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Chand v Mani [2007] FJMC 11; Civil Case No 134 of 2004 (15 May 2007)

IN THE RESIDENT MAGISTRATES’ COURT
AT LAUTOKA
IN THE WESTERN DIVISION

CIVIL CASE NO: 134 OF 2004

BETWEEN:

PARVEEN CHAND, f/n Meg Nath

VENITA WATI PRASAD, f/n Ambika Prasad
both of Vio Road, Lautoka.
PLAINTIFF

AND:

NARENDRA MANI, f/n Ram Sumer
DEFENDANT

SUN INSURANCE CO. LTD.
THIRD PARTY

Counsel for the Plaintiff: Mr R. Gordon
Counsel for the Defendant: Ms Natasha Khan
Counsel for Third Party: Mr S. C. Maharaj

Date of Hearing of Evidence: 26/04/07
Date of Judgment: 15/05/07

JUDGEMENT

BACKGROUND

[1] On 15/10/03 the plaintiff‘s motor vehicle registration number ED 070 and the defendant’s motor vehicle registration number EO 562 were involved in an accident at the junction of Naviti and Vakabale Street, Lautoka.

[2] Both vehicles sustained damages and it seems that the accident was caused by the defendant’s motor vehicle as it failed to stop at the junction which is controlled by traffic light and went through red light.

[3] Both motor vehicles were insured by the 3rd party by way of fully comprehensive cover.

[4] The plaintiff lodged his claim on 17/10/03 and his motor vehicle was repaired and he signed a discharge voucher on 27/04/04.

[5] On 26/10/04 the plaintiff filed the present claim against the defendant claiming a sum of $5,750.00 being the costs of repairs which was already paid by the 3rd party to plaintiff and claimed a further sum of $50.00 per day as loss of use of the motor vehicle from 15/10/03 till 27/04/04.

[6] The defendant on 03/06/05 joined the 3rd party claiming that the 3rd party should indemnify the defendant for the plaintiff’s claim.

PRELIMINARY ISSUE

[7] On 26/11/06 the parties agreed to the following issues:

1. The plaintiff’s counsel submitted that his client was entitled to:
   
   • (i) Cost of repairs;
     
   • (ii) Refund of excess of $750.00;
     
   • (iii) Loss of use of $9,600.00.
     
2. Defendant’s counsel submitted:
   
   • (i) If the plaintiff is entitled to loss of use than that should be paid by 3rd party.
     
   • (ii) Although the claim by the defendant was lodged outside the 30 days claim period, the 3rd party is still liable to indemnify the defendant against the plaintiff’s claim.
     

100. The 3rd party’s counsel submitted:
     
     • (i) That the 3rd party is not liable to pay loss of use as that is stipulated in the insurance policy.
       
     • (ii) That the 3rd party is not liable to indemnify the defendant as the defendant did not lodge his claim within 30 days period.
       

FILING OF DOCUMENTS AND SUBMISSIONS

[8] Thereafter the 3rd party and defendant filed a bundle of documents and written submissions.

Issues for determination were:

(1) Whether 3rd party is liable to honor the defendant’s claim when it was lodged after 30 days period?

(2) Whether 3rd party is liable to pay the plaintiff for the loss of use of the motor vehicle?

EVIDENCE

[9] Although the parties filed written submissions and agreed on facts and the issue the issue of the defendant lodging his claim was not very clear and upon my suggestion the 3rd party called a witness (Thomas) who was cross-examined by the defence counsel. The plaintiff’s counsel was not present when Thomas’s evidence was taken and the defendant did not call any evidence.

LATE OF LODGMENT OF CLAIM

[10] It is not in dispute that the defendant lodged his claim on 07/01/04.

[11] Thomas‘s evidence revealed that the letter of rejection of the defendant’s claim was written to Darrels Agency on 17/02/04 who was an agent of the 3rd party.

3RD PARTY’S KNOWLEDGE OF THE ACCIDENT AND MOTOR VEHICLES INVOLVED

[12] It cannot be disputed that the 3rd party was aware that is was the common insurer for both motor vehicles (see the claim form of the plaintiff where it is stated in answer to question as to whether the other vehicle was insured and if so name of the insurance company and it is stated: "Yes – Sun Insurance").

[13] The 3rd party’s contention is that despite the knowledge of the accident by the defendant it is not liable to pay the defendant as the defendant failed to lodge his claim within the 30 day period as stipulated in the insurance policy.

INSURANCE POLICY

[14] The insurance policy on CLAIMS reads as follows:

1. "CLAIMS"
   

(a) To make a claim, you and the driver must complete our claim form and lodge it to our office as soon as possible but no later than 30 days from date of accident or loss.

(b) Repairs must not commence without a prior approval.

(c) You must not make an admission of liability in connection with your claim without our prior written approval.

(d) If any claim is made against you or you receive any letter of demand summons or writs you must advise our office immediately and allow us the sole option to compromise or demand any claim in your name.

(e) Where you are not at fault and someone else is responsible for damages to your vehicle, SUN Insurance reserves the right to sue that person in your name and recover any payments made by SUN Insurance, you must co-operate with us in our attempts at recovery and give evidence in court when called upon to do so.

(f) You must co-operate with us and comply with all requests we may make for information and provide any other assistance sought from you in respect of any claim made by you.

(g) We will not pay any claims if you have given any false statement or declaration in contraction to your policy or when making any claim or if your claim is in any way false or fraudulent. Should we have already paid any claim you will be required to refund any payment made.

(h) For stereo and radio appliances, evidence of purchase(s) must be provided before your claim can be entertained.

Failure to comply with any of the above will entitle us to decline any claim made or to recover any payment already made and actual costs incurred by us.

[15] The issues raised in this case is very similar to the issues raised in the case of Dilip Kumar Jyostna Dilip Kumar trading as Binaco Textiles –v- National Insurance Company (Fiji) Limited FCA Civil Appeal No. ABU0056 of 2006S.

[16] In the above case the appellants had a fire insurance policy and in accordance with the conditions of the policy they notified the insurance company of the fire forthwith and also gave a notice in writing within 15 days but failed to commence proceedings within 12 months of the loss. The date of the fire was 10/09/94 and the action was commenced on 18/09/95 and despite the delay of only 8 days both the High Court and Fiji Court of Appeal held that the appellant’s action was out of time and that the action was struck out.

[17] The Fiji Court of Appeal said at page 7 of the cyclostyle judgment:

"[20] An insurance policy is a commercial contractual document. The modern approach to the construction of such a document was set out by Lord Hoffman when delivering the judgment of the majority in the House of Lords in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1997] UKHL 28; (1998) 1 All ER 98 at page 114.

"My Lords, I will say at once that I prefer the approach of the learned judge. But I think I should preface my explanation of my reasons with some general remarks about the principles by which contractual documents are nowadays construe. I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v. Simmonds [1971 3 All ER 237 at 240-242. [1971] 1 WLR 1381 at 1384 – 1386 and Reardon Smith Line Ltd. v. Hansen-Tangen v. Sanko Steamship Co [1976] 3 All ER 570, [1976] 1 WLR 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of ‘legal’ interpretation has been discarded. The principles may be summarized as follows.

(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.

(2) The background was famously referred to by Lord Wilberforce as the ‘matrix of fact’, but his phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the documents would have been understood by a reasonable man.

(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.

(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax (see Mannai Investment Co Ltd v. Eagle Star Life Assurance Co Ltd. [1997] UKHL 19; [1997] 3 All ER 352, [1997] 2 WLR 945).

(5) The ‘rule’ that words should be given their ‘natural and ordinary meaning’ reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Cia Naviera SA v. Salen Rederierna AB. The Antaios [1984] 2 All ER at 233, [1985] AC 191 at 201:

"if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made yield to business common sense."

[18] The Fiji Court of Appeal further stated at page 9

The critical words must be viewed in the context of the entire contract. In our view the combined effect of clauses 10 and 18 is to be lay down a claims procedure. First the insured must give notice forthwith. Then he must give notice of claim within 15 days and finally he must, if necessary, bring himself within clause 18 to hold the respondent liable in the event that the claim has not been accepted. Clearly the object of clause 10 is to alert the insurer promptly to the loss or damage order the policy and secondly the making of a claim. The commercial purpose of clause 10 is to enable the insurer to take steps in an appropriate case to investigate the claim promptly, to effect whatever salvage is available and to take any other available steps in mitigation of loss.

In contrast, clause 18 is directed at the insurer’s liability to the insured. It is directed at certainty for the insurer. Clause 18 is a cut off provision as to the insurer’s liability in regard to the claim to which it has earlier been alerted. The clause is directly relevant to two important aspects of the insurance business. First, the maintenance of adequate reserves for outstanding claims and secondly, the wider issue of fixing premiums".

[19] Applying the principles of Dilip Kumar’s case I hold that the 3rd party is entitled to decline the defendant’s claim and I further hold that the defendant’s action against the 3rd party shall be struck out.

[20] In light of my finding in paragraph 19, I feel that it is unnecessary for me to make a determination on the issue of payment on loss of use of the plaintiff’s motor vehicle. The 3rd party’s contention is that the insurance policy states that it is not liable. The insurance policy states that the insurer is not covered for the loss of use of his motor vehicle but the insurance policy at paragraph 5 states:

"Sun Insurance will pay, as a result of an accident caused by your vehicle, for damage to the property of another person."

In my view the loss of use is encompassed within the definition of the word damage.

[Mohammed Shafiullah Khan]
Resident Magistrate

15 May, 2007