Joseph Cadette v St. Lucia Motor & General Insurance Company Ltd

• Jurisdiction: St Lucia
• Judge: Blenman JA
• Judgment Date: 22 February 2021
• Neutral Citation: LC 2021 CA 2
• Court: Court of Appeal (Saint Lucia)
• Docket Number: SLUHCVAP2018/0039
• Date: 22 February 2021

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Gerard St. C. Farara, QC Justice of Appeal [Ag.]

The Hon. Mde. Margaret Price-Findlay Justice of Appeal [Ag.]

SLUHCVAP2018/0039

Between:

Joseph Cadette

Appellant

and

St. Lucia Motor & General Insurance Company Limited

Respondent

Appearances:

Mr. Leslie Prospere, Ms. Kristian Henry and Mrs. Megan Du Boulay Lee for the Appellant

Mr. Dexter Theodore, QC, with him, Ms. Sueanna Frederick for the Respondent

Civil appeal — Statutory Interpretation — Insurance Law — Motor Vehicles Insurance (Third Party Risks) Act — Section 4(7) — Requirements in respect of policies of insurance — Section 9 — Duty of insurers to satisfy judgment against persons insured against third party risks — Whether respondent on risk at time of accident and thereby obliged to satisfy judgment obtained against its insured — Section 11(1)(i) — Avoidance of restrictions on scope of policies covering third party risks — Whether learned master correctly construed and applied sections 4(7) and 9(1) of the Act in light of sections 11(1) and (2) — Unlicensed operator of motor vehicle — Whether section 11(1)(i) vitiated condition of certificate of insurance issued by respondent excluding persons not disqualified by order of court or law from driving motor vehicle — Whether respondent can rely on contractual defences under terms of insurance policy in its defence

Mr. Joseph Cadette (“Mr. Cadette”) was the registered owner of a vehicle which was involved in a collision with another motor car registered in the names of Messrs. Guy Anglion and Stephen Linor. At the time of the accident, the motor car was insured by St. Lucia Motor & General Insurance Company Limited (“St. Lucia Motor”) and was being driven by Ms. Hannah John (“Ms. John”), an unlicensed driver.

Following the collision, Mr. Cadette filed a claim in the High Court for damages against Ms. John and Messrs. Anglion and Linor as driver and owners of the motor car, respectively. After securing a default judgment, Mr. Cadette wrote to St. Lucia Motor seeking to be indemnified under the insurance policy. Upon refusal of St. Lucia Motor to satisfy the judgment on the basis that Ms. John was an unlicensed driver at the time of the collision, Mr. Cadette filed a claim against St. Lucia Motor alleging that it breached its statutory obligation to indemnify him under section 9(1) of the Motor Vehicles Insurance (Third Party Risks) Act (“the MVIA” or “the Act”). In its defence, St. Lucia Motor contended that it was under no obligation to indemnify Mr. Cadette in circumstances where a term of the insurance policy exempted it from liability in respect of any accident, loss, damage, or liability caused or sustained while the vehicle was being operated by an unlicensed driver.

Upon consideration of the three preliminary issues raised during case management of the claim, the learned master dismissed Mr. Cadette's claim with costs after determining that St. Lucia Motor was not on risk under the terms of the policy of insurance for the motor car at the time of the collision, and therefore had no obligation to satisfy the default judgment obtained by Mr. Cadette.

Mr. Cadette, being dissatisfied with the learned master's decision, has appealed on five grounds which may be helpfully crystallised into two issues, namely: (i) whether the learned master correctly construed and applied the provisions of sections 4(7) and 9(1) of the MVIA in light of the provisions of sections 11(1) and (2) of the MVIA; and (ii) whether St. Lucia Motor can rely on any contractual defences under the terms of the policy of insurance in its defence of Mr. Cadette's claim against it.

Held: dismissing the appeal; affirming the order of the learned master; and ordering costs to St. Lucia Motor in the sum of no more than two-thirds of the prescribed costs in the court below to be assessed by a master if not agreed within 21 days, that:

• 1. The legislative intent of the MVIA is to protect third parties against risks such as bodily injury, loss, death or property damage arising out of being involved in a motor vehicle accident. The compulsory nature of the MVIA is evidenced by section 3 which creates a mandatory requirement for all drivers to be insured against third-party risks. Further, section 4(7) of the Act imposes an obligation on insurers to indemnify injured third-parties for any liability which the policy covers; and section 9 creates an obligation on insurers to satisfy judgments obtained by injured third-parties resulting from any conduct of the insured which is covered by the policy.

  Sections 3, 4 and 9 of the Motor Vehicles Insurance (Third Party Risks) Act, Cap. 8.02 of the Revised Laws of Saint Lucia applied; Asiyah Grant v Javier Maduro BVIHCVAP2019/0001 (delivered 13th November 2019, unreported) considered.

• 2. It is clear that under the MVIA, the obligation on an insurer to satisfy a third-party judgment and the right of a third-party to seek satisfaction of its judgment(s) by the insurer are governed by section 9(1). Section 9(1) can only be properly invoked once the conditions outlined are met and does not oblige the insurer to satisfy any judgment obtained in respect of a liability falling outside the scope of the policy. Applying section 9(1) and its clear effect, it is evident that in so far as the certificate of insurance issued by St. Lucia Motor to Messrs. Anglion and Linor expressly excludes from coverage any incidents arising from the use of the insured motor vehicle by a person who is not qualified to drive in Saint Lucia, St. Lucia Motor is not liable under section 9(1) of the MVIA to satisfy any judgment obtained against the insured in those circumstances.

  Section 9(1) of the Motor Vehicles Insurance (Third Party Risks) Act, Cap. 8.02, Revised Laws of Saint Lucia applied; The Presidential Insurance Company Ltd v Resha St. Hill [2012] UKPC 33 applied; The Presidential Insurance Company Ltd v Mohammed and others [2015] UKPC 4 applied.

• 3. It is settled law that the Court must give effect to the natural and ordinary meaning of words used in the context of the legislation and may only depart where that meaning leads to an absurd result which cannot reasonably be supposed to have been the intention of Parliament. In this case, there is no ambiguity in section 11(1)(i) of the MVIA which clearly speaks to ‘persons named in the policy who may or may not drive the vehicle’. This could not be interpreted as covering an unlicensed driver operating the motor vehicle, and thereby vitiating the restriction contained in the certificate of insurance. This is more so particularly where the application of that restriction would exclude coverage in relation to Ms. John who, at the material time, was not a person named in the policy. Accordingly, there was no need to resort to the social and historical context in order to properly interpret the clear legislative provisions since, by way of emphasis, there was no ambiguity in the relevant legislative provisions. It is evident that the master correctly construed and applied sections 4(7) and 9(1) in light of sections 11(1) and (2) and properly concluded that St. Lucia Motor was not on risk at the material time and consequently not liable to cover the judgment debt under section 9 of the Act. Her decision cannot be impugned.

  Sections 9 and 11 of the Motor Vehicles Insurance (Third Party Risks) Act, Cap. 8.02, Revised Laws of Saint Lucia applied; Smith v Selby [2017] CCJ 13 (AJ) applied; Attorney General of the Turks and Caicos Islands v Misick and Others [2020] UKPC 30 applied; The Labour Tribunal v St. Lucia Electricity Services Limited [2020] ECSCJ No. 120 (delivered 8 ^th April 2020) followed.

• 4. Whilst sections 9(2) and (3) set out specified circumstances or statutory ‘let-outs’ under which an insurer may avoid indemnifying a third-party judgment creditor, as exceptions to the general duty to indemnify, there is nothing in the language of section 9 which limits an insurer's avoidance of indemnification to the named circumstances under sections 9(2) and (3) only. An insurer may rely on contractual defences provided that they do not run afoul of the provisions of the statute. Though the courts have recognised that exemptions provided for in the statute cannot be ignored, this cannot be interpreted to mean that the statutory ‘let-outs’ limit an insurer's reliance on contractual defences generally, especially in circumstances where they do not offend any of the provisions of the MVIA as in the appeal at bar.

  Sections 9 of the Motor Vehicles Insurance (Third Party Risks) Act, Cap. 8.02 of the Revised Laws of Saint Lucia applied; Matadeen v Caribbean Insurance Co. Ltd [2002] UKPC 69 applied; Mecheck Willis v Globe Insurance Company of Jamaica Limited [2015] JMCA Civ 36 applied.

• 5. Sections 4 and 9 of the MVIA do not impose an obligation on insurers to satisfy judgments obtained by a third-party for risks outside the terms of the policy except as specified under section 11 which does not invalidate an insurer's limitation on coverage to persons not disqualified by law to drive a motor vehicle. Accordingly, St. Lucia Motor is not precluded from availing itself of a contractual defence in Mr. Cadette's claim against it, particularly where the driver at the material time was not an authorised driver entitled to indemnity.

  Section 4 and 9 of the Motor Vehicles Insurance (Third Party Risks) Act, Cap. 8.02, Revised Laws of Saint Lucia applied Prudence Robinson v Sagicor General Insurance Inc [2019] ECSCJ No. 315, (delivered 18 ^th September 2019) distinguished; Matadeen v Caribbean Co Ltd [2002] UKPC 69 applied; The Presidential Insurance Company Ltd v Resha St. Hill [2012] UKPC 33 applied; The Presidential Insurance Company Ltd v Mohammed [2015] UKPC 4 applied.

Introduction

Blenman JA

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