Queensland Insurance (Fiji) Ltd v Aziz [1998] FJHC 27; Hba0015j.97b (4 March 1998)

Fiji Islands - Queensland Insurance (Fiji) Ltd v Aziz - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT LABASA

CIVIL APPEAL NO. 15 OF 1997
(Labasa Magistrates Court Civil Action 485/96)

BETWEEN:

QUEENSLAND INSURANCE (FIJI) LIMITED
Appellant

AND:

ABDUL AZIZ
(f/n Lal Mohammed)
Respondent

V.P. Ram for the Appellant
A. Sen for the Respondent

JUDGMENT

The Respondent owned a Toyota Hilux diesel powered van Registration No. CG 334. On about 30 June 1993 his son took the van to Edu’s Service Station for refuelling. He instructed the bowser attendant to add some diesel to the fuel tank and then went into the shop. Unfortunately by mistake the attendant filled the van’s fuel tank from the wrong pump filling the van at least partly up with petrol. After this happened the Respondent’s son returned to the van. Whether or not he was told what had occurred is not clear. What however is not in disputed is that he drove off in the van which a very short while later began to malfunction. About 3 or 4 kilometres from the Service Station the engine began jerking and issuing black smoke. A little distance further it broke down completely.

The Respondent was the holder of a motor vehicle policy issued by the Appellant. It covered him for accidental damage to his van. On about 6 July 1993 he submitted a claim. In paragraph 4 - details of the accident or loss - he explained that the accident had occurred when his vehicle had been wrongly refuelled. In paragraph 7 he attributed responsibility for this accident to Edu’s Service Station. He estimated the cost of repair, including replacing the engine at about $16,000, a figure similar to that is found in a repair quotation No. 1126 prepared on 13 July 1997 by Asco Motors, the vans suppliers and the local Toyota agents. The Respondent advised the Appellant that the van could there be inspected.

On 22 July the Appellant rejected the Respondents claim. Their Mr. Narayan wrote to the Respondent. Having noted that the van had been filled with gasoline rather than diesel he continued:

“we wish to draw to your attention that your relevant policy of insurance provides cover to your vehicle if your vehicle is accidentally damaged or if it is maliciously damaged by a person other than yourself. In view of foregoing the above incident does not fall into the scope of the cover granted and advise with regret your claim is repudiated accordingly.”

On 23 September 1993 the Respondent commenced proceedings. Paragraph 3 of the Statement of Claim stated that the Respondent’s vehicle was covered by an Insurance Policy issued by the Appellant and that under the policy the Appellant was “liable for the claim”.

Paragraphs 4, 5 and 6 of the Statement of Claim were to the effect that the Respondent’s vehicle had been accidentally damaged as a result of the negligence of Edu’s Service Station which had mistakenly fuelled the vehicle with petrol rather than diesel.

Solicitors for the Appellant (not Solicitors now appearing) filed a 9 paragraph Defence the first 8 paragraphs of which, apart from accepting that the Respondent owned the vehicle, either did not admit or denied each and every allegation contained in the Statement of Claim. The last paragraph pleaded that the Respondent had no cause of action against the Appellant.

The purpose of pleadings is to specify, limit and define the issues which the Court is to be called upon to resolve. Pleadings should be properly particularised to limit their generality, to inform the other side (and the Court) of the nature of the case they have to meet, to prevent the other side being taken by surprise and to tie the hands of a party so that he cannot, without leave, go into any matters not included (see generally the White Book 1988 paragraph 18/12/2). It is important to observe that each party must plead all the material facts on which he means to rely at trial, otherwise he is not entitled to give any evidence of them at the hearing (Philips v. Philips [1878] UKLawRpKQB 96; (1878) 4 QBD 127, 133).

Although Order XVI of the Magistrates Courts Rules (Cap. 14) do not require pleadings to be filed the common and accepted practice nowadays is for pleadings to be filed in cases of this kind. Under Rule 3(a):

“Every pleading shall contain a statement of all the material facts on which the party pleading relies ....”

While Rule 3(g) requires that:

“When a party denies an allegation of fact he must not do so evasively but answer the point of substance. And when a matter of fact is alleged with divers circumstances it shall not be sufficient to deny it as alleged along with those circumstances but a fair and substantial answer must be given” (emphasis added).

No application to amend the Defence was ever made and therefore when the matter came on for trial the Appellant’s position could properly be described as “you prove your claim and that you have a cause of action”.

The Resident Magistrate (M. Fernando Esq) in a careful and comprehensive twelve page Judgment identified the following five issues calling for his determination:-

(i) Was petrol pumped into the diesel tank?

(ii) Did the driver of the vehicle know that petrol had been pumped into the tank immediately after it had happened

(iii) Was the petrol in the diesel tank the cause of the damage to the engine

(iv) Is the Insurance Company liable for the damages under the insurance policy

(v) What is the quantum of damages.

Having heard and seen the Respondent and his witnesses and the witnesses called on behalf of the Appellant the Resident Magistrate resolved all the issues of fact in favour of the Respondent and awarded damages totalling $10,300.

On appeal Mr. Ram tendered a detailed well researched and learned written submission from which I derived considerable assistance and for which I am most grateful. Three basic issues were raised. The first was the correctness of the Resident Magistrate’s conclusion that the addition of petrol to the vehicle was the cause of the damage, the second was whether the Insurance Policy covered the cost of repairing the damage while the third was addressed at the heads and quanta of damages awarded.

The first issue is necessarily fairly detailed and involved. It took up 4 pages of close analysis in Mr. Ram’s submission. While a number of the points raised have force I am not satisfied that Mr. Ram has demonstrated that the Resident Magistrate erred in his approach. There were in this case as in many cases in the Magistrates Courts some deficiencies in the quality of the evidence but it will be remembered that the matters complained of had occurred over 4 years before the hearing. In my view the Resident Magistrate was entitled to reach such findings of fact as he arrived at and this first general ground of appeal fails.

Under the second ground Mr. Ram advanced two propositions. First, he says that the insurance policy contained an arbitration clause and that accordingly the Court should not have entertained the claim, secondly he says that the vehicle was being driven in an unsafe condition just prior to its final breakdown.

Unfortunately there is nothing in the record to show that either of these arguments was raised or advanced at the hearing. As has been seen neither the arbitration clause nor the possibility of contributory negligence was raised in the pleadings. The point is very fairly and realistically conceded by Mr. Ram on page 7 of his written submission. In my view the arbitration argument cannot in any event be sustained in view of the wording of Section 5 of the Arbitration Act (Cap 38). It is not the case, as was suggested, that contracts containing arbitration clauses are not justiciable: rather a party to a submission against whom a claim is brought may move the Court for the proceedings to be stayed. The Appellant did not so move in this case. The question of contributory negligence, if it was to be raised should have been raised both in the pleadings and during the hearing of the evidence. It was raised in neither. I am not disposed to allow it to be raised now.

The final general ground has, in my opinion rather more merit. The policy of insurance clearly excluded consequential loss. This is in line with the long standing rule that contracts of insurance providing cover for loss or damage are construed so as to extend only to loss of or damage to the subject matter of the insurance itself unless the contrary is clearly stipulated (see Mitsui v. Mumford [1915] 2 KB 27; Campbell v. Denman (1915) 21 Com. Cas. 357 and Moore v. Evans [1918] AC 185).

Although for reasons best known to itself the Appellant did not choose specifically to challenge these consequential heads of claim in its Defence it would not, in my view, be right to allow a party to recover damages to which it is not entitled merely because of a mistake by the other sides legal representatives. Under Order XXXVII of the Magistrates Courts Rules the High Court has “full jurisdiction over the whole proceedings as if the proceedings had been instituted ... in the Appellate Court as a Court of first instance”.

As has been noted the Respondent’s claim was originally rejected by the Appellant because the Appellant took the line that the inadvertent addition of petrol to the vehicles fuel tank was not an “accident” within the meaning of the policy. Wisely, in my view, Mr. Ram did not press this argument. As I see it the argument is clearly unsustainable. The Appellant’s claims department and legal advisers are respectfully referred to the very full and generous meaning of the term “accident” to be found at pages 18 - 22 of Stroud’s Judicial Dictionary 5th Edn.

In my judgment the filling of petrol in the circumstances of this case as found by the Resident Magistrate was clearly an accident within the meaning of the policy of insurance. Rather than peremptorily rejecting the Respondent’s claim the Appellant should have entertained it, inspected the vehicle, helped the Respondent to obtain a replacement engine and, if agreement could not be reached referred the matter to arbitration in a spirit of constructive engagement. If the Appellant had adopted a more sensible attitude then this whole long drawn out litigation would probably have been avoided.

Having said all that, however, it is clear to me that consequential loss was not covered by the policy and therefore should not have been claimed or awarded. It is also clear that the original claim for damages was somewhat over optimistic and that the Respondent could never have recovered the value of a new replacement engine given the age of the engine lost. The third general ground of appeal is allowed in part. The amount awarded will be reduced to the value of a replacement secondhand engine fully installed which I assess at $4,000. There will be no order as to costs.

M.D. Scott
Judge

4 March 1998.

Hba0015j.97b