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Sun Insurance Company Ltd v Fiji Public Trustee Corporation Ltd [2010] FJHC 255; HBC214.2009L (19 July 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 214 of 2009L

BETWEEN:

SUN INSURANCE COMPANY LTD
Plaintiff

AND:

FIJI PUBLIC TRUSTEE CORPORATION LIMITED
1st Defendant

AND:

PACIFIC TRANSPORT COMPANY LIMITED
2nd Defendant

AND:

LEVANI TURUKAWA
3rd Defendant

AND:

RAMESHWAR CHANDRA
4th Defendant

AND:

KRITIKA SINGH
5th Defendant

AND:

AVNEETA DEVI CHAND
6th Defendant

FINAL JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr. K Kumar for the Plaintiff
Mr. F Khan for the 2nd & 3rd Defendants
Mr. R Chaudhary for the 4th, 5th & 6th Defendants

Solicitors: Suresh Maharaj & Associates for the Plaintiff
Patel Sharma Lawyers for the 2nd & 3rd Defendants
Chaudhary & Associates for the 4th, 5th & 6th Defendants.

Date of Hearing: 15 July 2010
Date of Judgment: 19 July 2010

INTRODUCTION

[1] This is an application by Originating Summons for declarations that the Plaintiff third party insurer is not liable on a third party policy covering a motor vehicle involved in an accident. This is because it says the driver of the vehicle was intoxicated at the time of the accident.

THE APPLICATION

[2] The Originating Summons was filed on 18 November 2009. It sought the following orders:

1. A Declaration Order that Sun Insurance Company Limited, the Plaintiff, is entitled to avoid Liability to provide an indemnity against any claim under Third Party Insurance Policy Numbers – No. 520327 for vehicle Registration No. DA 776 issued on 18th December, 2007 on the grounds that the 1st Defendant breached the Terms and Conditions of the Policy.
   
2. A Declaration that the Sun Insurance Company Limited, the Plaintiff is not liable to satisfy any Judgment that has been or may be entered against the 1st Defendant arising out of the Motor Vehicle collision on 22/01/08, involving Motor Vehicle Registration Numbers DA 776 and DJ 250 being the subject of the claims in Lautoka High Court Action HBC Number 147/2009.
   
3. That Civil Action Number 147/09 be consolidated with the Action herein and be tried together and also there shall be Stay of Proceedings in High Court Action No. 147/09.
   
4. That the declarations sought herein be determined as a preliminary issue before the substantive hearing of the aforestated Action.
   
5. An Order that the Defendant do pay all the costs of these proceedings to the Plaintiff on a full indemnity basis.
   
6. Such further or other relief as this Honourable Court may deem just.
   

[3] The Originating Summons was filed pursuant to s 11(3) of the Motor Vehicle (Third Party) Insurance Act [Cap 177], which permitted an insurer to seek a declaration of avoidance of liability under the third party policy, on the grounds set out in the affidavit in support.

[4] The affidavit in support said a Mr. Devendra Nair was the registered owner and driver of a motor vehicle with registration number DA776 on the night of 22 January 2008 travelling to Suva. The vehicle was involved in an accident on that night with a bus, registration number DJ250, which was carrying fare paying passengers from Suva to Sigatoka. The driver of DA776 died in the accident. The Fourth, Fifth and Sixth Defendants were passengers in the bus. They were injured as a result of the accident and has sued the First, Second and Third Defendant (who are the representative of the deceased driver, the owner of the bus and the driver of the bus, respectively) for compensation for their injuries in civil action HBC 149/09 in this Court.

[5] The Fourth Defendant filed an affidavit in reply in which he denied that the Plaintiff was entitled to be absolved from liability on the basis claimed. He disputed the Plaintiff’s evidence of intoxication and said far stronger and convincing evidence was required to prove that the driver was intoxicated.

[6] The vehicle DA776 was covered by a third party insurance policy issued by the insurance company at the time of the accident. After the accident the insurance company had carried out an investigation into the accident. In a statement to the police, the Third Defendant, the bus driver, said:

Then I went to where the car driver, I found him lying down on grass verge I uncovered a cloth covering his face I could felt (sic) smell of liquor out from his body.

[7] Policy condition 1 (d) provided:

The person insured shall not use the motor vehicle nor shall the owner permit or suffer any person to use such vehicle:

...

(d) whilst any such person as aforesaid:

(i) is under the influence of intoxicating liquor, or

(ii) is as a result of age or some physical or mental condition rendered incapable of driving such vehicle with safety.

THE HEARING

[8] The basis on which avoidance of the policy was sought was that the driver was intoxicated. It is common ground that if the driver was intoxicated then the policy would be avoided. The issue here is whether the evidence of intoxication is sufficient to ground the application.

[9] At the commencement of the hearing counsel for the Plaintiff sought leave to call the bus driver and another witness to give oral evidence on the issue. He had to concede however, that their evidence would not advance his case because they would be repeating or confirming what has already been said in the affidavits. I therefore, refused him leave to call those witnesses.

[10] The standard of proof has been decided by the Court of Appeal[1] in Kumar v Sun Insurance Company Ltd [2005] FJCA 63; ABU0072 of 2004S (11 November 2005) where the court said:

[38] The expression "under the influence of intoxicating liquor" in exemption clauses in insurance policies has been held to mean "under such influence as to disturb the quiet, calm and intelligent exercise of faculties." It has a temporal rather than a causative connection: London v. British Merchants Insurance Co Ltd. (1961) 1 WLR 798.

[39] The finding of fact with which this submission is concerned, should not be altered upon appeal unless there was an absence of an evidentiary basis for it. The present is such a case since, although the evidence of the admissions made by Peni Kurisou, was received perhaps surprisingly without challenge, it was somewhat equivocal and it did not establish the extent of the beer consumed by the driver, or the degree of the effect that it had upon him. To consume liquor is not enough to invoke the exclusion. It was necessary for the insurer to show that the driver was "under the influence of intoxicating liquor," within the meaning given to that expression, when driving the vehicle at the time of the event giving rise to liability on the part of the owner or driver. The evidence in this case fell short of that required, in the light particularly of the time over which the beer was drunk, the time which elapsed between 10pm. and 1.30 am, the lack of evidence of the amount consumed by Kurisou, and the somewhat equivocal nature of the admission.

[40] It may be also observed that neither the owner or Kurisou took part in the proceedings. As a result there was no direct evidence on the issue, the proof of which rested upon the insurer.

[11] The owner and driver of vehicle DA776 is deceased. The only evidence is that of the bus driver which was that the deceased smelt of liquor. The evidence in Kumar was much stronger in that the driver admitted drinking beer yet the Court of Appeal said it as insufficient. The evidence in this case therefore falls far short of what is required by law. The application for declarations of avoidance must therefore fail.

[12] The order for consolidation of this action with HBC 147/09L is not appropriate but in any event is now not necessary.

COSTS

[13] This application involved only the Plaintiff and the 4th, 5th and 6th Defendants. Although the 2nd and 3rd Defendants have not been directly involved in the application, they have been served with the application and have not only appeared in support of the other Defendants at the hearing but appeared in four of the five occasions on which the application was called. They too should be awarded costs. Also, the outcome of this application concerns them depending on the final result of civil action HBC 147/09L.

[14] The normal rule applies so the Plaintiff is to pay the costs of the two groups of Defendants which I assess as $1,000 for the 4th, 5th and 6th Defendants and $500 for the 1st and 2nd Defendants.

ORDERS

[15] The Orders are therefore as follows:

1. The Originating Summons filed on 18 November 2009 is dismissed.
   
2. The Plaintiff shall pay the costs of $1,000 for the 4th, 5th and 6th Defendants and $500 for the 2nd and 3rd Defendants
   

Sosefo Inoke
Judge

^[1] Ward PA, Wood, Ford JJA