Insurance Company of the West Indies Ltd v Shelton Allen and Others

• Jurisdiction: Jamaica
• Judge: MORRISON JA
• Judgment Date: 11 October 2011
• Neutral Citation: JM 2011 CA 100
• Docket Number: SUPREME COURT CIVIL APPEAL NO. 5/2011
• Court: Court of Appeal (Jamaica)
• Date: 11 October 2011

BETWEEN

INSURANCE COMPANY OF THE WEST INDIES LTD

APPELLANT/INTERVENER

AND

SHELTON ALLEN (Administrator of the Estate of Harland Allen)

1 ^ST RESPONDENT

AND

MERVIS NASH

2 ^ND RESPONDENT

AND

DELAN WATSON

3 ^RD RESPONDENT

AND

NICHON LAING

4 ^TH RESPONDENT

[2011] JMCA Civ 33

SUPREME COURT CIVIL APPEAL NO. 5/2011

JAMAICA

IN THE COURT OF APPEAL

CIVIL PROCEDURE - Substituted service - Application for - Whether ex parte application should be granted for substituted service - Civil Procedure Rules 2002

Miss Camille Wignall and Miss Arlene Williams instructed by Nunes Scholefield Deleon & Co for the appellant

Jermaine Simms and Colin Alcott instructed by Marion Rose-Green for the 1 ^st respondent

PROCEDURAL APPEAL

MORRISON JA

Introduction

1 The 1 ^st respondent is the administrator of the estate of the late Harland Allen, who died on 28 April 2005 as a result of a motor vehicle accident along the Free Hill Main Road in the parish of St Mary. On the day in question, a motor vehicle owned and driven by the 2 ^rd respondent, came into collision with a motor vehicle owned by the 3 ^rd respondent and driven by the 4 ^th respondent (“the said vehicle”) and thereafter with the late Mr Allen, who was at the time a pedestrian on the sidewalk of the said road.

2 Proceedings were in due course commenced against the respondents by the 1 ^st respondent as the personal representative of the late Mr Allen. On 9 March 2010, on the ex parte application of the 1 ^st respondent, Master Simmons ordered, among other things, that personal service of the claim on the 3 ^rd respondent should be dispensed with and that service should instead be effected on the appellant, as insurer of the 3 ^rd respondent. Pursuant to this order, the appellant was duly served on 19 March 2010.

3 By notice of application for court orders filed on 19 May 2010, the appellant applied for an extension of time within which to make an application to set aside Master Simmons” ex parte order and service of the claim form on it pursuant to that order. In substance, the grounds of this application were that (a) the 3 ^rd respondent was in breach of the named driver policy of insurance and was therefore not entitled to an indemnity under the policy, a fact which, although it was known to the 1 ^st respondent before he applied for and obtained the order for substituted service, was not disclosed by him to the court; and (b) steps taken by the appellant to locate the 3 ^rd respondent had proved to be futile.

4 On 13 January 2011, Master George (Ag) made an order extending the time as prayed, but refused to set aside Master Simmons” ex parte order or service on the appellant. This is therefore an appeal (pursuant to leave granted by the learned Master) from that decision and in it the appellant relies on the following grounds of appeal:

‘a. The learned judge erred as a matter of fact and/or law in failing to consider that the 1 ^st Respondent/Claimant had failed on an ex parte application to make full and frank disclosure of the fact that the Appellant/lntervener had advised the 1 ^st Respondent/Claimant that the 3 ^rd Respondent/2 ^nd Defendant was in breach of the policy and that it would not be granting indemnity.

b. The learned judge erred as a matter of fact and/or law in finding that service on the Appellant/lntervener would enable the 3 ^rd Respondent/Defendant to ascertain the contents of the Claim Form and Particulars of Claim.

c. The learned judge erred as a matter of fact and/or law in failing to consider that as the steps taken by the Appellant/ Intervener to locate the 3 ^rd Respondent/Defendant have proven futile, the 3 ^rd Respondent/Defendant would not be able to ascertain the contents of the Claim Form and the Particulars of Claim.

d. The learned judge erred as a matter of fact and/or law in failing to consider that in light of the breach of the policy the Appellant/lntervener was no longer bound to honour the policy of insurance and would therefore no longer exercise any right of subrogation under the policy and would not be compelled to be in contact with the 3 ^rd Respondent/2 ^nd Defendant.

e. The learned judge erred as a matter of fact and/or law in finding that at the time of the accident there was a contract of insurance between the Appellant/lntervener and the 3 ^rd Respondent/Defendant.’

The facts

5 Before going to counsel's submissions in support of these grounds, it may be helpful to refer briefly to the facts upon which the appellant relied in its application to set aside the ex parte order. Miss Suzette Radlein, the appellant's legal counsel, in affidavits sworn to on 18 May 2010 and 18 November 2010, stated as follows. The appellant was at all material times the insurer of the said vehicle, in respect of which the 3 ^rd respondent had completed a proposal form, which was incorporated into the contract of insurance, in which he had stated that he would be the only driver of the said vehicle. A few months after the accident in which the late Mr Allen was killed, the appellant received information about it, including that at the material time the said vehicle was being driven by the 4 ^th respondent, who was not named and/or authorised to drive the said vehicle. By letter dated 2 November 2005, the appellant advised the 3 ^rd respondent that he was in breach of the policy of insurance and that no indemnity would therefore be granted to him in respect of any loss arising out of the accident. Further, also in breach of the policy, the 3 ^rd respondent did not report the accident to the appellant. Some three and a half years later, the appellant received notice of the 1 ^st respondent's action against the 3 ^rd and 4 ^th respondents and, by letter dated 4 June 2009, advised the 1 ^st respondent's attorneys-at-law that the 3 ^rd respondent had breached his policy of insurance and would not therefore be offered an indemnity in respect of any loss arising from the said accident. Despite having written to the 3 ^rd respondent, the appellant had heard nothing from him and all its efforts to locate him at his last known address had been unsuccessful. In any event, the 3 ^rd respondent's policy of insurance had not been renewed upon its expiry in February 2006 and the appellant therefore had no current contractual relationship with him and no knowledge of his present whereabouts. As a result, the appellant would be unable to accept service of any documents on behalf of the 3 ^rd respondent.

Submissions

6 On ground one, Miss Wignall for the appellant submitted that the learned Master had erred in failing to consider that the 1 ^st respondent had failed on the ex parte application to make full and frank disclosure of all the facts to Master Simmons, in particular the fact that the 3 ^rd respondent was in breach of the policy of insurance and that the appellant would accordingly not be granting him any immunity. Thus, on the authority of R v Kensington Income Tax Commissioners, ex parte Princess Edmond de Polignac [1917] 1 KB 486 and Pearson Education Limited v Prentice Hall of India Private Limited [2005] EWHC 655 (QB) , Miss Wignall submitted that the 3 ^rd respondent ought not to be allowed to obtain any advantage by virtue of his failure to make full disclosure and that the Master's order should therefore be set aside. Mr Simms for the 1 ^st respondent did not challenge the principle, but submitted that even if the learned Master had been aware of the fact that there had been a breach of the policy in respect of the named driver stipulation, that would not have been a relevant consideration and she would have come to the same decision in any event.

7 Taking grounds two and three together, Miss Wignall contended that the Master had failed to have regard to rule 5.13 of the Civil Procedure Rules 2002 (“the CPR”), which required an applicant for permission to serve process by a method other than personal service to show that the method of service proposed ‘is likely to enable the person to be served to ascertain the contents of the claim form and particulars of claim’. This reflected the long established principle that a defendant must be notified of proceedings which have been brought against him {Porter v Freudenberg [1915] 1 KB 857 ). In coming to her decision, the Master had (wrongly) placed great reliance on the decisions at first instance of Mangatal J (Ag) (as she then was), in ( Lincoln Watson v Paula Nelson Suit No. CL 2002/W-062 ) and Sykes J, in ( Egon Baker v Novelette Malcolm and Another Suit No. CL 1999/B055 ), both of which were decided under the provisions of the Judicature (Civil Procedure Code) Act (“the CPC”), in respect of which different considerations are applicable on an application for substituted service. English cases such as Gurtner v Circuit and Another [1968] 1 All ER 328 and Abbey National pic v Frost (Solicitors'Indemnity Fund Ltd intervening) [1999] 2 All ER 206 , upon which the 3 ^rd respondent relied, were also decided under the old rules in England.

8 Mr Simms for his part supported Master George's ruling, on the basis that she was right to place reliance on Lincoln Watson and Egon Baker , which were still good law in respect of the post CPR era, as also were Gurtner v Circuit and older cases dealing with service of process on insurance companies in road traffic cases.

9 Taking grounds four and five together, Miss Wignall submitted that by reason of the 3 ^rd respondent's breach at the time of the fatal accident of the named driver provision in the policy, the appellant was no longer bound to honour the policy since the said vehicle was not covered when being driven by the 4 ^th respondent. Once the said vehicle was used for a purpose not permitted by the policy, then it was not insured {The Administrator General v National Employers'...