BUKARI v. NORWICH FIRE INSURANCE SOCIETY LTD. [1966] GLR 525

Division: HIGH COURT, TAMALE

Date: 21 JUNE 1966

Before: CHARLES J.

NATURE OF PROCEEDINGS

ACTION by the plaintiff for a declaration that the defendants were liable to pay to the plaintiff the judgment debt awarded in his favour against the owner of a vehicle insured by the defendants. The facts are sufficiently set out in the judgment.

COUNSEL

E. O. Appiah for the plaintiff.

Bob Anane for the defendants. [p.526] of [1966] GLR 525

JUDGMENT OF CHARLES J.

The plaintiff’s claim is for:

“(1) A declaration that the judgment dated 1 June 1965 obtained by the plaintiff against Iddrisu Teaore for the sum of £G3,500 0s. 0d. (¢8,400.00) and £G105 costs (¢252.00) in an action in the High Court of Ghana, Tamale, entitled Mama Bukari v. Iddrisu Teaore No. 65/1964 was in respect of a liability required to be covered by a policy of insurance or a security under the Motor Vehicles (Third Party Insurance) Act, 1958.

(2) A declaration that by the joint effect of the provisions of a policy of insurance bearing number 77/BM4099 and a certificate of insurance with number 4099 issued by the defendants in favour of the said Iddrisu Teaore for the period 29 August 1962 to 28 August 1963 and the provisions of the Motor Vehicles (Third Party Insurance) Act, 1958, the defendants are liable to pay to or to the satisfaction of the plaintiff the sum of £G3,605 (¢8,652.00) being the sum payable under the said judgment including costs.

(3) The said sum of £G3,605.00 (¢8,652.00) with interest thereon at the rate of five per centum per annum.”

This action arises out of a motor accident on 16 August 1963 in which the plaintiff sued Iddrisu Teaore in the High Court, Tamale, and obtained judgment on 1 June 1965 for £G3,500 being damages awarded to him for personal injuries suffered by him as a result of the accident with costs assessed at £G105. At the material time of the accident Iddrisu Teaore was issued with a policy of insurance by the defendants in respect of motor vehicle No. AS 3541 under which the defendants undertook to indemnify Iddrisu Teaore against claims and costs which Iddrisu Teaore might have been legally liable to pay in respect of injuries caused by or arising out of the use of the said motor vehicle in compliance with the provisions of the Motor Vehicles (Third Party Insurance) Act, 1958,1 (hereinafter referred to as the Act). The facts in this case are not in dispute. The sole issue in this case is whether the plaintiff can invoke the provisions of section 10 (1) of the Act and thereby obtain an order from this court to compel the defendants to satisfy the judgment and costs awarded to him against Iddrisu Teaore.

It therefore behoves me to consider the relevant sections of the Motor Vehicles (Third Party Insurance) Act, 1958, to decide this issue. Section 6 (1) reads as follows:

[p.527] of [1966] GLR 525

“6. (1) A policy of insurance for the purposes of this Act must be a policy which—

(a) is issued by an insurer approved by the Minister; and

(b) insures such persons or classes of person 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—

(a) 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

(b) 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

(c) any contractual liability.”

Section 8 reads as follows:

“8. Any condition in a policy or security issued or given for the purposes of this Act providing that no liability shall arise under the policy or security, or that any liability so arising shall cease in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy or security, shall be of no effect in connection with such claims as are set out in paragraph (b) of subsection (1) of section 6:

Provided that nothing in this section shall be so construed as to render void any provision in a policy or security requiring the person insured or secured to repay to the insurer or the giver any sums which the insurer or the giver of the security may have become liable to pay under the policy or the security and which have been applied to the satisfaction of the claims of third parties.”

[p.528] of [1966] GLR 525

Section 10 (1) reads as follows:

“10. (1) If after a certificate of insurance has been delivered under the provisions 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, 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 for such judgment any sum payable thereunder in respect of the liability including any sum payable in respect of costs and any sums payable by virtue of any written law in respect of interest on that sum or judgment.” Under section 6 (1) (b) only a certain class of persons are required to be insured under the Act and paragraph (b) of the proviso to this section excludes liability in respect of death of or bodily injury to persons being carried in a motor vehicle at the time of the accident unless that person was travelling in a passenger vehicle or was being carried by reason of or in pursuance of a contract of employment. The evidence disclosed that at the time of the accident the motor vehicle was not a passenger vehicle nor was the plaintiff being carried by reason of or in pursuance of a contract of employment. As motor vehicle No. AS 3541 was a private car and as the plaintiff was under no obligation to pay nor did he pay any fare for travelling in the said vehicle it was not necessary under the Act for Iddrisu Teaore to take out a policy in respect of such a person as the plaintiff. However, the policy issued by the defendants to Iddrisu Teaore covered liability wider than was necessary to be done under the Act.

Counsel for the defendants submitted that as the liability in respect of which judgment was entered against Iddrisu Teaore was not required to be covered by a policy issued under the provisions of paragraph (b) of subsection (1) of section 6 then there will be no duty on the insurers (the defendants) to satisfy the judgment in respect of the injuries received by the plaintiff under section 10 (1) of the Act. Counsel for the plaintiff contends that as long as the policy issued by the defendants to Iddrisu Teaore covers the injuries suffered by the plaintiff then the defendants will be liable to satisfy the judgment entered in favour of the plaintiff against Iddrisu Teaore. In support of his contention he refers to the phrases “being liability covered by the terms of the policy” in section 10 (1) of the Act and argues that if the right of a third party under section 14 (1) of the [p.529] of [1966] GLR 525 Act to recover damages from an insurance company was only limited to the liability required to be covered under the Act, then there would be no necessity to include the phrase quoted above. Under section 10 (5):

“‘liability covered by the terms of the policy’ means a liability which is covered by the policy or which would be so covered were it not that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy; and

‘material’ means of such a nature as to influence the judgment of a prudent insurer in determining whether he will accept the risk and if so, at what premium and on what conditions.”

In my opinion the operative words in section 10 (1) of the Act are “judgment in respect of any such liability as is required to be covered by a policy issued under the provision of paragraph (b) of subsection

(1) of section 6.” If it was the intention of the Act to make an insurer liable for an injury which is not requited to be covered under the Act then the word “required” would not have been used in section 10 (1) of the Act. The phrase “being a liability covered by the terms of the policy” means being a liability which is required to be covered by the policy under section 6 of the Act. I am fortified in my opinion by the fact that this Act saddles an insurer with liability to a third party even though there is no privity of contract between the insurer and the third party, but this liability of the insurer only arises in respect of injuries which are required to be covered by the policy under the Act by virtue of which the insurer can be held liable under the provisions of the Act.

I therefore hold that the plaintiff is not entitled in law to invoke the provisions of subsection (1) of section 10 of the Act to obtain an order against the defendants to satisfy the judgment entered in favour of the plaintiff against Iddrisu Teaore. The claim of the plaintiff against the defendants is accordingly dismissed and judgment is entered in favour of the defendants with costs assessed at ¢480.00 inclusive of fee to counsel.

DECISION

Judgment for the defendants.

S. K. T.