Newim Life & General Assurance Company Ltd v Selwyn Redhead

• Jurisdiction: Caribbean States
• Judge: Actie, J
• Judgment Date: 03 May 2022
• Judgment citation (vLex): [2022] ECSC J0503-2
• Year: 2022
• Docket Number: CLAIM NO. GDAHCV2016/0012
• Court: Eastern Caribbean Supreme Court

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

HIGH COURT OF JUSTICE

(CIVIL)

Before:

The Hon. Mde. Justice Agnes Actie High Court Judge

CLAIM NO. GDAHCV2016/0012

Between:

Newim Life & General Assurance Company Ltd

Claimant

and

Selwyn Redhead

Defendant

Appearances:

Mrs. Daniella Williams Mitchell and Mr. Jordan Marshall for the Claimant

Mr. Derick Sylvester and Ms. Alicia Lawrence for the Defendant

Actie, J

1 This claim raises the issue as to whether the claimant is entitled to avoid a policy of insurance on the basis of non-disclosure or misrepresentation of a material fact.

Claimant's case

2 By claim form filed 18 ^th January 2016 the claimant claims:

• (1) A declaration that it is entitled to avoid the policy of insurance dated 12 ^th May 2011 and any judgment given in relation to the motor vehicle accident which occurred on the 10 ^th day of October 2012, between motor vehicle registration numbers PAD985 and PAA680 on the ground that the policy was obtained by the non-disclosure of material facts and/or by the representation of facts which were false in some material particular.

• (2) Costs.

3 Under a policy of insurance dated 12 ^th May 2011 which was effected over vehicle registration number PAA680 (hereafter “the Vehicle”) the defendant was insured by the claimant company. By certificate of ownership obtained on 11 ^th January 2016, however, the actual registered owners of the Vehicle at the time the policy was effected were Cosmos Williams and Richard Steele, not the defendant. Nevertheless, evidenced on the claimant's Private Motor Car Insurance Proposal form for the said policy (hereafter “the proposal form”), the defendant attested to the Vehicle being registered in his name for the purposes of insurance.

4 The claimant avers that the representation by the defendant that he was the registered owner of the Vehicle was a material statement of fact which was adopted by the claimant, and which influenced its judgment in ascertaining whether or not to take the risk in insuring the vehicle. The claimant contends that under no circumstance would it have authorised the issuance of the said policy of insurance to the defendant as the defendant had no insurable interest in the vehicle. The risk of effecting insurance coverage for the claimant's vehicle was based on the information provided by the claimant in the proposal form which the claimant relied on.

5 For this reason, the claimant claims that it is entitled to avoid the policy and any judgment given in relation to the Vehicle pursuant to Section 14 (3) of the Motor Vehicle Insurance (Third Party Risks) Act Cap 202. This is in light of a collision that occurred during the currency of the policy between the vehicle registration number PAD985 owned and driven by Nigel Dexter Noel and the said Vehicle, driven by Mark Duprey at the time, for which the said Nigel Dexter Noel, on 9 ^th November 2015, issued an action in the High Court against the registered owners and Mark Duprey, claiming damages for loss and damage as a result of the motor vehicle accident 1.

Defendants' case

6 The defendant contends that at all material times he was the owner of the Vehicle pursuant to the Motor Vehicle Insurance (Third Party Risks) Act. He states that he purchased the Vehicle from Cosmos Williams and Richard Steele for $13,500.00, and that upon purchasing the vehicle he paid the relevant fee at the Inland Revenue Department and signed the appropriate transfer form.

7 The defendant denies non-disclosure since he paid for the car and was issued a receipt. However the receipt is not before this court. He states that the vendors who sold the car had to sign the transfer form to complete the transfer, and the vendors only completed the process after the accident had occurred. The defendant states that he honestly believed himself to be the owner and/or registered owner of the Vehicle by virtue of him paying the relevant transfer fee and possessing the vehicle.

8 The defendant further contends that the non-disclosure was not material in that it did not, nor could it have, influenced the judgment of the claimant in determining whether to take the risk and for what premium and on what condition. Any nondisclosure would have been caused and/or contributed to by the servant and/or agent of the claimant to properly read, explain and/or give the defendant the opportunity to understand and interpret the nature of the questions in the said proposal form. Further, any mistake on the said proposal form must be attributed to the claimant's servant and/or agent who filled out same. The defendant states that at no time was any question on the policy explained to him nor was it asked whether he understood the questions put to him. At no time was he advised of his right to seek and obtain independent legal advice prior to providing the answers to questions asked to him by the claimant's servant.

9 The defendant counterclaims stating that the claimant owes a duty to ensure, in the absence of independent legal advice, that he fully understood and had explained to him the motor car insurance proposal form signed by him. The defendant contends that the claimant breached this duty and claims that he suffered loss and damage as a result.

10 The defendant counterclaims for:

• (1) a declaration that the claimant is entitled to honour the policy of insurance dated 12 ^th May 2011 and any judgment in relation to the motor vehicle accident which occurred on 10 ^th October 2012 on the ground that the policy was not obtained by material non-disclosure or by representation of fact which was false in some material particulars;

• (2) General damages for negligence and/or breach of statutory duty;

• (3) Interest; such further and/or other relief as the Honourable Court deems just and Costs.

Legal Analysis

Whether there was any non-disclosure or false representation of facts made by the defendant to the claimant

11 An assured owes a duty of disclosure to the insurer, which duty extends only to facts which are known (or deemed in law to be known) to one party and not the other 2. The learned editors of MacGillivray on Insurance Law set out the duty as follows:

“Subject to certain qualifications considered below, the assured must disclose to the insurer all facts material to the insurer's appraisal of the risk which are known or deemed to be known by the assured but neither known nor deemed to be known by the insurer. Breach of this duty by the assured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms.” 3

12 Furthermore, the learned editors of Halsbury's Laws of England state:

“The proposer is under a duty to disclose to the insurer all material facts as they are within his knowledge. The proposer is presumed to know all the facts and circumstances concerning the proposed insurance. Whilst the proposer can only disclose what is known to him the proposer's duty of disclosure is not confined to his actual knowledge, it also extended to those material facts which, in order [sic] course of business, he ought to know.” 4

13 This rule of law is premised on the understanding that an insurance contract is a contract based on the utmost good faith. If the utmost good faith is not observed by either party, the contract may be avoided by the other party 5.

14 It is the defendant's position, firstly, that he paid for the Vehicle in the sum of $13,500.00 and thereafter took possession of same. He states that he was not aware that only one of the prior owners signed the prescribed form transferring ownership of the Vehicle to him at the time of taking out the policy. The defendant also argues that the Motor Vehicles Insurance (Third Party Risks) Act makes provision for a person in actual charge or possession to be subscribed as an owner. This latter argument does not hold weight as this provision in the Act relates solely to unregistered vehicles. In the instant case, the Vehicle was registered, albeit in the previous owners' names.

15 It must be stated that the defendant provides no documentation or supporting witness to corroborate his above stated version of the facts. Moreover, the defendant admitted in cross-examination that this was not his first time owning

and insuring a motor vehicle. In fact, he owned, registered and insured three vehicles before the Vehicle in issue

16 Section 11(1)(b) of the Motor Vehicles and Road Traffic Act CAP 201 mandates that on change of possession of a motor vehicle, the registered owner and the new owner shall within seven days after such change of possession make application in writing signed by both of them to the Licensing Authority giving the name and address of the new owner the date of change of possession, and such application shall be accompanied by the certificate of registration and the prescribed fee.

17 There is no evidence as to the defendant's compliance with the above mentioned There is before the court, however, a certificate of ownership of the Vehicle which evidences that the Vehicle was registered in the names of Cosmos Williams and Richard Steele on 13 ^th April 2007. One month thereafter, the defendant on 12 ^th May 2007 signed the claimant's Private Car Proposal on which Richard Steele, one of the registered owners, is named as an authorised driver. Richard Steele is also stated to be the brother of the defendant.

18 Taking the facts as they appear, therefore, the defendant had a duty to disclose that he was not the registered owner of the Vehicle. However, the defendant at trial states that the proposal form was completed by the claimant's agent. He states that he has had three vehicles insured with the same company. He indicated that he was aware of the process to obtain the registration and transfer form from the Inland Revenue to complete the...