Village Automotive & Hardware Superstores Ltd v Anchorage General Insurance Ltd

• Jurisdiction: Trinidad & Tobago
• Court: High Court (Trinidad and Tobago)
• Judge: Mohammed, J.
• Judgment Date: 14 December 2015
• Neutral Citation: TT 2015 HC 358
• Docket Number: CV 2014-01099
• Date: 14 December 2015

Village Automotive & Hardware Superstores Ltd

and

Anchorage General Insurance Ltd

Mohammed, J.

CV 2014-01099

High Court

Civil practice and procedure - Application to strike out claim form and statement of case - Whether the limitation provision of the Condition of the Policy of Insurance applies so that the claimant's action was filed beyond the time limit stipulated - Whether the claimants successfully established that the defences of estoppel or waiver applied - Pleadings - Whether the claim form and statement of case disclosed grounds for bringing a claim - Whether the claimant's claim form and statement of case are an abuse of the process of the court and ought to be struck out.

Appearances:

Mr. Rodney Lamsee for the claimant

Mr. Keston McQuilkin instructed by Mr. Ramnarine Mungroo for the defendant

Mohammed, J.

1 Before this Court is the defendant's Notice of Application filed on the 28th October, 2014 to strike out the claimant's Claim Form and Statement of Case pursuant to Part 26.2(1)(c) and/or Part 26.2(1)(b) of the Civil Proceedings Rules 1998 (as amended) (“the CPR”) on the basis that it discloses no grounds for initiating a claim against the defendant and/or is an abuse of the processes of the Court. The defendant also seeks the costs of this Application and of the substantive matter.

2 The claimant is an automotive and hardware company and the defendant is an insurance company with whom the claimant holds an insurance policy. On or around the 27th April, 2010 certain premises of the claimant were destroyed by fire and the claimant accordingly sought indemnity from the defendant. However, the defendant has refused to do so. The claimant contends that the defendant has wrongfully refused/neglected or failed to indemnify the claimant under the contract of insurance and that, as a result, the sum of 4.2 million dollars is now due and owing to the claimant from the defendant.

3 Accordingly, the claimant alleges a breach of contract by the defendant and seeks the sum of 4.2 million dollars, interest, costs and such further and/or other relief as the Court deems fit. The Claim Form and Statement of Case were filed on the 28th March, 2014 with the Amended Claim Form and Statement of Case having been filed on the 29th September, 2014.

4 The Defence was filed on the 18th July, 2014. Therein, the defendant averred that the claimant's Statement of Case should be struck out as it discloses no reasonable cause of action and without prejudice thereto, the defendant denied the claimant's case, alleging that there has been no breach of contract.

The Application to Strike Out

The Defendant's Notice of Application

5 The defendant's Notice of Application to strike out under Part 26.2(1)(c) and/or Part 26.2(1)(b) of the CPR, filed on the 28th October, 2014, is supported by an affidavit of even date deposed to by Prakash Nandlal, the Claims Manager for the defendant. According to the defendant, the grounds of the application are as follows:

• (a) The claim which was issued on the 28th March, 2014 and then amended on the 29th September, 2014 concerns a 4.2 million dollar recovery against the defendant (the claimant's insurers) after one of the claimant's buildings located at Chanka Trace, El Socorro Extension was destroyed by fire.

• (b) In response, the Defence of the 18th July, 2014 filed, avers inter alia, that there are no grounds for the initiation of a claim. That for the purpose of this application, the defendant will refer to only one of the reasons set out in the aforementioned Defence, which is as follows:

  • a. Section 19 of the Conditions of the Policy of Insurance executed between the claimant and the defendant provides:

    “In no case whatsoever shall the Insurers be liable for any loss or damage after the expiration of twelve months from the happening of the loss or damage unless the claim is the subject of a pending action or arbitration.”

  • b. On April 28, 2010 the claimant informed its servant and/or agent, Comprehensive Insurance Brokers Limited, that its warehouse had been destroyed by fire and that they were in the process of quantifying their claim. Pursuant thereto, Comprehensive Insurance Brokers Limited informed the defendant of the loss and requested that they appoint an adjuster to investigate.

  • c. In or about May, 2010 during the course of the investigation the claimant submitted documents to their servant and/or agent, Comprehensive Insurance Brokers Limited.

  • d. The defendant, after their enquiries indicated to Comprehensive Insurance Brokers Limited that the loss location did not form part of either of the aforementioned broker's slips and therefore the loss location was not covered by the Policy of Insurance.

  • e. Further, in December 2010, the defendant through the appointed adjuster, Axis (Eastern Caribbean) Limited, indicated again to Comprehensive Insurance Brokers Limited that after final consideration, the loss location was not declared prior to the fire in that, the loss location was not set out in the broker's slip and/or the Policy of Insurance and therefore the Policy of Insurance did not cover the losses sustained by the claimant and the loss location.

  • f. Thereafter no arbitration proceedings were initiated by the claimant. Instead, the claimant filed the present proceedings more than three years after the defendant denied the claim and indicated same to the claimant's servant and/or agent.

  • g. That pursuant to Section 19 of the Conditions of the Policy of Insurance, the present claim is initiated after the 12 month period set out therein. Therefore, by effluxion and/or lapse of time the present proceedings are initiated out of time and the defendant and/or their co-insurers are not liable to compensate the claimant for their alleged losses.

The Claimant's Response

6 The claimant contends that when all the allegations in the proceedings are considered the Claim has every chance of success. According to the claimant, the Statement of Case with particulars served thereunder discloses a course of action fit to be decided by the Court both as to the questions of law or of fact or of mixed law and fact.

7 According to the claimant, the Claim requires prolonged and serious argument and the Court ought only to exercise its powers of striking out in clear and obvious cases and this Claim is not such a case. The Court must be satisfied that there is no reasonable cause of action. The claimant further contends that there is no abuse of process on the face of the Claim Form or Statement of Case.

8 The claimant submits that striking out ought to be very sparingly exercised and only in exceptional circumstances, not as in this case where there is a bona fide claim with substance and foundation and seriously arguable points of fact and law where the Court would be required to conduct a protracted examination of documents. The claimant reiterates that such jurisdiction should be exercised with great care and only in cases where the Court is absolutely satisfied that no good can come of the action. The claimant further submits that the Court ought to be wary of setting aside an otherwise non-fraudulent valid and enforceable contract of insurance.

9 With respect to Clause 19 of the Conditions of the Policy of Insurance, the claimant says that liability must have been admitted or established before such a disclaimer clause becomes operative. Time begins to run from the date of repudiation and not (as Clause 19 suggests) from the date of the occurrence of the fire. The claimant further contends that by its own admission, the defendant denied the Claim in December, 2010- some eight months after the occurrence of the fire. The claimant also contends that such delay is significant and has legal consequences.

10 The claimant goes on to submit that, be that as it may, the defendant disclaimed liability; it did not repudiate the contract of insurance. It would appear that the defendant was intending to keep the door open and was promising that it would continue to look at and consider the Claim. According to the claimant, the phrase “on the happening on (sic) any loss or damage” in Clause 19 suggests that arbitration or legal action is all that remains to be done to the Claim. The claimant contends that the Clause presupposes a valid Claim against the defendant has been made but until the defendant accepts the Claim as valid or denies liability there will be nothing to arbitrate or litigate. The claimant submits that the defendant finally purported to deny liability on the 5th November, 2012 some 2 ¹/₂ years after the date of the claimant's loss on the 27th April, 2010.

11 According to the claimant, by the defendant's own admissions the defendant also purported to deny liability through their agent Axis on the 21st December, 2010. The claimant says that the defendant disregarded same and substituted their own repudiation on the 5th November, 2012 approximately one month after Comprehensive Insurance Brokers Limited (CIBL) (the Broker/Agent of the defendant) sought the appointment of an Arbitrator in accordance with Clause 19 on (sic) the Condition of the Policy well within the limitation period of 12 months stipulated by the said clause.

12 The claimant further says that a letter of advice dated 21st January, 2011 from CIBL as agents for the defendant to the defendant's affidavit in response was left unanswered for 18 months while the defendants carried out investigations and review of the Claim. The claimant submits that such a lapse of time or delay constitutes conduct inconsistent with the continued validity of the policy even though the defendant did not intend it to have that result. The claimant further submits that delay for such length of time is evidence that the defendant in truth decided to accept liability and that the claimant was relieved from the other condition (sic) of the policy inclusive of...