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Supreme Court of Fiji |
IN THE SUPREME COURT OF FIJI
AT SUVA
CIVIL APPEAL No: CBV0015 OF 2008
(Appeal No. ABU0102 of 2006S)
BETWEEN:
LAUTOKA GENERAL TRANSPORT COMPANY LIMITED
Petitioner/Appellant
AND:
EMI VOSA
First Respondent
AND:
SIMELI RANATORA
Second Respondent
AND:
THE NEW INDIA ASSURANCE COMPANY LIMITED
Third Respondent
Counsel : Mr F. Khan for the Petitioner
Mr R. Chaudhary for the 1st Respondent
Mr A. Sudhakar and Mr A. K. Narayan for the 3rd Respondent
CIVIL APPEAL No : CBV0017 of 2008
(Appeal No. ABU0104 of 2006S)
BETWEEN:
THE NEW INDIA ASSURANCE COMPANY LIMITED
Petitioner/Appellant
AND:
EMI VOSA
First Respondent
AND:
SIMELI RANATORA
Second Respondent
AND:
LAUTOKA GENERAL TRANSPORT COMPANY LIMITED
Third Respondent
Coram: Hon. Justice Sathya Hettige, Justice of the Supreme Court
Hon. Justice Sriskandarajah Sundaram, Justice of the Supreme Court
Hon. Justice Suresh Chandra, Justice of the Supreme Court
Counsel: Mr A. Sudhakar and Mr A K Narayan for the Petitioner
Mr R. Chaudhary for the 1st Respondent
Mr F. Khan for the 3rd Respondent
Date of Hearing: Thursday, 11th October 2012
Date of Judgment: Wednesday, 24th October 2012
JUDGMENT
Facts of the Case
The High Court Case
Court of Appeal Civil Appeal No.ABU 0102 of 2006S
Court of Appeal Civil Appeal No.ABU 0104 of 2006S
Ground (a)
“General Powers of the Court
22.[1] In relation to an appeal, the Court of Appeal shall have all the powers and duties as to amendment and otherwise of the High Court
[2] The Court of Appeal shall have full discretionary power to receive further evidence upon questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner or commissioner:
Provided that in the case of an appeal from a judgment after trial or hearing of any cause or matter upon the merits, no such further evidence [other than evidence as to matters which have occurred after the date of the trial or hearing] shall be admitted except on special grounds.
[3] The Court of Appeal shall have power to draw inferences of fact and to give any judgment and make any order which ought to have been given or made and to make such further or other order as the case may require.
[4]The powers of the Court of Appeal under the foregoing provisions of this rule may be exercised notwithstanding that no notice of appeal or respondent’s notice has been given in respect of any particular part of the decision of the Court below or by any particular party to the proceedings in that court, or that any ground for allowing the appeal or for affirming or varying the decision of that court is not specified in such a notice; and the Court of Appeal may make any order , on such terms as the Court thinks just, to ensure the determination on the merits of the real question in controversy between the parties.
[5] The powers of the Court of Appeal in respect of an appeal shall not be restricted by reason of any interlocutory order from which there has been no appeal.”
“It is however evident that the late Mr.Buto was negligent in permitting, indeed on the evidence, demanding that Mr.Ramatora drive the bus. Mr. Buto knew or ought to have known that his co-employee was a mechanic not a bus driver and Mr Buto knew that his employer had given specific instructions that only he, Mr Buto, was to drive the bus that day. Mr Buto was not on a frolic of his own, and if the plaintiff had pleaded this negligence against Mr. Buto then the trial judge would have been bound to find negligence and further bound to find the bus company vicariously liable.”
“All relevant factual matters were before the trial judge and were determined by the trial judge. The witness who gave evidence on Mr.Buto’s instructions to Mr.Ramatora were cross-examined. Mr.Buto was killed in the accident, and this is not a case where if the plaintiff’s case had been pleaded as now amended, other evidence would have been called below.”
In saying this the Court notes that Mr. Ramatora did not give evidence. He was a Co-defendant with and, so the Court was told, is still an employee of the bus company and there is no suggestion that he was not called to give evidence because of the way liability was pleaded against the bus company. There can be no prejudice in the relevant sense to the other parties in allowing the amendment.”
Ground (b)
“The general principles ruling a case of this type are well known, but, ultimately, each case will depend for decision on its own facts. As regards the principles, their Lordships agree with the statement in Salmond on Torts,9th ed.,p.95, namely:”it is clear that the master is responsible for acts actually authorized by him: for liability to exist in this case, even if the relation between the parties were merely one of agency, and not one of service at all. But a master opposed to the employer of an independent contractor, is liable even for acts which he has not authorized, provided that they are so connected with acts which he has authorized that they may rightly be regarded as modes-although improper modes-doing them. In other words, a master is responsible not merely for what he authorize his servant to do, but also for the way in which he does it....On the other hand, if the unauthorized and wrongful act of the servant is not so connected with the authorized act as to be a mode of doing it, but is an independent act, the master is not responsible: for in such a case the servant is not acting in the course of his employment, but has gone outside of it.”
“As I understand the authorities the law at present makes the owner or bailee of a car vicariously responsible for the negligence of the person driving it, if, but only if, that person is (a) his servant and driving the car in the course of his employment or (b) his authorized agent driving the car for and on his behalf .......Thus, mere permission to drive is not enough to create vicarious responsibility for negligence..... So far as I know, until the present case, du Parcq LJ’s statement of law in Hewitt v Bonvin [1940]1 KB at 194, has never been questioned:
The driver of a car may not be the owner’s servant, and the owner will be nevertheless liable for his negligent driving if it be proved that at the material time he has authority, express or implied, to drive on the owner’s behalf. Such liability depends not on ownership, but on the delegation of a task or duty.”
“.............the Insurers agree to indemnify the Insured for all amounts which the Insured shall become legally liable to pay by way of compensation by reason of Personal Injury or Property Damage caused by an occurrence in connection with the Business.”
This clause shows that the Assurance Company agreed to indemnify any damage caused by the bus of the Transport Company not only if the bus is used for the purpose of the Company’s Business but also for the use in connection with the Business of the Company.
[11] In Ilkiw the authorized lorry driver Waines had instructions from his employer British Sugar not to allow the lorry to be driven by anyone else. In breach of those instructions he allowed a workman Samuels, who was not an employee of British Sugar and who had never driven a lorry before, to drive the lorry and the plaintiff was injured.
[12] Willmer LJ held that British sugar could not be made vicariously liable for the negligence of Samuels who was not their servant. However the trial judge had found that Waines was negligent in allowing Samuels to drive and that British Sugar was vicariously liable for Wainses’ negligence, and the Court of Appeal agreed holding that an employer could only escape liability:
“If, but only if, at the time of the negligent act, the vehicle was being used by the driver for the purpose of what has been called a “frolic” of his own. That is not this case.”
Grounds (c) to (h)
“In consideration of the payment of premium and subject to the terms conditions definitions exclusions warranties and limits of liability incorporated herein, the Insurers agree to indemnify the Insured for all amounts which the Insured shall become legally liable to pay by way of compensation by reason of Personal Injury or Property Damage caused by an occurrence in connection with the Business.”
This clause clearly provides subject to the terms conditions definitions exclusions warranties and limits of liability incorporated herein, the Insurers agree to indemnify the Insured.
PRIMARY MOTOR INSURANCE
The Insured warrants that during the currency of this policy, there will be maintained in full force and effect motor vehicle liability insurance covering both Bodily Injury and Property Damage in respect of vehicles owned by or leased or rented to the insured for which registration is required by reason of Road with a limit of liability any one accident of at least $ 100,000.
This warranty shall not apply to error or accidental omission by the Insured, his agent or employees:
In the event of a breach of this warranty, this policy shall not be voided but shall apply only to the extent as if the Insured had complied with.
PROVIDED FURTHER THAT the due observance and fulfilments of the terms, conditions and endorsement of this policy by the insured in so far as they relate to anything to be done or complied with by the insured shall be conditions precedent to any liability of the Company to make any payment under this policy. No waiver of any of the terms provisions, conditions and endorsements of this policy or the renewal thereof shall be valid unless made in writing signed by any authorized official of the Company.
This warranty shall not apply to error or accidental omission by the Insured, his agent or employees:
In the event of a breach of this warranty, this policy shall not be voided but shall apply only to the extent as if the Insured had complied with.
“When a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not.”
Similar view was expressed by Mellish LJ in Parker v South Eastern Railway Company [1877] UKLawRpCP 28; (1877) 2 CPD 416 at 421 and Latham CJ in Witon v Farnworth[1948] HCA 20; , (1948) 76 CLR 646 at 649.
“[35] Counsel for the third party submits that the failure of the 1st defendant to comply with this requirement from 1997 was either deliberate or reckless and was neither an error nor an accidental omission which might trigger the proviso to the “Primary Motor Insurance” endorsement.
[36] On behalf of the 1st defendant it is however submitted that insurance cover was at all relevant times effected on behalf of the 1st defendant with an employee of the third party who at no time advised the 1st defendant of any requirement to effect any other insurance policies other than the public liability policy and the third party insurance policy. The evidence of Pyara Singh on behalf of the 1st defendant confirms that no advice was ever given.
[37]on behalf of the 1st defendant it is then submitted that the third party is estopped by conduct of its employee or agent from denying that the 1st defendant maintained motor vehicle liability insurance. The evidence of Mr.Singh is that the employee or agent of the third party was relied upon by the 1st defendant to effect its insurance policy.”
49. From the above observation it could be seen that the learned High Court Judge has come to the conclusion that the Assurance Company had not given any advice at any time to the Transport Company to obtain and maintain motor vehicle liability insurance, covering both Bodily Injury and Property Damage. The employee or agent of the Assurance Company was relied upon by the Transport Company to effect its insurance policy. In effect the court has come to the conclusion that the failure to obtain and maintain motor vehicle liability insurance is an error or accidental omission by the Transport Company, his agent or employees. The High court Judge also observed that no evidence was led by the Assurance Company to rebut this position that the insurance was effected by an agent of the Assurance Company.
51. In the Court of Appeal His Lordships observed:
“[39] In relation to proving accident or omission, once it was established that the primary policy hadn’t been effected, the onus was on the bus company to prove that this was due to error or accidental omission. And that is what it did. The onus of rebutting this, or establishing that the failure was reckless or deliberate, then shifted back to the insurer.”
52. The High Court and the Court of Appeal have made concurrent findings of fact. In Bulu v Housing Authority [2005]FJSC 1;CBV0011.2004S(8 April 2005) the Supreme Court Held:
“[5] These grounds, so far as they relate to questions of fact, have been the subject of concurrent findings in the Court of Appeal and the High court.
[6] The appellate jurisdiction of the Privy Council in cases from Fiji and other jurisdictions was exercised in appeals as of right and by special leave. Even in appeals as of right the Privy Council would rarely disturb concurrent findings of fact. See Srimati Bibhabati Davi v Kumar Narendra Narayan Roy [1946] C 508. There is no appeal as of right to this court and a petitioner seeking special leave to review concurrent findings of fact faces considerable difficulties.”
53. In the above circumstances this court is not inclined to interfere with the finding of fact of the High Court Judge, which was affirmed by the Court of Appeal, that the Transport Company’s failure to obtain and maintain a Primary Motor Insurance is by error or by accidental omission.
The provisions of the warranty
54. The first limb of the warranty reads as follows:
“The Insured warrants that during the currency of this policy, there will be maintained in full force and effect motor vehicle liability insurance covering both Bodily Injury and Property Damage in respect of vehicles owned by or leased or rented to the insured for which registration is required by reason of Road with a limit of liability any one accident of at least $ 100,000.”
To comply with this warranty the Transport Company would have obtained and maintained a motor vehicle liability insurance covering both Bodily Injury and Property Damage with a limit of liability any one accident of at least $100,000. If the Transport Company had complied with this warranty at the time of accident it would have two insurance policy namely; Motor Vehicle liability Insurance policy and Public liability insurance policy in addition to the compulsory third party insurance.
55. The Public Liability Insurance Policy in clause 8 provides:
“If at any time claim arises under the policy there in any other existing insurance covering the same liability the company shall not be liable to pay or contribute more than its rateable proportion of any compensation cost of expenses.”
In other words if the Transport Company had complied with the warranty it would had been indemnified by the Motor Vehicle Liability Insurance Policy up to $100,000 and over and above it would have been indemnified by the Public Liability Insurance Policy .
56. As the Transport Company had not complied with the warranty and as it is a condition precedent to the liability of the Assurance Company to make any payment under the policy the Transport Company is not entitled to any indemnity. But as the failure to comply with the warranty was by error or accidental omission as shown by the Transport Company and found by the Court the Transport Company will fall under the exemption; the second limb of the warranty clause. i.e.:
“This warranty shall not apply to error or accidental omission by the Insured, his agent or employees:
In the event of a breach of this warranty, this policy shall not be voided but shall apply only to the extent as if the Insured had complied with.”
57. Under the above clause the Transport Company will be considered as it has complied with the warranty. The Assurance Company under the policy would indemnify any claim over and above $100,000 and Motor Vehicle liability Insurance Policy would have indemnified up to $100,000. In the instant case the Transport Company by error or accidental omission has not obtained the Motor Vehicle liability Insurance Policy therefore there is no insurance cover to indemnify the first $100,000. Hence the Assurance Company under the policy is only liable to indemnify any claim over and above $ 100,000.
58. The second limb cannot be interpreted to mean that the Assurance Company have to indemnify the full amount claimed as the failure to comply with the warranty was by error or accidental omission. The second limb of the warranty has to be read together and any other interpretation to the second limb other than the interpretation given above would lead to absurdity; where a person who had not complied with the warranty would be in a beneficial position than a person who had complied with the warranty and had obtained Motor Vehicle Liability Insurance Policy and paying premium for that policy as well.
59. The effect of the warranty is that when there is a deliberate breach of the warranty no claim would be payable but if the breach is by error, or by accidental omission it will be considered as if the Insured had complied with. And the insurer would be obliged to indemnify the Transport Company when the Transport Company became liable for amounts exceeding S100,000.00.
60. In the above circumstances the learned High Court Judge had erred that after finding that the breach of the warranty was by error, or accidental omission, the Assurance Company was liable to provide full and complete indemnity against the Plaintiff’s claim, interest and cost and indemnify the Transport Company as insurer.
61. The Court of Appeal had also erred in dismissing the appeal against this finding.
Special leave to Appeal
62. Section 7(3) of the Supreme Court Act 1998 provides :
“In relation to a civil matters (including a matter involving a constitutional question), 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.”
63. The points raised in this appeal raises issues of substantial general interest to the administration of civil justice in so far as it relates to all cases of compensation in fatal or personal injury claims affecting the general public at large. They clearly meet the requirements of s 7(3) of the Supreme Court Act 1998. We therefore grant special leave to appeal and go on to consider the substantive Appeal.
The Substantive Appeal
64. We hold that the Learned Trial Judge had come to the correct conclusion that the failure to obtain and maintain Motor Vehicle Liability Insurance Policy, is an error or accidental omission by the Transport Company, his agent or employees. The Court of Appeal had affirmed this finding.
65. However, we are of the view that both Courts had come to a wrong finding that when the insured failed to comply with the warranty by error or accidental omission the insurer the Assurance Company was liable to provide full and complete indemnity against the Plaintiff's claim, interest and cost.
66. The effect of the warranty is that when there is a deliberate breach of the warranty no claim would be payable but if the breach is by error, or by accidental omission it will be considered as if the Insured had complied with, and the insurer has to pay under the Public Liability Policy after the first $100,000.00.
67. The appeal therefore succeeds on this ground.
The Orders
68. The Orders are:
Civil Appeal No. CBV0015 of 2008
(a) Special Leave to appeal dismissed.
(b) The Petitioner to pay in a sum of $3,000 to the First Respondent.
Civil Appeal No. CBV0017 of 2008
(a) The Court set aside the judgment and the orders of the Court of Appeal in Civil Appeal No. ABU 0104 of 2006.
( b) The Court affirms the judgment and orders of the High Court subject to the variation; that the third party Assurance Company is liable to indemnify the 1st Defendant (1st Respondent) under Public Liability Policy over and above $100,000.00
(c) The Court makes no variation in the orders of costs awarded in the High Court and in the Court of Appeal in Civil Appeal No. ABU0102 of 2006.
(d) The Court makes no orders of costs in this appeal no. CBV0017 of 2008 as the case is in the nature of a test case and the insurer has made his legal point.
Justice Sathyaa Hettige
Judge of the Supreme Court
Justice Suresh Chandra
Judge of the Supreme Court
Justice Sriskandarajah Sundaram
Judge of the Supreme Court
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