IN THE SUPREME COURT OF TONGA

To'a

v

National Pacific Insurance

Supreme Court, Nuku'alofa 
Ward CJ 
C 839/99 

1 August 2000; 2 August 2000 

Insurance law — balance of probabilities — reckless, dangerous driving — insurers not liable 

In 1997 the plaintiff bought a car for use as a taxi by way of a loan from the Bank of Tonga for $7200. The loan was conditional on the borrower also arranging insurance for the vehicle and so the plaintiff took out a policy with the defendant company. The premium was paid directly by the bank to the defendant and the amount added to the plaintiff's loan account. The policy states that the sum insured was $7200. On 31 January 1998, the plaintiff was driving the insured vehicle and collided with a van causing considerable damage to the van and writing off the insured vehicle. The plaintiff was subsequently charged and pleaded guilty to negligent driving. He claimed under the policy and the insurance company paid $5500 on the basis that the value of the written off vehicle was $6000 less an excess of $500. Subsequently the other driver sued the plaintiff and obtained judgment in the Supreme Court against him for the damage to his vehicle in the sum of $3114, interest at 10% and costs of $1000. The plaintiff brought an action for the balance between the sum paid for the plaintiff's vehicle and the insured sum of $7200, for the sum awarded against him for the damage to the third party, for $3900 loss of earnings whilst waiting for the payment by the insurance company and for a further $500 for the loss of the use of the vehicle during the same period for his non commercial use of it. 

Held: 

1. The Court was satisfied that the defendant paid the market value at the time and there was no liability to pay any other figure under the policy for the damage to the plaintiff's vehicle. 

2. The fact the plaintiff pleaded guilty to a lesser offence was not proof of the manner of his driving. The Court was satisfied that the plaintiff's driving was reckless and dangerous. The exclusion clause was brought into effect so the insurance company was not liable for any claim by the plaintiff arising out of the accident. 

3. The claim was dismissed with costs to the defendant. 

Counsel for plaintiff: Mr Fifita 
Counsel for defendant: Mr 'Etika 

Judgment 

In 1997 the plaintiff bought a car for use as a taxi by way of a loan from the Bank of Tonga for $7200.00. A cheque for that amount was prepared by the bank and made payable to the vendor. The loan was conditional on the borrower also arranging insurance for the vehicle and so the plaintiff took out a policy with the defendant company. The premium was paid directly by the bank to the defendant and the amount added to the plaintiff's loan account. The policy states that the sum insured is $7200.00. 

On 31 January 1998, the plaintiff was driving the insured vehicle and collided with a van causing considerable damage to the van and writing off the insured vehicle. The plaintiff was subsequently charged and pleaded guilty to negligent driving. 

He claimed under the policy and the insurance company paid $5500.00 on the basis that the value of the written off vehicle was $6000.00 less an excess of $500.00. Subsequently the other driver sued this plaintiff and obtained judgment in the Supreme Court against him for the damage to his vehicle in the sum of $3114.00, interest at 10% and costs of $1000.00. 

This claim is for the balance between the sum paid for the plaintiff's vehicle and the insured sum of $7200.00, for the sum awarded against him for the damage to the third party, for $3900.00 loss of earnings whilst waiting for the payment by the insurance company and for a further $500.00 for the loss of the use of the vehicle during the same period for his non commercial use of it. 

During the trial the plaintiff also sought to allege that the defendant had failed to advise the plaintiff properly about the scope of the policy. That was not pleaded but I have no hesitation in saying that I accept that the plaintiff was given a sufficient explanation and, in any event, the policy document is clear in its terms. The plaintiff is an educated man and his work at that time required a familiarity with English - the language of the written agreement. 

The defence is that the sum paid was the market value of the vehicle and so was the proper amount and also that the driving of the plaintiff was reckless or dangerous and so was covered by one of the exclusions under the policy. Had the company known the true facts of the driving, it would not even have paid out the sum of $5500.00. The defence was also based on the suggestion that the contract of insurance was between the defendant and the Bank of Tonga and not the plaintiff but that is clearly incorrect on the evidence and has been abandoned by the defendant. 

The first issue is the claim for payment of the balance between the sum paid and the amount insured. The cover under the policy is plainly set out in section 1 of the policy and includes under "Amount Payable"; 

"We may choose either: 

a) to repair your vehicle OR 

b) pay you the amount of the loss not exceeding the market value of your vehicle … at the time of such loss …" 

The defence called evidence that the cash price of the vehicle when it was purchased was $5800.00 and that their engineers had placed a value of between $5500.00 and $6000.00 on it at the time of the loss. No separate evidence of value was called but the plaintiff agreed in evidence that the cash price he had paid when he purchased the vehicle was $5800.00. 

I am satisfied that the defendant paid the market value at the time and there is no liability to pay any other figure under the policy for the damage to the plaintiff's vehicle. 

The second point is more important because, if the defence is correct, it would exclude the whole claim including the sum actually paid. 

The policy includes under the heading "General Exclusions": 

"You are NOT covered for any loss, damage, injury or liability while any vehicle in connection with which cover benefits are granted under the Policy is: 

(c) Being driven in a reckless/dangerous manner." 

As the party relying on the exclusion, the burden is on the defence to prove that the driving was reckless or dangerous. It was the plaintiff who called evidence that, when the accident occurred, the other driver was travelling in the opposite direction and saw the plaintiff's vehicle driving towards him in a zigzag manner. He pulled in to the left hand side of the road. The other vehicle went across the road and back three times before it ran head on into his vehicle on the plaintiff's offside of the road at about 40 kph. The plaintiff's evidence was that he could not challenge that account because he was very tired at that time. Anyone who continues to drive when so tired that he is likely to fall asleep at the wheel is clearly driving recklessly. 

Counsel for the plaintiff suggests that, as the plaintiff was only convicted of negligent driving, the defence cannot rely on recklessness. I disagree. The fact the plaintiff pleaded guilty to a lesser offence is not proof in this court of the manner of his driving. I must decide the issue on the evidence before me in this court and the standard of proof is on the balance of probabilities. However, on the evidence as a whole including that called by the plaintiff, I am satisfied beyond any doubt at all that the plaintiff's driving on that day was reckless and dangerous. 

In those circumstances I find that the exclusion clause is brought into effect and the insurance company is not liable for any claim by the plaintiff arising out of this accident. 

The claim is dismissed with costs to the defendant.