The Judicial Committee of the Privy Council Decisions

Colonial Fire and General Insurance Company Ltd v. Harry (Trinidad and Tobago) [2006] UKPC 53 (22 November 2006)

Privy Council Appeal No 57 of 2005

Colonial Fire and General Insurance Company Limited Appellant

v.

Sarana Harry Respondent

FROM

THE COURT OF APPEAL OF

TRINIDAD AND TOBAGO

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL

Delivered the 22nd November 2006

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Present at the hearing:-

Lord Bingham of Cornhill

Lord Hoffmann

Lord Rodger of Earlsferry

Lord Walker of Gestingthorpe

Lord Mance

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[Delivered by Lord Walker of Gestingthorpe]

1. On 3 February 2000 Miss Sarana Harry, the respondent to this appeal, sustained personal injuries in a traffic accident on the Rienzi Kirton Highway at San Fernando. She was a passenger in a Nissan Centra sedan being driven by Christopher Singh. The car belonged to Chaitram Hargobin, who was at the time covered by a motor vehicle policy issued by the Colonial Fire and General Insurance Company Limited ("the company"), the appellant in this appeal.
2. Two sets of proceedings ensued. On 17 July 2000 Miss Harry issued a writ (HCA 887 of 2000) against Mr Hargobin, Mr Singh and the company claiming damages for personal injuries. The statement of claim pleaded that Mr Singh was Mr Hargobin's servant or agent and that the company was liable under section 10A of the Motor Vehicles Insurance (Third-Party Risks) (Amendment) Act 1996 ("the amending Act"). It is common ground that this was intended to refer to section 10A of the Motor Vehicles Insurance (Third-Party Risks) Act ("the principal Act") as amended by section 10 of the amending Act. On 16 January 2002 Miss Harry obtained judgment in default of appearance against Mr Singh, for damages to be assessed.
3. The other set of proceedings was commenced by a writ (HCA 2506 of 2000) issued by the company against Mr Hargobin on 12 October 2000 (that is, shortly before the expiration of three months from the issue of Miss Harry's writ). The company sought a declaration that it was entitled to avoid Mr Hargobin's policy on the grounds of material non-disclosure and misrepresentation. The purpose of these proceedings was to take advantage of section 10(3) of the principal Act, which makes an exception to the general liability of a motor insurer to indemnify in respect of third-party risks, even under a policy which has been (or is liable to be) avoided or cancelled. Section 10(3) provides:

"No sum shall be payable by an insurer under the foregoing provisions of this section, if, in an action commenced before, or within three months after, the commencement of the proceedings in which the judgment was given, he has obtained a declaration that, apart from any provision contained in the policy, he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact, or by a representation of fact which was false in some material particular, or, if he has avoided the policy on that ground, that he was entitled to do so apart from any provision contained in it.

However, an insurer who has obtained such a declaration in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within seven days after the commencement of that action he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled, if he thinks fit, to be made a party thereto."

4. The company's action was tried by Stollmeyer J, who heard conflicting evidence from Mr Singh (called as a witness on behalf of the company) and Mr Hargobin (on his own behalf). Stollmeyer J gave judgment on 28 May 2002. He preferred the evidence of Mr Singh and found that at the date of the proposal for the policy the car in question was being used for the purpose of conveying passengers for reward. He concluded that there had been material non-disclosure and misrepresentation on the part of Mr Hargobin and that the company was entitled to avoid the policy, as it proceeded to do. Mr Hargobin began an appeal against the order of Stollmeyer J but discontinued it on 27 August 2002.
5. Miss Harry's proceedings were still pending against Mr Hargobin and the company. In October 2002 the company amended its defence to plead the declaration made by Stollmeyer J. At the trial of Miss Harry's action before Narine J Mr Hargobin's counsel conceded that he had no defence and judgment was entered against him. The action then proceeded between Miss Harry and the company on a very narrow issue: whether or not the notice required by the proviso to section 10(3) of the principal Act had been given to Miss Harry within seven days after the commencement of the company's action against Mr Hargobin – that is, on or before 19 October 2000. Narine J observed in his written judgment:

"Counsel agreed that the only issue was whether the Third Defendant had given the Plaintiff notice of the filing of HCA No 2506 of 2000 before or within seven days of the commencement of that action."

6. Narine J heard evidence on that point from Mr Clifford Caesar, a police officer who also worked as a process server. The judge summarised his evidence as follows:

"It was his evidence that he went to Robert Street, Phillipines on 18 October 2000 around lunchtime. The Plaintiff was not at home. He made certain enquiries and returned between 3-4 pm that day. The Plaintiff was at home and he served her with a notice entrusted to him by Ms Dianne Shurland, Attorney-at-Law. The notice addressed to the Plaintiff dated 16 October 2000 gave her notice of HCA No. 2506 of 2000 filed by the Third Defendant, containing particulars of non-disclosure and misrepresentation on which the Third Defendant relied, in order to avoid the policy.

It was put to the witness in cross examination that he did not serve the Plaintiff personally and she was not at home at the material time. However, Mr Roopnarine revealed from the bar table that his instructions were that Mr Caesar did in fact leave the notice with the Plaintiff's mother, but not on 18 October 2000.

Mr Caesar was asked by Mr Roopnarine if he saw the Plaintiff in Court. The witness pointed to a young lady sitting next to an older lady (who it appears was the Plaintiff's mother), and ventured that the young lady looked like the Plaintiff. Counsel then indicated that she was not the Plaintiff. When the witness was asked to describe the Plaintiff he said that he could not do so accurately, having regard to the passage of time."

7. That appears to their Lordships to be an accurate summary of Mr Caesar's evidence as recorded in the judge's notes. It mentions all the points which have been relied on as casting doubts on the reliability of Mr Caesar's evidence. Its only significant omission is that Miss Harry identified herself to Mr Caesar. The judge's notes, after recording his evidence that he had found that Miss Harry was not at home and had made some enquiries, stated,

"As a result, I returned between 3-4 pm the same day. I met Sarana Harry. I enquired from a lady sitting next to her. I ID myself to Sarana Harry. She ID herself as Sarana Harry. I told her I have some documents for her. I proceeded to serve her the documents. I handed the documents to her personally."

8. The judge then referred to the evidence on behalf of Miss Harry:

"The Plaintiff called Ms Jennifer Housend, a coordinator at Servol Life Centre, Forres Park, Claxton Bay, with a view to establishing that the Plaintiff, who was a student at the centre, was at school on that day, and so could not have been at her home at the time at which Mr Caesar claimed he served her. The record, which Ms Housend admitted she did not produce, showed that 18^th October 2000 was a Saturday, which was not a school day. She did in fact have an attendance record for 13 to 17 October 2000. Surprisingly, neither the Plaintiff, nor her mother was called to give evidence on the issue of service. The Court was left with the uncontradicted evidence of Mr Caesar which it accepted on a balance of probabilities."

The judge's notes show that Ms Housend said that the afternoon roll was taken at 1.05 pm, and that a trainee finished school at 3.30 pm, and that: "In the afternoon they can leave and come back, or don't come back at all."

9. Narine J's fact-finding and conclusion appear to their Lordships to have been impeccable. He was bound to give a lot of weight to the absence of any evidence from either Miss Harry or her mother (an absence which is all the more surprising in view of Mr Roopnarine's intervention as to what his instructions were). Their Lordships see no reason to suppose that the judge failed to make use of his advantage in seeing and hearing the witnesses.
10. Nevertheless the Court of Appeal reversed the judge's findings of fact and allowed Miss Harry's appeal. There was a single judgment of Warner JA in which John and Archie JJA concurred. Warner JA made an incorrect summary of the evidence of Mr Caesar as having been that when he did not find Miss Harry at home on his first visit he returned the next day. Warner JA said that the judge had failed to deal with the fact that Mr Caesar had (more than a year after the disputed service) identified the wrong person in Court (what he is actually recorded as having said is "It looks like the little lady"). The judge did deal with this point, for what it was worth, in his judgment. In their Lordships' opinion there was no material on which the Court of Appeal could conclude that the judge had failed in the task of finding the facts.
11. Before the Board Mr Waite, QC for Miss Harry sought to argue that section 10(3) of the principal Act did not apply because Mr Singh had not been made a party to the company's action against Mr Hargobin. This point was never pleaded and it seems to have been raised at first instance as an afterthought, although Narine J did address it at the end of his judgment. It seems to have been accepted as a potentially live issue before the Court of Appeal, although in the event the Court did not find it necessary to deal with it. The Board heard argument from Mr Waite on this point, and looked at the terms of the proposal form, the policy and the certificate of insurance (which were not in evidence below). Mr Waite deployed some elaborate submissions based on section 4(7) of the principal Act (as substituted by section 5(h) of the amending Act) and referred (in his written submissions) to some authorities on the British Road Traffic Acts of 1930 and 1934.
12. Their Lordships are not persuaded by those submissions. It is no doubt possible to imagine factual situations in which it would be thought prudent for an insurer to join the driver of a motor vehicle (not being its policy-holding owner) as a party in declaratory proceedings under section 10(3) of the principal Act (or its British equivalent). Some of Mr Waite's authorities illustrate this. But it was a matter for the commercial judgment of the company whether to join anyone other than its policyholder, Mr Hargobin, as a party to its action seeking a declaration. The essential point is that the company did proceed against Mr Hargobin within the permitted period, did give the requisite notice to Miss Harry within the seven-day limit, did obtain a declaration, and did avoid the policy.
13. Their Lordships will therefore allow the appeal, set aside the order of the Court of Appeal, and restore the order of Narine J. Miss Harry must pay the company's costs in the Court of Appeal and before the Board.