K.W. March Ltd v Southern Pacific Insurance Co. Ltd [1969] FijiLawRp 9; [1969] 15 FLR 62 (27 March 1969)

[1969] 15 FLR 62

SUPREME COURT

Civil Jurisdiction

K. W. MARCH LTD. AND ANOTHER

v

SOUTHERN PACIFIC INSURANCE CO. LTD.

Thompson Ag. P.J.

5th, 6th February, 27^th March, 1969

Insurance — fire insurance policy — insurable interest — retailer indebted to supplier for insured — bare debt does not give rise to insurable interest — Rules of the Supreme Court (1934) (applied) O.19 rr.17-20.

Insurance — lapse of fire insurance policy — agreement to revive policy — agreement following non-disclosure by policy holder of material relevant information — avoidance of revival.

A company which has sold stock in trade to a retailer over a period of years and is owed money by the retailer in respect thereof, but has no mortgage or lien over the stock in trade or the premises, has no insurable interest therein. To give rise to an insurable interest there must be some right against the insured property itself and a bare debt is not sufficient.

A lapsed fire insurance policy may be revived but, as a contract of insurance is one uberrimae fidei, if the insurer agrees to revive it as a result of the failure of the policy holder to disclose to the insurer material relevant information, the revival may be avoided.

Action in the Supreme Court on a claim under a policy of fire insurance.

K. C. Ramrakha for the plaintiffs.

D. N. Sahay for the defendant company.

The facts are stated in the judgment.

THOMPSON Ag. P.J .: [27th March 1969]—

The first plaintiff is a company carrying on business in Suva. The second plaintiff is a businessman who in the years 1960-1962 was the owner of a retail shop business at Tovu, Totoya, Lau. The defendant is an insurance company which on 28th November, 1960, issued a policy of fire insurance in respect of the buildings where the second plaintiff carried on his business and in respect of the stock-in-trade of that business. That policy, which was tendered as Exhibit '1', purports to show that the plaintiffs were both insured under it. Their claim arises out of a fire which destroyed the shop and its contents on 24th September, 1962.