IN THE COURT OF APPEAL OF KIRIBATI
CIVIL JURISDICTION

CIVIL APPEAL NO. 3 OF 1996

BETWEEN

OTEN MEREKI
Appellant

AND

KIRIBATI INSURANCE CORPORATION
Respondent

Date of Hearing: 18 March 1997
Delivery of Judgment: 25 March 1997

Mr B Berina for the Appellant
Ms T Beero for the Respondent

JUDGMENT OF THE COURT
(Globe V.P., Connolly and Hymn JJ.A)

This is an appeal from a judgment of the High Court of Kiribati, by which a claim by the plaintiff Oten Mereki against the defendant the Kiribati Insurance Corporation was dismissed.

The plaintiff's claim was for damages arising from the failure of the defendant to indemnify him against damage caused to his bus as a result of an accident which occurred on or about 24 April 1993. By a policy of insurance dated 21 April 1993, the defendant agreed to indemnify the plaintiff against loss or damage to his bus. In paragraph 10 of the statement of claim it was alleged that on or about 15 February 1994 the defendant, in breach of section 1 of the policy notified the plaintiff by letter of its decision not to indemnify the plaintiff against damage caused to the bus. Paragraph 10 of the statement of defence is in these terms:

"The defendant denies paragraph 10 of the statement of claim and avers that the defendant was not in breach of section 1 of the policy because the defendant relies on the General Exceptions provided under such policy that where the plaintiff gives false information in the claim form entitled Motor Vehicle Accident Report, as required under the policy, the claim that the plaintiff pursues could not be allowed by the defendant.

(a) the plaintiff did not admit that his driver consumed liquor during 12 hours prior to accident as required under item 14 of the said form."

The learned trial judge dismissed the claim on two grounds. On the hearing of the appeal it was submitted for the appellant that only one issue as to liability was raised on the pleadings, namely the issue identified in paragraph 10 of the statement of defence. This was conceded by counsel for the respondent, and appears to be clearly correct upon the pleadings which were not amended at any stage.

The policy includes a provision under the heading "General Exceptions" that "the Corporation shall not be liable in respect of any accident, injury, loss, damage or liability caused sustained or incurred whilst any vehicle in respect of which indemnity is provided under the policy is being driven by any person including the insured whilst such person is under the influence intoxicating liquor or a drug" (clause 1(c)). It also includes a provision under the heading "Conditions" that "the due observance and fulfilment of the terms provisions and conditions and endorsements of this policy in so far as they relate to anything to be done or complied with by the insured and the truth of the statements and answers in the said proposal or in any claim or in any statement in support of a claim insofar as the truth of such statements or answers are material shall be conditions precedent to any liability of the Corporation to make any payment under this policy" (clause 8).

It was admitted in the pleadings that on or about 24 April 1993 the plaintiff's bus was involved in an accident and suffered damage. The plaintiff gave evidence at the trial that he drank two cans of beer at the Otintaai Hotel at about 10.00 pm on the night preceding the accident. The accident occurred about seven hours later at 5.00 am the next morning. He said he went to Kiribati Insurance Corporation on 26 April 1993 to report the accident. He was given a claim form. This includes a question:

14. Did driver consume any drugs or intoxicating liquor during 12 hours prior to accident: Yes?No
If so state precise quantity.

The word "yes" was struck out in the form. No answer was given to the second part of the question.

The truth of this answer was material to a claim for indemnity under a policy by which the liability of the insurer was excluded if a driver was under the influence of intoxicating liquor. It was admitted by the plaintiff that he consumed intoxicating liquor during 12 hours prior to the accident, and hence his answer to the question in the form was not true.

It was however submitted for the plaintiff both at the trial and on the appeal that he had given a true answer to the question put to him. The plaintiff gave evidence at the trial that he did not understand English, and that an officer from the defendant Corporation asked him whether he consumed alcohol 12 hours before the accident. There is evidence which supports his account. A letter from the General Manager of the defendant Corporation dated 15 February 1994 addressed to the plaintiff's legal representative states that when the insured was asked the question "did you consume intoxicating liquor twelve hours before the accident?" he answered "No". Moreover, an officer of the defendant Corporation who was called by counsel for the defendant gave evidence that he filled in the claim form for the plaintiff and that the question he asked him when he reached question 14 was: "Did you consume alcohol 12 hours before the accident?"

The question whether the plaintiff gave a true answer to the representative of the defendant Corporation depends upon his understanding of what he was asked. Did he understand the question as meaning did you consume intoxicating liquor at a time precisely twelve hours before the accident? Or did he understand it as meaning: Did you consume intoxicating liquor at any time during the twelve hours before the accident? It is extremely unlikely that any rational person would think that he was being asked. about his consumption of alcohol twelve hours before the accident. As the learned trial judge observed, the form in which the question was put to him would not lead a reasonable man to believe that he need not disclose that he had drunk intoxicating liquor during the 12 hours prior to the accident. Moreover, there is evidence which discloses that he was conscious of the effect which driving under the influence or intoxicating liquor would have upon his claim. There was evidence he was asked by the officer who filled in the form whether he consumed alcohol or not, and that he said no. There was evidence also that he had tried to induce defence witnesses not to say that he had been drinking on the night of the accident. The learned trial judge did not accept the evidence of the plaintiff as to the amount of alcohol he had consumed and preferred the evidence given by the defence witnesses. He stated that he did not accept that the plaintiff misunderstood what was required by question 14, and he found that his answer to that question was a deliberate lie.

We consider that this finding was justified on the evidence accepted by the learned trial judge. Though the answer given to the question put to him by the officer may have been literally true, the learned trial judge was satisfied that the plaintiff understood that he was being asked to answer the question as it is stated in the form. We agree with that conclusion.

It follows that the defendant company was entitled to refuse to indemnify the plaintiff under the policy.

Vice President
Judge of Appeal
Judge of Appeal