Caribbean Atlantic Life Assurance Company Ltd Appellant/Defendant v J. E. Nassief Respondent/Plaintiff [ECSC]

CourtEastern Caribbean Supreme Court
Docket NumberCivil Appeal No. 1 of 1970
JudgeCECIL LEWIS, J.A., GORDON, C.J. (Ag.), ST. BERNARD, J. A. (Ag), Acting Chief Justice
Judgment Date10 Jul 1970
JurisdictionCaribbean States
Neutral Citation[1970] ECSC J0710-1
[1970] ECSC J0710-1

IN THE COURT OF APPEAL

Before:

The Honourable the Acting Chief Justice

The Honourable Mr. Justice P. Cecil Lewis

The Honourable Mr. Justice St. Bernard (Ag.)

Civil Appeal No. 1 of 1970

Between:
Caribbean Atlantic Life Assurance Company Limited
Appellant/Defendant
and
J. E. Nassief
Respondent/Plaintiff

E. H. Francis for the Appellant

J. Armour and B. Alleyne for the Respondent

CECIL LEWIS, J.A.
1

The respondent having been assured by an agent and by the Chairman of the Board of Directors of the appellant company (hereinafter referred to as the company) that any premiums paid by him on an insurance policy which the company's agent was endeavoring to sell to him would be deducted by the income tax authorities from his income for the purposes of taxation, took out an insurance policy on the life of one Max Karam, an employee in his business, in the sum of $100,000.00. The policy in question was what is known as a "key man" insurance policy, and was completed on the l6th day of February, 1963, on which date the respondent paid the sum of $1,184.00 as the first premium. He paid subsequent premiums of $784.00 and $984.00 on 11th February, 1964 and 11th February, 1965 respectively—a total of $2,952.00.

2

The respondent was first informed by letter dated 23rd August, 1965, from the Comptroller of Inland Revenue that the premiums he had paid were not deductible for income tax purposes. Negotiations on the respondent's behalf between the company and the income tax authorities followed, and as a result a letter dated 10th February, 1966, was sent by theincome tax authorities to the company with a copy to the respondent. In this letter the income tax authorities confirmed that they were unable to vary their previous decision to disallow the premiums paid as deductions against the respondent's income. Thereupon the respondent sought to recover the premiums from the company, but as the company refused to repay them he brought an action against the company claiming repayment of the sum of $2,952.00 and other relief.

3

In his statement of claim the respondent pleaded that in the course of negotiations with the company the company's agents represented to him that he would be permitted relief by the income tax authorities for all premiums paid under the policy, that the said representation was made with the intention of inducing him to enter into the contract of insurance, that it was made by Mrs. Elaine Pringle and Mr. Pat Gonsalves who were at the material time agents of the company, that he was induced to and did purchase the said insurance policy on the faith of the said representation, that the representation made was not true, and that it was made fraudulently, knowing that it was false, or recklessly and not caring whether it was true or false. In the alternative it was pleaded that the representation was made innocently.

4

It was further alleged by the respondent that as soon as he discovered that the representation was untrue he repudiated the said contract of insurance first by word of mouth and subsequently by letter dated 19th November, 1965, and that the consideration for the payment of $2,952.00 has therefore wholly failed. He claimed the return of the moneys paid with interest at 6% and damages, and in the alternative rescission of the contract.

  • (a) that it offered to sell the respondent a contract of insurance;

  • (b) that the contract was completed on 16th February, 1963; and

  • (c) that three premiums totalling $2,952.00 were duly paid by the respondent on the dates and in the amounts described in paragraph 5 of the statement of claim.

The company in its pleadings admitted —
5

The company denied that the representation was made with the intention of inducing the respondent to enter into the contract of insurance, and also denied that the respondent was induced to, and did purchase the insurance policy on thefaith of the said representation.

6

In so far as the respondent claimed damages for fraud it was stated in the defence that the respondent had suffered no damage; that he was not entitled to rescission of the contract because it had been executed, and that in so far as the claim for damages for breach of contract was concerned, that...

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