:-

"2 – That leave be granted to the plaintiff to join Public Trustee Corporation Limited pursuant to Section 8 of the Succession, Probate and Administration Act, without any charge being leviable thereto for the purpose of accepting service of notices and proceedings and acting solely as a nominal defendant in place of the first defendant who has died after having filed defence through his solicitors". 

The application is supported by an affidavit of Jagdish Prasad sworn on 23rd and filed on 27th August, 2007. 

[2]	Both the intended parties, that is, Public Trustee Corporation Limited and Sun Insurance Company Limited oppose the application.

Documents

[3]	The plaintiff relies on the following documents:-

(i)	Writ of Summons filed on 8th March, 2006.

(ii)	Minutes of Pre-Trial Conference duly executed by the solicitors for the Plaintiff and Defendants filed on 5th March, 2007.

(iii)	Amended Writ of Summons filed on 29th May, 2007.

(iv)	Summons filed on 27th August, 2007.

(v)	Affidavit of Jagdish Prasad sworn on 23rd and filed on 23rd August, 2008.

(vi)	Submission filed on 21st November, 2007.

[4]	Sun Insurance Company Limited for the purposes of this application relies on the following documents:-

(i)	Affidavit of Arvindra Kumar sworn and filed on 1st October, 2007.

(ii)	Written submissions filed on 23rd November, 2007.

[5]	The Public Trustee Corporation Limited relies on the following documents:-

(i)	Affidavit in reply by Lenaitaisi Korodrau, sworn on 29th September and filed on 1st October, 2008.

(ii)	Written submissions filed on 5th December, 2007.

Brief Facts

[6]	The material facts are that the plaintiff Pudum Lata and her late husband Mohammed Kumar were passengers in motor vehicle registration number CR 366, driven by the second defendant, Iowane Waqairatavo. It is alleged that on or about 7th February, 2004 a taxi registration number LT 38 belonging to Suresh Chand collided with the said van. It was a tragic accident.

[7]	As a consequence of the accident the plaintiff suffered injuries. She lost her husband. On behalf of the plaintiff it is alleged that the accident occurred as a result of the negligence on the part of both the drivers. She sued both the drivers of the vehicles.

[8]	Initially, when the action was filed the first named defendant, namely Suresh Chand was alive. It is a common ground that Suresh Chand at all material time was the registered proprietor and owner of the taxi. An acknowledgment of Service was filed on his behalf by Sherani and Co. It is asserted by the Plaintiff that the said solicitors filed the Acknowledgment on instructions of Sun Insurance Company Limited, an Insurance Company, which provides a mandatory Motor Vehicle Third Party Insurance policy under the Motor Vehicle (Third Party Insurance) Act (Cap 177).

[9]	During the course of this proceeding Suresh Chand died placing the plaintiff in a difficult position to continue with the proceedings. This problem is further exacerbated by the fact that the personal representative(s) of late Suresh Chand did not extract a Grant of Letter of Administration or Probate. Accordingly, the plaintiff is unable to make an application to substitute the First Defendant.

[10]	 She made an application under S. 8 of the Succession, Probate and Administration Act (Cap 60) and substituted the deceased with Public Trustee Corporation Limited to be a nominal defendant. For now the Public Trustee Corporation Limited states that it has no instructions from the personal representative(s) of the deceased defendant, as such it does not desire to remain a party to this proceeding. 

[11]	Faced with this impediment the plaintiff seeks to join Sun Insurance Company Limited, on the ground that it is the Third Party Insurer, which will ultimately be liable to pay any damages awarded by the court. Ms Neelta submitted that the application is wholly misconceived.

[12]	With the aforesaid background, let me now consider the application.

Sun Insurance Company Limited (the Company)

[13]	On behalf of the plaintiff, Mr. Singh submitted that the deceased was insured by the Company, under a compulsory Motor Vehicle Third Party Insurance Policy. He relies on the affidavit filed by the said Company as proof of this fact and further that the said solicitors are acting on its instructions under the law of subrogation. A fact not denied by Ms Neelta. Mr. Singh rightly, pointed out that under S. 11(1) of the Act, the insurer is liable (subject to some qualifications) to satisfy any judgment entered against the defendant.

[14]	I was left with an impression from Mr. Singh’s submission that the filing of a defence by the solicitors acting on behalf of the insurer made it compulsory for the insurer to pay the debt. Thus, in order to protect its interest the company ought to be joined as a defendant. The joinder of the company will not prejudice but to the contrary will be beneficial to it.

[15]	First and foremost, under S. 11(1) an insurer is only liable to satisfy any judgment entered against an insured. It is not to be joined nor is it required to actively participate in a proceeding involving an insured. S. 11(1) reads as follows:-

"11	(1) If, after a certificate of insurance has been delivered under the provisions of ss. (4) of s.6 to the person by whom the 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 ss. 1 of s 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 there under 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." 

(emphasis added)

[16]	Secondly, however that liability is not as simple and automatic as it appears. S11 (1) itself is subject to statutory qualifications. The Supreme Court of Fiji in Dominion Insurance Company Limited v Kay Lynette Bamforth and Others, Civil Appeal Number CBV 0005 of 2002S – (unrep) 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."

(emphasis added)

[17]	Thirdly, as a general principle of law fortified by the Act itself, is that the insurer’s liability to indemnify, in addition to the Act and subsidiary legislation appurtenant thereto, is to be construed in conformity with the Policy instrument issued to the insured. Mills-Owens CJ in Murtaza Khan v R [1965] 11 F LR 161 at 167 said:

"Apart from these statutory exceptions the company may so far as Cap. 236 is concerned, as between itself and the insured, impose whatever conditions it likes."

[18]	For that reason the evidence of the relevant Policy is indispensable. In Repeka Naba -v- Tower Insurance (Fiji) Limited Civil Appeal N0. ABU0081/ 2005, the Court of Appeal held:-

"[36] Clearly, the appellant needed to rely on the existence of a policy to establish liability under section 11(1) and the proof of any liability depended on the terms of the policy. Without establishing those terms, she could not establish her case and she was unable to do so."

[19]	In Ashok Kumar and Chandra Mati Singh v Sun Insurance Company Limited, Civ App No ABU0072 of 2004, the Court of Appeal considered the effect of S6 (1)(b) in the context of persons that are covered. The Court held:- 

 "To circumscribe the specification or description of the person or classes of persons incurred would not be inconsistent with section 6(1) (b) of the Act whose purpose is to ensure coverage, if a policy is issued, of any liability which may be incurred in respect of the death or bodily injury caused by or arising out of the use of the vehicle, by the person, persons or classes of persons "specified in the policy". In other words, the section contemplates the entitlement of the authorised insurer to specify or limit the persons covered, leaving it to the insurer to identify or define who they may be. Once identified or specified, then the effect of the section is to ensure that their potential liability, in respect of bodily injury or death connected with the use of the vehicle is fully covered save for the permitted exceptions noted in the proviso (a) and (b) to section 6(1) of the Act."

(emphasis added)

[20]	The reason I have discussed some of the primary preconditions of the liability of an insured is that, associated with and perhaps on a similar rationale, is another fundamental proposition of law which is the issue raised by Ms Neelta in opposing the application. I will discuss this next.

[21]	Fourthly and more relevant to the present application is that the liability of the insurer does not arise until the issue of liability against the insured is conclusively decided. It is settled law that liability of an insurer does not arise until such time the liability of the insured is determined in the sense of being crystallized by a settlement, arbitration or adjudication. Lord Denning in Post Office -v- Norwhich Union Fire Insurance Society Limited [1967] LQB 363 at 373 S said:-

"It seems to me that the insured only acquires a right to sue for the money when the liability to the injured person has been established so as to give rise to a right of indemnity. His liability to the injured person must be ascertained and determined to exist, either by judgment of the court or by award in arbitration or by agreement. Until that is done the right to an indemnity does not arise." 

Furthermore on page 375 para B – C, His Lordship stated that the legal liability in this context necessarily implies:-

"In these circumstances I think the right to sue for these moneys does not arise until the liability of the wrongdoer is established and the amount ascertained. How is this to be done? If there is an unascertained claim for damages in tort, it cannot be proved in the bankruptcy; nor in the liquidation of the company. But nevertheless the injured person can bring an action against the wrongdoer". 

(emphasis added)

[22]	The expression of legal liability in the context does not carry any technical expression. It is simply liability attributable by operation of law and is so imposed. It is distinct in that it cannot be conferred by an agreement.

[23]	The proposition of law espoused in Post Office -v- Norwich Union Fire Insurance Society Ltd (supra) was subject of a detail consideration by the House of Lords in Bradley -v- Eagle Star Insurance Co. Ltd. [1989] A.C. 957. Lord Brandon in delivering the leading judgment at page 964 after noting the following:-

 "The Court of Appeal, rightly in my view, considered themselves bound to reach the conclusion which they did by an earlier decision of that court in Post Office -v- Norwich Union Fire Insurance Society Ltd [1967] 2 Q. B. 363. It follows that this appeal requires your Lordships to consider whether that earlier case was rightly decided",

And concluded as follows:-

"In my opinion the reasoning of Lord Denning M. R. and Salmon L. J. contained in the passages from their respective judgments in the Post Office case set out above, on the basis of which they concluded that, under a policy of insurance against liability to third parties, the insured person cannot sue for an indemnity from the insurers unless and until the existence and amount of his liability to a third party has been established by action, arbitration or agreement, is unassailably correct. I would, therefore, hold that the Post Office case was rightly decided, and that the principle laid down in it is applicable to the present case".

(emphasis added)

[24]	Hence before indemnity of an insurer comes in to play the insured must be found to be liable as a matter of law. In case of an act or omission of an employee or agent of the insured, the claimant must be able to establish vicarious liability of the insured before it can rely on the indemnity policy. Merely the liability of the servant or agent without any nexus or correlation to the vicarious liability of the insured is grossly inadequate. This is aptly borne by AMP Workers Compensation Services (NSW) Ltd. –v- QBE Insurance Ltd. [2001] NSWCA 267 where Handley JA at para 9 of the judgment stated the following:-

"The employer was vicariously liable for the negligent driving of Graupner in the course of his employment, and they were joint tortfeasors. The employer’s liability was potentially covered by both policies, but its rights of indemnity would not accrue until its liability to Mitchell has been crystallised by settlement or verdict. See Post Office -v- Norwich Union Limited [1967] 2 QB 363 CA and Cacciola v Fire and All Risks Insurance [1971] 1 NSWLR 691 CA. As a result of the decision taken by Mitchell’s legal advisers to sue Graupner as sole defendant, the employer’s potential liability was never crystallized and no longer exists".

(emphasis added)

[25]	Therefore, it goes without saying that as matter of law unless the plaintiff succeeds in her cause of action founded in negligence against late Suresh Chand not only as a driver but also as an owner of the LT 38 and an insured under the policy, she has no right to join the Third Party Insurer, Sun Insurance Company Limited. I uphold the submissions of Ms. Neelta. It follows that the application to join Sun Insurance Company Limited be declined.

Public Trustee Corporation Limited (PTCL) 

[26]	Mr. Singh joined the Public Trustee Corporation Limited, in place of late Suresh Chand after his death. He submitted the PTCL is joined for the purpose of serving "notices and proceedings". He acknowledges that the PTCL is merely joined as a nominal defendant. However, that position immediately turns tenuous as the plaintiff now intends to proceed with this action to trial and judgment. Is she entitled to join PTCL under S. 8 of the Succession Probate and Administration Act and continue with the proceedings, despite PTCL’s unwillingness to carry on with the proceeding on the basis it lacks any instructions? 

[27 ]	S. 8 of the Act provides:-

"8. Pending the grant of probate of a will or administration of the estate of an intestate, the real and personal estate of a deceased person shall, without any charge being leviable therefore, vest in the Public Trustee for the purpose of accepting service of notices and proceedings and acting as nominal defendant."

[28]	This provision and the role of the Public Trustee was considered by the Court of Appeal in Abdul Rauf -v- The Public Trustee of Fiji, Civil Appeal No. 59/1973 . Marsack J. A. at page 2 of the judgment said:-

"Counsel’s contention was that the powers of the Public Trustee, pending grant of probate of letters of administration, are expressly limited to the accepting of service of notices and proceedings and acting as nominal defendant. In my opinion this argument must prevail.

(emphasis added)

Following on, His Lordship held:-

"It seems to me that the purpose of the section is to nominate some person who can be served with proceedings brought against the estate, during the period when no executor or administrator has been formally appointed by the Court. In this case, the executor named in the will is Burns Philip Trustee Company Limited, and an application by this company for probate in solemn form is pending before the Supreme Court". 

(emphasis added)

[29]	On the powers of the Public Trustee in respect of continuing with a proceeding under S. 8 of the Act, His Lordship plainly held:-

"With respect, I am unable to accept the opinion of the learned trial judge that under Section 8/legal control of the estate/ is until probate is granted, in the hands of the Public Trustee; and that the Public Trustee has power to institute proceedings for the protection of the estate. No such power is, in my view, either expressly or by implication granted to the Public Trustee by Section 8. I follows, therefore, that I would allow the appeal and set aside the order of the Court below".

(emphasis added)

[30]	His Lordship Mr Justice Marsack’s aforesaid interpretation given to S. 8 is further fortified by Order 15, rule 7(6) although His Lordship made no reference to this rule in the judgment. Order 15 Rule 7 deals with the procedure for commencing suits against a deceased person. Under Rule 7(4) the Court has the power to appoint the Public Trustee for the purposes of receiving all notices and documents. This is precisely what S.8 is intended for. However, that role is a limited one. This is borne by Rule 7(6) which expressly states:-

"Where an order is made under paragraph (4) appointing the Public Trustee to represent the deceased’s estate, the appointment shall be limited to his accepting service of the writ or originating summons by which the action was begun unless, either on making such an order or on a subsequent application, the court, with the consent of the Public Trustee, directs that the appointment shall extend to taking further steps in the proceedings".

[31]	In light of the decision of the Court of Appeal and the Rules of the Court it is absolutely clear that the plaintiff cannot advance this action to trial until such time the personal representative of late Suresh Chand are appointed. All the Public Trustee can do is to accept the Notices or documents pertaining to the proceedings. That is where it starts and finishes. I am not merely guided but bound by the decision of the Court of Appeal and the practice and procedure of the Court as prescribed by the Rules. 

[32]	In this instance before me is an affidavit of the Chief Executive Officer of PTCL who emphatically states as follows:-

"…2.2	Hence I am reliably informed that there has been no Probate or Letter of Administration been granted to us under the above estate.

2.3	Further, the beneficiaries of the said Estate have not approached us nor appointed us to apply for the LA regarding the same.

3.0	Our respective officers have also conducted a search within our record to determine if the deceased made any Will with us before his death. I am reliably informed that there is no record of any Will made or kept by us in respect of the deceased.

4.1	I am also reliably informed by our Legal Officer that the Plaintiff will achieve no purpose by keeping FPTCL as party to this proceeding.

4.2	So it is only prudent for the sake of all parties that we withdraw from the proceeding in order that we put our focus only on our core business. Further, we also do not have the time or the resources to use in cases of this nature".

[33]	Since, the PTCL is not consenting to proceed further with this proceedings, I cannot force it to participate in this proceedings. Nor can I strike-out the action against the PTCL or the deceased. Death of a party does not abate an action; (Order 15, rule 6(1)) unless the death terminates the action; Bowker -v- Evans [1885] is Q. B. D. 555. In case of the death of one or more defendants the action against the deceased defendant cannot proceed any further until the personal representatives of the deceased are appointed. In support of this proposition, I make reference to page 220 para 15/7/9 of The Supreme Court Practice 1999 where it is stated:-

"Death of defendant—If a sole defendant dies and the cause of action is one that survives, the plaintiff may obtain an order to continue the proceedings as against the executor or administrator of the deceased defendant, or such executor or administrator may himself apply to be substituted or added as a defendant (Duke v. Davis [1893] 2 Q.B. 260); but unless and until such executor or administrator is added, the action cannot be continued."

(emphasis added)

[34]	In case of a deceased defendant with no personal representatives appointed against whom the action can be continued and the subsisting cause of action is based in tort, a court on application of the plaintiff may appoint a nominee of the Plaintiff to be appointed an administrator of the deceased defendant to continue with the proceedings; In the Estate of Knight [1939] 55 TLR 992; and also In the Estate of Gunning [1936] P. 40.

[35]	Therefore, presently this action cannot be proceeded with against the First defendant until the personal representative(s) is/are appointed and duly substituted or the plaintiff applies for the appointment of a nominal person to act as an administrator for the purpose of the litigation.

Conclusion

[36]	For the reasons discussed above the application to join the Sun Insurance Company Limited fails. There is no settlement, judgment or award against the deceased, late Suresh Chand who was the insured under the Motor Vehicle (Third Party Insurance) Act (Cap 177). Until the liability of the deceased as insured is conclusively determined, the third party (Plaintiff) cannot resort to seek any benefits under the Third Party Insurance Policy. 

[37]	As to PTCL, it is already a party. Thus it remains a nominal defendant until such time the proceedings is regularised. It cannot nor can it be coerced to take any active steps in the proceedings. 

[38] 	It therefore follows the Summons as whole lacks any merit and ought to be dismissed, which I so order.

Order: 

(a) 	Summon is dismissed.

(b)	Action is stayed until it is regularized.

(c)	PTCL to remain as party merely under S. 8 until such time the proceedings is regularised.

(d)	Costs be costs in cause.

Accordingly, so ordered.

J. J. Udit
Master