Andrene Brown v Insurance Company of the West Indies

• Jurisdiction: Jamaica
• Judge: CORAM: ANDERSON J.
• Judgment Date: 27 July 2011
• Judgment citation (vLex): [2011] 7 JJC 2702
• Docket Number: CLAIM NO: HCV 04439
• Court: Supreme Court (Jamaica)
• Date: 27 July 2011

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO: HCV 04439

BETWEEN

ANDRENE BROWN

CLAIMANT

AND

INSURANCE COMPANY OF THE WEST INDIES

DEFENDANT

Mr. Jeffrey Daley instructed by Jeffrey Daley & Co. for the Claimant; Mr. Walter Scott and Ms. Elizabeth Salmon instructed by Rattray Patterson Rattray for the Defendant.

Claimant alleging breach of contract by Insurer refusing to honour claim for allegedly stolen vehicle; Insurer purporting to avoid liability for misrepresentation and material non-disclosure and/or breach of warranty in declaration on proposal form; whether materiality is relevant where the defence is breach of warranty in proposal form; application of the principle enunciated in Dawsons v Bonnin.

CORAM: ANDERSON J.

1 In the instant case, Miss Andrene Brown, the "Claimant", commenced an action against the Insurance Company of the West Indies, ("ICWI" or the "Defendant") by way of a Fixed Date Claim Form in which she alleges that the Defendant has breached the insurance contract it had with her. She has sought reliefs from the Defendant as follows:

• 1. The sum of Two million Nine hundred and Forty-Five Thousand Dollars ($2,945,000.00) being monies due to the Claimant from the Defendant under the motor vehicle policy;

• 2. Damages for breach of contract;

• 3. The sum of Three Hundred One Thousand Five Hundred Thirteen Dollars and Fifty-Two cents ($301,513.52) being monies paid out by the Claimant to the lien holders as loan payment;

• 4. Loss of Use for the said motor car in the sum of Nine Hundred and Eighteen Thousand Dollars ($918,000.00);

• 5. Interest pursuant to the Law Reform Miscellaneous Provisions Act;

• 6. Such further and other relief as to this Honourable Court appears just;

• 7. Costs.

2 By an Order of Jones J. made on the — ^th April 2009, the Fixed Date Claim Form was converted to a Claim Form and affidavits from the Claimant and Joan Mattis, a representative of the Defendant were ordered to be treated as "Particulars of Claim" and "Defence" respectively.

The Background to the Claim

3 The Claimant is, and was at all material times, a civil servant employed in the Ministry of Labour as a Labour Administrator. She is a graduate of the University of the West Indies with a Bachelor's Degree and also holds a Masters Degree in Human Resource Development. It is not disputed that in or around January 2005 the Claimant entered into a contract of insurance with the Defendant to provide comprehensive insurance coverage of a 2005 Mitsubishi Pajero motor vehicle, licence #2847 EL, which the Claimant had purchased with the benefit of a Twenty Per Cent (20%) duty concession, awarded to the Claimant by virtue of her position as a travelling officer and civil servant.

4 To assist in the financing of the purchase of the said motor vehicle, she acquired a loan from RBTT Bank which loan was secured with the assistance of Mr. Jamelah Skeene, her then fianc", and her main witness in this case. The policy of insurance was renewed up to 2007. On or around the night of December 31, 2006, the vehicle, the subject of the insurance contract, was allegedly taken from Mr. Skeene when he was purportedly held up at gun point in the vicinity of the Old Harbour Main Road, in the Parish of St. Catherine. In consequence of this loss, the Claimant claimed against the Defendant on the policy of insurance. Subsequently, the Defendant purported to accept the claim and offered to indemnify the Claimant for her loss. However, after investigating the circumstances in which the claim had been made, the Defendant sought to deny the Claimant's claim and to assert that it was entitled to reject it based on the terms of the policy.

5 The Claimant in her claim insists that she is entitled to compensation from the Defendant insurer as she had a valid comprehensive policy of insurance over the vehicle and pursuant to her loss, her policy must be honoured. The Defendant, on the other hand, says it is entitled to deny the Claimant's claim on the basis of material non-disclosure and on the further basis that by virtue of a breach of a provision of the contract which was a warranty, it is entitled to avoid the policy.

6 The Claimant provided a witness statement, a supplemental witness statement and, in addition, was allowed to amplify her witness statement in Court. A witness statement was also given by Mr. Skeen for the Claimant and he was subjected to extensive cross-examination.

7 The Defendant has sought to deny the Claimant's claim on the basis that the Claimant has breached her duty of utmost good faith, a fundamental premise of contracts of insurance, by non disclosure of material facts or deliberate misstatements of facts in the completion of the proposal form. The Defendant also avers that by virtue of the declaration made by the Claimant in the proposal form, her answers to questions in the proposal were made warranties, the breach of which allowed the Defendant to avoid the policy.

8 The Claimant avers that she did not breach her duty of good faith, by non-disclosure of material facts in her signing of the proposal form. She also avers that the declaration does not allow the policy to be avoided.

The Evidence

9 The evidence in support of the Claimants case was provided by the Claimant herself and Mr. Skeene. Insofar as is relevant for the issues which the court must decide, she acknowledged that she signed the proposal form which was tendered into evidence as Exhibit #1. That proposal form asked certain questions and included questions about the place where the car would be garaged overnight and who would be the driver. (These are referred to further below). In her evidence, the Claimant explained how she paid for the vehicle with a Manager's cheque of her own which she bought in the sum of four hundred and eighty thousand dollars ($480,000.00), with help from her fianc" Mr. Skeene and a loan from RBTT Bank. In respect of the loan, it was her evidence that Mr. Skeene acted as a guarantor. The loan is evidenced by a letter of commitment dated January 14, 2005 from RBTT Bank Jamaica Limited addressed to Ms. Brown and Mr. Skeene in which the bank agreed to extend to Ms. Brown and Mr. Skeene as borrowers, (my emphasis) facilities of one million five hundred and fifty thousand dollars ($1,550,000.00). This letter was admitted into evidence as exhibit #2.

10 With respect to the payment for the motor vehicle, Ms. Skeene in cross examination acknowledged that the far greater amount of the four hundred and eighty thousand dollars ($480,000.00) was money from Mr. Skeene who owed her four hundred thousand dollars ($400,000.00) for working in his wholesale establishment for a year without remuneration. The loan from RBTT Bank was serviced by monthly deductions from her salary which was deposited to her bank account. Also during cross examination Ms. Brown acknowledged that she had signed a Customs Entry form in which she had confirmed that the vehicle would be used "exclusively for the purposes of Ms. Andrene Brown", From the other evidence adduced, it is clear that this had not been the case.

11 Ms. Brown also said that it was her understanding that under the comprehensive insurance policy she had effected, the vehicle would have been covered for insurance purposes while anyone drove it, as long as that person was authorized by her as owner of the vehicle.

12 She confirmed that Mr. Skeene often drove the car as he preferred that to another car, a Camry, which she also owned and had insured with the Defendant. She then recounted in her evidence the allegation of the car having been stolen from Mr. Skeene and this fact being reported to the police. She said she subsequently received a letter dated July 18, 2007 from the Defendant in which it had confirmed that it would settle the amount owed to the Bank. She claims she relied upon that letter to her detriment. That letter was followed by another, dated the 19 ^th July 2007 from the Defendant to RBTT, indicating that it had decided not to honour the Claimant's claim. She says that this decision refusing to honour her claim is a breach of her insurance contract with the Defendant and she claims damages for breach of contract, including transportation costs of three thousand dollars ($3,000.00) per day for three hundred and six (306) days for a total of some nine hundred and eighteen thousand dollars ($918,000.00).

13 In her witness statement the Claimant also alleges that the Defendant acted in a "retaliatory and discriminatory manner" and claims:

• a) The sum of $2,945,000.00 being monies due to me from the Defendant under the motor vehicle policy;

• b) damages for breach of contract;

• c) the sum of $1,000,000.00.

• d) loss of use in the sum of $918,000.00 and continuing;

• e) interest at commercial rates on sums found to be due.

14 It must be remembered that it is for the Claimant to establish, on a balance of probabilities, that there has been a breach of contract such as to entitle her to the reliefs sought. It will be crucial to examine in some more detail, the cross examination of Ms. Brown as that is very relevant to the nature of the defences raised by the Defendant. In the course of his cross examination of Ms. Brown, Mr. Scott sought her confirmation that she had signed the proposal form. She agreed. She was directed to the provision in the proposal form which was in the following terms:

"I hereby declare that all the above statements and particulars are true and I/We declare that if any such particulars and answers are not in my/our writing the person or persons filling in such particulars and answers shall be deemed to be my/our agent for that purpose. I/We further understand that the vehicle above referred to is/are in good condition and undertake that vehicle(s) to be insured shall not be driven by any person who to my/our knowledge has been refused any motor vehicle...