Anderson v Harvey Trinder (NG) Pty Ltd [1975] PGSC 1; [1975] PNGLR 24 (2 October 1974)

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PRACTICE AND PROCEDURE - Pleading - Action for damages for personal injuries - Motor vehicle accident - Inability to serve owner of motor vehicle with process - Action against insurer pursuant to s. 12 of Motor Vehicles (Third Party Insurance) Act 1952 - Inability to serve process of the essence of the cause of action - Necessity to plead - Motor Vehicles (Third Party Insurance) Act 1952 s. 12[xix]¹.

In an action for damages for personal injuries arising out of a motor vehicle accident, where the owner of the motor vehicle cannot be served with process and the action is brought against the defendant insurer under the provisions of s. 12(1) of the Motor Vehicles (Third Party Insurance) Act 1952, the fact that the owner cannot be served with process is a matter which is of the essence of the cause of action against the insurer and which should accordingly be alleged in the statement of claim and proved on the trial, unless expressly admitted in the statement of defence.

In this action the plaintiff sued a defendant insurer for damages for personal injuries arising out of a motor vehicle accident pursuant to s. 12 (1) for the Motor Vehicles (Third Party Insurance) Act 1952. The statement of claim alleged inter alia that:

N2>“(a) Before, on or after the 31st May, 1971 the defendant was the insurer pursuant to the provisions of the Motor Vehicles (Third Party Insurance) Ordinance 1952 (as amended) of Papua New Guinea of a vehicle registered number 49-149 and owned by Olavi Johannes Julin.

N2>(b) On or about 31st May, 1971 the said Olavi Johannes Julin or another driver so negligently and unskilfully controlled and drove the said motor vehicle that the same collided with a motor cycle driven by the plaintiff.

N2>(c) As a result of the said negligence the plaintiff sustained personal injuries and loss.

N2>(d) On 31st July, 1971 the plaintiff gave to the defendant a notice pursuant to s. 12 (2) of the Motor Vehicles (Third Party Insurance) Ordinance 1952 (as amended) which said notice set out a short statement of the grounds of the plaintiff’s claim and such said notice was given one month after he became aware that the said Olavi Johannes Julin could not be served with process.”

In addition to the above matters the statement of claim alleged the due incorporation in Papua New Guinea of the defendant company, set out particulars of the negligence alleged and set out particulars of the injuries sustained by the plaintiff and the special damages claimed by him.

The statement of defence consisted of an admission of incorporation in Papua New Guinea and a blanket denial of all the other allegations contained in the statement of claim.

At the conclusion of the plaintiff’s case counsel for the defendant elected not to call evidence and submitted that there was no evidence, or no sufficient evidence to satisfy the provisions of s. 12 (1) of the Motor Vehicles (Third Party Insurance) Act 1952, that “the owner of the vehicle cannot be served with process”. The case is reported on the preliminary ruling only.

WILLIAMS J: The plaintiff sues the defendant for damages for personal injury arising out of a motor vehicle accident.

The action is brought against the defendant insurer under the provisions of s. 12 (1) of the Motor Vehicles (Third Party Insurance) Act 1952 (as amended) which is in the following terms:

“Where the death of or bodily injury to a person has been caused by, or has arisen out of the use of a motor vehicle insured under this Ordinance but the owner of the motor vehicle cannot be served with process, a person who could have obtained a judgment in respect of the death or bodily injury so caused against the owner if he had been served with process may recover by action against the insurer the amount of the judgment which he could have so recovered against the owner.”

At the conclusion of the plaintiff’s case counsel for the defendant stated that no evidence would be adduced on behalf of the defendant. In the course of his address he submitted, inter alia, that there was no evidence, or no sufficient evidence, to satisfy the provisions of s. 12 (1) that “the owner of the vehicle cannot be served with process”.

I turn now to the evidence concerning this aspect of the matter. Mr. Broughton, a migration officer, was called by the plaintiff. He said that records held by his department showed that one Olavi Johannes Julin had left Papua New Guinea on 2nd June, 1971, for Cairns, North Queensland. The department’s records showed no forwarding address and there was no record of his return to Papua New Guinea.

Constable Murepe also gave evidence for the plaintiff. He stated that he made some investigations into the accident giving rise to this action. He was asked if a summons had been issued against Julin and replied, “A summons was issued against him. When it came to be served I couldn’t serve it. He was away from his place.” Asked in cross-examination when it was he was trying to serve the summons he replied, “It was about three weeks after the accident”. He added that several attempts had been made over a period of a week.

Counsel for the plaintiff made two alternative submissions. The first was that the words, “the owner of the motor vehicle cannot be served with process” contained in s. 12 (1) amounted to a condition precedent to the bringing of an action against the third party insurer, and that on the state of the pleadings no proof that the owner could not be served with process was required on the part of the plaintiff. The alternative submission was that, in any event, the plaintiff’s evidence did establish that the owner could not be served with process.

As to the first submission reliance was placed upon the provisions of O. XXII r. 12 of the Rules of this Court. That rule is in the following terms:—

“An averment of the performance or occurrence of all conditions precedent necessary for the case of either party shall be implied in the pleading: And when the performance or occurrence of any condition precedent is denied, the condition must, unless it already appears by implication, be distinctly specified in his pleading by the party denying it.”

It was submitted that an averment that the owner of the vehicle could not be served with process was to be implied in the statement of claim and that, if the defendant wished to deny this, then it was a matter for specific denial in the statement of defence. There was no denial contained in the statement of defence.

The general scheme of the Motor Vehicles (Third Party Insurance) Act is to require insurance of all motor vehicles. An owner of a motor vehicle is required at all times during the registration or renewal of registration of the vehicle to indemnify himself by a third party policy with a licensed insurer under the Act against all sums for which he or his estate shall become liable by way of damages for death or bodily injury to a person arising out of the use of the motor vehicle (s. 6 (1)). Section 7 (1) sets out the requirements of a policy issued pursuant to the Act. Section 7 (1) (b) provides that a policy of insurance shall insure the owner and the driver jointly and each of them severally against all liability incurred by the owner or the driver in respect of the death of or bodily injury to a person caused by or arising out of the use of the motor vehicle. Section 11 (1) of the Act sets out the duties of the owner or driver in relation to the giving of information to the insurer concerning an occurrence giving rise to the death or injury to a person arising out of the use of the vehicle and further provides that neither the owner nor the driver shall, without the written consent of the insurer, make any compromise or admission in respect of death or bodily injury nor shall the owner or driver, without the written consent of the insurer, enter upon or incur expense in relation to litigation in respect of any liability which is covered by the policy of insurance. Section 13 sets out that an insurer may undertake the settlement of a claim against a person in respect of a liability against which he is insured, may take over on behalf of that person proceedings against him, may defend or conduct those proceedings in the name of and on behalf of that person and shall indemnify that person against all costs and expenses of and incidental to any such proceedings whilst he retains the defence or conduct of them.

Ordinarily, of course, a person injured as a result of a motor vehicle accident brings an action for damages against the tortfeasor who, in turn, looks to his insurer for indemnity. Section 12 (1) of the Motor Vehicles (Third Party Insurance) Act provides an exception to this rule in that it authorises the injured person “to recover by action against the insurer” in the circumstances envisaged in the sub-section. Those circumstances are that the claimant could have obtained a judgment against the owner but is unable to do so by reason of the fact that the owner cannot be served with process. In these particular circumstances the injured person may sue and recover from the insurer, a right which does not exist independently of s. 12 (1).

It is basic to the plaintiff’s contention that the fact that the owner of the vehicle cannot be served with process is a “condition precedent” within the meaning of O. XXII r. 12. This topic is dealt with in the Annual Practice (1973) p. 261 as follows:

“Cases constantly occur in which although everything has happened which at common law prima facie entitle a man to a certain sum of money or vest in him a certain right of action, there is yet something more which must be done or something more which must happen in the particular case before he is entitled to sue either by reason of the provisions of some statute or because the parties have expressly so agreed; this something more is called a condition precedent. It is not of the essence of such a cause of action but it has been made essential. It is an additional formality superimposed on the common law ... But an allegation which is of the essence of the cause of action is not a condition precedent within the meaning of this rule and must still be pleaded in the statement of claim. Thus the law merchant requires that notice of dishonour be given to every person who is sought to be made liable on a negotiable instrument except the acceptor. Unless such notice was duly given or was waived or excused no action lies against the drawer or any endorsee. Hence the statement of claim whether endorsed on the writ or not must contain either an allegation that notice of dishonour was given to the defendant or a statement of of the facts relied on as excusing the giving of such notice.”

From the above it appears that a distinction is to be drawn between a case where everything has happened which at common law prima facie vests a right of action in a person yet something further must happen before he can sue on his right of action and a case where an allegation is of the essence of the cause of action.

For the proposition that the words in s. 12 (1) amounted to a condition precedent reliance was placed upon Gates v. W. A. and R. J. Jacobs, Ltd.[xx]² and Lane v. Glenny [xxi]³. The first of these cases concerned an action to recover possession of leased premises for breach of covenant. A statute required that notice of the breach be given before action to recover premises. It was held that the performance by the plaintiff of the statutory condition was a condition precedent to his right of action and was to be implied in his pleading without being specifically pleaded. The second case cited concerned an action brought by a solicitor to recover costs from his client. A statute provided that a solicitor could not commence or maintain an action to recover fees until the expiration of one month from the delivery of a bill. It was held that a defence arising upon the non-delivery of a proper bill must be specially pleaded.

It seems to me that these cases are distinguishable from the present case in that in each case a cause of action had arisen between the plaintiff and the defendant but that a further step had to be taken before action could be taken to enforce the plaintiff’s right by action. This, I think, is in contrast with the situation in the present case. On the occurrence of the injury to the present plaintiff there arose (subject to proof of negligence) a cause of action against the owner of the vehicle. No cause of action then arose against the insurer. In order to have a cause of action against the insurer the requirements of s. 12 (1) of the Motor Vehicles (Third Party Insurance) Act must first be met. This situation is, I think, similar to that appearing in the cases relating to actions on bills of exchange (e.g. Fruhauf v. Grosvenor & Co.[xxii]⁴: May v. Chidley [xxiii]⁵) and the cases relating to assignees of debts (e.g. Seear v. Lawson [xxiv]⁶). In the former kind of case it was necessary that notice of dishonour be given before the defendant could be liable on the bill of exchange and that the notice be pleaded in the statement of claim and proved. In the latter kind of case the plaintiff had to plead and prove an assignment to show his status as a plaintiff.

In my view the fact that an owner cannot be served with process is a matter which should be alleged in the statement of claim and proved on the trial unless expressly admitted in the statement of defence. It is a matter which is of the essence of the cause of action against the insurer and not something superimposed upon a liability otherwise attaching to the insurer at the suit of a party injured by an insured vehicle. The primary liability of an insurer under the Act is to indemnify his insured and it is only by resort to s. 12 (1) that the injured person may recover by direct action against the insured.

I might also say that the words “performance” and “occurrence” appearing in O. XXII r. 12 appear to me to be quite inapt to describe the proposition of fact involved in the phrase “the owner cannot be served with process”.

I turn to the evidence adduced at the hearing by the plaintiff which was adduced for the apparent purpose of establishing that the owner could not be served with process. I have already set out this evidence. To my mind this evidence takes the matter no further than that very shortly after the accident the owner left Papua New Guinea and went to Cairns, Northern Queensland. There was no evidence that any attempt had been made to ascertain his whereabouts or that any attempt had been made to effect service of process for the recovery of damages upon him. It seems to me that the evidence falls far short of establishing that the owner could not be served with process.

[xix]<Infra p. 25.

[xx][1920] 1 Ch. 567.

[xxi](1837) 112 E.R. 402.

[xxii](1892) 61 L.J.Q.B. 717.

[xxiii][1894] 1 Q.B. 451.

[xxiv][1880] UKLawRpCh 285; (1880) 16 Ch.D. 121.

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Supreme Court of Papua New Guinea

Anderson v Harvey Trinder (NG) Pty Ltd [1975] PGSC 1; [1975] PNGLR 24 (2 October 1974)

Papua New Guinea Law Reports - 1975