Solomon Ghanny Oil & Engineering Ltd v N.E.M. (West Indies) Ins. Ltd
| Jurisdiction | Trinidad & Tobago |
| Judge | Moosai, J. |
| Judgment Date | 19 May 2000 |
| Neutral Citation | TT 2000 HC 93 |
| Docket Number | HCA No. S 3114 pf 1986 |
| Court | High Court (Trinidad and Tobago) |
| Date | 19 May 2000 |
High Court
Moosai, J.
HCA No. S 3114 pf 1986
Mr. K. Harrikissoon for the plaintiff
Mr. S. Maharaj S.C. and Mr. R. Kawalsingh for the defendant
Insurance - Fire insurance policy — Plaintiff claimed against defendant for a certain sum being loss suffered by the plaintiff under a policy of insurance issued by the defendant in respect of certain stock kept on the premises — Whether plaintiff had insurable interest in goods — Whether plaintiff had misrepresented or omitted to apprise defendant of material facts — Whether plaintiff's servants wilfully caused or connived at setting of fire to premises — Whether defendant had discharged burden of proof — Judgment for defendant with costs.
This is but one of four High Court actions brought by the plaintiff and related companies against the defendant. The plaintiff's attorneys have agreed to use the instant action as a test case with the parties being bound by the decision. In the instant action the plaintiff claimed against the defendant the sum of $952,635.00 being loss suffered by the plaintiff on or about June 14, 1986 under a policy of insurance No. W. 213, 995 (“the said policy”) issued by the defendant in respect of certain stock kept at Lots 1 & 2 Laurier Boulevard, Coconut Drive, San Fernando (“the said premises”). In its Statement of Claim the plaintiff pleaded that by the said policy the defendant insured the plaintiff against loss or damage by fire of numerous and miscellaneous items of hardware and oilfield supplies, fittings and stocks and that on or about June 14, 1986 the said supplies, fittings and stocks were destroyed by fire.
By its Re-amended Defence the defendant admitted the issuing of the said policy in respect of certain articles stored in a building on the said premises but did not admit that the plaintiff was interested in the said supplies, fittings and stocks to the extent of the amount so insured. Further, the defendant alleged that, in breach of Clause 1 of the said policy, the plaintiff misrepresented and/or omitted to apprise the defendant of material facts. Alternatively the defendant contended that the answers to the questions in the proposal for the said policy formed the basis of the contract and, as the answers were untruthful and/or inaccurate, the defendant was not liable to the plaintiff under the said policy. Finally the defendant contended that in breach of Clause 13 of the said policy the plaintiff's servant/servants and/or agent/agents wilfully caused or connived at the setting of the fire at the said premises. It should be noted that in his closing address Mr. Maharaj indicated that he was no longer pursuing the reliefs sought at paras.5(1)(vii) and (ix) and 8 of the Amended Defence.
By its Re-amended Reply the plaintiff denied being in breach of Clause 1 of the said policy and/or that it was guilty of misrepresentation or failure to apprise the defendant of material facts. Further the plaintiff contended that the contract of insurance was executed on April 29, 1986, two (2) days before the proposal form was signed, and that the parties never considered the proposal form to be part of the contract and/or the basis of the contract for the said policy or forming part thereof. Additionally, the plaintiff pleaded estoppel, namely, that the defendant was estopped from relying on the basis clause as being incorporated into the contract of insurance or forming part of the contract of insurance. Further or alternatively the plaintiff pleaded waiver namely, if the facts pleaded in paragraph (5) of the Defence could be. considered as misrepresentation, the defendant waived their right to rely on same by executing and/or entering into the contract of insurance prior to the signing of the said form and cannot rely on any purported misrepresentation made subsequent to their entering into the contract of insurance.
It should be noted at the very outset that I had granted leave to the defendant to re-amend its Defence at the end of the Defence's closing address. That amendment pleaded, in the alternative, that the answers to the questions in the proposal for the said policy formed the basis of the contract and, as such answers were untruthful and/or inaccurate, the defendant was not liable to the plaintiff under the said policy. I granted leave as all the evidence with respect to the proposal form had been led at the trial. The plaintiff's witness, Steve Ghany, testified as to the circumstances in which the proposal form was executed and there was extensive cross-examination by Defence counsel as to his knowledge and/or the effect of the basis clause on a contract of insurance. I was of the view that no injustice could have been caused to the other side. Further I had been addressed by counsel in his closing address on the effect of the basis clause. I had also reserved on the question of costs but 1 believe that the proper order to be made is that the costs of and occasioned by the amendments will be the plaintiff's in any event: Loutfi v. C. Czarnikow Ltd. [1952] 2 All E.R. 823.
I subsequently granted the plaintiff an adjournment to consider the amendment and on the final day, defence counsel consented to the Re-amended Reply.. At this late stage the plaintiff, for the very first time, sought leave to call additional evidence. The court had great difficulty in understanding what was the basis for calling the additional evidence., Mr. Harrikissoon seemed to be arguing that because the receipt was dated April 29, 1986 and referred to a policy number, the contract of insurance was entered into on April 29, 1986. That being the case, Mr. Harrikissoon argued that the proposal form which was dated May 1, 1986, as it was signed after the contract of insurance was effected namely, May 1, 1986, could not be the basis of the contract of insurance. However, in my view, that was part of the Defendant's case all along! Indeed that was the basis of Mr Harrikissoon's closing address on this issue and his address was before the amendment was granted. Accordingly I ruled that there was no additional evidence necessary as all the evidence was before the court.
The main issues on the pleadings therefore seem to be:
(1) Whether the plaintiff owned the goods covered by the policy and/or had an insurable interest in same.
(2) Whether the matters pleaded at para.5 of the Defence amounted to misrepresentations or omissions and the effect of same.
(3) Whether the plaintiff's servants and/or agents, in breach of clause 13 of the policy, wilfully caused or connived at the setting of fire to the said premises.
The defendant is contending that in breach of Clause 13 of the policy the plaintiff's servant (s) and/or agents wilfully caused or connived at the setting of the fire to the said premises. The defendant is contending that the fire was wilfully caused by Steve Ghany, his servants or agents. Clause 13 of the policy provides inter alia:
“if the loss or damage be occasioned by the wilful act, or with the connivance of the insured… all benefit under this Policy shall be forfeited.”
It should be noted that while the claim is based on a breach of Clause 13 of the policy, there is a presumption in the case of every insurance contract that the assured cannot by his own intentional act bring about the event upon which the insurance money is payable and then recover under the policy: Bell v. Carstairs (1811) 14 East 374; 104 E.R 646; MacGillivray & Parkington on Insurance Law, 7th Edition, para. 444. That is not the result of any rule of public policy, but of a prima facie rule of construction of the contract, by which it is presumed that the insurers have not agreed to pay on that happening: Beresford v. The Royal Insurance Company [1938] A.C. 586, 595.
Once the assured establishes that a loss by fire has occurred, the onus of proof shifts to the insurer to plead and prove that the fire was caused by the wilful act of the assured: MacGillivray ibid. para 1881. In looking at the standard of proof Denning, L.J. (as he then was) stated in Bater v. Bater [1951] Probate 3,5 at pp. 36 and 37:
“The difference of opinion which has been evoked about the standard of proof in recent cases may well turn out to be more a matter of words than anything else. It is of course true that by our law a higher standard of proof is required in criminal cases than in civil cases. But this is subject to the qualification that there is no absolute standard in either case. In criminal cases the charge must be proved beyond reasonable doubt, but there may be degrees of proof within that standard.
As Best, C.J., and many other great judges have said, ‘in proportion as the crime is enormous, so ought the proof to be clear’. So also in civil cases, the case may be proved by a preponderance of probability, but there may be degrees of probability within that standard. The degree depends on the subject-matter. A civil court, when considering a charge of fraud, will naturally require for itself a higher degree of probability than that which it would require when asking if negligence is established. It does not adopt so high a degree as a criminal court, even when it is considering a charge of a criminal nature; but still it does require a degree of probability which is commensurate with the occasion.”
Further in Watkins v. Legal and General Assurance [1981] 1 Lloyd's — Report 674 Neil, J. stated:
“In the light of the evidence before me I have come to the conclusion that the insurers have established to the high degree of probability that is required that this fire was started deliberately by Mr. Watkins. The claim must therefore fail.”
Our Court of Appeal has approved that standard of proof for arson in John Chung v. Colonial Fire and General Insurance Co. Limited Civil Appeal No. 151 of 1991...
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