Naba v Tower Insurance (Fiji) Ltd [2011] FJSC 9; CBV0002.2011 (24 June 2011)

SUPREME COURT OF FIJI

Civil Appeal CBV0002 of 2011
[From Court of Appeal ABU 81.05]

Repeka Naba

v

Tower Insurance (Fiji) Limited

12 May 2011

Calanchini, Justice of the Supreme Court

RULING ON EXTENSION OF TIME

Mr V Mishra for Petitioner [Applicant]
Mr A K Narayan for Respondent [Respondent]

Introduction

[1] This is an application by Repeka Naba for leave to file out of time an application for special leave to appeal to this Court and that the time for filing the same be extended.

[2] This application comes before me pursuant to section 11 of the Supreme Court Act 1998 (the Act) which provides that a single Judge of the Supreme Court may exercise any power vested in the Supreme Court not involving the decision of an appeal or reference. Section 14 of the Act provides that for the purpose of the Act the Supreme Court has in relation to matters that come before it all the power and authority of the Court of Appeal which may be exercised as required according to the circumstances of the case. Finally, Rule 46 of the Supreme Court Rules 1998 provides that the High Court Rules and the Court of Appeal Rules apply with necessary modification to the practice and procedure of the Supreme Court.

The Application

[3] The Petitioner is seeking an extension of time for filing an application for special leave to appeal a judgment of the Court of Appeal delivered on 14 July 2006.

[4] Rule 6 of the Supreme Court Rules states:

"A petition (for special leave to appeal) and affidavit in support must:

(a) be lodged at the Court registry within 42 days of the date of the decision from which special leave to appeal is sought; and

(b) be served upon the registrar and all parties to the proceedings who are directly affected by the petition."

[5] The application before the Court is dated 22 February and was filed on 24 February 2011. A period of some four and a half years has elapsed between the date of the Court of Appeal judgment and the present application.

[6] Rule 20 (4) of the Supreme Court Rules enables the Court, for good and sufficient cause, to grant an extension of time subject to any conditions that may be imposed.

Principles

[7] The power to extend the time for an appeal is discretionary, and has to be exercised judicially, having regard to established principles. The following factors are usually considered when determining an application for an extension of time, namely (a) the length of the delay, (b) the reasons for the delay, (c) whether there is an arguable case on the appeal and (d) the degree of prejudice to the respondent if time is extended.

Delay and Reasons for Delay

[8] I have already indicated that the delay is well over four years. This is considerable and unusual. Consequently it is necessary to consider whether the reason explains and excuses the delay and would provide sufficient grounds for me to proceed to consider merit and prejudice.

[9] The reason for the delay is set out in the affidavit of Pamela Kenilorea sworn on 22 February 2011. Put simply, the reason why an extension of time is sought is because there has been a change in the law concerning the interpretation of section 11 of the Motor Vehicles (Third Party Insurance) Act Cap 177 (The Third Party Insurance Act).

CHANGE IN LAW

[10] The Court of Appeal, admittedly reluctantly, dismissed the appeal and affirmed the decision of the judge at first instance who had found that the respondent Tower Insurance (Fiji) Limited was not liable to pay damages awarded to the Appellant because the third party policy did not cover a driver who did not hold a driving licence. In reaching that conclusion the Court of Appeal followed an earlier decision of the Court in Ashok Kumar and Chandra Mati Singh –v- Sun Insurance Company Limited (unreported civil appeal No. 72 of 2004 delivered 11 November 2005).

[11] It is claimed by the Petitioner that the law has changed as a result of the recent decision of this Court in Sun Insurance –v- Pranish Prakash Chand (unreported civil appeal No. 5 of 2008 delivered on 15 October 2010)

[12] There are perhaps two delays that need to be considered. The first delay relates to the time between the decision of the Court of Appeal delivered on 14 July 2006 and the date the application was filed. The second delay is the time between the decision of the Supreme Court delivered on 15 October 2010 and the date the application was filed. There is no attempt to satisfactorily explain the second delay. Putting that matter to one side for the present, the more pressing issue concerns the first delay.

[13] The issue at this stage is whether a change in the law provides a sound basis for seeking leave to appeal some four years out of time. The change in the law involves an interpretation by this Court of a statutory provision. The decision means that there can now be recovery under a compulsory policy of insurance under circumstances where previously insurance companies had successfully avoided liability.

[14] The Petitioner submits that there has been a change in the law in the sense that previous misconceived decisions about the meaning of a section in a statute have been put right, which provides a good ground for allowing an extension of time in which to seek special leave to appeal. Whether such an occurrence provides a sufficient justification for the delay of some four years is in the first place dependent upon whether the decision of this Court in Sun Insurance –v- Pranesh Prakash Chand (supra) delivered on 15 October 2010 operates retrospectively. In other words, can the Petitioner now rely on that decision as representing the interpretation of the section in the relevant legislation that applied in July 2006. Alternatively, is it sufficient that the Court of Appeal applied the interpretation of the section that had hitherto been applied by that Court in similar cases.

[15] It is appropriate, at this stage, to make three observations about the present proceedings.

[16] First, the judge at first instance found that the respondent was not liable to pay because the policy did not cover a driver who did not hold a driving licence. The driver was a sixteen year old youth and unlicenced at the time "of the accident". The accident involved the petitioner then a girl of 6 years old being struck by the vehicle driven by the unlicensed driver. There was no dispute that the owner of the vehicle at the time of the accident was insured under a policy of third party insurance as required by the Act.

[17] The Court of Appeal considered and applied the earlier decision of the Court in Ashok Kumar (supra). As an intermediate appellate court and no doubt mindful of the consequent need for the legal certainty resulting from the binding effect of its previous decisions, the Court of Appeal considered itself bound by the earlier decision of the Court and was unable to distinguish the appeal from Ashok Kumar (supra). In Ashok Kumar (supra) it was not disputed that the driver of the insured vehicle did not hold any driving licence at the time of the accident. Furthermore it would appear that the Court could not apply any of the clearly defined exceptions that were set out in Young –v- Bristol Aeroplane Co. Ltd [1944] 2 All ER 293. In Davis –v- Johnson [1978] UKHL 1; [1978] 1 All ER 1132, the House of Lords re-affirmed this principle "expressly and unequivocally." This decision has, in my judgment, the effect of closing the door on any attempt to widen the well – defined exceptions set out in Young (supra). This view of the binding effect of previous Court of Appeal decisions had been confirmed in Ambika Nand and Others –v- Mohammed Samsuden Sahu Khan (unrepresented civil appeal No.66 of 1995 delivered 14 August 1997).

[18] Secondly, the Petitioner had not previously sought to appeal the decision of the Court of Appeal. She could have sought leave from the Court of Appeal or special leave from this Court within the time limits prescribed by the Rules of the Court. It is difficult to say whether it was because of or in spite of the comments made by the Court of Appeal in paragraph 39 of its judgment:

"We have mentioned that the effect of section 6 (1) (b) of the Act has allowed insurance companies to avoid the principal reason for compulsory third party insurance, namely the protection of innocent victims of road accidents. For 28 years since the suggestion was made by Kermode J in Michael Raman –v- R (unreported criminal appeal No. 27 of 1978 delivered 30 May 1978) the Courts have repeatedly called for legislative change to bring the law in Fiji into line with one or other of the various systems in other jurisdictions. We, again, repeat that request. Until something is done, cases like the present will continue where the appellant is unlikely ever to be able to recover the damages she had been awarded and clearly needs."

[19] Whatever the reason, the Petitioner did not seek to appeal the 2006 decision of the Court of Appeal until recently and, in effect, only as a result of the decision of this Court in Sun Insurance –v- Pranesh Prakash Chand (supra)

[20] Thirdly, in its decision in Sun Insurance (supra) this Court did not refer to the decision of the Court of Appeal in the present proceedings. It referred with approval to the decision of Mills–Owen CJ in Murtaza Khan –v- R (1965) 11 FLR 161.

[21] The Court stated in paragraph 68 that:

"The authority _ _ _ of Mills-Owen CJ in Murtaza Khan in our view (reflects) the true intent of the United Kingdom legislature in 1930 and 1934 and (is) authority supporting the view we have ourselves formed."

[22] It should be noted that in Murtaza Khan (supra), the issue was whether the policy issued under the Act extended to a private vehicle in respect of which a fare was charged on isolated occasions.

[23] The Court also referred to Dominion Insurance Company Limited –v- Bamforth and Others (unreported civil appeal No.CBV 5 of 2002 delivered 24 October 2003). The proceedings arose out of a motor accident and involved, amongst other things, a conclusion that the time limit fixed under section 11 (3) of the Act was directory rather than mandatory. The Court of Appeal held that if there was substantial compliance with the time limit contained in the section the purpose of the provision would have been achieved. As a result the notice of the commencement of proceedings that had been given to the insurer 13 days after they began rather than within 7 days as required by the Act did not entitle the Appellant to avoid its statute imposed liability to pay the judgment amount.

[24] Finally, in paragraph 72 this Court commented on the decision of the Court of Appeal in Ashok Kumar (supra) as follows:

"In the view of this Court Ashok Kumar and Another –v- Sun Insurance Company Limited (supra) it is open to question as to whether it was correctly decided. The driving restriction for permitted drivers depends on their having held and not having been disqualified from holding or obtaining a licence. The restriction to exclude drivers who have failed to renew their driving licence after thirty days from its expiry would seem to be an insurance company device to avoid liability. It is arguably within the mischief of the 1934 Road Traffic Act Paul II reforms in the United Kingdom."

[25] It is clear that this Court disapproved of the practice of an insurer claiming it could avoid liability under the Act in a case where the driver had held a valid licence prior to the accident but had failed to renew it within 30 days when the accident occurred. In Ashok Kumar (supra) the learned judge at first instance had found that the driver Ratu Peni Kurusoni did not hold a driver's licence at the time of the accident. Furthermore, the learned trial judge also found that Ratu Peni Kurusoni was driving under the influence of liquor at the relevant time. [See Sun Insurance Company Limited –v- Ratu Peni Kurusoni, Mohammed Islam, Ashok Kumar and Another (unreported civil action No.238 of 2002 at Lautoka delivered 23 September 2004)].

[26] Returning to the principal issue concerning the retrospective effect of the decision of this Court in the Sun Insurance –v- Chand (supra). The Court's statement of principles in paragraph 68 of its judgment provided what it described as the first of two independent reasons for dismissing the insurer's appeal. The Court did not accept the proposition that section 11 of the Third Party Insurance Act only confers third party rights against an insurer where at the time of the event the insured and his permitted user of the insured vehicle were not in any breach of conditions on the policy. The reasons for that proposition were then stated in some detail by the Court. The proposition is sufficiently wide to cover a range of fact situations including where a driver has never held a licence, driving whilst disqualified, failing to renew a driving licence and charging a fee for a passenger's journey.

[27] I accept that the Court of Appeal decision in Pranesh Prakash Chand –v- Sun Insurance Company Limited (unreported civil appeal No. ABU 42 of 2006 delivered on 11 July 2008) was considering both the Third Party Insurance Act and the policy in the context of the use of the insured vehicle rather than the status of the driver of the insured vehicle. The rationale for the Court of Appeal's decision in that case was conveniently stated in paragraph 29:

"It seems to this Court that an exclusion based on the purpose for which a vehicle is being used offends section 6(1) of the Act which provides that the policy must be a policy which insures the person, persons or classes of person "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 that vehicle", and which section specifies the liability that can be excluded, which does not include an exclusion based on the purpose for which the motor vehicle was being used."

[28] As the Court of Appeal pointed out, to hold otherwise would mean that a vehicle could be in and out of cover during the course of a morning depending upon the purpose for which it was being used.

[29] The Court of Appeal also conveniently set out what it considered to be the essential scheme of the legislation. In paragraph 31 the court said:

"Section 6 mandates that a third party insurance policy must cover any liability arising out of the use of the insured vehicle, apart from specified matters. Section 10 permits an insurer, as between the insurer and the insured in relation to eight specified matters, to restrict the insurer's liability to the insured, but provides that those restrictions will be of no effect as between the insurer and the injured third party."

[30] The Court continued in paragraph 32:

"The words in section 11 (1) "being a liability covered by the terms of the policy" have to be read as being a liability covered by the policy in accordance with the Act."

[31] In the same decision the Court of Appeal considered its earlier decision in Ashok Kumar (supra). The Court of Appeal considered Ashok Kumar (supra) to be correctly decided on the basis that policy wording that sought to restrict cover to owners who held a licence and to persons driving with the owner's permission who held a licence at the relevant time was not in breach of section 6 (1) (b) of the Third Party Insurance Act because the section permitted the insurer to insure such person, persons a classes of persons as may be specified in the policy.

[32] These observations concerning its earlier decision in the Ashok Kumar appeal (supra) were of course only obiter. Nevertheless the reasoning of this Court in its decision on the appeal has the effect of confirming the Court of Appeal's decision so far as it concerned the issue before it but at the same time disapproved and rejected the Court of Appeal's observations on its early decision in Ashok Kumar (supra).

[33] The general principle that the common law operates retrospectively means that this Court's decision must be applied by a court at first instance and an intermediate appellate court in respect of any proceedings that give rise to an issue concerning the interpretation of section 11 of the Third Party Insurance Act. It will make no difference whether the policy came into existence and/or the event giving rise to a claim occurred before or after the decision of the Supreme Court in Sun Insurance (supra).

[34] However in my judgment this form of retrospective operation does not provide a basis for a substantial extension of time to appeal the decision of an intermediate court of appeal. The decision of the Court of Appeal in these proceedings was in accordance with the principles of precedent and was considered to be the correct interpretation and application of the legislation.

[35] In reaching this conclusion I have been assisted by the decision of the Court of Appeal in R v Cottrell [2007] EWCA Crim 2016; [2007] 1 WLR 3262. Sir Igor Judge P at page 3277 stated:

"In short, the principle is that the defendant seeking leave to appeal out of time is generally expected to point to something more that the mere fact that the criminal law has changed, or been corrected, or developed. If the appeal is effectively based on a change of law, and nothing else, but the conviction was properly returned at the time, after a fair trial, it is unlikely that a substantial injustice occurred."

[36] Furthermore, in Eyre –v- Wynn – MacKenzie [1895] UKLawRpCh 194; [1896] 1 Ch 135 Lindley LJ stated the position in relation to the effect of a statute that changed the law in relation to mortgage profit costs on judgments given before the Act was passed. He said:

"If this application is to be regarded as an appeal on the merits, it is impossible for us to say that the law was wrong as the law stood at the time when it was given. It is obvious that the Act was not intended to interfere with judgments which had already been given by the Court. If we gave leave to appeal in this case, we should be re-opening all judgments of a similar kind which had been given prior to the passing of the Act. We cannot do that."

[37] In my judgment there is no reason why the same cannot be said about a final appellate court's decision that effects a change in the law. It cannot be said that the Court of Appeal decision was wrong as the law stood at the time when it was given.

[38] As a result I have concluded that the change in law reason does not justify the delay and is not a ground for granting an extension of time.

SPECIAL LEAVE

[39] I should also indicate at this stage that I do not consider that, on the material that is before me, the Petitioner would be able to satisfy the requirements under section 7 (3) of the Act for the grant of special leave that is required pursuant to section 8 (2) of the Administration of Justice Decree 2009.

[40] Section 7(3) of the Act states:

"In relation to a civil matter _ _ _ the Supreme Court must not grant special leave to appeal unless the case raises:

(a) a far-reaching question of law;

(b) a matter of great general or public importance;

(c) a matter that is otherwise of substantial general interest to the administration of civil justice."

[41] In Bulu –v- Housing Authority (unreported civil appeal CBV 11 of 2004 delivered on 8 April 2005) this Court noted that section 7 (3) has substantially codified the principles developed by the Privy Council for the grant of special leave. In my judgment section 7(3) has not only codified those principles but has to some extent narrowed their application in Fiji. In the same decision the Court noted that it had regularly applied the principles developed by the Privy Council over a number of years. The Court referred to the decision in Daily Telegraph Newspaper Company –v- McLaughten [1904] UKLawRpAC 45; [1904] AC 776. In doing so the Court accepted that:

"The case had to be one of gravity involving matter of public interest, or some important question of law, or affecting property of considerable amount and where the case is otherwise of some public importance or of a very substantial character. Even so special leave would be refused if the judgment sought to be appealed from was plainly right, or not attended with sufficient doubt to justify the grant of special leave. A decision on the facts of a particular case _ _ _ did not warrant the grant of special leave."

[42] Since the decision in Bulu –v- Housing Authority (supra) this Court has continued to adopt the same approach when considering applications for special leave to appeal. (See Dr Ganesh Chand –v- Fiji Times Limited and Margaret Wise (unreported civil appeal CBV of 2009 delivered 8 April 2011) and Praveena's BP Service Station Limited –v- Fiji Gas Limited (unreported civil appeal CBV 18 of 2008 delivered 26 April 2011)).

[43] In the present application it is apparent that the reasoning of the Supreme Court in Sun Insurance (supra) was expressed in sufficiently wide terms to conclude that it has changed the law in a manner which would otherwise have also applied to the facts of the present case. The subject matter of the present proceedings is therefore now essentially a matter relating to the rights of an injured third party to recover from an insurance company damages awarded against a negligent driver of the insured vehicle. It raises no more than a question connected with the construction of an agreement. The law has been changed. The interpretation that courts in this country are required to adopt in respect of section 11 of the Third Party Insurance Act has been determined by this Court. Under those circumstances it would appear that the present petition would not meet the threshold prescribed by section 7 (3).

[44] In those circumstances I must decline the application for leave to file out of time a petition for special leave to appeal. In view of the unusual nature of this application, I direct that the parties should pay their own costs.

W.D. Calanchini
Judge of the Supreme Court

24 June 2011