Center Garage Ltd v UAP Assurance [2003] VUSC 38; Civil Case 013 of 1998 (4 July 2003)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 13 of 1998

BETWEEN:

CENTER GARAGE LIMITED
Plaintiff

AND:

UAP ASSURANCE
Defendant

Plaintiffs: Mr. Malcolm
Defendant: Mr. Ozols

JUDGMENT

This case revolves around the use of the French word "attentats".

On 12^th January 1998 in Port Vila there was a riot. The plaintiff ran and still runs a vehicle repair maintenance and sale business. Considerable damage was done in the riot to his property and that of his clients that was on the premises at the time. He claims for this damage against his insurers, the defendants. They declined to pay, saying his policy did not cover these events, save for VT1,2 million in respect of theft and broken glass.

It is necessary to look at the history of events and, of course, the working of various documents.

In 1995 the plaintiff was building new premises for his business. Gilda Gauchet, his sister and officer manager of the business, was asked by the plaintiff to arrange insurance cover. She contacted Raymond Michel, an employee of Caillard Kaddour, the Vanuatu agent of the defendants. Insurance was arranged. There is no argument that this did not cover riot damage. The policy is set out at RM4, affidavit of Raymond Michel filed on 13^th May 2003 (document 5 in the bundle).

The first part of the document is headed "Conditions Particulières" (Special Conditions). There are then details of the parties, dates, premises etc.

Under the ........ part "Recapitulation des Garanties", (Summary of Guarantees) there are two sub headings "Guaranties de Base" (Basic Cover) and "Garanties Facultatives" (Optional Cover). There is an agreed translation of the policy at page 65 in the bundle. Listed under each head are various types of risk and on the right end of each line the words "Garanti/Exclu", (Included/excluded). One of these words has been crossed out on each line to say if the risk is included or not.

Under "Garanties Facultatives", seventh line is the risk "Dommages causés par les attentats" (Damages caused by criminal attempts). This is the cover required for riots. "Garanti" is crossed out, "Exclu" remains.

The police is shown to run from 17^th July 1995 to 16^th July 1996. The place of insurance is "Dock Situé Route de Mélé", the plaintiffs new premises. It would appear for a substantial portion of that year the plaintiffs were not in the new premises. This does not affect the issues in this case. Still within "Conditions Particulières".

These then follow pages headed "Tableau des Garanties" and later "Garantie Facultative". Under this latter heading are listed the optional covers and heading "Ce qui est garanti" (What is included) and "Ce qui est exclu" (What is excluded). There then follow a list of specifically what is included or excluded. For risks such as breakage of glass and electrical damage reference is made under what is excluded to article 13 of the general conditions, (see page 72 and 73 for the English translation).

These then follows the document "Assurance incendie et Multinique, Contrat d'assurance multinisque professionelle TOM, Condition Générales". Article 13 is found under "Titre III - Clauses Générales du Contrat", (page 98). The Article is headed "Les Exclusions Communes" (Common Exclusions) and sub-headed "Ce qui est exclu".

Various causes of loss or damage are listed, including "de la guerre étrangère ou civile", (foreign or civil war). Riot damage is not listed.

I therefore find that from July 1995 to July 1996 the plaintiff was covered for the risks "Garanti" (i.e. not excluded) listed under the heading "Garanties de Base" and "Garanties Facultatives" even if cause by riot. There was no cover for riot generally.

What follows thereafter is a matter of evidence and examination of the wording of documents, particularly renewal proposals.

The plaintiff says he was unhappy with the health of his cover. He asked his office manager to arrange full cover. She says she spoke to Mr. Michel and he agreed. He would send an amended cover rate to include riot damage and other extra risks.

The July 1996 - July 1997 "Proposition de Renouvellement" was in slightly different form from the first document setting out cover. It is clearly computer generated and Mr. Michel accepted in evidence he entered the details for this and subsequent renewals.

The middle of the document is headed "Tableau des Garanties". It then lists a series of risks, places the word "Garanti" and a premium sum after each. Some of these risks were not covered under the original contract e.g. Responsabilité Civile is fully included. Titre II sets out what is included and excluded. The word "Dommages" (damages) appears on its own, with a stated premium. It was not explored in evidence what this meant standing its own.

The last item on the list is "attentats: Garanti (VT) 6153". The renewal note for 1997 - 1998 is the same save for minor adjustments in premium.

The plaintiff says there was clearly a request to include riot. He already had cover for the specified risks if caused by riot. For two successive years the renewal proposal stated this. UAP must have known and accepted, whatever the agent here could or could not write. Caillard Kaddour have a computer link several times daily. He paid the premium.

The defendants deny cover. They say "attentats" refers to criminal acts causing the risks which the plaintiff selected from the menu. If riot cover was included it would state "Dommage causés par les attentats" as set out in the original "Conditions Particulières", (page 5). The word "attentats" on its own was insufficient.

I heard the evidence of Gilda Gauchet (sworn statement of 21^st May 2003), Raymond Vallette (23^rd March 1999 and 21^st May 2003) and Josette Vallette (21^st May 2003) for the plaintiffs. I have heard the evidence of Raymond Michel (13^th May 2003 and 16^th June 2003) for the defendants.

There are two principal areas of factual disagreement: first what was said when the "full cover" was sought, if at all, second what was said in the days immediately following the riot.

Raymond Vallette says he wanted more cover and asked his sister to arrange it. Gilda Gauchet says she telephoned Michel and it was arranged. This was not long before renewal date and the new proposal came out covering what they had already plus "Responsabilité Civile" and "Attentats".

Raymond Michel says "at no stage between July 1995 and the time of the riot did Raymond Vallette's sister ever approach us to vary the cover provided under the policy." In any event he could not write such cover, he would have to refer to UAP in Noumea.

On 13^th February 1998, the day after the riot, Mr. Vallette says he met Mr. Michel and Mr. Bernier, the man in charge of Caillard Kaddour at the premises. They inspected the damage and both were saying "not to worry you are fully covered for the damage." About a month later Mr. Bernier came to his office and said "he had some good news and some bad news." He told Mr. Vallette they were not covered for riot but they would pay VT2,000,000. Mrs. Vallette said she was there on the morning after the riot and both Mr. Michel and Mr. Bernier attended about 9 to 9.30. She does not recall any conversation between them.

Mr. Michel says he went on his own that morning. Before leaving he checked the policy with Mr. Bernier and they knew there was no riot cover. He says Raymond Valette "made a comment to the effect that he hoped he was covered. I replied I will take pictures first and then I will go back to the office and advise the insurer. At that time I know he was not covered for riot damage but I did not think it was either my place nor was it a good time for me to tell him that. thereafter most of the dealing were between Loïc Bernier and Mr. and Mrs. Vallette and I undertook that it was Mr. Bernier who told him that he had not riot cover".

Mr. Michel referred to 20.30 similar policies for business in Port Vila. They were not covered for riot damage either. Examples were provided.

The plaintiff responded that in the following years the word "attentas" was removed.

I accept the witnesses are either referring to documents or relying upon their memories for events of over five years ago. I also accept they were doing their best to recollect those events.

It must be noted that Mr. Bernier did not give evidence. Whilst his opinion as to whether there was cover or not and who was present and what was said would not in itself be definitive, it might have helped, particularly on what was said on the day after the riot. However, I must judge this case on the evidence I have heard.

Where there are differences I prefer the evidence of the plaintiffs witnesses. I do this on the basis not of credibility but on the basis of reliability, especially when put against the factual circumstances.

I find Gilda Gauchet at Mr. Vallette's behalf did ask Mr. Michel for wider cover. That was before the renewal notice in 1996. The renewal notice came and covered risks not previously covered and the kind Mrs. Gauchet sought. On the evidence there is no other explanation as to why those extra risks should be added.

I accept the evidence of Mr. and Mrs. Vallette as to who was present and what was said the day after the riot. I accept Mr. Michel and Mr. Bernier would have checked the policy before he set out. It, as he says, it excluded riot he could not have looked forward to the visit with anything other then apprehension.

The photographs in Mr. Vallette's first sworn statement show the extent of the damage. Uppermost in the mind of Mr. and Mrs. Vallette when their insurance agent visited would be "We are covered, aren't we?" This would not be limited to the broken glass, but all the damage. If Mr. Michel was not saying anything on this topic Mr. Vallette, as would anyone, have clearly and immediately realised his concern was being avoided. This is consistent with Mr. Vallette's evidence. Further, the breaking of the news a month later as "good news and bad news" is consistent with an insured who had been told he is insured, then is told he is not. At the least for a remark like that to have been made there would have to been some doubt which was then being resolved. This is not consistent with Mr. Michel's recollection.

Accordingly I find the plaintiffs did ask for riot cover and received successive renewal notices including the words "attentats". As far as the agents have were concerned that was what they understand and intended to cover. This accounts from the charge of stance between assurances on the day after the riot and the good news/bad news of a month later.

"Attentats" means a (criminal) attempt, outrage "(Harrops New Hurter Dictionarie). "Victime d'un attentat" means a victim of crime. On the face of the documents "attentat" could not refer to the listed risks, as they were already covered in the original policy without the presence of that word. The suggested distinction between "attentats" and "dommages causés par des attentats" has no substance. The listed cover guaranteed states "Incendie" (fire) and "Tremblements de terre" (earthquake). It does not state "dommages causés par ...".

Mr. Michel states Caillard Kaddour had not authority to write riot cover. Such a request would have been forwarded to UAP in Noumea for approval. At paragraph 2 of his sworn statement of 13^th May 2003 he says that Caillard Kaddour is "the representative agent" of UAP Insurance. The only defendant in these proceedings is UAP.

There was no argument before me concerning the question of agency and to what extent Caillard Kaddour could bind UAP. However, the two are "on-line" on a daily basis. The wording for the additional cover must have been known by UAP early in the year following its addition. It then reserved the insurance with that same additional wording. There was no query raised. The only remaining argument for the defendant is to say the reason no query was raised is because they understand it to mean what Mr. Michel did. There is no evidence to that effect. There is no expert or other evidence concerning such policies other then that of Mr. Michel.

Accordingly I find that there was a valid policy of insurance of the defendants in force in January 1998. That policy covered the riot damage at the plaintiff's premises. It is now a matter for the parties, in accordance with the terms of that policy, to attempt to arrive at a figure for the insured loss.

I award the plaintiff its costs on the standard basis.

Dated at Port Vila, this 4^th day of July 2003.

R. J. COVENTRY
Judge.