Motor Union Insurance Company Ltd v Linzey

JurisdictionCaribbean States
CourtFederal Supreme Court (West Indies)
JudgeMr. Justice Rennie, Mr. Justice Archer, Mr. Justice Wylie
Judgment Date12 Nov 1959
Docket NumberCivil Appeal No. 1 of 1959

Federal Supreme Court. Appellate Jurisdiction

Rennie, J.A. Archer, J.A. Wylie, J.A.

Civil Appeal No. 1 of 1959

Motor Union Insurance Co. Ltd.
and
Linzey

Insurance - Motor Insurance — Liability of insurance company

Facts: This was an appeal in respect of the appellant's liability under a policy of insurance. The respondent had insured his motor car with the appellant insurance company. The issues before the Court were to ascertain the meaning of the arbitration clause in the insurance policy. Whether the effect of the clause was to limit the liability of the insurance company to £500 and whether the appellant was under a duty to submit the dispute to arbitration.

Held: Appellant was not obliged to submit the dispute to arbitration, but the respondent was obliged to do so. Reference to the matter of arbitration was a condition precedent to the bringing of an action and the failure of the respondent to refer it to arbitration must necessarily result in failure of his claim. The policy was limited to the amount stated in the policy. Appeal dismissed.

Mr. Justice Rennie
1

This appeal is in respect of the appellant's liability under a policy of insurance.

2

At the hearing of the appeal, the respondent applied to amend his reply so as to deny that the proviso in tine policy, which limited the appellant's liability, formed a term of the policy and to make a consequential amendment to paragraph 8. The Court took the view that to grant these amendments would result in an injustice to the appellant and accordingly refused the application.

3

In November, 1951, the respondent insured his Ford motorcar with the appellant with the circumstances I shall hereafter relate. He did not take delivery of the policy when it was issued, instead he asked the appellant's agent to keep it for him. Between November, 1951 and August, 1852, the respondent's car was involved in three accidents. In respect of the first he was paid £9. 11s.9d. by the appellant and, in respect of the second, he eras paid $176.00. The third provides the subject matter of this appeal. In the third accident one Neslie King, a passenger in the respondent's car, was injured. He claimed damages for his injuries arid eventually brought an action against the respondent. In this action he was awarded damages, which together with the costs of the action, amounted to £1,054.6s.h.d. The appellant has paid Neslie King £500 of the amount of his judgment and contend that that sum represents the extent of its liability under the policy of insurance. The respondent claimed and obtained a judgment against the appellant for a further sum of £554.6b.4d. It is in respect of that judgment that this appeal is brought.

4

The policy of insurance contains two provisions that figure prominently in the litigation. The first limits the appellant's liability to £500 in respect of injury to a passenger in any one accident and the second requires differences arising out of the policy to be submitted to arbitration. Nothing turns on the wording of the proviso that limits the liability to £500 and for that reason it does not seem necessary to quote the proviso. But the position is not so clear with respect to the, arbitration clause. It is necessary to look at this clause to see if the respondent has complied with its terms: That clause is as follow: -

“All differences arising out of this Policy shall be referred to the Arbitration of some person to be appointed by the Company and the insured or if they cannot agree upon a single Arbitrator to the decision of two Arbitrators one to be appointed in writing by each party and in case of disagreement between the arbitrators to the decision of an umpire who shall have been appointed in writing by the arbitrators before entering on the reference and an award shall be a condition precedent to any liability of the Company or any right of action against the Company. If the Company shall disclaim liability to the insured for any claim hereunder and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to Arbitration under the provisions herein contained then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder”.

5

I now go back to the circumstances in which the car was insured and for this purpose quote from the judgment of the learned trial judge: -

“In November, 1951, the plaintiff who was the owner of a Ford V.8 motorcar whose registration number was M 10 went to the office of Messrs. M.S. Osborn, the local agents of the Motor Union Insurance Company Limited (hereinafter referred, to as ‘the...

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