St. Aubyn Ltd v Tower Insurance (Fiji) Ltd [2015] FJHC 99; HBC12.2013 (20 February 2015)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 12 of 2013

BETWEEN :

ST. AUBYN LIMITED a limited liability company duly incorporated in Fiji and having its registered office situated at BDO Zarin Ali, Level 8, Dominion House, Thompson Street, Suva.
Plaintiff

AND:

TOWER INSURANCE (FIJI) LIMITED having its head office situated at 1st Floor, Tower House, Thompson Street, Suva.
Defendant

Appearance : Ms Devan S. of Neel Shivam Lawyers for the Plaintiff
Mr Narayan A. K. of AK Lawyers for the Defendant

Date of Judgment: 20 February 2015

JUDGMENT

[1] The Writ of Summons and the Statement of Claim was filed on 22 January 2013 and the Defendant filed its Statement of Defence on 20 February 2013.

[2] On 1 March 2013, the Plaintiff filed Summons for Judgment on Admissions pursuant to Order 27 Rule 3 of the High Court Rules 1988. The Summons was supported by the Affidavit of Annmarie De Vos, the Director of the Plaintiff Company sworn on 28 February 2013.

[3] Thereafter, the following Affidavits were filed in the proceedings of this case.

3.1 Supplementary Affidavit of the Plaintiff filed on 1 March 2013.

3.2 Affidavit in Response of the Defendant filed on 15 April 2013.

3.3 Affidavit in Reply by the Plaintiff filed on 2 August 2013.

3.4 Affidavit in Reply by the Plaintiff filed on 23 June 2014.

[4] It is noted that Summons to amend the Defence was filed after the Summons filed by the Plaintiff for Judgment on admissions.

[5] 5.1 The Plaintiff was engaged in the business as a hotelier and restaurant operator in Suva. The Plaintiff obtained Insurance Policy referred to as Certificate of Currency, marked (Annexure A to Affidavit of the Plaintiff dated 28 February 2013) and as a Schedule forming part and parcel of the Policy Industrial Special Risks was covered. By the said Policy, the Defendant insured Plaintiff in respect of inter-alia consequential loss being loss of gross profit owing to reduction of turnover and increase cost of working for a period of 6 months.

5.2 The Plaintiff claimed during the currency of the said policy sustained pecuniary loss for the period April 2012 to November 2012. The loss was caused due to water damage to the business premises by water leakage to the premises and breakdown of the left.

5.3 The Plaintiff claimed $200,707.00 as business loss under the policy.

5.4. Prior to filing of the action, the Defendant on 18 July 2012 had made a progressive payment of $20,000.00 to the Plaintiff.

5.5 The above facts are undisputed by the Defendant except for the fact that $124,458.39 was paid to the Plaintiff which could be decided at a substantive hearing.

[6] The Summons filed by the Defendant on 18 April 2013 is to amend the Defence subsequent to Plaintiffs summons filed on 1 March 2013 for Judgment on admission. Order 27 Rule 3 of the High Court Rules 1988 states:

"Order 27 – 1. ...........................

2. ...........................

3. Where admissions of fact or part of a case are made by a party to a cause or matter either by his pleadings or otherwise, any other party to the cause or matter may apply to the court for such judgment or order as upon those admissions he may be entitled to, without waiting for the determination of any other questions between the parties and the court may give such judgment or make such order on the application as it thinks just".

6.1 The Defendant in its Statement of Defence admitted that:

(a) The Plaintiff is a limited liability company;

(b) The Defendant is engaged in the business of providing general domestic and commercial insurance in Fiji;

(c) By the Policy No. 51510798 dated 15 October 2012, (Industrial Special Risks), the Defendant agreed to insure the Plaintiff for an indemnity period of six months in respect of inter-alia consequential loss being loss and gross profit owing to reduction of turnover and increased cost of working;

(d) The Plaintiff sustained pecuniary loss as a result of water damage during the currency of the policy.

6.2 The Plaintiff duly advised of the loss to the Defendant.

6.3 The Defendant engaged the services of McLarens Young International to investigate and review the Plaintiff's claim.

6.4 The Defendant made partial payment of $19,000.00 on 18 July 2012.

6.5 The loss adjusters' recommendation after review of the Plaintiff's claim was the Defendant to make further investigation by an external forensic accountant to clarify and verify number of matters.

6.6 Loss adjusters had in the meantime offered a settlement proposal for $86,831.00.

6.7 Loss adjusters had offered the Plaintiff $86,831.00 as a settlement amount if not agreed to pursue their full claim of $200,707.00 subject to the Defendant obtaining external expertise to conduct additional inquiries in the accounts.

6.8 There were several meetings that had been conducted between the Plaintiff, the Defendant and Loss Adjusters and no payment was made in respect of demand letter dated 7 November 2012.

6.9 Replying to letter of 7 November 2012, the Defendant by letter dated 14 November 2012, the Defendant by letter dated 14 November 2012 informed the Plaintiff they have requested for another opinion from a business interruption specialist in Australia.

6.10 Up to the date of filing of this action, the Plaintiff has not been informed whether the Defendant has received the further opinion in respect of the Plaintiff's claim.

6.11 The Plaintiff is entitled to indemnify under the Insurance Policy and any sum claimed in excess of the value of losses assessed by the local Loss Adjusters, would be subject to obtaining an overseas external forensic accountant report.

[7] Having admitted above the Defendant further stated in its Statement of Defence.

7.1 The Loss Adjusters appointed by the Defendant concluded the loss was $86,831.00 on the evidence provided by the Plaintiff including VAT returns, financial statements and discussions with the Plaintiff's Director.

7.2 The Plaintiff's assessment claim is still incomplete, since the Plaintiff failed to provide full and complete status of its business accounts to the satisfaction of the loss adjusters to substantiate the claim in excess. As such the Defendant had to enlist an external forensic accountant to ascertain and confirm the local loss adjusters assessment and the Plaintiff's action is premature.

7.3 The Defendant is willing to pay $86,831.00 being the assessed loss. The Plaintiff has substantiated only this sum and not a greater amount.

7.4 The Defendant simultaneously intends to pay into court the sum of $86,831.00.

[8] Submissions conclusions and determination

8.1 As at the date of the hearing, the Defendant had paid a sum of $64,864.00. This was confirmed by the Defendant as per annexure LN 4 to the Affidavit of Luisa Mitchell filed on 23 June 2014. In addition to the said sum the Defendant had paid $60,594.60 less $1000 excess payable under the physical property loss claim as per annexure LM2 to the Affidavit in Response dated n15 April 2013. Total amount paid under both policies is $124,458.49.

8.2 I agree at the hearing the Plaintiff's counsel referred to Order 27 Rule 3 paragraph 6 of this judgment. I emphasize the words "...the court may give such judgment or make such order on the application as it thinks just".

In such circumstances, the court has to exercise discretion considering the facts of the case.

8.3 It is an admitted fact that the Defendant filed its Summons to amend the Statement of Defence only after the Summons for Judgment on Admission was filed. On perusal of the draft, amended Statement of Defence, I find the Defendants' attempt was to withdraw the admissions made on its Statement of Defence, and I agree with the Plaintiff there is no substantial explanation to justify the withdrawal of the admission. However, I must state that admission was on the liability of $86,831.00 and now the Defendant says it was a mistake made in the Statement of Defence. This court cannot allow mistakes to be corrected without justifiable reasons which cause prejudice to the Plaintiff.

8.4 The main purpose of filing the Summons to amend the statement is to withdraw the admission of $86,831.00. However, the liability on the Insurance Policy was not denied by the Defendant. In fact the admission of liability to the extent of $86,831.00 was further forfeited in the Statement of Defence. As stated in the paragraph 10, the Defendant states:

"the loss adjusters appointed by the Defendant concluded in its final report that the value of the loss pertaining to business interruption was $86,831.00. This conclusion was arrived at in all available evidence provided by the Plaintiff including Vat returns, financial statements and discussions with the Plaintiffs Directors".

This cannot be taken as a conditional offer and the figure of $86,831.00 arrived by the loss adjusters and this was their decision. The Defendant further agreed to pay $86,831.00 as assessed loss to the business interruption. If the Statement of Defence is amended great prejudice will be caused to the Plaintiff since the resultant position of the amendment amount to complete change of the Defence. I determine to dismiss the summons filed by the Defendant.

8.5 On the other hand on the admission of the liability on the Plaintiff is not entitled for a judgment for the full claim. On the admissions and this matter has to proceed with a substantive trial to decide on the actual loss.

Accordingly, I make the following Orders:

(a) The Summons for Leave to amend the Statement of Defence dismissed;

(b) The judgment is entered on admission in a sum of $86,831.00 and any payment made up to now by the Defendant should be deducted from the said sum and balance amount from $86,831.00 should be paid to the Plaintiff within seven(7) days hereof;

(c) Defendant is ordered to pay interest from the date of the Statement of Defence i.e. 20.2.2013 to the date of payment at the rate of 4% per annum on the outstanding amount on the judgment sum of $86,831.00.

(d) Order and declare that the Plaintiff is entitled to pursue this action on the amount claimed in the Statement of Claim less the said $86,831.00 and the matter to take its own course;

(e) No Order as to costs.

Delivered at Suva this 20th Day of February 2015

............................
C. KOTIGALAGE
JUDGE