IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

ACTION NO. HBC 0047 OF 1994

BETWEEN:

PRABHA SHANDIL
(f/n Shiu Raj) of
9 Kings Road, Davuilevu, Nausori
as next friend of SHALENDRA PRASAD SHANDIL
1st Plaintiff

PRABHA SHANDIL
(f/n Shiu Raj) of
9 Kings Road, Davuilevu, Nausori
as the intended administratrix of
the estate of ATMA PRASAD SHANDIL
2nd Plaintiff

AND

THE COLONIAL MUTUAL LIFE ASSURANCE
SOCIETY LIMITED a limited company
duly incorporated in Australia and
having its head office at 3 Central Street, Suva
1st Defendant

LALITA CHAND
(f/n Atma Prasad Shandil)
of Navua, Fiji, Domestic Duties
2nd Defendant

R. Chand for the Plaintiffs
S. Parshotam for the 1st Defendant
No appearance for the 2nd Defendant 

Date of Hearing: 15th August 1996
Date of Interlocutory Judgment: 27th August 1996

INTERLOCUTORY JUDGMENT

This is an application by the 1st Defendant to set aside an order which I made on the 26th of August 1994 that the 1st Defendant pay all moneys to the Plaintiffs under Policy No. 499017-7104534(8) within fourteen days and that the costs of this application be paid by the Plaintiffs.

The application raises a short but important point of law under Section 83(2) of the Insurance Act Cap. 217 which apparently has never been previously decided in Fiji. The question I have to decide is whether a nomination of a Beneficiary under a life insurance policy taken out by Satendra Prasad Shandil with the 1st Defendant on the 10th of November 1985 for a period of 11 years can be changed by a later Will of the policy-holder dated 9th August 1992 in which the testator nominated his grandson Shalendra Prasad Shandil as a beneficiary under the insurance policy in lieu of his daughter Lalita Kumari who is the 2nd Defendant.

Section 83(1) of the Insurance Act so far as relevant is as follows:

"The holder of a policy of ordinary life insurance may, when effecting the policy or at any time before the money secured thereby becomes payable, nominate a person or persons to whom it shall be paid in the event of his death."

Subsection (2) is as follows:

"A nomination under subsection (1) shall -

(a)	be incorporated into the text of the policy; or

(b)	be made by an endorsement on the policy, in which case written notice thereof shall be communicated to the insurer who shall record it in the register maintained under section 49(1)(a)."

The relevant facts are as follows:

The 1st Plaintiff is a minor and sues through his mother as next friend.

The 2nd Plaintiff is the intended administratrix of the estate of Atma Prasad Shandil who died testate on 7th of October 1992. Atma Prasad Shandil executed his last Will and Testament on the 9th of August 1992 and appointed his son Satendra Prasad Shandil to be his sole executor and trustee.

Satendra Prasad Shandil died testate on the 4th of November 1992 and appointed his wife the 2nd Plaintiff as his sole executrix, trustee and beneficiary of his estate.

Probate No. 28969 was granted to the 2nd Plaintiff on the 9th of February 1993.

By virtue of the Will made by Satendra Prasad Shandil his life insurance cover policy with the 1st Defendant together with all benefits accrued therein was to be given to the 1st Plaintiff absolutely.

On the 21st of December 1992 the solicitors for the Plaintiffs wrote to the 1st Defendant advising of the death of Satendra Prasad Shandil (hereinafter called "the deceased") on the 7th of October 1992 and of the policy held by the 1st Defendant. They also stated that they were in the process of obtaining probate of the estate.

On 21st December 1992 the 1st Defendant wrote to the solicitors for the 2nd Defendant stating inter alia that the 1st Plaintiff might have an interest in the policy but that the nominated beneficiary in the policy was Lalita Kumari the 2nd Defendant and daughter of the deceased.

On the 19th of January 1993 the Plaintiffs' solicitors wrote to the 1st Defendant instructing it not to release any moneys payable under the deceased's policy until the matter had been adjudicated by this Court. They also enclosed a copy of their letter of the same date to the solicitors for the 2nd Defendant the relevant parts of which are as follows:

"We have filed an application for grant of probate.

We enclose herewith copy of letter written to Munro Leys & Company which is self explanatory.

Please do not release any monies payable under the deceased's policy numbered 7104534 to any person until and unless the matter has been adjudicated upon by the Court."

On the 18th of March 1993 the 1st Defendant's solicitors wrote to the Plaintiffs' solicitors advising that by virtue of Section 83 of the Insurance Act the need for a probate was dispensed with, as title was already established by the beneficiary named in the policy by the deceased.

On 27th of May 1994 I made an order ex-parte restraining the 1st Defendant from releasing or paying any moneys in respect of the policy to the 2nd Defendant until further order and a copy of the order was served on the 1st Defendant.

Three months then passed without any response from the 1st Defendant and on the 26th of August 1994 I ordered that the 1st Defendant pay all moneys due under the policy to the Plaintiffs within fourteen days. As a result of that the 1st Defendant engaged its present solicitors who issued a Summons to set aside my order of 26th of August. The Defendant's Summons was supported by an affidavit of Mosese Taga the Customer Benefit Officer of the 1st Defendant who, so far as relevant, deposed as follows:

(a)	because the deceased had exercised his rights under Section 83 of the Insurance Act and nominated the 2nd Defendant as the "named beneficiary",

(b)	upon the death of the deceased the proceeds of the policy became payable to the named beneficiary and as such could not and did not form part of the estate of the deceased.

It is that question which falls now for my decision. Before dealing with the submissions I received from counsel I must refer to a second affidavit filed prior to the hearing of the present application on behalf of the 1st Defendant of Joape Kunikoro the Life Administration Manager of the 1st Defendant, sworn on the 20th of June 1996.

Mr. Kunikoro states that he has perused all records maintained by the 1st Defendant with respect to the subject life policy and has found no notice of any cancellation or change given by the policy holder (the deceased) to the nomination earlier made by him.

The relevant part of the policy in question is contained in the schedule under the heading special provisions and I quote it in full.

"SPECIAL PROVISIONS

Pursuant to Section 83 of the Fiji Insurance Act the policy owner has nominated the person or persons listed below as beneficiary/ies in the event of the death of the life insured. Should the nominated beneficiary/ies predecease the life insured, any monies which may become payable under this policy shall be paid to the member, his executor, administrator or assigns.

Named beneficiary/ies LALITA KUMARI (DAUGHTER)

CHANGE OF BENEFICIARY - Subject to the rights of any assignee, or any irrevocably appointed beneficiary the insured may at any time change the beneficiary by filing written notice thereof at the Head Office of Colonial Mutual accompanied by the policy for suitable endorsement by Colonial Mutual. Such change, when so endorsed, to be effective as of the date of the execution of the notice by the insured." 

On behalf of the Plaintiffs Mr. Chand submits that the last Will of the deceased must prevail over any nomination by him in an earlier insurance policy. If the Court were to accept the contention of the Defendant that because the deceased gave no notice to the 1st Defendant of any cancellation or change of the nomination made in the policy prior to his death this would mean that if the deceased changed his mind on his death bed and nominated somebody else under the policy or if he were overseas and shortly afterwards there made a Will or dying declaration naming somebody else, he obviously could not notify the 1st Defendant of his change of mind in time for the policy to be endorsed with the name of the new nominee.

He referred to the definition of "policy-holder" given under the Insurance Act which so far as relevant means "the person who for the time being is the legal holder of the policy for securing the contract of the insurer and in relation to ordinary life insurance business includes an annuitant".

Even though the definition does not say so expressly Mr. Chand says that I should hold that the term "policy-holder" impliedly also means "the executor or administrator of any policy holder". When I pointed out to him that the term "legal holder" is not defined in the interpretation section of the Act Mr. Chand replied that in the present context this must mean also the executor or administrator of an estate.

In summary Mr. Chand said that the term "policy-holder" can be extended to the Will because the same intention of the "policy-holder" is maintained and extended to his Will.

Mr. Parshotam began his submission for the 1st Defendant by telling me that he had been informed by his agents in Australia and New Zealand that Section 83(2) appears to be unique to Fiji because the legislation in those countries does not allow any change in the nominee of an insurance policy to be made by a Will. He said that Section 83 sets out the procedure which must be followed by any policy-holder to change the name of a beneficiary in an insurance policy namely that any change or cancellation must be before the policy-holder dies and must be notified to the insurance company in writing before his or her death; if not then the insurer shall not be liable for any payment made to the nominee mentioned in the policy or in the register of the insurer. He stressed that the mechanism is prescribed by statute and referred to the mandatory use of the word "shall" and the expression "shall not".

As no notice was given to the company by the deceased during his life-time of the change of the nominee made in his Will, Mr. Parshotam submits that the company is entitled to pay the Second Defendant the proceeds of the policy and that this has already been done. Therefore Mr. Parshotam says the 1st Defendant is not liable to any other person.

He further points out that under the Succession, Probate and Administration Act Cap. 60 "Will" is defined as any testamentary disposition. He then referred to a number of English cases but conceded that in all of those on which he relied for his argument that the insurance policy must prevail, the English legislation was different from that here.

The first case mentioned by Mr. Parshotam was Lemage v. Goodban and Others (1865) L.R. 1 P.D. 57 in which at p.62 the Court said:

"The will of a man is the aggregate of his testamentary intentions, so far as they are manifested in writing, duly executed according to the statute."

To this I would add with respect the description given by Halsbury's Laws of England Fourth Edition Volume 50 Para 201 "the Will or testament is the declaration in a prescribed manner of the intention of the person making it with regard to matters which he wishes to take effect upon or after his death".

Mr. Parshotam then continued that if the Plaintiffs rely on the fact that probate had been granted to the 2nd Plaintiff of her late husband's Will on the 9th of February 1993 this did not assist the Plaintiffs here because no where in the Succession, Probate and Administration Act is the granting of probate made a pre-condition for the effectiveness of a Will. All probate does, said Mr. Parshotam, is to give title and powers to the executor or administrator of an estate; it does not affect testamentary dispositions.

I agree.

In Tristram and Coote Probate Practice, 27th Edition at page 4 the authors say:

"A grant of probate is conclusive evidence of the executor's title to all property in the estate and of the right of the executor or administrator to administer the estate".

Counsel then referred me to various cases the first being Eccles Provident Industrial Co-operative Society Limited v. Griffiths (1912) A.C. 488 at 490. This was a case under the English Industrial and Provident Society Act (1893) which, among other things, empowered a member of a society registered under that Act to nominate any person to whom his property in the society could be transferred at his decease "provided the amount credited to him in the books of the society does not then exceed one hundred pounds sterling".

Of this provision Lord Mersey said at p.490:

"The object of section 25 is, in my view, to give to the poorer members of a society, that is to say, to those who have not more than £100 to their credit, the power to make provision for the disposal, at their death, of this small sum without the expense being incurred of the making of a will or of administering this part of their estate. The nomination can only be made by the members who are within this poorer class, and it is the duty of the secretary of the society, before he enters the name of the nominee in the society's book, to see that there is not more than £100 to the member's credit. If the exercise of the right to nominate is delayed until the amount to the credit is more than £100 the right itself is lost. Once made the nomination takes effect, not by creating any charge or trust in favour of the nominee as against the nominator, as was suggested during the argument (for the nominator can at any moment revoke the nomination), but by giving to the nominee a right as against the society, in the event of the death of the member without having revoked the nomination, to require the society to transfer the property in accordance with the nomination."

Bennett v. Slater (1899) 1 Q.B. 45 was an earlier case under the Friendly Societies Act in which the Court held that any nomination of a beneficiary made by a member of a friendly society under the Act could not be revoked in any manner other than prescribed by the Act, and therefore was not revocable by a subsequent Will of the nominator.

Rigby L.J. said at p.51 on the submission that a Will could revoke a nomination:

"The Act provides for making the nomination, and for revoking it in a particular manner. Why should we imply that there is a power of revoking it by will? There is nothing in the Act to point to a will as a possible instrument of revocation."

The final case cited by Mr. Parshotam was In re Danish Bacon Co. Ltd Staff Pension Fund Trusts - Christensen and Others v. Arnett and Others (1971) 1 WLR 248 which concerned nominations by members of a Pension Fund later changed by a member of the fund.

Dealing with the relevant legislation Megarry J. at p.253 quoted with approval from the judgment of Farwell L.J. when Eccles Provident Industrial Co-operative Society Ltd. v. Griffiths was in the Court of Appeal. Farwell L.J. said:

"Section 25 of the Act of 1893, like several other sections of the same character in similar Acts, is in my opinion intended to confer a benefit on members of societies of this kind by giving them a limited power of disposition in its nature testamentary without the formality and expense of making a will or obtaining probate. The nomination in pursuance of such a power is, like any other testamentary disposition, revocable, as, under the Wills Act, a will is revocable, and, like a will, does not, prior to the nominator's death, affect his property, but leaves him free to deal with it as he pleases, either by withdrawing it in accordance with the rules of the society, or receiving payment of his loans to the society, or receiving payment of his loans to the society, without any power of interference by the nominee. The nominator is in the position of a testator, and the nominee of a legatee."

Interesting as these cases are, as Mr. Parshotam concedes, the legislation which the Courts were applying in them was different from that which I have to consider here in that in none of them was a Will stated to be a means of changing a nomination under a pension fund.

Section 83(2) allows this, subject, as Mr. Parshotam would have it, to a policy holder notifying his insurance company of any change he made in the nomination by a Will made after the policy came into force. I was at first attracted by this argument as evidenced by questions which I put to Mr. Chand during the course of his submission but having read the various cases and authorities I have mentioned I have come to the conclusion after much thought that Mr. Chand's submissions are correct here. I am fully conscious of the plain meaning rule of statutory interpretation which prevents the Court from re-writing an Act so as to eliminate mistakes or by filling in the gaps. Numerous judges of great standing have upheld this rule. Thus Burbury J. later, Burbury C.J. of the Supreme Court of Tasmania said in St. Leonards Municipal Council v. Williams (1966) Tas SR 166 at 169; 15 LGRA 62 at 65:

"It is emphatically not the province of the courts to write into an Act of Parliament something which is not there because it may be thought that it would be convenient if it were there."

In Daymond v. South West Water Authority (1976) A.C. 609 at 645 Viscount Dilhorne in the House of Lords said:

"If there is such a defect, it is not for us sitting judicially to remedy it by legislating to put into (the section) words which Parliament could, if it had wished, have inserted."

Lord Salmon said in Johnson v. Moreton (1980) A.C. 37 at 50:

"The courts have no power to fill in a gap in a statute, even if satisfied that it has been overlooked by the legislature and that, if the legislature had been aware of the gap, the legislature would have filled it in."

As perhaps might be expected Lord Denning M.R. did not agree with these pronouncements; in R. v. Barnet London Borough Council; ex p. Shah (1982) Q.B. 688 at 720 he said:

"In these circumstances I think we must abandon our traditional method of interpretation .... We must ourselves fill in the gaps, which Parliament has left. We must do our best to legislate for a state of affairs for which Parliament has not legislated."

Lord Denning's views in this instance have never been accepted. In the High Court of Australia even Murphy J. who felt much sympathy with Lord Denning's views held they were "highly controversial" in Dillingham Construction Pty Ltd v Steel Mains Pty Ltd (1975) 132 CLR 323 at 335.

Thus it may be said that in the course that I am now going to follow I am flying in the face of the authorities or, perhaps putting it another way, tempting the fates. Nevertheless in the end a judge must decide each case according to the justice of it as he sees it.

In my judgment the first sentence in the last paragraph of subsection (2) of section 83 is vital to the resolution of this question. It says that before the money secured by the policy becomes payable a nomination may be cancelled or changed any time by an endorsement or by a Will of the policy holder.

I cannot bring myself to conclude that it was the intention of the draftsman of Section 83 or of the Parliament which passed the Insurance Act to thwart or frustrate the intention of a policy-holder testator who wished to change his or her nomination of a beneficiary under a life insurance policy by a later Will. To hold otherwise in my view would be to deny such a holder the rights given him by law by his making a Will. I consider there is much force in Mr. Chand's contention that this could cause hardship or injustice where a testator had second thoughts sometime after nominating a beneficiary in the policy. As a hypothetical example, surely it would be unfair if the person named as beneficiary in the policy were to suddenly come into a fortune when there was another person not so well off whom the policy-holder considered was then worthier of his bounty but who could not take under the policy because the testator could not notify the insurer of his change of nominee in time before his death.

A Will represents usually the last wishes of a testator as to how he wants his property to be disposed of on his death. In my view under the definition of "policy-holder" in the Act the executrix of the deceased's estate here is the legal holder of the policy and the letter by the Plaintiffs' solicitors to the 2nd Defendant's solicitors copied to the 1st Defendant that day constitutes sufficient notification under section 83(2) of a change of beneficiary under the policy and I so hold.

At the suggestion of Mr. Parshotam I allowed counsel for the Plaintiffs to make application instanter directing the 1st Defendant to pay all the proceeds of the policy to the 1st Plaintiff.

It was agreed by both counsel that if I were to find for the 1st Plaintiff I should not award any costs and I make such an order. I was also told by Mr. Parshotam that if I found for the Plaintiff the 1st Defendant would seek leave to join the 2nd Defendant as a third party, she having now been paid under the policy by the 1st Defendant. If counsel wishes to pursue this, I will grant the necessary leave.

JOHN E. BYRNE
JUDGE

Legislation and authorities referred to in judgment:

Insurance Act Cap. 217.
Succession, Probate and Administration Act Cap. 60.
Halsbury's Laws of England, Volume 50, Para 201.
Tristram and Coote Probate Practice, 27th Edition.
Bennett v. Slater (1899) 1 Q.B. 45.
Eccles Provident Industrial Co-operative Society Limited v. Griffiths (1912) A.C. 488.
In re Danish Bacon Co. Ltd. Staff Pension Fund Trusts - Christensen and Others v. Arnett and Others (1971) 1 WLR 248.
Daymond v. South West Water Authority (1976) A.C. 609.
Dillingham Construction Pty. Ltd. v. Steel Mains Pty Ltd. (1975) 132 CLR 323.
Johnson v. Moreton (1980) A.C. 37.
Lemage v. Goodban and Others (1865) L.R. 1 P.D. 57.
R. v. Barnet London Borough Council; ex p. Shah (1982) Q.B. 688.
St. Leonards Municipal Council v. Williams (1966) Tas SR 166.

Additional case referred to in argument:

Whicker v. Hume (1858) 11 E.R. 124.
HBC0047D.94S