Advantage General Insurance Company Ltd v Shereen Andrea Henry
| Jurisdiction | Jamaica |
| Judge | Straw J |
| Judgment Date | 04 October 2012 |
| Neutral Citation | [2012] JMSC Civ 133 |
| Date | 04 October 2012 |
| Court | Supreme Court (Jamaica) |
| Docket Number | CLAIM NO. 2010 HCV 02707 |
[2012] JMSC Civ 133
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CLAIM NO. 2010 HCV 02707
Motor Vehicle Insurance — Insurable Interest — Misrepresentation/Non disclosure — Breach of Warranty
The declarations are being sought on the basis that the policy was obtained by misrepresentation and/or non disclosure of material facts and also that the defendant was in breach of the warranty she gave on the proposal form by which she applied for insurance.
The factual circumstances are not in dispute and are summarized as follows:
On the 4 th December 2007, Ms Henry completed, signed and submitted to the representative of Advantage General, an insurance proposal form in which she applied for coverage of a Toyota Corolla motor car licensed as aforementioned. She was issued with the said policy of insurance based on the representations in the proposal form.
The policy comprehensively insured the said motor car for the period 4 th December 2007 to 3 rd December 2008. On the policy form, she answered ‘yes” in response to the following questions:
Do you own the vehicle?
Is it/are they registered in your name?
On the 25 th March 2008, Advantage General received a Notice of Proceedings informing the company that a claim had been filed in the Supreme Court against Ms. Henry to recover damages arising from an accident involving the said motor car on the 5 th February 2008.
Up to that date, Ms Henry had made no report to Advantage General concerning the accident as required by the terms of the policy. Advantage General hired Priority Investigations Services to carry out investigations and as a result, a statement was collected from Ms. Henry who made the following disclosure:
‘Stanford Johnson, now deceased was my brother. He was the owner of—the Toyota Corolla—. He purchased the car along with others and placed them in my name. I did not contribute to the purchase of this car. It was kept by my brother who was living in Linstead.’
She also stated that she did not know of the accident until she was informed by Advantage General.
Mrs. Suzette Campbell, counsel for Advantage General, based her submissions on three limbs.
Firstly, that Ms. Henry had no insurable interest in the motor car; secondly that her misrepresentation and non disclosure of the facts concerning the true ownership of the motor vehicle entitles Advantage to avoid the policy and thirdly, that she breached the warranty given as to the truth of her statements on the proposal form.
I will deal with each of these issues in turn.
A working definition of insurable interest as applied in English law is given in the text, MacGillivray on Insurance Law, 10 th Edition, Paragraphs 1-49, pg 25:
‘Where the assured is so situated that the happening of the event on which the insurance money is to become payable would, as a proximate cause, involve the assured in the loss or diminution of any right recognized by law or in any legal liability there is an insurable interest in the happening of that event to the extent of the possible loss or liability.’
The want of insurable interest is a question going to the root of the contract and an insurer is entitled to raise the defence that the assured either has no interest or an insufficient interest to constitute an insurable interest in law.Macaura v Northern Ireland Assurance Co. Ltd and others (1925) AC 619 (1925) AC 619 at pg 631-632.
[ MacGillivray describes the nature of insurable interest loosely as the assured's pecuniary interest in the subject—matter of the insurance arising from a relationship with it recognized by law [para 1-11, pg 67].
In relation to insurable interest in property, MacGillivray speaks to the two requirements for the possession of a valid insurable interest identified in English law which have been derived from the case law [para1-120, pg 55].
Firstly, the assured must be so situated to the insured property that he will suffer economic loss as the proximate result of its damage or destruction. The author distils this requirement from the leading case ofLucena v Craufurd, [1806] 2 Bos. & Pul. [N.R.] 269, where Lawrence J, gave his classic description of an insurable interest at pg 302:
‘A man is interested in a thing to whom advantage may arise or prejudice happen from the circumstances which may attend it…and a man is so circumstanced with respect to matters exposed to certain risks or dangers, as to have a moral certainty of advantage or benefit, but for those risks or dangers, he may be said to be interested in the safety of the thing. To be interested in the preservation of a thing, is to be so circumstanced with respect to it as to have benefit from Its existence, prejudice from its destruction.’
Lord Eldon inLucena spoke to the second requirement of a legal relationship between the assured and the subject matter [pg 321]:
‘….nor am I able to point out what is an interest unless it be a right in the property or a right derivable out of some contract about the property, which in either case may be lost upon some contingency affecting the possession or enjoyment of the party.’
InRouth v Thompson [1809] 11 East 428 [1809] 11 East 428, the requirement was described as possession of a legal or equitable right in property [per Lord Ellenborough C.J. pg 433], Lord Eldon's test was subsequently summarized as requiring a legal or equitable interest in the insured property. Moran, Galloway & Co. v Uzielli [1905] 2KB 555, 562; Macaura v Northern Ass. Co., pg 630.
Is the defendant's legal title sufficient under the circumstances of this case to find that she had an insurable interest?
Counsel for the claimant contends that it is not sufficient as she did not contribute to the purchase of the vehicle and had no pecuniary interest in it. She posits the principle that a bare legal title either to land or goods does not necessarily give the holder an insurable interest [seeKennedy v Boolara Butter Factory Pty, Ltd ] [1953] VLR 548, 554.
Counsel also submits that the defendant had no reasonable expectation of some financial benefit. She had stated that that the car was kept by her brother who was living in Linstead. There is no evidence to suggest that she should take or have a financial interest in the vehicle. According to counsel, the evidenceconfirms that she was without custody and possession of the vehicle from the time it was insured to the date of loss in the accident. Further, she was unaware of the accident until informed by the claimant and she failed to notify the insurers of the accident. Finally, she took no action to enforce the policy of insurance to recover an indemnity under the policy.
Considering all the above circumstances, counsel has therefore submitted that the court should come to the conclusion that she had no interest at the time when the event insured against occurred and cannot recover anything under an indemnity policy.
Counsel for the defendant, Ms. Gayle, has submitted that the court considers other common law jurisdictions which have dispensed with the requirement of legal or equitable interest. InConstitution Insurance of Canada v Kosmopoulos [1987] 34 DLR [4 [1987] 34 DLR [4th] 208, the Supreme Court of Canada held that a moral certainty of economic advantage from property was a sufficient ground of insurable interest therein.
This definition, however, would not assist Ms. Henry as she cannot be said to have any moral certainty of economic advantage from the motor vehicle.
Ms. Gayle has also relied onFeasey v Sunlife Insurance of Canada (2003) Lloyd's Rep. IR pg 637 in which Waller LJ at para 80 outlined the following factors to be taken into consideration regarding insurable interest:
‘When one examines the authorities therefore one sees that the court is concerned to analyse by reference to the terms of the policy what is the subject of the insurance; to analyze what insurable interest a person has in the subject matter of the policy; and to consider whether the subject embraces that (insurable) interest….’
Based on this analysis, she has asked the court to consider that the subject matter is a motor vehicle and the defendant is the legal owner of the vehicle. Inrelation to the answers to the two questions asked, Ms. Henry became a suitable candidate for the issuance of the policy as her disclosed interest was covered by the terms of the policy.
She has further submitted that Ms. Henry's statement (at a later date) that her brother was the owner of the vehicle was nothing more than an admittal of his equitable interest in the property. As there may be a multiplicity of different interests in the same property, her being the title holder provided sufficient link to the asset to validly insure it.
Feasey , as well as Kosmopoulos is not binding in the Jamaican jurisdiction as they are decisions of the Canadian Courts. However, the English authorities were examined.
It is important to note that inFeasey, Waller J placed the cases dealing with insurable interest into groups. Group 1 concerned cases where the court had defined the subject matter as an item of property and where there must be a real or equitable interest in the property for the insured to suffer loss which he can recover under the policy. He placed both Lucena and Macaura in this group [para 81].
InLucena, the subject was certain identified ships. The perils insured against were loss of the ships. It was held that the assured had no legal or equitable interest in the ships but a mere expectation. The expectation could not be insured so the subject did not embrace the insurable interest. In Mac...
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