The Lion Of Africa Insurance Company Ltd v. Mrs Stella Anuluoha (1972) LLJR-SC

The Lion Of Africa Insurance Company Ltd v. Mrs Stella Anuluoha (1972)

LawGlobal-Hub Lead Judgment Report

SIR I. LEWIS, J.S.C. 

In Suit No. 0/144/64 in the Onitsha High Court the plaintiff was the widow of one Benjamin Anuluoha who was a passenger in a vehicle driven by one P.E. Mofus alias M. Ezeoba; during the journey owing to the negligence of the driver an accident occurred resulting in the death of the plaintiff’s husband. The plaintiff, in a separate action No. 0/131/63, brought a claim against that driver, P.E.Mofus alias M. Ezeoba, under the Fatal Accidents Law, 1956 of the then Eastern Region of Nigeria and recovered in judgment the sum of 34,886pounds together with 80 guineas costs. The plaintiff then brought the present action claiming to recover the total sum awarded to her in suit No. 0/131/63, namely 34pounds, in all, from the present defendants because the defendant in suit No. 0/131/63, the negligent driver, was insured with the present defendants. The plaintiff based her claim on section 10(1) of the Motor Vehicles (Third Party Insurance) Act (Cap. 126 of the Laws of the Federation of Nigeria 1958) which reads:

“10. (1) If after a certificate of insurance has been delivered under the provision of subsection (4) of section 6 to the person by whom a policy has been effected judgment in respect of any such liability as is required to be covered by a policy issued under the provisions of paragraph (b) of subsection (1) of section 6 of this Ordinance, 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 such judgment any sum payable thereunder in respect of the liability including any sum payable in respect of costs and any sum payable by virtue of any written law in respect of interest on that sum or judgment.”

Paragraph 11(b) of the amended statement of defence reads:-

“11. Paragraph 11 of the statement of claim is denied. The defendants shall ask the court to dismiss the plaintiff’s claim on the following grounds …

(b) The judgment is not in respect of a liability required to be covered by compulsory insurance. Therefore the deceased was not a third party within the provisions of Motor Vehicles (Third Party) Insurance Act or Law, consequently the defendant insurance company has no duty to satisfy the said judgment and the plaintiff cannot maintain any right of action directly against the said defendant insurance company.”

On the 31st January, 1966, Kaine J. gave judgment for the plaintiff for the sum claimed of 34pounds, together with 80 guineas costs.

The first point taken in the present case by Mr. Obi Okoye for the insurance company, the defendants, was that the learned trial judge was in error of law when he held that the plaintiff could recover by virtue of the provisions of section 10(1) of the Motor Vehicles (Third Party Insurance) Act when he said:-

“I now come to the first point raised by Mr. Obi Okoye. His contention in a nutshell is that the plaintiff is not entitled to bring this action against the defendant under the provisions of Motor Vehicles (Third Party Insurance) Act because the deceased husband of the plaintiff was a passenger in a private car and according to section 6(1)(b)(ii) of Motor Vehicles (Third Party Insurance) Act he was not deemed to be covered by the third party insurance policy because the vehicle was not a passenger vehicle but Mr. Umeadi said that the policy covered the deceased under section 6(1)(b) of Motor Vehicles (Third Party Insurance) Act and he referred the court to the case of McCarthy v. British Oak Insurance Co. Ltd., the All England Law Reports 1938 Volume 3 page I and he contended that the car was being used for social or pleasure purposes at the time of the accident and not as in the case of Wyatt v. Guildhall Insurance Company Ltd., 1937 the All England Law Reports Vol. 1, page 792 where it was a contract of hiring.

I have to say that I am inclined to agree with Mr. Umeadi. There is nothing in the judgment before me (exhibit B) to show that there was a contract of hiring between the deceased and the insured. The judgment mentioned that the deceased and the insured were friends and that the deceased and the women and the insured were travelling in the car when the accident happened. There was no evidence that any of three passengers paid the insured any money. This in my opinion disposes of the first point raised by Mr. Obi Okoye and I am therefore of opinion that this action is properly laid under section 10(1) of Motor Vehicles (Third Party Insurance) Act and therefore the plaintiff is entitled to judgment.”

It was counsel’s submission that in section 10(1) the words “judgment in respect of any such liability as is required to be covered by a policy issued under the provisions of paragraph (b) of subsection (1) of section 6 of this Ordinance” showed that it was only a liability required to be covered by section 6(1)(b) that made an insurer liable in respect of a judgment given against their insured. He further submitted that when one looked at section 6(1)(b) which reads:-

“6. (1) A policy for the purposes of this Ordinance must be a policy which:-

(b) insures such persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of a motor vehicle covered by the policy:

Provided that such policy shall not be required to cover:-

(i) liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment; or

(ii) save in the case of a passenger vehicle or where persons are carried by reason of or in pursuance of a contract of employment liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting on to or alighting from a motor vehicle at the time of the occurrence of the event out of

which the claims arise; or

(iii) any contractual liability .”,

it is clear that whilst death caused by the motor vehicle covered by the policy must in general be covered the proviso (ii) showed that a policy was not required to cover the case of a passenger in a motor vehicle who was killed unless the motor vehicle was either a passenger vehicle or the person concerned was being carried by reason of or in pursuance of a contract of employment. A “passenger vehicle” was defined in section 2(1) of the Motor Vehicles (Third Party Insurance) Act as “a motor vehicle used for carrying passengers for hire or reward”, so that it is only if the person is being carried for hire or reward that an insured must be covered by a policy. In other words so far as the insurers are concerned it is in their own interest to show that the passenger is not being carried for hire or reward, not the converse. There was no evidence here of either any hire or reward and in our view the basic contention of the defendants is right that they were not required to cover what happened by the insurance so the fact that it was covered by the insurance is immaterial so far as the plaintiff is concerned vis-a-vis the insurers as they cannot be liable under section 10(1) to pay what had been awarded against their negligent insured driver in the earlier action No. 0/131/63. That it is not every case that is covered under section 10(1) we have already indicated in The New India Assurance Co. Ltd. v. Odubanjo SC. 85/1969 (unreported) of the 8th October, 1971 when we said:-

“We turn now to section 10(1) of the Motor Vehicles (Third Party Insurance) Act but to our mind it is not material to the facts pleaded in the present appeal as the plaintiff here was not suing for damages for death or bodily injuries but for damages to his car.”

The provisions of sections 10(1) and 6(1)(b) of the Motor Vehicles (Third Party Insurance) Act are to all intents and purposes in pari materia to section 10 of the Road Traffic Act 1934 and section 36(1)(b) of the Road Traffic Act 1930 in England and as to these provisions Halsbury’s Laws of England 3rd Edition Volume 22 para. 755 says:-

“755. General exclusion of passengers.

Subject to certain exceptions a policy is not required to cover liability in respect of the death of, or bodily injury to, a person being carried in or upon, or entering or getting into or alighting from, the vehicle at the time of the occurrence of the event out of which the claim arises. Anyone who travels as a passenger in a private car has, of course, a right of action against his host, if negligent driving of the host, or of the host’s servant if he is driving within the scope of his employment, results in injuries to the passenger, but this may be a barren remedy if the host is insured only within the compulsory limits. Even if the host has a wider insurance, the direct remedies against the insurance company available to a third party within the range of compulsory insurance will not be open to the passenger.”

Further in Wyatt v. Guildhall Insurance Company [1937] 1 All E.R. 792 Branson J. at page 797 said as to these English provisions:-

“The effect is then that, unless this is a vehicle in which passengers ‘are carried for hire’ in the sense in which one would generally use that kind of expression, as, for instance, ‘a house in which parties are given’ or ‘a shop in which umbrellas are kept,’ that is to say habitually given or kept, I think the proviso applies without the exception and, consequently, upon this ground also the plaintiff would fail.”

Chief Williams for his part on behalf of the plaintiff/respondent conceded that he could not argue that under section 10(1) read in conjunction with section 6(1)(b) of the Motor Vehicles (Third Party Insurance) Act there was any requirement for the insurers to cover the carrying of a passenger as here without hire or reward. Nonetheless he indicated that he would rely on the provisions of section 11(1)(a) of the Motor Vehicles (Third Party Insurance) Act which subsection reads:-

“11. (1) Where under a policy issued for the purposes of this Ordinance a person, hereinafter referred to as the insured, is insured against liabilities to third parties which he may incur, then:-

(a) in the event of the insured becoming bankrupt or making all composition or arrangement with his creditors; or

(b) in the event of the insured being a company and a winding up order being made or a resolution for the voluntary winding-up of the company being passed in respect of the company or a receiver or manager of the company’s business or undertaking being duly appointed or in the event of possession being taken by or on behalf of the holders of any debentures secured by a floating charge, or any property comprised in or subject to the charge,

if either before or after either event any such liability is incurred by the insured his rights against the insurer under the policy in respect of that liability shall, notwithstanding anything in any written law to the contrary contained, be transferred to and vest in the third party to whom the liability was so incurred.”

On this section he further submitted that the establishment of the insured becoming bankrupt or making a composition or arrangement with his creditors was a condition precedent to recovering under this section 11 (1 )(a) and that the plaintiff therefore on the authority of Gates v. W.A. & R.J. Jacobs Ltd. [1920] 1 Ch. 567 did not have to plead it, and it was for the defendants to object to noncompliance which they had not done. The short answer however to this contention, which was never previously advanced in the High Court, is that section 11 was never relied on either in the pleadings or in the evidence or in argument by counsel. Moreover it was not the type of condition precedent contemplated either in Gates v. W.A. & R.I. Jacobs Ltd. (supra) which pertained to the required service of notice under section 14 of the Conveyancing Act 1881 specifying breaches of covenant before an action for recovery of the premises could be brought and where it was held that it was for the defendants to object to non-service of such notice and not for the plaintiff to affirm in pleading the actual service or in Yassin v. Barclays Bank D.c.a. (1968) N.M.L.R. 380 at 387-388 which pertained to a demand in writing for payment as a condition precedent to a guarantee being enforceable. Those are quite different to the position here where a plaintiff can commence an action to recover under the provisions of sections 10(1) and 6(1)(b) of the Motor Vehicles (Third Party Insurance) Act without having recourse in any way to section 11. Section 11 is not in itself an absolute condition precedent to the bringing of any action. If therefore the plaintiff wishes to rely upon the exceptional circumstances set out in section 11 then he must say so in his pleading so as to give notice to the defence of the material facts that he is relying on within the provisions of Order 33, rule 5 of the High Court Rules (under Cap. 61 in volume 4 of the Laws of Eastern Nigeria 1963) which reads:-

“5. Every pleading shall contain a statement of all the material facts on which the party pleading relies, but not the evidence by which they are to be proved, such statements being divided into paragraphs numbered consecutively, and each paragraph containing as nearly as may be a separate allegation.”

This was made abundantly clear in England where though a condition precedent necessary for the case of a party must under the rules be implied in his pleading it has been indicated that an allegation which is of the essence of the cause of action is not a condition precedent within the meaning of the rules and so must still be pleaded in a statement of claim (see Annual Practice of the Supreme Court, 1970 volume 1 page 249). In this present case save as a general proposition oflaw it was never suggested by Chief Williams that in fact there had ever been any bankruptcy of the insured or composition or arrangement by him with his creditors within the terms of section 11 of the Motor Vehicles (Third Party Insurance) Act and we see no merit in this submission.

We would only add that though what we have already indicated is sufficient to dispose of this appeal one other ground of appeal was argued by Mr. Obi Okoye namely that the insurers never had notice of the proposed action as required by section 10(2)(a) of the Motor Vehicles (Third Party Insurance) Act which reads:-

“2. No sum shall be payable by an insurer under the provisions of subsection (1):-

(a) in respect of any judgment unless before or within seven days after the commencement of the proceedings in which the judgment was given the insurer had notice of the bringing of the proceedings.”

It was his submission that a letter the defendants received which was marked ‘without prejudice’ could not be looked at to determine whether from its contents they had the necessary notice, but paragraph 7 of the statement of claim reads:-

“By a letter dated 17th September, 1963 addressed to the Manager of the defendant Company and delivered personally to the above mentioned Felix Echi Onyesoh on 18th September, 1963 the defendants were notified that:-

(i) Messrs. Ezebilo Umeadi & Co. a firm of solicitors were acting for the dependants of the late Benjamin Anuluoha.

(ii) Benhamin Anuluoha had been killed as a result of the negligent driving of the car No. P.H. 5700 by Mr. P.E. Mofus an insured of the said defendants; and

(iii) the aforesaid solicitors have been instructed to commence proceedings against the insured for damages unless the defendants cared to make a move to settle out of court.” ,

and paragraph 7 of the amended statement of defence reads:-

“With regard to the letter dated 17th September, 1963 addressed to the Manager of the defendants company and delivered personally to Felix Echi Onyesoh on 18th September, 1963 as pleaded in paragraph 7 of the statement of claim the defendants admit receipt of the said letter but plead as follows:-

(a) that neither the letter itself nor the contents of it is admissible in evidence as it was a letter written and clearly marked “WITHOUT PREJUDICE”

(b) If the letter were admissible the defendants would contend that:-

(i) it does not constitute notice of the proceedings as contemplated by section 10(2)(a) of the Motor Vehicles (Third Party Insurance) Ordinance Cap. 139;

(ii) it was not a notice of proceedings but a notice of insurance claim for compensation;

(iii) it was bad in law being a conditional notice and as such ineffective;

(iv) it was vague as to who gave the notice.

The defendants therefore deny the rest of paragraph 7 of the statement of claim and contend that the plaintiff is precluded from recovering from the defendants the judgment subject of this claim for want of authority to sue the defendants having failed to give the defendants any notice of proceedings with regard to the said suit 0/131/63.”

All that section 10(2)(a) requires is that “the insurer had notice of the bringing of the proceedings” and to our mind on the pleadings to which we have referred this was clearly admitted so that there was no need for the plaintiff to seek to put in evidence the letter objected to by the defendants on the ground that it was written without prejudice.

We therefore saw no merit in this submission on behalf of the defendants/ appellants but for the other reasons which we have already given the appeal must be and is hereby allowed and the judgment of Kaine J. awarding the plaintiff 34pounds, together with 80 guineas costs is set aside and in its place we order that the plaintiff’s claim be dismissed with 30 guineas costs to the defendants in the High Court. The defendants are entitled to their costs in this appeal which we assess at 44 guineas.

SC.397/1966