Insurance Company of the West Indies v Margaret Forest-Duncan

• Jurisdiction: Jamaica
• Judge: G. Fraser, J.
• Judgment Date: 27 July 2016
• Neutral Citation: [2016] JMSC CIV 136
• Docket Number: CLAIM NO. 2007 HCV 04909 CLAIM NO. 2008 HCV 01667
• Court: Supreme Court (Jamaica)
• Date: 27 July 2016

[2016] JMSC CIV 136

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

Coram:

G. Fraser, J.

CLAIM NO. 2007 HCV 04909

CONSOLIDATED WITH:

CLAIM NO. 2008 HCV 01667

Between:

Insurance Company of the West Indies

Claimant

and

Margaret Forest-Duncan

Defendant

Between:

Margaret Forest-Duncan

Claimant

and

Insurance Company of the West Indies

Defendant

and

Binoc Visions Investigations Limited

4th Defendant

Ms. Sudene Riley Instructed by Kinghorn & Kinghorn for the Claimant

Mr. Gavin Goffe & Mr. Adrian Cottrell instructed by Myers, Fletchers & Gordon for 1 ^st & 2 ^nd Defendants

Insurance Law — Avoidance of policy by Insurer for misrepresentation and material non-disclosure — Arbitration clause and whether non compliance automatically determines the right to redress by the court — Breach of conditions — whether such breach material or entitles Insurer to avoid policy — treatment of disputed confessions in civil litigation — whether issues of undue influence, duress and involuntariness material to admissibility of confession — The Motor Vehicles Insurance (Third-Party Risks) Act, sections 8 & 18.

INTRODUCTION

1 The Claimant Margaret Forrest-Duncan is the owner of a motor vehicle bearing registration plates numbered and lettered 5850EY. This motor vehicle was insured with the 2 ^nd Defendant, Insurance Company of the West Indies (ICWI), under a comprehensive policy effected on or about 19 ^th January 2007. The Claimant's vehicle whilst driven by her spouse was involved in a collision along the Mount Rosser Road and was damaged and a claim was subsequently made to the Insurers.

2 Based on the circumstances of the claim including the delay in making it and how the fact of the collision first came to their attention; ICWI employed the services of the 4 ^th Defendant, BINOC to make enquiries. The investigations unearth certain inconsistencies and discrepancies on the part of the Insured Claimant and her spouse relative to the usage of the insured motor vehicle and this appeared to have heightened the suspicions of the 2 ^nd Defendant. Consequently the Defendants concluded that the Claimant had made material misrepresentations to ICWI and that she had an intention to utilize the vehicle as a PPV but applied for insurance for a vehicle as private usage.

3 During an interrogation of the Claimant at ICWI's office on the 23 ^rd October 2007; the Claimant allegedly confessed that to her prior knowledge the insured vehicle had been used as a ‘robot’ taxi. This alleged confession was reduced into writing and signed by the Claimant. The confession statement also included a release which operated to discharge ICWI from its obligations under the policy. The insurance policy was subsequently cancelled by ICWI and the Insured/Claimant was so advised by letter under the signature of Miss Raquel Ashman and dated 29 ^th October 2007. The reason given for the cancellation was that the vehicle was used contrary to the terms and conditions of the policy contract.

THE CLAIMS

4 The events which obtained thereafter resulted in suit being filed by ICWI via a Fixed Date Claim Form No. 2007 HCV 04909 wherein the Insurance Company had sought to obtain declarations from the Court, justifying their action of voiding the Claimant's policy of Insurance consequent to the alleged breach of its terms and conditions by the Claimant. The 2 ^nd Defendant in said suit is saying that the Mrs. Duncan deliberately withheld or misrepresented facts that may have influenced the underwriter's opinion as to the risk to be incurred, whether they would take such risk, or what premium they would charge, if they did take it. They are saying there is an obligation on the Insured to disclose, and the concealment of a material circumstance known to the Insured thereby avoids the policy. ICWI in their claim are seeking the following relief:

1

A declaration that it is entitled to avoid the Policy of Insurance No. 34152032/1 and to refuse to indemnify the Defendant in respect of loss, damage, expense or claims from third parties incurred as a result of an accident involving the Defendant's motor vehicle licence No. 5850EY on June 11th 2007, along the Mount Rosser Main Road, in the parish of St. Catherine, on the grounds of misrepresentation and/non disclosure of material facts. 2. A declaration that the Policy of Insurance No. 34152032/1 is void for breach of warranty of contract by the Defendant 3. A declaration that the Defendant is in breach of the conditions of the Policy of Insurance, accordingly entitling the Claimant to avoid and/or repudiate any liability there under 4. Costs 5. Such further and/or other relief as this Honourable Court deems just

5 In response to the action of ICWI, the Claimant filed her own suit in Claim No. 2008 HCV 0166; wherein ICWI and BINOC were joined as Defendants. The Claimant is seeking the pronouncement of various declarations by the Court as also damages on the basis that the alleged confession was obtained by fraud, duress and undue influence by the servants and or agents of both Defendant Companies. She insists that there still exists a valid and enforceable contract of insurance between her and ICWI and accordingly; Mrs. Margaret Forrest-Duncan is seeking declarations contrary to those sought by ICWI as follows:

1

That the correspondence of the 23rd October 2007 i.e. “the purported confession” written and signed by her was fraudulently produced by the Defendants and is consequently null and void 2. That the correspondence of 23rd October 2007 was produced by duress and is therefore null and void 3. That the correspondence was produced by undue influence 4. A valid and legally enforceable contract of insurance still exists 5. IWCI s obliged to honour the terms of the agreement and to provide compensation for damages and losses suffered by her and provide indemnity for her in respect of loss, damage, expenses or claims made by third parties arising out of the accident on the 11th July 2007.

6 Both claims were consolidated on the 23 ^rd January 2008 and subsequently; ICWI was permitted to amend their defence and to include pleadings and make reference to condition 8 of the Private Car Policy. This clause inter alia provides for arbitration as a condition precedent to suits being filed in the event there are disputes arising out of the policy of insurance; and specifically states that if claims are not referred to arbitration within twelve (12) calendar months from the date of disclaimer “then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable”. The Claimant is nonetheless insisting that she is entitled to satisfaction from the Defendant Insurer as she had a valid comprehensive policy of insurance on the vehicle and pursuant to her loss, her policy must be honoured.

7 Whether an insured will recover for a claim at all, and if so, the amount he or she will be paid; depends largely on the policyholder's own knowledge of his or her rights and responsibilities as also the terms and conditions of the contract itself. The policy under consideration typically contains very brief insuring clause(s) describing what is covered and conversely dozens of paragraphs and thousands of words are spent listing exclusions, exceptions and limitations. Policyholders are invariably at the mercy of their Insurance Company, and I say this because, the company wrote the policy, the company interprets the policy, the company evaluates the claim and the company holds the money. The insurer may however legitimately refuse to pay a claim because:

• a) The Insured did not tell the truth when applying for insurance coverage

• b) The Insured had failed to disclose something material which could affect the claim

• c) The Insured withheld information or misled the insurers

• d) The Insured had not followed the claims process correctly e) The Insured had not kept to a warranty/condition of the policy. In this case the Insurer, ICWI is alleging all of the above.

THE EVIDENCE OF MRS. FORREST-DUNCAN

8 The evidence in support of the Claimant's case was provided by the Claimant herself and Mr. Duncan her spouse and driver of the motor car in question. Insofar as is relevant for the issues which the court must decide, she acknowledged that she had completed a proposal form; which was tendered into evidence as Exhibit 4. That proposal form asked certain questions and included questions about the use of the motor car which was to be for the personal use and business of the Insured. In the course of the cross examination of Mrs. Forrest-Duncan, Counsel Mr. Goffe sought her confirmation that she had signed the proposal form; she agreed. Mrs. Forrest-Duncan was directed to the provision in the proposal form which was in the following terms:

I/We 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 insurance or continuance thereof. I/we hereby agree that this Proposal and declaration shall be the basis of and be considered as incorporated in the policy to be issued hereunder which is in the ordinary form used by the Insurance Company of the West Indies Limited for this class of insurance and which I/We agree to accept.

9 She testified that all the answers she provided were true for the time she was in insurance contract with ICWI. She also agreed that in relation to the question about using the motor vehicle for passenger hire she had stated “no”. She said she could not recall if at that time she was made to understand that if...