HIGH COURT OF LAGOS:
10TH MARCH, 1969
SUIT NO: LD/337/68;
Abiola Oshodi – for Plaintiff
Gerald Impey – for Defendants
INSURANCE AND REASSURRANCE: – Third Party Insurance Policy –Motor Vehicle – Claim for damages for negligent driving of motor vehicle – Statutory requirement that notice of action be served on insurers – Section 10(2)(a) of the Motor Vehicles (Third Party Insurance) Act Cap 126 – Whether mandatory that the notice be sent by registered post
INSURANCE AND REASSURRANCE:- Statutory requirement that notice of impending action be served on insurers – Form of letter that is deemed sufficient – Whether must be in a particular form – Particulars a letter need to disclose to constitute a sufficient notice of action
INSURANCE AND REASSURRANCE:- Insurance Policy – Construction of towards the determination of the liability of the insurer – When insurer’s liability has become fixed by the capital fact of a loss within the range of the responsibility assumed in the contract – Attitude of courts to invitation to deprive an insured of the accrued benefit of indemnification arising from insurer’s liability based on narrow or technical construction of the conditions and stipulations of the Policy
INSURANCE AND REINSURANCE:- Action brought against a defendant entitled to indemnification under a policy of insurance – Statutory requirement that notice of action be served on insurers – Whether service of notice of action on agent of insurer is valid service on the insurer – Whether notice of the proposed action within s. 10(2) (a) of the Act is only valid if given by the Policy-holder or his legal personal representative – Whether service of notice of action by Plaintiff’s solicitor on the insurer’s company is sufficient notice
INSURANCE AND REISURANCE:- Enforcement of Third-Party Insurance Policy – Application by insured defendant for the joinder of insurance company as a party to suit brought against him for negligent driving – Propriety of – How treated
TORT AND PERSONAL INJURY: – Motor vehicle accident – Negligent driving occasioning bodily harm – Where proved against a party who was entitled to indemnification under a Third Party Insurance Policy – Whether insurers can be compelled to indemnify defendant by paying over award directly to plaintiff-claimant
COMMERCIAL TRANSACTIONS – COMMUNICATIONS:- Delivery or non-delivery of the letter – Proof of – Where shown that letter was delivered at the Defendants’ address to authorized agent (clerk or receptionist, etc.) – Failure of agent to deliver letter to principal – Whether delivery at the office of the trustee would be equivalent to a delivery to him in person
TRANSPORTATION AND LAW – MOTOR VEHICLE:- Motor Vehicle insurance – Third party policy – Insured person’s right of indemnity arising therefrom against insurers – Who may invoke same – Whether open to both insured person and third parties entitled to proceed against insured person for liability covered under the policy
HEALTHCARE LAW: – Healthcare financing – Cost of treatment for pain and suffering caused by negligent driving by defendant with third party insurance policy – Whether victim entitled to recover from insurance company – Conditions precedent
ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION:- Insurance Policy – Clause stipulating a reference to Arbitration and an award of an Arbitrator – When deemed waived by parties
CHILDREN AND WOMEN LAW:- Women and Healthcare/Justice Administration – Woman who suffered bone fracture due to negligent driving of defendant – Effort by insurer’s of defendant to deny liability based on technical grounds – Attitude of court thereto
PRACTICE AND PROCEDURE – EVIDENCE:- Signature on a document – Where genuineness disputed – Onus of proof – Failure to call alleged maker of signature of signature to deny or affirm –
INTERPRETATION OF STATUTE:- Section 10(2)(a) of the Motor Vehicles (Third Party Insurance) Act Cap 126 – Interpretation of
The Plaintiff was injured on the 11th September, 1965 by a car belonging to one R.E. Ezekiel Hart. As a result of the accident her leg was broken into two. Mr. Hart the owner and driver of the car had been insured against third-party risks with the Defendant Company (hereinafter referred to as “the Insurers”), under the provisions of the Motor Vehicles (Third Party Insurance) Act Cap. 126 of the Laws of Nigeria. At the material time the policy of insurance under which Mr. Hart was covered was still in force. In an action by the Plaintiff against Mr. Hart, judgment was entered by this Court on the 18th day of August, 1967 in her favour, for a total sum of £3,745.4s.0d. representing damages and costs. The Insurers have refused to indemnify Mr. Hart, and they now dispute Plaintiff’s claim contending that they had no notice of the proceedings as required by Section 10(2)(a) of the Motor Vehicles (Third Party Insurance) Act Cap 126 “before or within seven days after the commencement of the proceedings in which judgment was given” against Mr. Hart. This was the only point on which issue was joined. It is the only ground on which the Insurers seek to disclaim liability under the policy.
Now Section 10(2)(a) is to the following effect:-
“No sum shall be payable by the Insurer under the provisions of sub-section (1): –
(a) in respect of any judgment unless before or within seven days after the commencement of the proceedings in which the judgment was given the insurer had given notice of the bringing of the proceedings;”
Section 10(2) of the Act enables an Insurance Company to avoid liability under a policy in certain circumstances. The insurers did not in this case seek to avoid the policy; on the contrary they renewed it at the expiration of its life, save that they imposed an additional term in the policy upon which in the event of an accident the insured (Mr. Hart) would be liable to pay the first £50 of any claim which might be the subject of indemnity under the policy, vide exhibits ‘A’ and ‘H’.
The facts in this case are fairly simple. The Plaintiff had been injured by the negligence of Mr. Hart whilst driving his Volvo Motor Car on 11th September, 1965. The Court, in a civil action by the Plaintiff, found against Mr. Hart and awarded damages and costs in the amount hereinbefore stated. About five days after the judgment, Mr. Hart wrote to the Defendants, apparently claiming indemnity under the policy but he received no reply. He, then, had an interview with the General Manager of the insurers who promised to refer the matter to their solicitors who would get in touch with him.
In May 1966, before the bringing by the Plaintiff of the proceedings which resulted in the judgment aforesaid, Mr., Hart received a letter from Plaintiff’s Solicitor making a claim in respect of the accident. About two months later the Solicitors again wrote him a letter to which was attached a copy of an application for a writ of summons. He took the letter together with the attachment to the insurers and left it with a young Ibo Clerk whom he had met before in that office. The insurers, claimed Mr. Hart, knew about the claim against him because he had earlier reported the accident to them. He received “no claim bonus” upon the renewal of his policy following the accident in question and another one within the year. He was finally sued by the Plaintiff; he said he caused the writ of summons to be sent to the insurers and received the letter, exhibit `B’ dated the 7th October, 1966 in reply. The letter reads as follows:-
7th October, 1966.
Re: Claim 8296-Accident 11th September, 1965 At Lewis Street, Lagos
We refer to your letter of the 28th September and our subsequent telephone conversation of the 6th instant.
Indemnity under the Policy we issue is subject to the Policy-holder fulfilling certain obligations thereunder following any accident likely to give rise to a claim against him.
In particular, you should alert us immediately upon the occurrence and supply full details so that we can make all necessary enquiries to protect our own interest. In addition, every letter, claim, writ, summons or process should be immediately passed to us and immediate notice should be given of any impending proceedings.
We note that you have instructed your solicitor to represent you at these proceedings and we consider that we have been severely prejudiced by your actions. We intend to reserve our rights under the policy as the question of indemnity is in some doubt and we are taking legal advice upon our position. We have no wish to act hastily and we will let you have our final decision before this action comes up for hearing on the 24th October.
A copy of this letter has been sent to your solicitor whom we have unsuccessfully tried to contact on the phone.
The writ of summons – vide attachments to exhibit ‘E’ – would appear to have been issued on 6th September, 1966. Shortly afterwards, on the 27th September, 1966, Mr. Akpodiete, a solicitor of this Court, acting for Mr. Hart, wrote to inform the insurers of the pendency of the action in the High Court against Mr. Hart, The letter, exhibit ‘C’, is as follows:
Ladun Martins ………………………………………………………………. Plaintiff
I am a Legal Practitioner and have been instructed by your customer, Mr. R. Ezekiel-Hart, who is a defendant in the above suit which is coming up for hearing in the Lagos High Court on Monday the 3rd Day of October, 1966, to act for him.
As you are the Insurers of my client, it is normal and proper to notify you of the accident and of the claim suit, and I hereby do so accordingly. I am further instructed that the plaintiff’s solicitors have been in touch with you in respect of their claim for £6,000.
I have accepted the brief and you may be rest assured that I will do my best for you and my client and my bill will follow in due course. I should mention that normally you should be joined as co-defendants in the suit.
Mr. Ezekiel-Hart further instructs me that the accident of the 11th September, 1965 also involved another victim, Mrs. Rebecca Taiwo, who has not made any claim. I thought I should apprise you of this in your own interest.
Thanking you in expectation of your kind co-operation.
I remain, Yours faithfully (Sgd.) Ekuo Akpodiete.
B.C. Madiebo & Co.,
13/15 Balogun Street, Lagos.
The claim for £6,000 referred to in paragraph 2 of the above letter is contained in the letter, exhibit ‘K’ of the 19th May, 1966. Then on the following day Mr. Hart wrote to the insurers giving a historical background to the claim about which his Solicitor had already intimated them. When the action came before the Court, Mr. Hart applied for an order to join the insurers and, on the 24th October, 1966, Alexander, J., granted the application. The insurers, however, moved to discharge the order claiming that a reference to Arbitration under a clause of the policy was a condition precedent to any right of action against them. On the 14th day of November, 1966 the Court granted their application and ordered that proceedings against them be stayed pending a reference to Arbitration and an award of an Arbitrator. It is to be observed that neither the insurers nor their insured took any steps in this direction as per Condition 7 of the Policy. They appeared to have waived this condition. It is not now the basis on which the insurers are presently seeking to dispute liability under the policy. Their reason for doing so is founded on the alleged failure of Mr. Hart to give them notice of the proceedings in pursuance of the Act. On the other hand, Mr. Hart claimed to have informed the insurers of the accident on the 15th September, 1965 by filling a form which he posted to them; the latter, however, denied receiving it, but according to Mr. Hart, the denial came after he was sued by the Plaintiff. Mr. Hart would appear to have been twice involved in motor accidents in 1965 during the currency of his policy. Barely two months after the accident of the 11th September, 1965, (the subject matter of the present claim) he was involved in another one on the 13th November, 1965, for which repairs’ cost of £164.8s.4d. was paid to Messrs R.T. Briscoe by the insurers.
A clerk to the Plaintiff’s Solicitors, one Mr. Binuyo, produced a Despatch Book (exhibit ‘J’) which was in use in the Plaintiff’s Solicitors’ Office from the 28th June, 1963 till the 10th January 1969. Entries in the Book show, inter alia, a letter from Plaintiff’s solicitors, exhibit ‘K’, dated the 19th May, 1966. It was addressed to the insurers and entered in the Despatch Book on the 20th May, 1966; it was duly signed for on the 23rd May, 1966. The original of the letter was addressed to Mr. Hart and was also despatched through the Despatch Book and signed for on the 20th May, 1966. Both entries in the Despatch Book followed in sequence. The letter reads:
Mr. E. Hart,
Inspector General of Police,
Police Headquarters, Maloney Street,
I am instructed by my client Miss Ladun Martins of 29 Makinde Street, Suru-Lere to demand from you the sum of £6,000 being special and general damages resulting from your negligent driving.
On or about the 11th day of September, 1965, you drove your Car No. LG. 9273 negligently at Lewis Street, Lagos. As a result of your negligent driving, you collided with my client and caused her grievous bodily injury. Her both legs were injured. My client was immediately rushed to the Orthopaedic Hospital at Igbobi where she was operated upon and admitted into the hospital for treatment which lasted for some months. Up till now, my client goes to the Hospital for treatment.
TAKE NOTICE therefore that unless you pay as demanded above or make a satisfactory arrangement with me on or before the 31st Day of May, 1966, I shall carry out my further instructions and that without further notice.
Abiola A. Oshodi
National Employers Mutual Insurance Company,
12/14 Broad Street,
Policy No. 113839
Mr. Binuyo said that he had previously delivered letters to the insurers at the instance of two other solicitors. The witness also gave evidence of posting a letter, exhibit ‘M’, to the insurers on the 18th August, 1966, giving notice of Plaintiff’s intention to sue Mr. Hart to enforce payment of the claim for damages, and threatening that if the claim was not met on or before the 27th August, 1966, proceedings would be commenced against Mr. Hart. The insurers denied receiving the two letters, exhibits ‘K’ and ‘M’. This is hardly surprising since their defence to the claim is based on alleged failure of Mr. Hart to give them notice of the proceedings.
A point was made by the insurers that the letters were not sent by registered post. Whilst it would have been more satisfactory to do so, it was, however, not a term of the policy that all correspondence based on it must be by registered post.
The Defendants did not themselves claim to have sent their letters, exhibits ‘B’, `P’ and `Q’ by registered post or that there was a collateral agreement to that effect, nor, indeed, that under Section 10(2)(a) of the Motor Vehicles (Third Party Insurance) Act the notice of the bringing of the proceedings must be sent to the insurers by registered post.
The insurers, as I said earlier, denied receiving the letter, exhibit ‘M’, of the 18th August, 1966, the last paragraph of which reads as follows:-
“TAKE NOTICE therefore that unless Mr. Hart or your Company pays the said sum of £6,000 as demanded by the proposed writ of summons, on or before Monday the 27th day of August, 1966, I shall file the writ of Summons in Court and that without further notice.”
It was stated that the first intimation the insurers had of this claim was through a letter, Exhibit ‘C’ of 27th September, 1966 from Mr. Akpodiete, Solicitor to Mr. Hart. This was followed by Mr. Hart’s letter on the 29th September, exhibit ‘D’. Up to that time the insurers denied ever receiving any notification from Mr. Hart about the accident, and, further, that no accident report form said to have been sent by Mr. Hart on the 15th September, 1965, four days after the accident, was in fact received. Mr. Terry who is Claims’ Superintendent of the insurers, however, admitted receiving a copy of the letter (exhibit ‘K’) dated 19th May, 1966, some 8 months after the occurrence of the accident. The terms of the letter have already been set out above. Letters addressed to insurers in 1966 were signed for by the Receptionist. Mr. Terry could not, however, say who was the Receptionist whose signature appears in the Despatch Book (exhibit ‘J’) in respect of the letter, exhibit ‘K’. He said in evidence that:-
“When the Receptionist received mails she handed them to me for opening.”
The insurers did not call the Receptionist who was on duty on the 23rd May, 1966, to deny the signature against the entry in the Despatch Book for the 20th May, 1966. I must presume that there is some sort of record in the insurers’ office showing who that Receptionist is, and that in the ordinary course of duty she would have handed the letter, exhibit ‘K’, to Mr. Terry. In Reed v. Harvey L.R. Q.B. 184 where there was a controversy over the delivery or non-delivery of a registered letter posted to a trustee, Lush, J., said at page 187 as follows:-
“We think the evidence ought to have been gone into with regard to the delivery or non-delivery of the letter. If it were shown that the letter was delivered at the Defendants’ address to the person in charge, then we do not think it would be an answer on the part of the trustee to say, that his clerk took it in, and never delivered it to him. We think the delivery at the office of the trustee would be equivalent to a delivery to him in person.”
Accordingly, adopting the views of the learned Judge, I hold that the delivery of exhibit ‘K’, on the 23rd May, 1966, at the office of the insurers, to a Receptionist who signed for it, is equivalent to a delivery to the insurers.
The evidence in this case points clearly, in my view, to the fact that on the 15th September, 1965 Mr. Hart filled in an Accident Report form and posted it to the insurers; that in May, 1966, when he received exhibit ‘K’, he telephoned to the Claims Manager and told him of it. exhibit ‘K’ shows that a copy of the letter was endorsed to the insurers; that the letter exhibit ‘L’ with a copy of an intended application for a writ of summons was taken by him to the insurers at about 2 p.m. on the 19th August, 1966; that the insurers renewed Mr. Hart’s policy when it expired; that although the insurers succeeded in getting the proceedings against them stayed in Plaintiff’s action against Mr. Hart, the ground for obtaining that order is not an issue in the present action. It does not strike me as probable that Mr. Hart, a Superior Police Officer, would be so naive as to fail to take advantage of his rights under the policy; the evidence shows that he had done so on other occasions where lesser claims were involved. I have no reason to disbelieve Mr. Binuyo’s evidence that copy of the letter, exhibit ‘K’, was delivered to the insurers and that the signatory to the Despatch Book (exhibit ‘J’) was the Receptionist on duty at the time. Equally difficult to brush aside is his evidence that he posted the letter exhibit ‘L’ to Mr. Hart and Exhibit ‘M’ to the insurers. On all of these points, I am satisfied with the evidence of Mr. Hart and Mr. Binuyo and believe them to be true. With this view of the evidence which I have taken, it seems that the contention that the insurers had no notice of the bringing of the proceedings in accordance with the provisions of s. 10(2) (a) of the Motor Vehicles (Third Party Insurance) Act is no longer tenable. I find that the letters, exhibits ‘K’ and ‘M’, are sufficiently formal in character warning the insurers of a proposed action against Mr. Hart if the Plaintiff’s claim for damages was not met on or before the 31st May, 1966 and the 27th August, 1966 respectively. Such notice, as we have in Exhibits ‘K’ and ‘M’, has been held to be sufficient in law – see the Privy Council case of Ceylon Motor Insurance Association Ltd. v. Thambugala (1953) 2 All E.R. 870; at page 873 of the judgment appears the following:-
“The notice which has been sent in this case sets out the name and address of the proposed plaintiff, the name of the owner and number of the car which caused injuries, the date of the accident, and the sum which was being claimed from the owner as damages. Their Lordships are of the opinion that these elements, taken together, constitute a sufficient notice of action under s. 134(a) and that there are no elements in it which in any way reduce it to something less than a sufficient notice.”
It is argued that notice of the proposed action within s. 10(2) (a) of the Act and Condition 1 (i) of the Policy shall be given either by the Policy-holder or his legal personal representative. Even if the insurers’ contention is correct that Mr. Hart did not himself give notice of the proceedings in which judgment was given, there is evidence, which I believe, that adequate notice was given by Plaintiff through her Solicitors. In Cross v. British Oak Insurance Co. Ltd. (1938) All E.R. 383 du Parcq, J., observed at page 386 as follows:-
“It is of the great importance to the person who ultimately recovers judgment that he should be able to recover against the insurers, and, though he is not obliged to give the notice himself he may give it.”
Accordingly, I hold that a notice given by an agent of the insured is of equal validity as that given by the insured himself. The learned author of MacGillivray on Insurance Law Fifth Edition has this to say at page 1714:
“In determining the liability of the insurer he is entitled to the benefit of his contract fairly construed and can stand upon all of its stipulations. But when his liability has become fixed by the capital fact of a loss within the range of the responsibility assumed in the contract, courts are reluctant to deprive the assured of the benefit of that liability by any narrow or technical construction of the conditions and stipulations which prescribe the formal requisites by means of which this accrued right is to be made available for his indemnification. But there is no reason why the same rules of construction should not be applied to conditions requiring notice as to other conditions in the policy. They are not inserted for the purpose of enabling the insurers to escape liability, but rather to give them a reasonable opportunity of investigating the claim under the most favourable circumstances, and thereby of detecting and rejecting fraudulent or exaggerated demands. The condition ought to be construed fairly to give effect to this object, but at the same time so as to protect the assured against being trapped by obscure or ambiguous phraseology.”
This view would appear to be reflected in Section 8 of our Motor Vehicles (Third Party Insurance) Act which provides that:
“Any condition in a policy or security issued or given for the purposes of this Act providing that no liability shall arise under the policy or security or that any liability so arising shall cease in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy or security shall be of no effect in connection with such claims as are set out in paragraph (b) of subsection (1) of Section 6.”
This section is substantially similar to Section 38 of the English Road Traffic Act, 1930. In Revell v. London General Insurance Company Ltd. (1934) All E.R. Rep. 744.
“The policy contained a condition whereby it was provided that, if a claim under the policy was made and rejected and an action was not commenced within three months of such rejection, all benefit under the policy should be forfeited. The insured’s driver knocked down and injured two policemen, who made claims against the insured. The insurers rejected the insured’s claim for indemnity in both cases more than three months before the insured brought this action to enforce it. The insurers relied on this condition, the insured contended that the condition provided that “that … liability … shall cease in the event of some specified thing being … omitted to be done after the happening of the event giving rise to a claim,” and was therefore, by virtue of s. 38 of the Road Traffic Act, 1930, “of no effect in connection with such claims as are mentioned in s.36(1) (b)” of the Act.”
MacKinnon, J., held that the insurers were liable to indemnify the insured because (i) the condition was within the above definition contained in s. 38, (ii) the reference in s. 38 to “such claims” was to claims “in respect of any liability which may be incurred by the insured in respect of death or bodily injury to any person caused by or arising out of the use of the vehicle on a road,” and, therefore, covered these claims to indemnity in respect of the injuries to the policemen. The learned trial Judge at page 749 of his judgment stated that:-
“The result is that, although the facts as specified in No. 6 of these conditions have occurred, namely, the writ was not issued till more than three months after the claim was rejected by the company, that clause in the policy is rendered invalid by virtue of s.38 of the Road Traffic Act of 1930, and therefore, the second defence also fails.”
On the whole I am satisfied that the Plaintiff has established her claim against the insurers and, accordingly, is entitled to a declaration as per her Statement of Claim, to wit:-
(1) That the judgment in suit No. LD/440/66 was in respect of a liability required to be covered by a Policy of Insurance No. 113839 issued to one R.E. Ezekiel Hart and dated the 2nd day of September, 1964;
(2) That pursuant to the said Policy the Defendants are liable to pay to the Plaintiff the sum of £3745.4s.0d. being the said sum under the said judgment with interest at 4%.
The Plaintiff is awarded the costs of this action which, together with £38.4s.3d. out-of-pocket expenses, I assess and fix at 158 guineas.
Judgment for the Plaintiff: Declaration as per statement of claim ordered.