Prudence Robinson v Sagicor General Insurance Inc.

• Jurisdiction: St Lucia
• Judge: Carrington JA
• Judgment Date: 18 September 2019
• Judgment citation (vLex): [2019] ECSC J0918-2
• Docket Number: SLUHCVAP2017/0034
• Court: Court of Appeal (Saint Lucia)
• Date: 18 September 2019

[2019] ECSC J0918-2

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mde. Gertel Thom Justice of Appeal

The Hon. Mr. John Carrington, QC Justice of Appeal [Ag.]

SLUHCVAP2017/0034

Between:

Prudence Robinson

Appellant

and

Sagicor General Insurance Inc.

Respondent

Appearances:

Mrs. Lydia Faisal for the Appellant

Mr. Mark Maragh for the Respondent

Civil appeal — Insurance — Non-compliance with Form C of Motor Vehicles (Third Party Risks) Regulations — Effect of non-compliance — Different versions of cover note — Whether valid cover note existed at time of accident

The appellant was standing near a bus stop when a collision between a motor truck driven by Cyril Jn Baptiste and a motor vehicle occurred. As a result of the collision, the driver of the motor vehicle lost control of the vehicle and collided with the appellant causing him to be severely injured and eventually losing his right leg.

The appellant brought a claim against the driver and the owners of the motor truck, whom he claimed were insured by Barbados Fire & Commercial Insurance Company Limited, the predecessor to the respondent, Sagicor General Insurance Inc (“Sagicor”), giving notice of the claim to the insurer. Subsequently, default judgment was entered against the defendants to the claim and damages were assessed (the “judgment debt”). The defendants, however failed to satisfy the judgment debt and sought to enforce it by bringing a claim against Sagicor pursuant to section 9 of the Motor Vehicles Insurance (Third Party Risks) Act (the “Act”).

Sagicor denied that the driver and the owners of the motor truck were its insureds at the material date as it had never issued or agree to issue a contract of insurance in favour of these persons. It had merely issued on a “cover note” giving comprehensive coverage in relation to the motor truck for the period of 30 days in consideration of the insureds having agreed to pay the requisite premium, which they never paid. Sagicor pleaded that the 30-day period of the cover note had expired before the date of the injury to the appellant with the result that Sagicor was not on risk as at the date of the injury.

In the court below, there were different versions of the cover note. The appellant produced a copy of the cover note which he claimed originated from the records of National Commercial Bank of St Lucia Ltd. which held a mortgage over the motor truck and which stated a four month period of cover while Sagicor produced a copy of a cover note which stated cover to be for 30 days.

The learned judge found that the cover note produced by Sagicor did not comply with the Form C of the regulations under the Act which deals with the proper form in which a cover note is to be issued. The judge noted that the best scenario would be that there was a stated intention by the defendants to pay the premium for a policy which would within 4 months. However, the premium was never paid. Consequently, the cover note expired in 30 days.

The learned judge also found that the cover note produced by the appellant was not supported by evidence of any officer of the bank and was thereby “double hearsay”. The learned judge therefore dismissed the claim on the ground that the appellant had failed to prove that Sagicor had held a valid policy of insurance for the vehicle that caused his injuries.

Both the appellant and Sagicor, being dissatisfied with the judgment of the learned judge, appealed. At the hearing of the appeal, Sagicor withdrew its counternotice.

Held: Allowing the appeal, setting aside the order of the learned judge dismissing the claim of the appellant, remitting the matter to the High Court and awarding costs to the appellant to be assessed by a master of the court if not agreed within 21 days, that:

• 1. Regulation 3 of the Motor Vehicles (Third Party Risks) Regulations requires that every covering note issued by an insurer shall have printed in front or at the back of it a certificate of insurance in the form set out in Form C. The Act does not state the effect of non-compliance with the specified form. However, section 24 of the Interpretation Act of Saint Lucia provides that, where a form is prescribed or specified by any enactment, deviations therefrom not materially affecting the substance nor calculated to mislead shall not invalidate the form used. In the present case, there is a certificate of insurance in front of the cover note as required by regulation 3. There was no finding in any event by the judge that the form of the cover note in question was materially different in substance from Form C or was calculated to mislead. In the absence of such a finding, the effect of section 24 of the Interpretation Act is that, contrary to the conclusion of the learned judge, the cover note relied on by Sagicor was not invalidated.

• 2. The contract of insurance contained in a temporary covering note should be enforceable against the insurer. In this case, any failure of the insured to pay the premium could not have caused the cover note to change from providing cover for 4 months to providing cover for 30 days. An implied or express promise to pay the premium would therefore have been sufficient consideration to render the contract enforceable once there had been offer and acceptance of the cover. In the absence of such an implied promise, the failure to pay the premium may have entitled the insurer to cancel the coverage under the terms of the contract between the insurer and the insured but unless it did so, the coverage would have continued for the periods stated on the face of the note. Sagicor could not raise non-payment of the premium as a defence to the claim made by the appellant under the Act as the Act does not permit the insurer to raise contractual defences under the policy against the claim of a third party judgment creditor. Further, the learned judge erred in his implicit finding that the premium had not been paid as Sagicor led no evidence at the trial of such non-payment and the conclusion therefrom that the cover note never took effect and the coverage never came into existence.

  Taylor v Allon [1965] 1 All ER 557 applied.

• 3. The motor truck was being used on the road and was subject to a bill of sale from the bank. The presumption must be that it was insured at some point in time at the minimum in accordance with the terms of the cover note produced by the insurer. However, by virtue of section 6 of the Act the policy would have remained valid unless and until the insurer notified the Licensing Authority of its expiration. There was no evidence that Sagicor (or its predecessor) had notified the Saint Lucia Licensing Authority of the expiration of the cover note after the 30-day period. There was no evidence that the cover note had been avoided or a claim had been made within the statutory period under section 9 of the Act to avoid the cover note for non-payment of premium. The result is that the cover note had to be treated as having been valid originally and as having expired under its terms before the date of the injury to the appellant but by virtue of section 6 of the Act, the absence of evidence of notification to the Licensing Authority meant the only finding available to the judge was that it remained valid as at the date of the appellant's injury.

1 Carrington JA [AG.]: On 28 ^th October 2000, the appellant, a police officer, was standing near a bus stop in Mon Repos at the junction of Lumbard Road and the Castries/Vieux Fort Highway in Saint Lucia when there was a collision between a motor truck driven by Cyril Jn Baptiste and a motor vehicle. As a result of the collision, the driver of the motor vehicle lost control of the vehicle and that vehicle collided with the appellant. The appellant was severely injured and eventually lost his right leg. He brought a claim on 17 ^th October 2003 against the driver and the owners of the motor truck, Francis Charlery and Nelson Smith, whom he claimed were insured by Barbados Fire & Commercial Insurance Company Limited, the predecessor to the respondent, Sagicor General Insurance Inc (“Sagicor”), giving notice of the claim to the insurer on 2 ^nd November 2003. On 21 ^st March 2005, default judgment was entered against the defendants to that claim. Damages were assessed on 29 ^th July 2005 in the sums of $60,962.54 for special damages; $190,000.00 for general damages; interest on the special damages at the rate of 3% per annum from 17 ^th October 2000 to 29 ^th July 2005; interest at the rate of 6% of the global sum of $250,962.54 from 29 ^th July 2005 until payment and costs in the sum of $28,000.00 (collectively the “judgment debt”).

2 The judgment debtors did not satisfy the judgment debt and the appellant sought to enforce it against Sagicor pursuant to section 9 of the Motor Vehicles Insurance (Third Party Risks) Act 1 (the “Act”) and brought the claim giving rise to this appeal against Sagicor on 25 ^th July 2008. The material parts of section 9 of the Act are as follows:

“9. Duty of insurers to satisfy judgment against persons insured against third-party risks

• (1) If, after a certificate of insurance has been duly delivered under this Act to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy of insurance under section 4(1)(b) (being a liability covered by the terms of the policy to which the certificate relates) is obtained against any person who is insured by the policy then, although the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, he or she shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the

  liability, including any amount payable in respect of costs and any sum payable in respect of...