3PLR – MARK KAYODE V. ROYAL EXCHANGE ASSURANCE
POLICY, PRACTICE & PUBLISHING LAW REPORTS, 3PLR
MARK KAYODE
V.
ROYAL EXCHANGE ASSURANCE
HIGH COURT OF JUSTICE
10th September, 1956
1955-1958 WNLR 154
3PLR/1956/87 (HC)
BEFORE:
TAYLOR, J.
REPRESENTATION
Ayoola for Plaintiff.
Thanni for Defendant.
MAIN ISSUES
INSURANCE AND REINSURANCE:- Motor vehicle insurance Policy – Breach of by insurer – Claims by policy holder to recover thereto – Heads of claim allowed – How construed from policy – Pre-accident value of vehicle – How determined – Cost of repairs – Party on whom onus of proof lies – Consequential loss awards – “Loss consequent upon the accident and in which the motor vehicle was at the same time damaged” – Meaning of – How determined
INSURANCE AND REINSURANCE:- Motor vehicle insurance – Recovery for “loss of use” under a Motor vehicle insurance Policy – Period covered – Deductibles – Cost of towage – How determined – When lack of credible expert witness would be fatal – Relevant considerations
INSURANCE AND REINSURANCE:- Claim for general damages against insurers for breach of contractual duties – Where plaintiff is suing under the policy which states and limits his claims – Whether cannot succeed for being a head of claim which is not covered by the policy
COMMERCIAL LAW – CONTRACT:- General damages – Where not founded on contract and in fact was expressly negatived therein – Attitude of court thereto
ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION:- Agreement containing an arbitration clause – Whether can be waived – Nature of – Whether can oust the jurisdiction of the courts or prevent parties from putting in a claim in court in spite of its existence
ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION:- Arbitration clause in an agreement – Purport of – How invoked – Whether merely enables the other party to apply for a stay of legal proceedings pending such arbitration – Whether grant or refusal of the application for stay is within the court’s discretion
TRANSPORTATION AND LOGISTICS LAW:- Motor vehicle used for transportation – Where insured – Damage thereto – Heads of claim that may be recovered – How determined
ETHICS – POLICE OFFICER:- Display of tardiness and unpreparedness in addressing issues deemed to be within his official domain – Attitude of court thereto
PRACTICE AND PROCEDURE – EVIDENCE – EXPERT WITNESS:- Witness represented as an expert witness – Where fails to impress the court as such – Treatment of evidence adduced therefrom
PRACTICE AND PROCEDURE – COURT:- Court discretion – Application for stay of proceedings pursuant to the activation of an arbitration in the agreement founding the suit before court – How treated
MAIN JUDGMENT
Taylor, J.:
The plaintiff claims from the defendant company the sum of £4,000 being general and special damages for breach of a contract dated the 12th February, 1955. This sum is made up as follows:- £1,100 is claimed as the pre-accident value of the lorry; £2,100 as loss of earnings from 16th April to 17th November, 1955 at the rate of £300 a month. £24 is claimed as towage fees and £776 as general damages. The plaintiff is the owner of a motor vehicle No. 00 7812 which he used for plying for passengers. The defendant is an insurance company and the contract entered into was one of Insurance which is defined in Shawcross on Motor Insurance 2nd Edition at page 70 as:-
“A contract whereby one person called the insurer undertakes in return for the agreed consideration called the premium, to pay another person called the assured, a sum of money on the happening of a specified event.”
The plaintiff gave evidence on the 31st July, 1956, and stated inter alia that he bought the lorry No. 00 7812 on the 2nd February, 1955. It was new and not second hand when he bought it. He had a body built on it and then took it for testing to the Motor Traffic Officer who passed it and gave him the necessary authority to carry forty-three passengers. After the test he insured the lorry with the defendant company on the 12th February, 1955 for £1,140 and paid a premium of £121 12s 7d. He was given Exhibit “A” the insurance policy. A month afterwards the lorry was damaged on the Ibadan-Shaki road. He said he was in the lorry when the accident took place and says that the cause of the accident was a tyre burst. He testified to the damage caused to the lorry as a result and said that the defendant was informed. Five days after informing the defendant company the lorry was removed by Khalil and Dibbo to Messrs S.C.O.A. he paid Khalil and Dihlw by virtue of Exhibit “E” the sum of £24. The Invoice is dated 16th March, 1955 and payment is stated as being made on 19th March, 1955. The lorry was repaired but not to the plaintiff’s satisfaction for he stated it was not repaired to its pre-accident value. He wrote to the defendant to refer the matter to arbitration and tendered Exhibits “C” and “D” in respect thereof. Exhibit “C” is a letter dated the 6th July, 1955, written by the Solicitor of the plaintiff to the defendant in effect expressing the plaintiff’s willingness to submit to arbitration and requesting the defendant to declare their final stand. The reply to this was dated the 18th July, 1955, and the defendants stated their preparedness to submit to arbitration but pointed out the delay that is usually caused by arbitration and in the alternative suggested that the services of the Chief Engineer of Messrs U.T.C. Motor Limited, Ibadan together with an engineer appointed by the insured be co-opted and a joint inspection be made and a report submitted. The defendant too was to be represented. As a result of Exhibit “D” the plaintiff appointed one Karunwi as his mechanic. The plaintiff said he heard nothing more from the defendant in this respect, but later the defendant’s agent, Messrs. S.C.O.A. informed the plaintiff that they had instructions to repair the lorry which they did and invited the plaintiff to inspect same. He did so and was still not satisfied with it. Further repairs were refused by the defendant’s agent. The plaintiff asked to be allowed to take the lorry and he be given money for the repairs which he would see to was done to his satisfaction. This was refused unless he signed for the delivery of the lorry. He was to sign in effect what turned out to be a satisfaction note. He refused to do this. However, later, the lorry was taken out to the Motor Testing Officer who is authorized by Government to test vehicles and if roadworthy to issue a roadworthy certificate in respect thereof. This vehicle failed the test. The lorry is still with the defendant company’s agent, Messrs S.C.O.A. The plaintiff values the lorry at £1,100 before the accident. He further stated that his earnings a day were 410 on the lorry and that out of this sum he pays £1 for the servicing of the lorry every thirty days and he paid the driver £4 a month. He claims at this rate for seven months instead of eight months for he allows the defendant’s agent one month within which to effect the repairs. Under cross-examination he stated further that he paid £120 to have the body built on the lorry and that the price of the lorry was £1,000. He contradicted himself over the question of the date of the repairs in relation to the consultation with his Counsel, but this was not material. Two further Exhibits “I:” and “I1” were put in under cross-examination. Exhibit “E” a letter dated 28th of April, 1955, was written by plaintiff’s solicitor to the defendant and notified the latter of the damage to the lorry on the 11th March, 1955, and of the expenses of towing incurred by the plaintiff. In this letter the plaintiff’s attitude seems to be one of a replacement of the lorry by a new one instead of repairs as he says same was a total loss and he states further in paragraph 6:-
“If your firm does net agree with my clients, it is hereby suggested that the matter be submitted to arbitration, for my client is not prepared to accept anything other than a total replacement or payment of the pre-accident value of vehicle.”
Exhibit “F” was dated the 6th May, 1955, and was in reply to Exhibit “E.” It referred the plaintiff to paragraph 4 of the Policy and further stated that Messrs S.C.O.A. had been further instructed to repair the lorry and paragraph 2 of the letter further stated:-
“We would further suggest that the time for the insured to complain as to the method of dealing with the claim is when the repairs have been completed and for very good reasons he is unable to accept them as satisfactory. You will of course appreciate that if such complaint is made it must be substantiated by the opinion of a reputable engineer following upon inspection by him of the repaired vehicle.”
The next witness was Gabriel Kolade, a policeman No. 1011 of the Motor Traffic Unit. This witness began his evidence in a most unsatisfactory manner, unsatisfactory not in the sense of tending to disbelief but in a manner unbecoming of a Policeman who is supposed to be an impartial witness. He was at first reluctant to testify. He began his evidence with:-
“I cannot remember the Number of the vehicle tested on 12th of December, 1955.”
That was when the number of this lorry was put to him and he was asked if he remembered the vehicle being tested that day. His answer by itself is at first understandable, but when it is borne in mind that this witness was served with subpoena duces tecum on the 21st of July, 1956, to produce at the hearing the record where he recorded the result of the testing of vehicle No. 00 7812 on 2nd of December, 1955 (which was a mistake for 12th December, 1955,) one would have expected him to come to Court prepared to testify on the matter and more so in view of the fact that a subpoena ad testificandum was issued on the Motor Testing Officer to testify as to the result of the testing of the vehicle in question on the 12th December, 1955. After an interval of fifteen minutes this witness refreshed his memory and continued his evidence with the words:-
“I remember something about Lorry No. 00 7812.”
He stated further that the vehicle was tested in his presence and the result was that the vehicle failed the test and was found not to be roadworthy. He stated under cross-examination that he refreshed his memory from what he called the defect sheet which was then tendered by Counsel for the defence and marked Exhibit “G.”
The driver then gave evidence and corroborated the master-plaintiff as to the daily earnings of the lorry and the cause of the accident and stated further that when the tyre burst the lorry went off the road and hit a tree. He further corroborated the plaintiff as to the sum of £1 paid every thirty days for servicing of the lorry. He then tendered Exhibits “H” and “H1,” the former certificate of roadworthiness of the lorry and stage carriage licence of same.
The last plaintiff’s witness was Emanuel Karunwi a motor mechanic who gave evidence as to the state and condition of the lorry on inspection by him. I will not deal with his evidence at any length because he came to testify as an expert and was found to be most inexpert in respect of such minor parts of the car as the tachometer or revolution counter when questioned by the Court. I reject his evidence. I am however perfectly satisfied with the other plaintiff’s witnesses whose evidence I accept subject to the minor discrepancy referred to by me. I did not form the impression that Gabriel Kolade, P.C. 1011 was an untruthful witness by his demeanour, nor did I even form the impression that his memory needed much refreshing.
The defence then called Sydney Brian Savage their Claims Manager. He corroborated the plaintiff that S.C.O.A. were instructed by them to repair the vehicle when the former notified them of the accident. He tendered Exhibit “J” a letter written to them by the S.C.O.A. Motors, Ibadan and also Exhibit “K” another letter written by the U.T.C. Limited, Motor Department, Ibadan, to the defendant informing the latter of the repairs done to the lorry and the condition of the lorry. Under cross-examination he said that he knew that the lorry was for use as a passenger carrying vehicle and admitted the agency of S.C.O.A., Ibadan, for the defendant. He further corroborated the plaintiff as to the satisfaction note being required before a vehicle is allowed to leave the repair premises.
Finally the defence called Lucien Paul Leterne the Manager, S.C.O.A., Ibadan, who confirmed that the vehicle was repaired by his firm and is still in the garage. He stated that the vehicle was now in good condition. Counsel then proceeded to address me and draw my attention to the relevant sections of the policy and the interpretation they wish me to put upon same. The points for decision are the following
- Was the vehicle repaired in accordance with the terms of the policy?
- If not then to what is the plaintiff entitled?
Looking at Exhibit “A” it will be seen that the vehicle was insured for the sum of £1,140. The lorry appearing on the body of the policy is not the lorry with which we are concerned, but it is not disputed that the memo attached to this policy and dated the 14th March, 1955, makes the terms, conditions and exceptions of the policy applicable to the lorry in dispute and which is shown on this memo as Austin Lorry No. 00 7812.
What then are the liabilities of the defendant’s in this case?
They are stated in section 1 sub-section (i) and (ii). The bone of contention in this case is the construction to be put upon sub-section (ii) of the policy. I propose to quote these sub-sections.
Sub-section (i): The Company will indemnify the insured against loss of or damage to the Motor Vehicle and/or its accessories whilst thereon;
(a) by accidental collision or overturning or collision or overturning consequent upon a mechanical breakdown or consequent upon wear and tear;
(b) by fire external explosion self-ignition or lightning or burglary house-breaking or theft;
(c) by malicious act;
(d) whilst in transit by road rail inland waterway lift or elevation.
The plaintiff is clearly covered by sub-section i (a), for on the evidence which I accept the damage took place as a result of a tyre burst and accidental collision with a tree. The defendant’s liability under this head cannot on the evidence before me be seriously contested. The only point advanced by the defendant is that they have repaired the vehicle to its pre-accident value. Can it really be contended that a lorry bought on the 2nd February, 1955, in a brand new condition and which had passed the roadworthy test and was damaged on the 11th March, 1955, was returned to its pre-accident value by repairs which when completed and the vehicle tested by the testing authorities did not enable the vehicle to pass the test for roadworthiness? Undoubtedly the defendant has not discharged its duty fully and must be held liable under this head. Be it noted that I have come to this my decision in the absence of Exhibit “G” which though tendered by the defence I do not allow to have any weight on my mind. The vehicle was insured for £1,140 as from the 12th February, 1955, and the claim is for £1,100 stated as its pre-accident value.
There was no evidence led by the defence in rebuttal of thus. The vehicle being insured for £1,140 the plaintiff is entitled to the sum of £1,140 on the authority of In re Wilson and Scottish Insurance Corporation Limited (1920) 2 Ch. D., page 23 at pages 31-32 per Astbury, J. but since the claim is for £1,100 I cannot award more than is claimed and I therefore award the plaintiff the sum of £1,100 on this head of liability. Section 1 sub-section (ii) states as follows:—
“The company shall not be liable to make payment in respect of consequential loss depreciation wear and tear mechanical or electrical breakdowns, punctures or breakages nor for damage caused by overloading or strain or by explosion of the boiler of the motor vehicle nor for damage to tyres unless the motor vehicle is damaged at the same time.”
Learned Counsel for the defendant interprets this sub-section as meaning that the defendants are in no way liable for consequential loss and further that the defendants are liable only under sub-section (i) or sub-section (ii) but not both. Looking at the section it is quite clear that it is governed by the words “unless the motor vehicle is damaged at the same time.” The comma should therefore be read after the word “tyres” and before the word “unless.” In other words the company is not liable for consequential loss and all those heads of liability therein stated unless at the same time the motor vehicle is damaged. As for Counsel’s other contention one would have expected to find the word “or” between sub-section (i) and subsection (ii) if Counsel’s contention were correct. The loss therefore comes under this section being a loss consequent upon the accident and in which the motor vehicle was at the same time damaged. The object of section 1 sub-section (ii) is to exempt the defendant from consequential loss such as the plaintiff has suffered by the non-user of the vehicle for those eight months but only under certain conditions or to put it in another way the object is to make the company liable for consequential loss only if the vehicle is at the same time damaged. Had the intention been to exempt the company from consequential loss altogether one would have expected this sub-section to be worded in a manner similar to that which is found at page 503 of Shawcross on Motor Insurance (2nd Edition) which states as follows
“The company shall not be liable to pay for
(a) Loss of use depreciation wear and tear mechanical or electrical breakdown failures or breakages.’.
The learned Author goes on to say at page 504 as follows—
“this exception presents many difficulties of construction
“Loss of use” This refers to the loss which the assured sustains of the user of the vehicle during the time that it is out of action as a consequence of some damage covered by the clause. As has been pointed out such loss would without this express exception not be covered unless the policy expressly extended to it. In certain circumstances it should be noticed insurers who fail to perform their part of the contract may be liable for the loss of use. The exclusion of loss of use excludes any further loss caused thereby.”
To how much then is the plaintiff entitled? He claims for seven months out of the eight months in which the vehicle was with the defendant’s agent. The vehicle was towed to S.C.O.A. in the month of March 1955, and the vehicle is there this day. The claim is made as from 16th April to 17th November action having been commenced on the 19th November, 1955. The plaintiff claims at the rate of £300 a month. He stated that he pays £1 for the servicing of the car every thirty days and £4 to his driver every month. The plaintiff testified that repairs could have been completed in one month and his mechanic Mr. Karunwi supported him in this respect. The defendant called no witness to testify on this point. I have already rejected the evidence of the mechanic and since the plaintiff is not himself a mechanic I reject his estimate of one month in view of his own evidence as to the damage done to the lorry, e.g., he told me that the chassis frame was bent in three places and other extensive damage was done. I would estimate a reasonable period at four months taking into account the fact that the garage would be unable to devote the whole period to it in view of the fact that they would have other vehicles to repair and service. The plaintiff is therefore entitled to consequential loss for four months at the rate of £300 a month which comes to 41,200 less the sum of £4 a month for the salary of the driver for those months which comes to £16 and less £1 a month for four months servicing of the car after the repairs could have been completed, making a total deduction of £20 which reduces the figure of £1,200 to £1,180. In respect of the towage fees this is covered by S.1. sub-section (iii) which states thus—
“In the event of the motor vehicle being disabled by reason of loss or damage covered under this policy the company will bear the cost of protection and removal to the nearest repairers but not exceeding twenty per cent of the agreed cost of repairs.”
There is no evidence as to the agreed cost of repairs, nor has the plaintiff given me any idea as to the cost of repairs with the exception of the evidence of his mechanic which I have rejected as unreliable. I must therefore refuse this head of liability.
Under the head of general damages the plaintiff is suing under the policy which states and limits his claims. He cannot in my view succeed under this head of claim which is not covered by the policy and is negatived by provisions of section 1 of the policy.
It should be stated in passing that this agreement contains an arbitration clause under condition 8. This matter is pleaded in paragraph 10 of the Statement of Defence and though Counsel for the defence stated specifically that he was abandoning it, yet it should be mentioned that an arbitration clause in an agreement such as this does not in any way oust the jurisdiction of the courts, nor does it prevent parties from putting in a claim in court in spite of its existence; it merely enables the other party to apply for a stay of legal proceedings pending such arbitration. Such application in my opinion is made by way of motion on notice and even then the grant or refusal of the stay is within the court’s discretion. Authority for this will he found in Shawcross as above at page 615,
The result is that the plaintiff is entitled to judgment for the sum of £2,280 which I award him with costs.
Judgment for Plaintiff.
