Gillett et Al v Motor and General Insurance Company Ltd

• Jurisdiction: Belize
• Court: Supreme Court (Belize)
• Judge: Malone, C.J.
• Judgment Date: 01 January 1978
• Docket Number: Civil Action No. 141 of 1976
• Date: 01 January 1978

Supreme Court

Malone, C.J.

Civil Action No. 141 of 1976

Gillett et al

and

Motor and General Insurance Co. Ltd.

Appearances:

Senator S.W. Musa for the plaintiffs

Mr L Sanguinette for the defendant

Before the Hon. Sir Denis Malone, Chief Justice

Contract - Insurance — Motor vehicle — Limited liability

Insurance - Motor insurance — Limited liability

Facts: Plaintiff sued defendant to recover sum in excess of minimum liability stated in contract between insured and defendant — Plaintiff was awarded judgment against insured in excess of that covered by policy of insured — Whether liability or insurers (defendant) limited to amount stated in contract between insured and defendant or whether such liability was ousted by virtue of rights conferred on a third party by s. 20 Motor Vehicles Insurance (Third Party Risks) Ordinance No. 14 of 1958 — Whether absence from s. 20 (1) of Ordinance of words to be found in equivalent sections of acts of other Commonwealth Caribbean territories affected the construction to be given to that section — Legislation in Guyana considered and distinguished

Facts: Judgment recovered by third party against insured in sum of excess of minimum liability stated in contract between insured and insurer — Third party action against insurers to recover full amount of judgment — Whether liability of insurers limited to amount stated in contract or whether such liability ousted by virtue of rights conferred on a third party by s. 20, Motor Vehicles Insurance (Third Party Risks) Ordinance, No. 14 of 1958 — Whether the absence from s. 20 (1) of Ordinance of words to be found in equivalent sections of acts of other Commonwealth Caribbean territories affected the construction to be given to that section — Similar legislation in Guyana considered and distinguished

Held: Construction of s. 20(1) of Ordinance was unaffected by omission of additional words to be found in s. (8)(1) of Act of Guyana — Action dismissed.

Held: Construction of s. 20(1) of Ordinance unaffected by omission of additional words to be found in S(8)(1) of Act of Guyana — Action Dismissed.

1 By a judgment of this Court, the plaintiffs in an action of negligence were awarded as damages the sum of $21,360.00 against the owner of a bus insured by the defendant under a motor vehicle insurance policy. The bus owner having failed to pay the damages, the plaintiffs sought to recover from the defendant, but the defendant refused to pay more than $8,000.00 of the damages awarded. This action was then brought by the plaintiffs against the defendant and the sole issue is whether the defendant is liable to the plaintiffs for the whole of the judgment sum awarded or is liable for no more than $8,000.00 of that sum.

2 On the face of it, the schedule to the policy in question limits the liability of the defendant in respect of the total claims for any one accident to $8,000.00. A limitation of that description does not conflict with the provisions of the governing Ordinance which is the Motor Vehicles Insurance (Third Party Risks) Ordinance, No. 14 of 1958, and which is hereinafter referred to as “the Ordinance”. The reason being that section 4 (1) of the Ordinance which specifies the requirements that must be complied with by motor vehicle insurance policies, authorises such a limitation in proviso (vi) to that section. But it is the contention of Counsel for the plaintiffs that the rights conferred on a third party by the Ordinance against an insurer are not necessarily governed by any limitations to which the contract made between the insurer and the insured may be subject. That he says is because the provisions of section 20 of the Ordinance enable a third party to recover from an insurer a sum greater than the amount which the insurer undertook to indemnify the insured. So it comes down to this that the outcome of this case is dependent on the construction to be given to section 20 of the Ordinance. The relevant provisions of that section are as follows:

“Duty of insurers to satisfy judgments against persons insured in respect of third party risks.

20. -(1) If, after a certificate of insurance has been issued under subsection (4) of section 4 to the person whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of subsection (1) of section 4 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) …………………..

(3) …………………..

(4) If the amount which an insurer becomes liable under this section to pay in respect of a liability of a person insured by a policy exceeds the amount for which he would, apart from the provisions of this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.

(5) ……………………

(6) ……………………”

3 That section is not unique to this country as its equivalent is to be found in similar Acts enacted by other commonwealth Caribbean territories. The corresponding Act of Guyana is one such example.

4 The language of section 20(1) of the Ordinance differs however from the language of section 8 (1) of the equivalent Act of Guyana (The Motor Vehicles Ordinance (Third Party Risks) Act, No. 22 of 1937) in a significant respect. It omits the words: “and subject to any limitations on the total amount payable under the policy in consequence of the fourth, fifth and sixth provisos to section 4(1)(b)” which appear in section 8(1) of the Guyana Act, immediately after the words: “insurer shall, subject to this section …” Had the language of section 20(1) of the Ordinance followed that of section 8(1)...