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Bi v Sun Insurance Co Ltd [2020] FJHC 355; HBM3.2019 (28 May 2020)

IN THE HIGH COURT OF FIJI

AT LABASA

CIVIL JURISDICTION


Civil Case No: HBM 3 OF 2019


BETWEEN:


JAITUN BI

PLAINTIFF


AND:


SUN INSURANCE COMPANY LIMITED

DEFENDANT


BEFORE:

M. Javed Mansoor, J


COUNSEL:

Mr S. Raramasi for the Plaintiff

Mr. A. Ram for the Defendant


Date of Hearing:

18 February 2020


Date of Judgment:

28 May 2020


RULING


HIGH COURT RULES: PRACTICE & PROCEDURE Originating summons – strikeout application – insurance claim – breach of insurance policy – effect of intoxication on policy – use of breath tests and analysis – High Court Rules, Order 5 Rules 2, 3 & 4, Order 28 Rule 9 – Motor Vehicles (Third Party Insurance) Act, section 10 – Land Transport (Breath Tests & Analyses) Regulations 2000, section 9 (1) & (2) – Land Transport Act, sections 103 (1) (a), 102 (1), 105 (1) & 114

The following cases are referred to:

  1. Q. B. E Insurance v Prasad [2011] FJSC 14 CBV0003.2019
  2. Sun Insurance Company Ltd v Chandra [2017] FJHC 788; HBC 168.2016 (12 October 2017)
  1. Prasad Ltd v Quest Apartment Hotels (NZ) Ltd [2017] FJHC 788; HBC 168.2016 (12 October 2017)
  1. Dharam Singh and others v Hardayal Singh and others [1994] FJHC 135; HBC 0215d.94s (4 October 1994)
  2. Reserve Bank of Fiji v Gallagher [2006] FJCA 37; ABU 0030; ABU 0031; ABU 0032; U2005S (14 July 2006)
  1. The plaintiff initiated this action by an originating summons filed on 30 September 2019, seeking orders directing the defendant to pay the plaintiff the sums awarded by the Labasa High Court in civil action No. 40 of 2016, which, too, was filed by the plaintiff against the owner and the driver of a motor vehicle which had caused her personal injuries in a motor accident. In that action, default judgment was entered in the plaintiff’s favour on 13 March 2018. By that judgment, the court awarded the plaintiff special damages in a sum of $5,110.00 and general damages in a sum of $37,000.00, which is sought to be enforced against the defendant, in its capacity as insurer of the defendants in the concluded action mentioned above.
  2. The defendant filed an affidavit in response dated 18 November 2019 through an assistant manager in charge of claims to which the plaintiff filed an affidavit in reply on 22 November 2019. The defendant averred that the plaintiff’s proceedings were commenced contrary to the High Court rules, and was liable to be struck out with costs. The affidavit stated that judgment was obtained in default of the appearance of the defendant in case No. 40 of 2016, and that the defendant, in this action, the insurer, was not a party to that action.
  3. The defendant also filed a notice of motion on 14 January 2020, supported by an affidavit, seeking to stay this action pending the final determination of the Savusavu Magistrates Court traffic case No. 234 of 2014 or alternatively to strike out the action with costs. The application was made pursuant to Order 18 Rule 18 of the High Court Rules. It is this notice of motion that is the subject of this ruling.

Stay of action

  1. The defendant submitted that a stay of this action was necessary in order to lead evidence of the driver’s conviction in the Magistrate Court. The defendant argues that the plaintiff should seek payments from the insured and his driver as the defendant is exempted from third party liability due to the driver’s intoxication at the time of the accident, resulting in a breach of a condition of the insurance policy and thereby rendering void the contract of insurance.
  2. The defendants in civil action No.40 of 2016 were the owner and the driver respectively of the vehicle that caused injuries to the plaintiff. The driver, who was under the influence of liquor, was charged in court under sections 103 (1) (a) and 114 of the Land Transport Act 35 of 1988. The outcome of the case pending against the driver in the Magistrate Court of Savusavu, claims the defendant, is very relevant to its successful defence of this proceeding.
  3. Referring to the second limb of regulation 9(2) of the Land Transport (Breath Tests & Analyses) Regulations 2000, the defendant submitted that this allowed evidence to be led regarding the fact of conviction due to driving the vehicle while being intoxicated, which, it argued, was relevant to its defence of the action. The defendant contended that condition 1 (d) of the insurance policy stipulated that the policy would become void if the vehicle is driven by an intoxicated person, and that evidence of the driver’s intoxication would be led to establish the insured’s breach of the insurance policy.
  4. The defendant submitted that the law permitted the reception of evidence to show a breach of the insurance contract due to intoxication, and that in order to bring this evidence through the second limb of regulation 9(2)[1], the conviction of the driver on the basis of intoxication was crucial; ostensibly, the stay of this action was pleaded to allow sufficient time for Magistrate Court proceedings to conclude.
  5. The plaintiff submitted that the proceedings in the High Court should not depend upon the case in the Magistrate Court, and that the defendant was trying to prolong this action to avoid making the payment ordered by the High Court in HBM 40/2016. The plaintiff referred the court to the decision of the Supreme Court in Q.B.E Insurance (Fiji) Limited v Prasad[2]. In that case, the Supreme Court affirmed the decision of the High Court, which ordered the insurance company to pay the third party. The Supreme Court held that once the insurer is given notice, and the issues between the third party and the original defendants are decided by court, the insurer could not raise them to escape liability in an action by the third party against the insurer. The court was of the opinion that the only remedy for the insurer was to persuade the insured to appeal the original action.
  6. The plaintiff pointed to regulations related to breath tests and contended that these regulations do not allow evidence of breath tests or analysis to be led in evidence for the purpose of the contract of insurance. Regulation 9(1) of the Land Transport (Breath Tests & Analyses) Regulations 2000 reads, “In proceedings for an offence under section 103(1)(a) or 105(1) evidence may be given of the concentration of alcohol present in the blood of the person charged, as determined by a breath analysis instrument operated by a police officer authorised in that behalf by the Commissioner of Police, and the concentration of alcohol determined as aforesaid is deemed to be the concentration of alcohol in the blood of that person at the time of the occurrence of the event referred to in section 102(1)(a) or 105(1) where the breath analysis was done within 2 hours after the event, unless the defendant proves that the concentration of alcohol in his blood at the time of that event was less than the prescribed limit”.
  7. Regulation 9 (2) states: “The fact that a person has undergone a breath test or submitted to a breath analysis and a result of a breath test or breath analysis are not, for the purposes of any contract of insurance, admissible as evidence of the fact that the person was at any time under the influence of or affected by alcohol or incapable of driving or of exercising effective control over a motor vehicle, but nothing in this regulation precludes the admission of any other evidence, including evidence of a conviction under section 102(1), 103(1) or 105(1) of the Act to show any such fact”.
  8. It seems clear, therefore, that notwithstanding regulation 9 (2), the defendant would not be precluded from leading evidence of the fact of intoxication. A simple instance of this would be an admission of intoxication before the Magistrate by the driver of the vehicle. Such an admission, and any resulting conviction, may be led in evidence in resisting payment under an insurance policy. Regulation 9 (2) only renders inadmissible evidence relating to the use of the breath test and its analysis.
  9. The statute regulates the imposition of conditions in the insurance policy, and does so by making reference to certain matters the inclusion of which in the insurance policy will not affect the insurer’s liability. Section 10 of the Motor Vehicles (Third Party Insurance) Act imposes limitations on enforcing the conditions of contract by providing that notwithstanding the stipulation in the insurance policy of certain conditions specified in the enactment, the insurer’s liability to the third party remains unaffected. If the conditions stipulated in section 10 of the Motor Vehicles (Third Party Insurance) Act are included in the insurance policy and the vehicle if used in contravention of those conditions, and where a third party has suffered death or bodily injuries as a result of such use, the liability of the insured to the third party can be met by the insurer. In such circumstances, the insurer has a right to claim the sum paid to the third party from the insured.
  10. The issue relating to this this action, however, does not arise from these statutorily stipulated matters. The controversy relates to conditions of the insurance policy that are not mentioned in section 10 of Motor Vehicles (Third Party Insurance) Act. The reception of such evidence in civil proceedings relied upon by the insurer to avoid its obligations under the insurance contract on the basis of the insured’s breach of such a condition has been recognised in Fiji.
  11. In Sun Insurance Company Ltd v Chandra[3], the Supreme Court stated, “....as there was a contravention of the condition in the policy issued by Sun Insurance excluding their liability in respect of the person driving the vehicle they cannot be held liable in respect of the claim of the third party. The third party will have to be satisfied with their claim against the insured and take whatever steps they could to enforce the same against the insured”.
  12. The Supreme Court in Sun Insurance Company Ltd v Chandra explained the statutory position of the Motor Vehicles (Third Party Insurance) Act in this way:
    1. “Under the statute the insurer can impose certain conditions in the insurance policy. If the conditions stipulated in S.10 are included in the insurance policy and the vehicle is used in contravention of those conditions, and where a third party has suffered death or bodily injuries as a result of same, liability of the insured can be met by the insurer vis-à-vis third party. In such circumstances, the insurer has a right to claim the sum paid to the third party from the insured.
    2. A policy stipulating conditions other than those contemplated in S.10 can be included in the policy and the particulars of such conditions should be incorporated in the certificate of insurance issued in conformity with the schedule set out in regulation 3 of the Act.
    1. The certificate of insurance prescribed in the schedule gives two categories of conditions namely (a) person or class of persons entitled to drive and (b) limitations as to use. If the vehicle is used in breach of any of the conditions coming under these categories, the insurer is exempted from third party liability”.
  13. In my view, with respect, the ratio of Sun Insurance v Chandra in contradistinction to the decision in Q.B.E Insurance v Prasad expresses the correct position of the law. For these reasons, I am satisfied that the defendant is entitled to rely upon the evidence related to intoxication in the proceeding against the driver in the Savusavu Magistrate Court. But, I am not convinced that a stay of this action is necessitated by the pendency of the Magistrate Court proceeding. This action could proceed, with suitable directives to the Magistrate Court to expedite its proceeding against the driver.

Institution of proceedings

  1. The defendant submitted that this claim was heard by the High Court previously as well and dismissed in HBM 5 of 2018, in a judgment delivered on 25 June 2019 by Justice Seneviratne as that action was instituted by summons. The plaintiff filed this action by originating summons after dismissal of the previous action. The defendant submitted that where facts are in dispute, originating summons is not an appropriate mode to initiate an action, and that in this action it was necessary to lead evidence of intoxication; for this reason, the writ of summons was the appropriate way to initiate this action. The defendant referred to the decision in Prasad Ltd v Quest Apartment Hotels (NZ) Ltd[4] in support of its contention.
  2. Order 5 of the High Court Rules 1988 deals with the mode of beginning civil proceedings. Rules 2, 3 & 4 respectively set out the proceedings which must be begun by writ, originating summons or either by writ or originating summons. Rule 4 (1) & (2) is relevant and is reproduced below:

(1) “Except in the case of proceedings which by these rules or by or under any Act are required to be begun by writ or originating summons or are required or authorised to be begun by petition, proceedings may be begun either by writ or by originating summons as the plaintiff considers appropriate”.

(2) “Proceedings-

(a) in which the sole or principal question at issue is, or is likely to be, one of the construction of an Act or of any instrument made under an Act, or of any deed, will, contract or other document, or some other question of law, or

(b) in which there is unlikely to be any substantial dispute of fact, are appropriate to be begun by original summons unless the plaintiff intends in those proceedings to apply for judgment under Order 14 or Order 86 or for any other reason considers the proceedings more appropriate to be begun by writ.”


  1. Halsbury’s Laws of England 4th ed. vol. 37 at paragraph 559 states:

“Where it appears to the court at any stage of proceedings begun by originating summons that they should for any reason be continued, as if begun by writ, it may order proceedings to continue as if so begun, even if the cause or matter in question could not in fact have been begun by writ.”


  1. I have already opined that evidence of intoxication before the Magistrate Court of Savusavu could be relevant in this action. Therefore, the plaintiff would have been better advised to have begun this action by writ; it is a possibility though that the plaintiff was unaware of the Magistrate Court proceeding against the driver at the time of instituting this action. In these circumstances, Order 28 Rule 9 of the High Court Rules 1988 becomes operative.
  2. Order 28 Rule 9 states inter alia:
  3. The court is vested with the discretion to continue the action as if it was begun by a writ, and, accordingly, I will make order to proceed after the filing of pleadings as in the case of a writ, as such a course seems to be proper in the circumstances of this case. In making such an order, I am fortified by several decisions including Prasad Ltd v Quest Apartment Hotels (NZ) Ltd[5], Dharam Singh and others v Hardayal Singh and others[6]and Reserve Bank of Fiji v Gallagher[7]. The defendant’s notice of motion filed on 14 January 2020 is dismissed with costs.

ORDERS

  1. The defendant’s application for strikeout of this action sought by notice of motion filed on 14 January 2020 is dismissed.
  2. The defendant’s application for a stay of this action sought by notice of motion filed on 14 January 2020 is refused.
  1. This action will continue as if begun by a writ of summons in terms of Order 28 Rule 9 of the High Court Rules. The plaintiff will file and serve on the defendant a writ of summons within 28 days of this ruling. The matter is to take its normal course after the filing of the writ.
  1. The registrar is directed to submit a report on the status of traffic case No. 234 of 2014 in the Magistrate Court of Savusavu.
  2. The defendant is directed to pay the plaintiff costs summarily assessed in a sum of $3000 within 14 days of this ruling.

Delivered at Suva this 28th day of May, 2020


M. Javed Mansoor
Judge


Solicitors:
For plaintiff: Maqbool & Company
For defendant: Gibson & Company


[1] Land Transport (Breath Tests & Analyses) Regulations 2000
[2] (2011) FJSC 14 CBV0003.2019
[3] [2012] FJSC 8; CBV0007.2011 (9May 2012)
[4] [2017] FJHC 788; HBC 168.2016 (12 October 2017)
[5] [2017] FJHC 788; HBC 168.2016 (12 October 2017)
[6] [1994] FJHC 135; HBC 0215d.94s (4 October 1994)
[7] [2006] FJCA 37; ABU 0030; ABU 0031; ABU 0032; U2005S (14 July 2006)

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