Laho Ltd v QBE Insurance (Vanuatu) Ltd [2003] VUCA 26; Civil Appeal Case 15 of 2003 (7 November 2003)

IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Civil Appellate Jurisdiction)

Civil Appeal Case No. 15 of 2003

BETWEEN:

LAHO LIMITED
Appellant

AND:

QBE INSURANCE (VANUATU) LTD.
Respondent

Coram: Hon. Justice Bruce Robertson
Hon. Justice John W. von Doussa
Hon. Justice Daniel Fatiaki
Hon. Justice Oliver A. Saksak
Hon. Justice Patrick I. Treston

Counsel: Mr. Boar for the appellant
Mr. Hurley for the respondent

Hearing Date: 3rd November 2003.
Judgment Date: 7th November 2003.

JUDGMENT

The appellant appeals against the decision of the learned Chief Justice declining his application to appeal out of time and, dependent upon the decision in relation to that, seeks an order that the decision of Justice Coventry of 2 April 2001 be set aside in its entirety.

The original claim, for which judgment was delivered on 2 April 2001, concerned the interpretation of a contract of insurance between the appellant and the respondent concerning the motor vessel "Latua" owned by the appellant. It seemed that on 7 May 1999 the vessel left Port Vila bound for the island of Emae in the Shepherds group, with 27 people on board. A report was received from the captain of the vessel at 9.30 a.m. placing her 2 nautical miles West of Lelepa Island. Between 11.30 a.m. and noon she was seen off Moso Island. Thereafter neither the vessel nor anyone aboard has been seen again.

The learned Chief Justice declined the appellant's claim for indemnity from the respondent in respect of the loss of the vessel under the contract of insurance. His Lordship found that the insurer was discharged from liability under the contract from the time that the vessel left the wharf at Port Vila. He held: -

1. That the Australian Marine Insurance Act 1909 was the applicable law;
   
2. That the claimant had failed to prove on the balance of probabilities that the vessel was seaworthy when she set off and, in the absence of any other explanation for her loss, he could not say that the vessel was lost as a result of perils of the sea.
   
3. That the appellant had failed to disclose material facts concerning the vessel namely that it had taken on water on 24 December 1998 and thereafter was slipped for three to four months and underwent substantial repairs to her hull. His Honour held that had the respondent known of those material non-disclosed facts it would not have assumed the risk.
   
4. That disclosure of the proposed increase in the number of passengers to 25 was not notified to the respondent and this induced the insurer to enter into policy.
   
5. That there were clear breaches of the express warranties under Section 39 of the Act in three aspects:-
   
   • (a) The vessel set sail with 23 passengers on board when its safety certificate limited the number to 15;
     
   • (b) The vessel should have carried three ratings. It only carried two;
     
   • (c) The safety certificate required a "Mate 1" to be on board. The highest qualification held by any member of the crew was "Mate 2".
     

In relation to the appeal against the decision of the learned Chief Justice for leave to appeal out time it is clear that such a decision is entirely a discretionary one for the Court (see Norwich & Peterborough Building Society v. Steed (1991) (1) All ER 888).

We accept that the appropriate factors to take into account in deciding whether or not to grant an extension of time for filing an appeal include: -

1. The length of the delay;
   
2. The reasons for the delay;
   
3. The chances of the appeal succeeding if time for appealing is extended; and
   
4. The degree of prejudice to the potential respondent if the application is granted.
   

(See CM. Van Stillroldt BV v. El Carriers Inc [1983] 1 All ER 699. Norwich & Peterborough (above). Mallory v. Butler [1991] 2 All ER, 889)

We deal with each of those in turn.

The length of delay

Clearly there has been very lengthy delay in this matter between the date of judgment on 2 April 2001 and the filing of the Notice of Appeal on 4 July 2003. The Notice of Appeal was not served until 5 August 2003. Under rule 20 of the Western Pacific Court of Appeal Rules 1973 the time for appeal is 30 days after the decision complained of, calculated from the date on which the judgment or order of the High Court was signed, entered or otherwise perfected. It seems that, as the judgment was released by the Registry on 12 April 2001, the 30 days for the filing of the appeal expired on Monday 14^th May 2001. Accordingly the proposed appeal has been filed over two years, one month and approximately two weeks too late, which is a significant period indeed.

The reasons for the delay

In giving reasons for the delay the applicant relied upon sworn statements of Mr. Ouchida, Chief Titongoamata, Mr. Bell and Mr. Karie. In those statements reliance was placed upon a statement attributed to counsel for the appellant at trial to the effect that it was all over and that they could not appeal. The appellant appears to have relied upon this statement as to appeal rights. We remain sceptical about that and unconvinced that that of itself would be sufficient grounds for allowing an appeal to be filed out of time. That is particularly so on the narrative which appears from the statements that various lawyers were consulted from time to time and that legal advice had been forthcoming, and yet no appeal was filed until 4 July 2003. We find that there are clearly gaps in the explanations provided and we remain unconvinced that the delay has been satisfactorily explained.

The chances of the appeal succeeding

We find that although we are not deciding the merits of the appeal, the conclusions reached by his Lordship appear to be available on the basis of the evidence adduced. The findings appear to have been consistent with the evidence and those conclusions persuade us that there is little chance of an appeal succeeding on that basis.

As to the submission that his Lordship should have applied the English Marine Insurance Act 1906 instead of the Australian Marine Insurance Act 1909, it is clear that the parties to the insurance contract for the marine hull of the vessel expressly agreed that "this insurance is subject to Australian law and practice". It seems that counsel on behalf of the appellant at trial accepted that the Australian Marine Insurance Act 1909 was the applicable law to be applied, and his Honour confirmed that when he said: -

"It has been accepted throughout that the Australian Marine Insurance Act 1909 is the applicable law".

Of course the parties are entitled to choose whichever law they want to govern their contract and this has traditionally been so particularly with marine insurance contracts.

The course of the parties choosing the Australian law to govern their contractual agreement cannot be contrary to Article 95 of the Constitution of the Republic of Vanuatu. That states:-

"95. (1) Until otherwise provided by Parliament, all Joint Regulations and subsidiary legislation made thereunder in force immediately before the Day of Independence shall continue in operation on and after that day as if they had been made in pursuance of the Constitution and shall be construed with such adaptations as may be necessary to bring them into conformity with the Constitution.

(2) Until otherwise provided by Parliament, the British and French laws in force or applied in Vanuatu immediately before the Day of Independence shall on and after that day continue to apply to the extent that they are not expressly revoked or incompatible with the independent status of Vanuatu and wherever possible taking due account of custom.

(3) Customary law shall continue to have effect as part of the law of the Republic of Vanuatu."

Parties are not restricted by that article from making contractual arrangements outside the laws applicable in the Republic of Vanuatu and we find that that submission by the appellant has no merit. In short, we consider that the parties' choice of the Australian Marine Insurance Act 1909 does not offend the Constitution.

In any event, the laws of Australia and England under the relevant Marine Insurance Acts are virtually the same and the Australian legislation was based on the English Act. As it seems that his Lordship was justified in reaching the conclusions that he did, even if the UK Marine Insurance Act 1906 been applied the result would have been the same.

In summary, we conclude that even if the time for appealing were extended there seems little chance of the appeal succeeding.

The degree of prejudice to the potential respondent

Because of the significant lapse of time between the decision and the filing of the appeal, it is clear that the respondent is entitled to consider that the matter was at an end as far as the claim by the appellant was concerned. Of course claims by other potential claimants, such as the estates of infants who perished, are still potentially available but prior to the filing of the appeal even in negotiating, compromising and paying the agreed costs to the respondent in September 2001 the appellant gave no indication that an appeal was intended. Furthermore no such mention was made even in January 2003, when there was a meeting between the parties to resolve certain other issues. It is our view that the respondent would be significantly prejudiced should the appellant be granted leave to file the appeal out of time. If such leave were granted the respondent would suffer further delays in resolving the matter as well as commitment of unnecessary administrative costs, legal resources and expenses.

It is our view that the appeal against the learned Chief Justice's decision to decline the application for leave to appeal out of time cannot be upheld. The appeal must be dismissed. The appellant will pay the costs of the respondent on this appeal.

Dated at Port Vila, this 7^th day of November 2003.

Hon. Justice Robertson
Hon. Justice von Doussa
Hon. Justice Fatiaki
Hon. Justice Saksak
Hon. Justice Treston