(1) Nelista Rambally individually and as personally representative of the Estate of Hezekiah Rambally (2) Rudolph Rambally (3) Sieana Rambally Claimants v (1) Barbados Fire and General Insurance Company Ltd (2) Thomas Jean (3) Thomas M. Jean Insurance Brokerage Ltd Defendants [ECSC]
| Jurisdiction | St Lucia |
| Judge | EDWARDS J |
| Judgment Date | 31 October 2005 |
| Judgment citation (vLex) | [2005] ECSC J1031-1 |
| Docket Number | Case No. SLUHCV 1179 of 2000 |
| Court | High Court (Saint Lucia) |
| Date | 31 October 2005 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
(Civil)
Case No. SLUHCV 1179 of 2000
Mr. V. Jude, Mr. A. George and Mr. C. Rambally for Claimants
Mr. R.L. Cheltenham Q. C. and Mr. E. Calderon for 1 st Defendant (Mr. Cheltenham absent) 2 nd and 3 rd Defendants
Unrepresented and absent
On the 26 th May 1997, the building housing the Country Style Bakery and Restaurant at Bexon—Castries, was destroyed by fire. At the material time there was in existence a policy of insurance with the 1 st Defendant Barbados Fire and General Insurance Company Limited ( the Insurers). This policy was dated 22 nd July 1996. It covered the said building machinery, equipment and stock against loss or damage by fire, flood and other perils.
This policy No. SLJC 0098, was effected by the 2 nd Claimant Mr. Rudolph Rambally ( RR) in the name of his uncle Hezekiah Rambally, who was then one of the registered owners of the property. The other registered owner was his wife Mrs. Nelista Rambally ( NR) the first Claimant.
The 2 nd Defendant Mr. Thomas Jean acted as broker through his Company Thomas M. Jean Insurance Brokerage Limited ( the Brokers) in this insurance transaction.
The policy was procured through the Insurers' local agent J.E. Maxwell and Company Limited, whose Chief Executive Officer is Mr. Joseph E. Maxwell.
The policy did not disclose that NR, RR and his wife Mrs. Sienna Rambally (SR) had a pecuniary interest in the said property. It only disclosed the interest of Hezekiah Rambally and the Mortgagee Royal Bank of Canada to whom Hezekiah Rambally was indebted.
RR and SR were in the process of completing their purchase of this property from the owners. They had paid a deposit of $300,000.00 under a sale agreement dated 8 th June 1995. There was a balance of $300,000.00 to be paid. RR and SR took possession of the property and occupied it from 1 st July 1995 up to the date of the fire. RR and SR had also been paying $5,510.00 monthly from the 29 th July 1995 to Royal Bank of Canada towards liquidating Hezekiah Rambally's outstanding Mortgage loan.
On the 3 rd January 1997, Hezekiah Rambally died. On the 14 th July 1999, Letters of Administration No. 3 of 1999 were issued by the High Court to NR his widow. RR and SR are not beneficiaries of the deceased Hezekiah Rambally.
By notice of loss dated 27 th May 1997, the local agent of the Insurers was informed of RR's Claim under policy No. SLJC 0098, arising from the fire.
Following a series of correspondence and oral discussions between the parties, their lawyers and the loss adjusters within an eleven months period, the Insurers by letters dated 12 th February and 3 rd May 1998, communicated their decision to reject the claim of RR.
The Insurers contended then that RR being a stranger to the insurance contract, could not claim the proceeds of the insurance policy on the basis that he owned the said property, or was an assignee of or a beneficiary under the policy.
By then the insurance policy had lapsed. It appears from the documentary evidence that the Insurers ought to have been aware of Hezekiah Rambally's death from the latest 27 th May, 1997. The Initial Advice document at the back of the Insurers' Fire Claim file dated 27 th May 1997 discloses this. However it was only after the letter dated 4 th December 1997 from the lawyers for the Insurers concerning the date of death, that RR's lawyers supplied this information on the 5 th January 1998.
It is important to detail the sequence of events concerning the pleadings in this matter. On the 17 th September, 1999 the Claimants commenced action against the Insurers only in Suit No. 709 of 1999. This suit was apparently discontinued after a Defence was filed on the 7 th January 2000.
By Writ of Summons filed on the 20 th January 2000 another action in Suit No. 55 of 2000 was brought against the Insurers only. It is not clear whether this was discontinued. By Writ of Summons filed on the 4 th December 2000 the present Suit No. 1179 of 2000 was brought.
Pursuant to the Order of the Court made on the 20 th March 2002, an Amended Statement of Claim was filed on the 26 th March 2002, which added the Brokers as 2 nd and 3 rd Defendants.
On the 5 th September 2003 a Default Judgment Order was filed. This Order states that "By Virtue of Order of the Honourable Acting Justice Murray Shanks Judgment be and in hereby entered for the Claimants against the Second and Third named Defendants for an amount to be decided by the Court".
By a Further Amended Statement of Claim filed on the 15 th December 2003 the Claimants alleged that the Insurers mistakenly issued the policy SLJC 0098 with them not being insureds and not having business interruption coverage.
Further, that the said policy and its proceeds are an asset of the Estate of Hezekiah Rambally to which the Administratrix NR is entitled as trustee of the insured property for the benefit of RR, SR and the Mortgagee. That NR, RR and SR are actual or implied insureds under the policy and/or third party beneficiaries with insurable interests. That at all material times NR and the deceased were trustees of RR and SR, and the brokers were agents of the Insurers. That the Insurers conduct and denial of the insurance claim of RR and SR therefore constituted a breach of Contract and a breach of Covenant of Good Faith and Fair Dealing.
The Claimants seek 7 Declarations. These include Declarations relating to the validity of the sale agreement between the deceased, RR and SR, the validity and survival and effect of the policy after the death of Hezekiah Rambally, the coverage of the Claimants insurable interests under the policy, the operation of estoppel by conduct to negative the Insurer's rejection of RR's claim, and the reformation of the Insurance Policy.
The Claimants also seek to recover the sum of $750,000.00 for Special Damages, General Damages including punitive or exemplary damages for the alleged despicable, oppressive, fraudulent or malicious conduct of the Insurers, Interest and Costs.
The Insurers by their Amended Defence filed on the 30 th October 2003 in substance denied any breach of the insurance contract, while reiterating their previous contention articulated in the letters of the 12 th February and 3 rd May 1998. Further, they have invoked Conditions 7, 8 (d) and 13 of the Conditions and Stipulations under the insurance policy. These Conditions may serve to defeat the Claim of the Claimants. Their allegations of arson leveled against RR have not been proven. The other averments will be discussed later.
The convoluted facts, the pleadings, evidence, law and submissions led Counsel for the Claimants to prepare an Agreed Statement of Issues filed on the 4 th June 2004 identifying 34 issues to be determined in this case.
However, I have identified 6 main issues some of which are very complex, for the resolution of this case. They are—
-
(1) Were the Insurance Brokers Agents of the Insurers in procuring the policy commissioned by RR? ( SEE paras 23 to 45)
-
(2) Did Hezekiah Rambally through RR disclose to the insurers that the real property and items covered by the Insurance Policy had been sold in 1995 by Hezekiah Rambally to RR? ( SEE paras 47 to 74)
-
(3) What insurable interests were covered by policy No. SLJC 0098? ( SEE paras 76 to 120)
-
(4) What legal effect did the death of Hezekiah Rambally have on the said insurance policy? ( SEE paras 122 to 130)
-
(5) Are the Insurers entitled to avoid the policy for non-disclosure and misrepresentation material to the risk and lack of pre-contract good faith or rely on the Conditions pleaded? ( SEE paras 131 to 189)
-
(6) What measure of damages and other remedies if any, are available to the Claimants in the circumstances? ( SEE paras 191 to 214)
By paragraph 7 of the Claimants pleadings they allege that Mr. Thomas Jean, acting in his own name and/or through his Brokerage Company was at all material times agent and/or employee of the INSURERS. By paragraph 19, they allege that J.E. Maxwell and Company Limited and Thomas Jean were agents of the Insurers, and that the Insurers are bound by the promises, representations, acts, conduct and/or omissions to act by the said Defendants. The Claimants contend further that they and each of them, relied upon the representations and/or express or implied promises of the said agents that the Claimants, and each of them would be insured under the policy, and that the policy would have coverage for business interruption.
[23–A] By their Amended Defence at paragraph 1, the Insurers contend that neither of the Claimants was a party to any agreement for insurance of the property with the Insurers. By paragraph 9, The Insurers have denied each allegation in the statement of Claim.
[23–B] The burden of proof is upon the Claimants to establish on a balance of probability that the Brokers were serving 2 masters. In attempting to discharge this burden, the evidence presented by the Claimants included a Declaration made by Mr. Thomas Jean on the 23 rd April 1998 which formed part of the Claimants' documents in the Trial Bundle. At paragraph 1 of this Declaration Mr. Jean stated:
"I am a licensed and qualified Insurance Broker for the securing and procuring of policies of insurance on behalf of various companies, including the Barbados Fire and General Insurance Company Limited" .
Mr. Jean stated also at paragraph 9 of...
To continue reading
Request your trial