POKUA vs. STATE INSURANCE CORPORATION [1973] 1 GLR 335

CASES REFERRED TO

(1) Bright v. Ashford [1932] 2 K.B. 153; 101 L.J.K.B. 318; 147 L.T. 74; 96 J.P. 182; 48 T.L.R. 357;

76 S.J. 344; 30 L.G.R. 212; 29 Cox. C.C. 455, D.C.

(2) Gray v. Blackmore [1934] 1 K.B. 95; [1933] All E.R. Rep. 520; 103 L.J.K.B. 145; 150 L.T. 99; 50 T.L.R. 23; 77 S.J. 765.

(3) Owusu v. Royal Exchange Assurance, Supreme Court, 21 June 1965, unreported; digested in (1965) C.C. 152.

(4) State Insurance Corporation v. Mansah, Court of Appeal, 23 December 1968, unreported; digested in (1969) C.C. 41.

(5) Elliott v. Grey [1960] 1 Q.B. 367; [1959] 3 W.L.R. 956; [1959] 3 All E.R. 733; 124 J.P. 58; 103 S.J. 921, D.C.

(6) Ellis v. Hinds [1947] 1 K.B. 475; [1947] 1 All E.R. 337; [1947] L.J.R. 488; 176 L.T. 424; 63 T.L.R. 181; 91 S.J. 68, D.C.

[p.339] of [1973] 1 GLR 335

(7) Marsh v. Moores [1949] 2 K.B. 208; [1949] 2 All E.R. 27; [1949] L.J.R. 1313; 113 J.P. 346; 65 T.L.R. 318; 93 S.J. 450; 47 L.G.R. 418, D.C.

(8) Monk v. Warbey [1935] 1 K.B. 75; [1934] All E.R. Rep. 373; 104 L.J.K.B. 153; 152 L.T. 194; 51 T.L.R. 77; 78 S.J. 783, C.A.

(9) Hardy v. Motor Insurers’ Bureau [1964] 2 Q.B. 745; [1964] 3 W.L.R. 433; [1964] 2 All E.R. 742, C.A.

(10) Heydon’s Case (1584) 3 Co.Rep. 7a; 76 E.R. 637.

(11) New Great Insurance Co., of India Ltd. v. Cross [1966] E.A. L.R. 90; (1965) A.L.R. Comm. 449, E.A.C.A.

(12) Royal Exchange Assurance v. Sosu, Court of Appeal, 4 May 1970, unreported. (13) Rogerson v. Scottish Automobile and General Insurance Co., Ltd. (1931) 146 L.T. 26; 48 T.L.R.

17; 75 S.J. 724; 37 Com.Cas. 23, H.L.

(14) Herbert v. Railway Passengers Assurance Co., Ltd. [1938] 1 All E.R. 650; 158 L.T. 417. (15) Bonham v. Zurich General Accident and liability Insurance Co., Ltd. [1944] 2 All E.R. 573; 171 L.T. 372; 61 T.L.R. 59; reversed, [1945] K.B. 292; [1945] 1 All E.R. 427; 114 L.J.K.B. 273; 172 L.T. 201; 61 T.L.R. 271, C.A.

(16) Wyatt v. Guildhall Insurance Co., Ltd. [1937] 1 K.B. 653;[1937] 1 All E.R. 792; 106 L.J.K.B. 421;

156 L.T. 292; 53 T.L.R. 389; 81 S.J. 358.

(17) Koah v. Royal Exchange Assurance, High Court, Cape Coast, 26 April 1968, unreported; digested in (1968) C.C. 79.

(18) Tattersall v. Drysdale [1935] 2 K.B. 174; [1935] All E.R. Rep. 112; 104 L.J.K.B. 511; 153 L.T. 75;

51 T.L.R. 405; 79 S.J. 418.

(19) Godwin v. Lecky 1945 N.I.L.R. 40.

(20) Evans v. Walkden [1956] 1 W.L.R. 1019; [1956] 3 All E.R. 64; 120 J.P. 495; 100 S.J. 587; 54 L.G.R. 467.

(21) Revell v. London General Insurance Co. [1934] All E.R. Rep. 744; 152 L.T. 258; 50 L1.L.Rep.

114.

NATURE OF PROCEEDINGS

APPEAL from the ruling of a circuit court, dismissing an action by the appellant against the respondents, the insurers, for satisfaction of a judgment debt under section 10 (1) of the Motor Vehicles (Third Party Insurance) Act, 1958. The facts are fully set out in the judgment of Bentsi-Enchill J.S.C.

COUNSEL

Dapaah for the appellant.

H. P. Swaniker (with him Pobee for the respondents).

JUDGMENT OF BENTSI-ENCHILL J.S.C.

The question raised by this appeal is of obvious public importance affecting not only insurance companies but everybody else, whether as insured motorists or as the potential victims of motor accidents. Does our Motor Vehicles (Third Party Insurance) Act, 1958 [p.340] of [1973] 1 GLR 335 (No. 42 of 1958), hereinafter referred to as the Act, place any restrictions on the contractual freedom of insurance companies to issue third party policies subject to conditions which can result in avoiding liability to third parties injured as a result of the use of vehicles required to be covered by such insurance? More specifically, where a policy of third party motor insurance contains a suspensory condition rendering the policy inoperative whenever the insured vehicle is driven by someone other than the person named in the policy as the driver, is the insurer nevertheless rendered liable by the Act to a third party injured whilst the vehicle is being driven by someone other than the named driver? The facts of the case giving rise to this question are as follows:

(1) Facts and issues of the case

By a judgment of the Circuit Court, Kumasi, dated 13 July 1967 Adjoa Pokua, the appellant in this case, was awarded ¢2,400 with ¢200 costs against one C. Y. Bandoh in respect of personal injuries caused by the negligent driving of one Ibrahim Moshie, a driver then in charge of Bandoh’s vehicle insured by the State Insurance Corporation, the respondents in this appeal.

Following this judgment the appellant instituted proceedings in the same court claiming that the respondents as insurers of the said vehicle in accordance with the provisions of the Act, were liable under section 10 thereof to satisfy the judgment thus obtained by her against Bandoh.

This action did not proceed to trial, and the only evidence additional to what may be gathered from the pleadings was documentary, consisting of the policy of third party insurance issued to Bandoh by the respondents which was marked exhibit B, the certificate of insurance relating to this policy marked exhibit A and the judgment in the case entitled, Adwoa Pokua v. C. Y. Bandoh by which the appellant was awarded the damages and costs mentioned above.

It is evident from these documents that the facts relied on by the parties for their main contentions in the pleadings are indisputable, notwithstanding the respondents’ general traverse of the appellant’s statement of claim. And this presumably explains why, upon the close of the pleadings and at the request of the appellant’s counsel in the summons for directions, an order was made for preliminary argument on the issues of law raised on the pleadings. Following the preliminary argument which covered many days, a brief, clear and straightforward ruling was delivered by his honour Judge Apatu-Plange, the learned circuit court judge, by which he held that the appellant’s claim must fail. It is from this ruling that the present appeal has been brought.

It seems to me necessary to point out by way of a practice direction that, since the respondents by their statement of defence did not admit the averments in the appellant’s statement of claim, the mere fact that they also raised a point of law does not justify the procedure

[p.341] of [1973] 1 GLR 335 adopted in the court below. In circumstances of this kind where the resolution of issues of law depends on findings regarding disputed issues of fact, it is the peculiar province of the court of first instance to make the requisite findings of fact either upon trial or pursuant to admissions made by the parties before proceeding to determine the consequential issue of law. There happen to have been orders made at the summons for directions stage requiring the respondents to admit certain facts and to produce the proposal form referred to in their statement of defence, neither of which was complied with. Nor, indeed, even at this appeal has the request by this court for the respondents to exhibit the proposal form been complied with, apparently because they cannot find it. The respondents by their defence raised the objection that they had received no official notification of the judgment relied on by the appellant and put the appellant to strict proof thereof; but their counsel has indicated they are not pressing that point.

Fortunately, as indicated above, the documents tendered and forming part of the record of proceedings make it possible to conclude that the facts behind the essential contentions of both parties are indisputable and thus to determine this appeal in a way that need not require the delays of a reference back to the court below for finding regarding disputed issues of fact.

These facts and legal contentions must therefore be set out here with the requisite fullness. On the side of the appellant the following assertions of facts can be said to have been established:

(1) That Bandoh held a policy of third party insurance, numbered CV253822, issued by the respondents.

(2) That by section II-1 (I) of the said Policy the respondents undertook to indemnify Bandoh against all sums including claimant’s costs and expenses which he should become liable to pay in respect of death of or bodily injury to any person caused by or arising from the use of vehicle No. AT 2305.

(3) That by sections II-III of the said policy, the respondents undertook to indemnify any driver whom Bandoh ordered or permitted to drive the said vehicle.

(4) That the said policy specifically covered the following uses of the said vehicle, namely “use for carriage of passengers or goods in connection with the insured’s business and use for social, domestic and pleasure purposes.”

(5) That the appellant was a passenger on the said vehicle at the time of the accident that caused her bodily injuries and that the vehicle was at the time being used for carrying passengers; and that she was awarded ¢2,400 damages and ¢200 costs against Bandoh in respect of her injuries which were caused by the negligent driving of the vehicle by Ibrahim Moshie in the course of his employment as Bandoh’s driver.

[p.342] of [1973] 1 GLR 335

On the basis of these facts the following legal submissions were made on behalf of the appellant:

(a) that the respondents are liable under the policy to indemnify Bandoh in respect of the damages and costs which he is required to pay under the judgment in respect of the negligence of his servant Ibrahim Moshie,

(b) that the said liability incurred by Bandoh in respect of the use of the said vehicle is precisely the kind of risk required, under section 6 (1) (b) of the Act, to be covered by a policy,

(c) that the said vehicle was in fact insured, and certified by the respondents to have been insured, as a passenger vehicle in accordance with the requirements of the Act, and

(d) that the respondents are liable under section 10 (1) of the Act to satisfy the judgment thus obtained by her against Bandoh.

The respondents’ answer to the legal assertions based on the facts stated above is founded on one solid, indisputable fact. The policy contained an endorsement cyclostyled on a slip of paper and attached to the part of the policy headed “conditions.” That endorsement states, “It is hereby agreed and declared that this policy shall be inoperative whilst the motor vehicle is being driven by or is for the purpose of being driven in the charge of any person other than K. Amoah.” It is to be observed further that the policy is expressed to be “subject to the terms exceptions and conditions herein or endorsed or otherwise expressed hereon.” On the basis of this fact that the respondents contended that “since by virtue of the fact that the plaintiff admits that one Ibrahim Moshie was driving the vehicle at the time it was involved in the accident, the policy became inoperative and [they] cannot be called upon to satisfy this judgment.”

To this defence the appellant replied with the contention that the suspensory condition in the policy pleaded by the respondents is illegal and unenforceable against her on the grounds of public policy in that (a) it defeats the purpose, object and policy of the Act and (b) (I think this is what was intended to be said, though the actual pleading here is difficult to follow) that it has the effect of enabling the respondents to evade their duty under section 6 (1) (b) of the Act to indemnify Bandoh in respect of any liability that he might incur in respect of the use of the vehicle.

These, then, are the issues of law upon which Judge Apatu-Plange made the ruling dismissing the appellant’s claim and from which this appeal has been brought. They are issues which obviously require the interpretation of the policy and of the Act.

Now, whatever may be said regarding the merits of the conclusion arrived at by the learned circuit judge, it cannot, I think, be denied that a major part of the reasoning with which he supported his conclusion was not adequately responsive to the complexities of the issues with which he was confronted. He perceived, correctly in my view, that the main question for determination is whether or not the

[p.343] of [1973] 1 GLR 335 suspensory provision in Bandoh’s policy offends against the Act. But his ruling, which indeed refers to sections 6 and 10 of the Act, does not really undertake the consequential tasks of statutory interpretation thereby raised. He makes affirmations concerning the sanctity of contract as follows: “It is to be noted that insurance policies are specific contracts entered into between the insurer and the policy holder, and both parties are bound by the terms of the contract which both executed.” Again he states:

“As already indicated nothing in the Motor Vehicles (Third Party Insurance), Act, 1958, prohibits insurance companies from imposing any and every condition that they may choose to impose. Consequently, there is nothing that the court can do than to enforce the terms of the policy to the letter. It is up to Parliament to impose any restrictions they choose if they find it necessary, but as the law stands at present it will be difficult for a court of law to overlook an express provision in any policy that operates in either party’s favour.”

Those affirmations manifestly overlook various explicit provisions of the Act. In view of my disagreement with much of the reasoning of the court below it becomes necessary to undertake a careful interpretation of the relevant sections of the Act as well as of the insurance policy to see whether we are necessarily led to the same conclusion as was arrived at in the court below.

This is all the more necessary because, as will appear from what follows, this is the first time that this court has been squarely faced with the specific issue raised in this appeal. Furthermore there are important reasons why this court should not follow many of the British decisions in this field (on two of which Judge Apatu-Plange relied), notwithstanding the fact that the provisions of our Act have been borrowed from British legislation.

(2) Justification for an independent interpretation of the Act

Among these reasons are the following: In the first place our one enactment is based on incomplete borrowings from three successive British enactments, namely, the Third Parties (Rights against Insurers) Act, 1930 (20 & 21 Geo. 5, c. 25), the Road Traffic Act, 1930 (20 & 21 Geo. 5, c. 43), and the Road Traffic Act, 1934 (24 & 25 Geo. 5, c. 50). Each of the two later enactments sought to close gaps in the pre-existing law when viewed in terms of the express concern to protect injured third parties. Therefore there are pre-1934 British decisions construing provisions of the 1930 legislation which are impliedly reversed by the 1934 enactment. Instances of several such decisions are Bright v. Ashfold [1932] 2 K.B. 153, D.C. and Gray v. Blackmore [1933] All E.R. Rep. 520 which have been cited in this appeal without reference to the effect of the 1934 enactment on them. Their persuasiveness therefore becomes suspect when applied to our comprehensive enactment which [p.344] of [1973] 1 GLR 335 includes provisions from the 1934 legislation; for in construing any particular section of our Act our courts are both obliged and enabled to have regard to other sections of our Act borrowed from the later British legislation.

Secondly, the persuasiveness of many pre-1946 British decisions construing the provisions of the said 1930 and 1934 legislation can be seen to have been rendered suspect by the massive criticism implied in the Motor Insurers’ Bureau Agreement of 1946. This is an agreement made with the British Minister of Transport by the Motor Insurers’ Bureau, an incorporated central organisation of insurers transacting compulsory motor insurance business in Great Britain. By this agreement the insurers in effect undertook to meet various liabilities from them, which the court decisions had exonerated, liabilities which can, I think, be shown to have been expressly intended by the said legislation.

In essence the insurers undertook, as stated in Halsbury’s Laws of England (3rd ed.), Vol. 22, pp. 382-383, that:

“[I]f judgment in respect of a liability compulsorily insurable [under the legislation referred to above] is obtained in any court in Great Britain against any person or persons, whether in fact covered by a contract of insurance or not, and the judgment is not satisfied in full within seven days from the date when it becomes enforceable . . . then the bureau will, subject to the fulfilment of certain conditions, pay to the judgment creditor any sum then payable or remaining payable under the judgment in respect of that liability, including taxed costs or such portion thereof as is attributable to that liability.”

(The emphasis is mine.) The effect of this agreement coupled with the supporting arrangements made by the insurers among themselves under the “Domestic Agreement” was to give the protection required by the legislation for injured third parties irrespective of the restrictions in the insurance policy actually issued, provided the accident flowed from a compulsorily insurable user of the motor vehicle concerned. It thus implemented the purposes of the legislation whilst leaving the insurers free to pursue their contractual remedies against the insured or their tort remedies, where necessary, against offending negligent motorists. This had the result of negativing the effect of the somewhat narrow and frustrating judicial interpretation of this legislation and of rendering it largely unnecessary any longer to call on the British courts to consider as between third party and insurer or insured any problems relating to third party insurance. In the result further legislation by the reforming post-war Labour Government aimed at ensuring the more effective implementation of the purposes of the existing enactments was averted.

These events which took place before our legislation was introduced make it more than usually necessary to be circumspect in the use of the pre-1964 British case law as a guide to the interpretation of our Act. Certainly, where more than one interpretation is possible regarding

[p.345] of [1973] 1 GLR 335 any provision of our Act the clear duty of this court must be to prefer the interpretation that manifestly effectuates the express purposes of our Act.

Another important point of difference between the situations in Ghana and Britain is the availability to our courts of rules of law derived from other jurisdictions than Great Britain. The Interpretation Act, 1960 (C.A. 4), s. 17 (4) specifically empowered our courts, when deciding upon a rule of common law to “have regard to any exposition of the rule by a court exercising jurisdiction in any country.” And the Courts Act, 1971 (Act 372), has provided in section 49 (1), r. 7 that:

“[I]n the determination of any issue arising from the common law or customary law the Court may adopt, develop and apply such remedies from any system of law (whether Ghanaian or non-Ghanaian) as appear to the Court to be efficacious and to meet the requirements of justice, equity and good conscience.”

It follows from these provisions that, in our approach to the problem of enforcing third party rights in motor insurance cases, we need not be hamstrung by those English doctrines of privity that heavily influenced the British interpretation of sections of their third-party legislation which we have borrowed. For, these sections of the Interpretation Act, 1960, and the Courts Act, 1971, that I have referred to above, furnish our courts with the necessary independent authority to develop a different doctrinal position on third party rights.

The question may well be asked, for example, whether quite apart from the right of action accorded to injured third parties by section 10 of the Act our courts do not have an independent basis for according protection to such third parties whenever the liability is covered by a policy of third party insurance, having regard to the combined effect of the provision just referred to and the policy of our Contracts Act, 1960 (Act 25), which provides for the enforcement of third party rights in Ghana. Section 5 (1) of the Contracts Act, 1960, admittedly gives a right of action only to third parties for whose benefit a contract has been made. But contracts of third party insurance required to be entered into by the Act are obviously intended for the benefit of third parties. And even when not so required by the Act, such contracts, notwithstanding their formal aspect of being contracts of indemnity, are in ultimate substance and effect contracts made for the benefit of injured third parties. On the basis of this line of reasoning our courts might well hold that third parties can sue the insurance companies directly in such cases, contrary to dicta in Owusu v. Royal Exchange Assurance, Supreme Court, 21 June 1965, unreported, digested in (1965) C.C. 152 and State Insurance Corporation v. Mansah, Court of Appeal, 23 December 1968, unreported; digested in (1969) C.C. 41, which were focused solely on section 10 of the Act. All this is stated only by way of indicating lines of independent development available to our courts on the basis of existing Ghanaian law. But

[p.346] of [1973] 1 GLR 335 it also suggests that Ghanaian decisions like those referred to above which overlook the relevance of these enactments may well have been arrived at per incuriam.

It is pertinent in this regard to note as stated by Keeton and O’Connell in their book, Basic Protection for the Traffic Victim (1965) at p. 202 that as far back as 1926 the French Cour de Cassation (i.e. the court at the summit of the regular courts in France) gave to the victim of an insured tortfeasor a “direct action” against the insurer, and this right was subsequently recognised in legislation. On the same page it is stated at footnote 20 that:

“Judgment of June 14, 1926, Cour de Cassation. (Ch. civ.), [1927] D.I. 57 (report Collin, note Josserand), [1927] S.I. 25 (note Esmein). The right of direct action against the insurer was made statutory by Law of July 13, 1930, art. 53, [1930] Journal Officiel 8003, 8004 (France). See I. M. Picard and A. Besson, Les assurances terrestres en droit francais . . . s. 379 et seq. (2nd ed. 1964, Paris) . . . “

We are told at the same page that:

“The resulting benefit is not solely procedural. The victim’s right against the insurer is not defeated by any breach of the insurance contract by the tortfeasor. Normally the tortfeasor does not bear any part of the judgment and has no interest in the litigation; rather, the victim and the insurer alone are interested parties.”

So say Professors Keeton and O’Connell in their epoch-making book, Basic Protection for the Traffic Victim, cited above, relying for this proposition on G. Viney, Le declin de la responsabilite individuelle [The Decline of Individual Liability] (1964 Paris) a book which I have been unable to lay hands on myself.

It is to be observed further that the construction by the French courts of the Civil Code provisions relating to tort liability has been sufficiently favourable to victims of traffic accidents to forestall the enactment of a special compensation statute. (See generally Esmein, “Liability in French Law for damages caused by motor vehicle accidents,” 2 Am. J. Comp. L. 156 (1953).)

It may well be open to us here in Ghana, equipped as we are with a compensation statute in the form of the Act under consideration in this appeal, to interpret it in such a way as advances the purposes for which it was enacted. In this undertaking some reassurance may be derived from a study of the efforts being made everywhere to meet this world-wide problem of ensuring provision for the victims of automobile accidents. These, then, are some of the reasons why many of the decisions of British courts on the provisions which are the origin of our comprehensive Act are, in these particular circumstances, of somewhat less persuasive authority than they would otherwise be.

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(3) Interpretation and application of the Act

Against the background of the foregoing observations we can now turn to a systematic interpretation of the relevant sections of our Act. In this regard it should be unnecessary to say more by way of preliminaries than that it is important to see the statute as a whole and to read its various sections in their relation to each other and in the light of its object and purpose.

It so happens that the overriding object, intent and purpose of the Act are very clearly indicated in the long title to the Act and in the formulation and design of its various express provisions. It is expressed to be “An Act to make provision for the protection of third parties against risks arising out of the use of motor vehicles, and for purposes incidental thereto.” To achieve this purpose three principal devices borrowed from the different British enactments are employed. In the first place the intended protection for third parties against the risks of motor vehicle user is sought to be achieved by the obligatory requirement, on pain of severe punishment, of third party insurance cover for any and every user of a motor vehicle; and the insurance cover must be one that satisfies the requirements of the Act. The Act provides in section 3 (1) and (2) as follows:

“3. (1) Subject to the provisions of this Act no person shall use, or cause or permit any other person to use, a motor vehicle unless there is in force in relation to the user of that motor vehicle by such person or such other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the provisions of this Act.

(2) Any person acting in contravention of this section shall be liable on conviction to a fine not exceeding two hundred pounds or to imprisonment for one year or both such fine and imprisonment and a person convicted of an offence under this action shall be disqualified from holding or obtaining a driving licence.”

It is evident that the third party insurance cover required by this section, even when considered on its own, is for every user of a motor vehicle, including user for which a person is vicariously responsible. If “no person,” whether by himself or through the agency of another, may use a motor vehicle unless there is third party insurance cover for such user, then every user of a motor vehicle is required to be covered. The owner of a vehicle, that is to say, must have insurance cover for any use that he may put his vehicle to as well as for any use that he may cause or permit any other person to have of his vehicle; and this clearly includes any use that he can properly be held either directly or vicariously or by necessary implication from his conduct to have permitted another person or persons to have of his vehicle. The only qualification of the foregoing argument consists in certain excepted

[p.348] of [1973] 1 GLR 335 liabilities specified in the proviso to section 6 (1) (b) of the Act referred to later. As to the word “use,” it is obviously employed in the broadest possible sense. See the construction of the word by Lord Parker C.J. in Elliott v. Grey [1959] 3 All E.R. 733 at p. 736, D.C.

At this juncture the words of Lord Goddard C.J. in Ellis v. Hinds [1947] 1 K.B. 475 at pp. 48-45, D.C., a case cited by counsel for both parties to this appeal become apposite:

“It is to be observed that the section says nothing about driving; it refers to the use of the vehicle. No doubt the owner of a car who drives himself uses the vehicle, but so he does if it is driven on his account by his servant … A person who rides in his car while it is being driven by someone else or who sends his driver out with his motor vehicle on business, uses, but does not drive, the vehicle. In the latter case, clearly, he causes his driver to use the vehicle. If when the owner is driving, or the car is being driven by the servant on the employer’s business, so that the owner would come under liability if death or personal injury is caused to a third person by the negligence of the driver, and the liability of the owner is covered by insurance, in our opinion it is clear that there is in force relation to the user of the vehicle whether by the owner or driver, a policy of insurance. The appellants in this case were using the vehicle which was being driven by their servant. If their liability for accidents was covered, there was in force a policy in relation to the user of the vehicle by another person although that person’s separate liability was not covered.”

No one can reasonably quarrel with the foregoing interpretation, and this is the part of the judgment on which Mr. Dapaah for the appellant relied, including the holding which emerges clearly from that judgment that where a person who causes or permits another person to use a vehicle on the road holds a policy covering such user, he is not required by section 35 of the Road Traffic Act, 1930, (our s. 3 of the Act) to see that there is in existence a separate policy in relation to the person whom he causes or permits to use the vehicle. This was also the holding in Marsh v. Moores [1949] 2 K.B. 208, D.C.

But Lord Goddard in Ellis v. Hinds (supra) at p. 485 went on and this is the part of the judgment relied on by Mr. Swaniker, for the respondents, as follows:

“If the owner of a car who has covered his own liability by a policy lends it to a friend he will commit an offence unless either his own policy extends to cover liability incurred by the friend while driving, or the friend has a policy which will indemnify him while he is driving another person’s car. It is not unusual for an owner to effect a policy which covers only liability incurred either by himself alone or by himself and another named person; in such a case use of the car by any other person would not be covered by the policy.”

[p.349] of [1973] 1 GLR 335

This also is unexceptionable so far as pure insurance law goes. A policy covers what the parties have agreed it should cover, and policies are variously tailored to meet various requirements. But as Greer L.J. put it in Monk v. Warbey [1932] 1 K.B. 75 at p. 80, C.A., “the Road Traffic Act, 1930 was passed for the very purpose of making provision for third parties who suffered injury by the negligent driving of motor vehicles by uninsured persons to whom the insured owner had lent such vehicles.” And the relevant question demanding answer is whether an owner and an insurance company, notwithstanding their common law freedom to contract as they please, are at liberty to make any kind of agreement that does not cover the vicarious liability of the owner in this manner under a third party insurance contract in view of the provision in section 3 of the Act that the policy demanded by that section must be one that satisfies the requirements of the Act. For, as we have seen, that section requires not only that every user must be covered by a third party policy but also that such a policy must satisfy the requirements of the Act.

The question therefore arises: what are the requirements which must be satisfied by the insurance cover thus demanded by section 3 for every user of a motor vehicle? It is in the spelling out of these requirements, mainly in section 6 of the Act, that we encounter the second implementing device. That section provides as follows:

“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— . . .

(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 arises;

. . .

(3) Notwithstanding anything in any written law contained a person issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of person specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of person.

(4) A policy shall be of no effect for the purposes of this Act unless and until there is issued by the insurer to the person by whom the policy is effected a certificate, in this Act referred to as

[p.350] of [1973] 1 GLR 335 a certificate of insurance, in the prescribed form and containing such particulars of any conditions subject to which the policy is issued and of such other matters as may be prescribed.”

(The emphasis is mine.)

It emerges, then, that the mandatory requirements regarding third party insurance policies issued in compliance with the provisions of this Act are mainly two. First there is the requirement in section 6 (1) (a) and section 6 (4) that such policies may be issued only by approved insurers, and that a policy issued by an approved insurer will be of no effect unless the insurer issues a further document, called a certificate of insurance, in a prescribed form. The prescribed form, be it noted, as laid down by the Motor Vehicles (Third Party Insurance) Regulations, 1959 (L.N. 12), and as evidenced by the certificate of insurance exhibit B in this case, is one that requires the insurer to certify that “the policy of insurance to which this certificate relates is issued in accordance with the provisions” of the Act.

Secondly, and perhaps even more important is the requirement of section 6 (1) (b). As already indicated above, this paragraph excepts certain liabilities in its proviso (b). These exceptions are of course important as showing that our Act does not extend protection to third parties in respect of injuries arising from the excepted types of user. But they are irrelevant to this case which is concerned with the use of a motor vehicle as passenger vehicle, a use required to be covered by insurance.

Apart then from the specific exceptions, section 6 (1) (b) imposes the requirement that the policy thus issued must be one that covers any liability that may be incurred by the person or classes of person insured by the policy. That this is the meaning of section 6 (1) (b) in relation to the insured Bandoh in this case seems to me to be inescapable.

For since, as we have seen, the owner of a motor vehicle is obliged by section 3 to obtain third party insurance cover for risks arising from his use of the vehicle, it follows from the requirement laid down in section 6 that he must be a “person specified” in the policy obtained by him, and the policy must be one that insures him, the owner, Bandoh in this case, in respect of any liability that may be incurred by him concerning the death of or bodily injury to any person caused by or arising from the use of the motor vehicle. An insurance policy necessarily specifies whom and what it insures. Under the common law and in the absence of legislative prescription parties are free to agree on a policy that is wide or narrow in its coverage, i.e. as to whom and what it insures. But section 6 (1) (b) prescribes that the coverage given by a policy issued in compliance with the Act, i.e. the insurance “of such persons or classes of person as may be specified in the policy,” i.e. the insurance of Bandoh in this case, shall cover any liability that may be incurred by the insured persons or classes of person, i.e. any liability that may be incurred by Bandoh.

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That is to say that the words “such persons or classes of person as may be specified in the policy” are not to be taken as implying that the parties are free to specify whom they please in a policy issued in compliance with the Act, an implication which, in my view has often been wrongly read into them. These words do no more than refer to the fact that insurance policies necessarily specify whom and what they insure, the effect of the section being to require, regarding policies issued in compliance with the Act, that such policies must insure the person or persons thus specified in respect of any liability which may be incurred by him or them, etc.

That is to say that the combined effect of sections 3 and 6 is to place an obvious restriction on the otherwise unquestionable freedom of persons seeking third party insurance cover, and of approved insurers, to cover what risks and what liabilities they please. The owner of a motor vehicle must, in compliance with section 3 of the Act, have a policy of third party insurance in force in respect of his user of the vehicle. To comply with the Act the said policy must be one that specifies him as a person insured by the policy, and the policy must insure him in respect of any liability that may be incurred by him in respect of the death of or bodily injury to any person arising out of the use of the motor vehicle.

It may insure others besides the owner, such for example as a named driver; but it must insure the owner as required by section 3, and this insurance must, as prescribed by section 6 (1) (b), cover the owner in respect of any liability that may be incurred by him in the manner indicated. This is the measure of the restriction and the duty imposed by the Act on the owner of a motor vehicle. He is therefore not at liberty to contract for a more limited coverage if he is to comply with the requirements of the Act, as he must. The owner of a passenger vehicle, for example, may not take the kind of policy involved in this appeal because liabilities may be incurred by him in respect of the use of the vehicle at a time when someone other than the named driver is driving, thus suspending the insurance cover, e.g. when the named driver is sick or on leave or otherwise unavailable or when he takes the vehicle to a roadside fitter for urgent repairs and the fitter tests the vehicle on the road, eventualities that are well-nigh inescapable in Ghana. A suspensory named driver condition that excludes the owner’s insurance coverage required and defined by sections 3 and 6 (1) (b) therefore manifestly has the effect of preventing the policy in which it is included from satisfying the requirements of the Act, and is therefore plainly contrary to the policy of the Act. We thus come face to face with one ground for questioning the propriety of inserting this type of named driver condition in a policy issued in purported compliance with the requirements of the Act.

In any case, Bandoh happens to be a person specified in the policy exhibit B. So that irrespective of section 3, the effect of section 6 (1) (b) is to require that exhibit B being a policy issued in compliance with

[p.352] of [1973] 1 GLR 335 the Act, shall cover any liability that may be incurred by Bandoh. And, as already found above, sections II-III of exhibit B in fact expressly cover Bandoh’s use of the vehicle and sections II-III even cover Ibrahim Moshie as a driver “whom Bandoh ordered or permitted to drive the said vehicle.” The endorsed named driver provision therefore offends against the express requirements of section 6 (1) (b) so far as Bandoh’s liabilities are concerned.

As to the range of liabilities thus required to be insured by a policy purporting to be issued in compliance with the Act, there are highly illuminating passages in the judgments of Lord Denning M.R. and Pearson L.J. in Hardy v. Motor Insurers’ Bureau [1964] 2 Q.B. 745, C.A. This was a case in which the English Court of Appeal had to consider the combined effect of sections 203 and 207 of the consolidating English Road Traffic Act, 1960 (8 & 9 Eliz. 2, c.16), sections which are similar to sections 6 and 10 of our Act. The appellant in that case was a security officer of a large metal works. One day he saw in an adjoining car park, a van with a road fund licence that had been stolen from one of the company’s cars. When the driver attempted to leave the park, the appellant stopped him and opened the near side door so as to speak to him. The driver then drove off at a great speed, dragging the appellant along the road so that he received numerous injuries. The driver was subsequently charged at the magistrate’s court with driving a motor vehicle whilst uninsured, among other offences. He pleaded guilty to this charge. The appellant thereafter instituted proceedings against the driver for damages for personal injuries and recovered £300 damages, but as the defendant was unable to pay these, the appellant claimed satisfaction from the Motor Insurers’ Bureau, basing his claim upon the Motor Insurers’ Bureau Agreement referred to earlier in this judgment. For the Bureau it was contended that the driver’s liability to the appellant was a liability for the consequences of his own wilful and deliberate act and was not compulsorily insurable and under section 203 of the Road Traffic Act, 1960 (s. 6 of our Act). In his judgment, Lord Denning M.R. at pp. 760-761 had this to say:

“The policy of insurance which a motorist is required by statute to take out must cover any liability which may be incurred by him arising out of the use of the vehicle by him. It must, I think, be wide enough to cover, in general terms, any use by him of the vehicle, be it an innocent use or a criminal use, or be it a murderous use or a playful use. A policy so taken out by him is good altogether according to its terms. Of course, if the motorist intended from the beginning to make a criminal use of the vehicle — intended to run down people with it or to drive it recklessly and dangerously — and the insurers knew that that was his intention, the policy would be bad in its inception. No one can stipulate for iniquity. But that is never the intention with which such a policy is taken out. At any rate no insurer is ever party to it. So the policy is good in its inception. The question arises only when the motorist

[p.353] of [1973] 1 GLR 335 afterwards makes a criminal use of the vehicle. The consequences are then these: if the motorist is guilty of a crime involving a wicked and deliberate intent, and he is made to pay damages to an injured person, he is not himself entitled to recover on the policy. But if he does not pay the damages, then the injured third party can recover against the insurers under section 207 of the Road Traffic Act, 1960; for it is a liability which the motorist, under the statute, was required to cover. The injured third party is not affected by the disability which attached to the motorist himself.

So here the liability of Phillips to [the plaintiff] was a liability which Phillips was required to cover by a policy of insurance, even though it arose out of his wilful and culpable criminal act. If Phillips had been insured, he himself would be disabled from recovering from the insurers. But the injured third party would not be disabled from recovering from them.”

And Pearson L.J., also declared himself at p. 765 as follows:

“The Road Traffic Act, 1960, by sections 206 and 207 [which reproduce sections of earlier legislation included as sections 8, 9 and 10 in our Act] confers alternative or independent rights in certain events on the persons to whom the insured has become liable. Public policy should be so applied as not to diminish their rights. It follows that the insurance policy required by the statute has to cover liability arising from any use, even an intentionally criminal use, of the vehicle on a road . . . Thus the liability of Phillips to the plaintiff was a liability required to be covered by a policy of insurance under the Road Traffic Act. The agreement applies, and the plaintiff is entitled to succeed.”

So much then for the duty imposed by the Act upon the motor vehicle owner to obtain third party insurance coverage commensurate with the extensive range of his potential liabilities. As a duty imposed for the benefit of third parties there is an obvious public concern to ensure compliance. It is evident that the British decisions on the relevant enactments fully acknowledge the extent of the duty thus imposed on the vehicle owner. But, as I shall presently show, they have generally regarded the enforcement of this duty as resting mainly on the negative criminal sanction of punishment for non-compliance, and have failed to accord appropriate weight to the positive duties imposed by the legislation on the insurer to issue policies that comply with the prescribed requirements and therefore to enforce the measures provided in the legislation to ensure such compliance. The combination of measures expressly provided in our Act for the enforcement of this duty is what constitutes the third device for implementing the purposes of the Act.

To this I now turn. To begin with, the expressions “policy” and policy of insurance” are defined in the Act as meaning “a policy of insurance in respect of third party risks arising out of the use of motor

[p.354] of [1973] 1 GLR 335 vehicles, being a policy which complies with the provisions of the Act, and includes a covering note issued in respect of any such a policy.” And section 6 (1) (a) prescribes that such a policy may be issued only by an insurer approved by the minister. The definition of “policy” in the Act thus gives clear notice to an approved insurer regarding the type of cover that policies issued by him must provide. The approved insurer is further required under section 6 (4) to issue a certificate of insurance in a prescribed form by which he is further required to certify that the policy issued by him satisfies the requirements of the Act. And the policy is declared to be of no effect for the purposes of the Act unless and until the insurer has issued this certificate of insurance.

Admittedly section 6 (4) authorises the insurer to insert on the certificate the particulars of any conditions subject to which the policy was issued. But this has to be read subject to the provisions of sections 8 and 9 by which conditions and certain restrictions are rendered ineffective against third parties. And it is significant that the prescribed form of the certificate contains a notification to insurers that they are not to insert under the headings “persons or classes of person entitled to drive” and “limitations as to use” any limitations that have been rendered inoperative by the provisions of the Act.

The result should therefore be to deprive an insurer who gives such a certificate from any justification for refusing to pay the compensation required by the Act to be paid to an injured third party based on the ground that a policy thus certified by him in fact does not provide the extensive third party cover required by the Act, or that it provides less than the required cover. For such a ground can only amount to a plea by the insurer that he has not performed the duty imposed by the Act to provide the required cover. In fact, in a case like the present one, where the plea is necessarily based on a suspensory provision deliberately inserted by the insurer, it amounts to a plea by him that he has deliberately failed or refused to perform a statutory duty.

A crucial point here which is apt to be overlooked is that the certification required in section 6 (4) has the result of vesting the insurer with a statutory power, the exercise of which is essential for bringing into force the provisions of a policy taken out in compliance with the Act. The issuing of a certificate of insurance is therefore the exercise of a statutory power which, among other evidentiary functions, enables the insurer to comply with his statutory duty to provide the cover required for third parties. And where the insurer in effect pleads a defective or deliberately defective exercise of the power, this court of conscience can help him to cure the defect and hold him to the performance of his statutory duty, at least by preventing such a plea from enuring to his benefit and to the disadvantage of the injured third party. For such duties must be strictly performed. And it must be presumed that no approved insurer will contract for such an insufficient cover as must involve the allegedly insured motorist in the criminal offence created under section 3 of the Act, and as must result in an injured

[p.355] of [1973] 1 GLR 335 third party being deprived of the protection intended and provided for him by the Act. The standard of duty thus placed by the Act upon approved insurers is of special importance in a country such as ours where all the advantages of knowledge, legal advice and bargaining power are on the side of the insurance companies, and where the vast majority of people seeking such obligatory insurance cover can only approach such transactions with the most superficial knowledge and understanding, and with a high susceptibility to being induced to contract for less than meets their needs.

It is pertinent in this regard to observe the careful avoidance by the respondents of any suggestion in their statement of defence that the suspensory named-driver condition was in any way referred to in the proposal form upon the basis of which Bandoh’s policy was issued. They have failed to produce that proposal form in both courts despite specific orders. The uneasy question arises whether the insured had full and fair knowledge that this suspensory condition was in the policy, and whether there was appropriate notice to Bandoh in the proposal form that there would be such a condition. However, it is not necessary to dwell on this issue.

Our Act does not stop at this requirement of certification for enforcing the insurer’s duty to provide the required cover and thus to give protection to injured third parties. It contains provisions in sections 8, 9 and 10 (1) which are expressly aimed at frustrating, as against third parties, and in respect of liabilities required to be covered by insurance under section 6, the conditions, restrictions and prohibitions normally employed by insurers to limit their liability and thus avoid paying compensation in regard to risks otherwise covered by their policies.

By section 8 of the Act (which is copied from section 38 of the British Road Traffic Act, 1930, but with a significant correction in the placing of commas, as we shall see), the Act renders any such conditions void at least as against third party claimants. By section 9 which was copied from section 12 of the amending Road Traffic Act of 1934, it does the same with a batch of specified restrictions that apparently had not been effectively covered by section 38, at least in view of the judicial interpretation of that section. And by section 10 (1), also copied from the said 1934 Act, it roundly proclaims the “duty of insurers to satisfy judgments against persons insured” by them in respect of liabilities required to be covered by a policy under section 6 (1) (b) of the Act, if such a policy is backed by their certificate of insurance. In such a case the insurance company is obliged to satisfy the judgment creditor even if he is otherwise entitled “to avoid or cancel or may have avoided or cancelled the policy.”

As the answer to the questions raised in this appeal mainly depends on the effect of the provisions, we must now examine them closely.

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Section 10 (1) is the section under which the appellant’s claim is brought, and it is the section which lays down the conditions which she as a third party, must satisfy in order to establish her claim under the Act. I propose therefore to approach the interpretation of these three sections by beginning with section 10. It 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 of 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.”

This section requires first that a certificate of insurance shall have been delivered in accordance with section 6 (4) of the Act. This condition is satisfied by exhibit A in this case. Next, the section requires that the appellant should have a judgment against a person insured by the policy in respect of which the certificate of insurance was issued. Such is the appellant’s judgment against Bandoh. Thirdly there is the requirement that the judgment must be in respect of a liability required to be covered by compulsory insurance, a requirement which has been emphasized in decisions of former Ghanaian appellate courts, such as Owusu v. Royal Exchange Assurance (supra) and State Insurance Corporation v. Mansah (supra). This is a condition that the appellant must be held to have satisfied (1) in view of paragraph (4) of the respondents’ statement of defence in which it is admitted that Bandoh’s vehicle was insured for use in carrying passengers and goods, an admission which is confirmed by the policy exhibit B, and (2) in view of the proviso (b) to section 6 (1) (b) of the Act which includes coverage in regard to passenger vehicles among the liabilities required to be covered by insurance, and (3) in view of the judgment obtained by her against Bandoh which shows that she suffered her injuries while travelling as a passenger on Bandoh’s said vehicle. The Act defines “passenger vehicle” as meaning a motor vehicle used for carrying passengers for hire or reward. As a vehicle insured for use for carrying passengers, the vehicle in question must be deemed to have been used as a passenger vehicle when it was carrying the appellant. This, in my view is not only substantially admitted in paragraphs (4) and (9) of the statement of defence, but is also a proper inference to make from the use of the word in the context of the pleadings and the judgment, concerning a fishmonger travelling as a passenger on such a vehicle.

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Lastly the section requires that the liability in respect of which the judgment was obtained must be one which is in fact covered by the policy. And this, of course, is the real question in controversy between the parties, namely, whether the policy exhibit B actually covered Bandoh’s liability when someone other than Amoah was driving the vehicle in question at the time of the accident. If the suspensory provision in the policy is valid as Mr. Swaniker contends then the appellant’s claim must fail. If, as Mr. Dapaah contends, it must be held to have been rendered ineffective as against an injured third party by the provisions of section 8 or 9 or on the ground of its being contrary to the public policy expressed in the Act, then the liability must be deemed to have been covered by the policy and the appellant must succeed, “notwithstanding that the insurer may be entitled” as against the insured “to avoid or cancel or may have avoided or cancelled the policy.” The sweeping character of this “notwithstanding” clause in section 10 (1) should not escape notice. But we must now turn to sections 8 and 9 to see whether or not the suspensory condition should prevail against the appellant’s claim.

It is evident that these two sections, i.e. sections 8 and 9, and section 10 clearly anticipate that insurers will attempt to insert various conditions and restrictions in their policies with the aim of limiting or avoiding liability in specified circumstances. It is also clear that these sections only interfere with such conditions and restrictions when they appear in policies covering liabilities compulsorily insurable under section 6 (1) (b). Even in such cases section 9 does not interfere with the effect of such restriction in the rights of the insured; and section 8 only so interferes if the policy does not contain a provision enabling the insurer to recover from the insured any sum he may have had to pay to a third party. That is to say, that whilst freedom of contract is preserved generally as between the insurer and the insured it is interfered with whenever it affects the claims of third parties, in the sense that the effect of various conditions and restrictions in policies is disallowed or nullified as against third parties. It should not escape attention that this constitutes a strident interference with the common law doctrine of privity of contract.

It is to be noted in this connection that Bandoh’s policy exhibit B contains such a stipulation in its avoidance clause, and the insurers would therefore be entitled to recover from Bandoh any payment they might be required to make to the appellant if the suspensory condition regarding the named driver were held to have been rendered ineffective by section 8. That clause which is entitled “Avoidance of certain terms and right of recovery,” runs as follows:

“Nothing in this policy or any endorsement thereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under and by virtue of the provisions

[p.358] of [1973] 1 GLR 335 of the legislation specified in the schedule. But the insured shall repay to the corporation all sums paid by the corporation which the corporation would not have been liable to pay but for the said provisions.”

But the material question here is this: precisely what conditions and restrictions do these sections render of no effect in the manner explained above? Section 8, which as already indicated was copied from the earlier British Road Traffic Act of 1930, provides 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 of the security 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.”

(The emphasis is mine.)

Concerning this section, it was urged on behalf of the respondent insurer by Mr. Swaniker that if a policy purports to provide to the specified person a general cover but also contains a condition which ab initio excludes liability from arising (as for example in the present case, a provision by which the policy shall be inoperative whenever the insured vehicle is driven by someone other than the named driver), then such a condition is not invalidated by the provisions of section 8. The argument is that such a condition takes effect before the event (i.e. the accident) giving rise to the liability occurs, and section 8 only applies to events which happen after the liability has arisen.

This argument is well supported by an impressive battery of British decisions and by some decisions of our own courts largely based on the British decisions, and I shall presently refer to them.

One basic consideration, however, which Mr. Swaniker’s proffered interpretation overlooks is this: the same type of condition can be formulated by a skilful draftsman to take effect before rather than after an accident giving rise to the claim. The suspensory condition in this case, for example, could have been formulated as follows: “provided however that the insurer shall be free to repudiate any claim made in respect of injuries caused by an accident arising from the negligent driving of the vehicle by any person other than Amoah.”

[p.359] of [1973] 1 GLR 335 This alternative formulation does not suspend the operation of the policy. It only entitles the insurer to avoid liability if and when it arises in the event of someone other than Amoah negligently causing an accident, i.e. the condition takes effect after the event, and would on the respondents’ interpretation, be caught by the section. But the insurer’s design is the same: to defeat any claims arising if and when someone other than Amoah drives the vehicle. One formulation cleverly prevents liability from arising if the stipulated event ever occurs. The other formulation enables the insurer to avoid liability after the event has occurred and the liability has arisen. If third party claimants are to be protected then there is every reason why the basic design of avoiding liability to pay should be frustrated, no matter how it is formulated as a condition.

It may be surmised with confidence that the formulation of the type of suspensory condition employed in Bandoh’s policy was based on the interpretation of this section proffered by the respondents. The best way of limiting the general liability assumed under a third party policy is to subject it to a condition that prevents liability from arising whenever certain eventualities occur, rather than to reserve a power to repudiate the liability once it has arisen.

What, then should we expect section 8 to provide, having regard to the requirement of extensive coverage for compulsorily insurable third party liabilities laid down in section 6 (1) (b)? What does the section actually provide?

On purely commonsense grounds it is obviously to be expected that a section intended to protect third parties from being deprived of the coverage required for them under third party policies would concern itself with any stratagem or condition designed to enable insurers to escape liabilities assumed by them under such policies whether such conditions are formulated so as to prevent liability from arising or to avoid liability when it arises under the terms of the policy.

One has only to inspect the plain language, grammar and logic of our section 8 to see that the section expressly and unambiguously conforms with what we might rationally expect. Section 8 is expressly aimed at any condition in a policy issued for the purpose of the Act, i.e. third party policies in regard to compulsorily insurable liabilities. It logically specifies the two alternatives (before or after the accident) which exhaust the universe of possible conditions, separating them with a comma followed by “or.” The first group comprises conditions taking effect before the accident, i.e. conditions “providing that no liability shall arise”; the second group comprises those taking effect after the accident, i.e. “or” conditions providing “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.” Each of these two alternatives is the subject of the sentence whose predicate is: “shall be of no effect in connection with such claims as are set out in paragraph (b) of subsection (1) of section

[p.360] of [1973] 1 GLR 335

6.” And the second alternative subject is marked off from the common predicate by a comma.

The fact that the second alternative contains language regarding the cessation of a liability that has arisen while the first alternative does not is simply explained. To defeat a claim based on a liability that has arisen, provision has to be made for avoiding or repudiating the liability. Such provision is obviously unnecessary if liability has been prevented from arising.

This plain and unambiguous reading of the section obviously yields an interpretation which is not only natural, grammatical and logical; it also happens to make sense in terms of the expressed purpose of the Act. In such circumstances the duty of the court is clear; it is in the language of Heydon’s Case (1584) 3 Co.Rep 7a at p. 7b “always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico.”

It follows that the interpretation proffered by Mr. Swaniker for the respondents must be rejected even though it is well supported by decisions of courts in Britain such as Bright v. Ashfold [1932] 2 K.B. 153, D.C. and Gray v. Blackmore [1933] All E.R. Rep. 520 which he cited, and several others.

In Bright v. Ashfold (supra) the condition in a policy relating to a motor cycle stipulated that the insurer would not be liable for any loss or damage caused or sustained while the vehicle is carrying a passenger “unless a side car is attached.” The insured had an accident while carrying a passenger on the pillion seat without a side-car being attached to the motor cycle, and he was charged with using a motor vehicle on the road without there being in force in relation to the user of the vehicle a third party policy of the kind required by the Road Traffic Act, 1930. The justices dismissed the information on the ground that the condition in the policy was of no effect by reason of section 38 of the 1930 Act (our s. 8), and that therefore the policy of insurance was in force on that occasion. On appeal to the Divisional Court, Lord Hewart C.J. in a brief judgment, said at p. 158:

“This was a condition which circumscribed the operation of the policy from the beginning. There was, therefore, no policy of insurance against third party risks at all in force in relation to the use of the motor cycle by the respondent, where a passenger was being carried otherwise than in a side-car.”

It is to be observed in the first place that the specific side-car issue in this case was effectively disposed of by section 12 of the amending Road Traffic Act of 1934 (see our s. 9 (g) ), which renders ineffective as against third parties any restriction in a policy regarding “the carrying on the motor vehicle of any particular apparatus.” Secondly this is a

[p.361] of [1973] 1 GLR 335 case where the insured was being prosecuted for using a motor vehicle on the road without the required insurance cover. It is therefore the rights of the insured rather than those of a third party claimant that arose in any real sense for discussion. And we have seen that the contractual rights of the insurer as against the insured are largely untampered with by section 38 of the 1930 Act (our s. 8), at least in the sense of allowing the insurer to recover from the insured what he is forced to pay to third parties.

It is to be noted, nevertheless, that this is a judgment which makes no reference whatsoever to the duty placed on the insurer to issue a policy that satisfies the requirements of the Act, or to the certificate of insurance and its implications as to the exercise by the insurer of a statutory power and the alleged performance of a statutory duty. But, as already pointed out, this case was concerned with the punishment of an insufficiently insured motorist, and not directly with the rights of third parties, though these were implied. And, it is to that extent understandable if it did not address itself to the policy of the Act and its expressed purpose of protecting injured third parties.

In Gray v. Blackmore [1933] All E.R. Rep. 520, the suspensory condition stipulated that the insurer was not liable whilst the car was being used for trade purposes, and the accident occurred when the vehicle was being used for trade purposes. It was held that liability to pay the third party could not arise because the operation of the policy was suspended when the vehicle was being used for trade purposes. The judgment of Branson J. which was more fully reasoned, at least addressed itself to the question why section 38 (our s. 8) allegedly invalidates only conditions formulated to take effect after the happening of the event giving rise to claim. And the justification he advanced is persuasive. But he failed to consider that the same condition which is invalidated when it takes effect after the event can be formulated to take effect before the event and to achieve the same result of avoiding payment to third party claimants. And he therefore dismissed without proper inquiry the perfectly valid concern in the section to prescribe that “any condition providing that no liability shall arise under the policy shall be of no effect,” i.e. under a policy like exhibit B which, but for the suspensory condition endorsed on it, clearly covers the liability in respect of which the claim is brought. And Branson J. asserts at p. 525 that this “is obviously a provision which the statute never meant to enact.” For this assertion he gives no reason whatever. And it is, with respect, patently erroneous.

The error in that assertion arises, I think, from a misunderstanding of the interpretation I have suggested to be the correct one. An insurance policy which stipulated that no liability shall arise under it would indeed be a strange one: but it is a mistake to identify a policy with the suspensory or dissolutive conditions that may be inserted in or endorsed on the policy. The section is aimed at conditions in policies, i.e. in third party policies; not the policies themselves. A policy as

[p.362] of [1973] 1 GLR 335 defined under the Act, is a third party policy issued in compliance with the requirements of the Act. And we have seen the range of liabilities that, under section 6 (1) (b), such a policy must cover. This, then, is the meaning of the word policy in section 8. And the section is plainly aimed against conditions that may be inserted in such policies to avoid incurring the third party liabilities otherwise covered by such policies. It bears repeating that the section does not defeat such conditions in so far as they affect the insured person, provided appropriate reservations are made in the policy. But it is aimed at defeating such conditions in so far as they affect third party claims whether the condition takes effect before or after the event giving rise to the claim. Far from being strange, it is the commonest thing to find policies which appear to cover every liability and which nevertheless are made subject to conditions which all but take away the protection apparently accorded.

The third party policy in this appeal, for example, expressly provides the kind of cover for Bandoh in respect of Ibrahim Moshie’s driving that is required under section 6 (1) (b) of the Act. The function of the suspensory condition endorsed on it is to provide that no liability shall arise in respect of accidents caused by any driver such as Moshie, other than Amoah. It does so by providing that the policy shall be inoperative when any such other driver drives the vehicle. The effect of section 8 is to invalidate this condition in so far as it affects the appellant’s claim which the respondents would have been bound to meet but for the condition, since the policy without the condition actually covers Bandoh in respect of the liability. And the avoidance clause in the policy would, by virtue of its express stipulation quoted above, enable the respondents to recover from Bandoh any payments they may make to the appellant.

It is to be noted that in Gray v. Blackmore (supra) as in Bright v. Ashfold (supra) the party directly concerned before the court was the assured rather than the third party claimant though, again, the rights of third parties were necessarily involved. Here, too, this fact may be considered as somewhat excusing the omission, as in Bright v. Ashfold (supra), to attend to the rights of injured third parties against insurers and to the fact that the Act explicitly imposes duties on the motorist and the insurer alike to cover compulsorily insurable liabilities in the manner prescribed by the Act. In dismissing the insurer’s claim, Branson J. in Gray v. Blackmore (supra) at p. 526, uses revealing language, which may well have inspired the language of Judge Apatu-Plange, quoted earlier as follows:

“I see nothing in the statute which prevents an underwriter and an assured from agreeing to a policy with any conditions that they choose; and if the assured takes the car upon the road in breach of these conditions it cannot thereby throw a greater obligation upon the underwriter. All that happens is that he is on the road without a policy which is covering him under the Road Traffic Act, and he is liable under s. 35 as though he had not taken out a policy at all.”

[p.363] of [1973] 1 GLR 335 Language like this, when applied to the interpretation of a section of our Act, is difficult to excuse in view of the express provisions which it overlooks. The unfettered freedom of contract asserted in it is obviously incorrect so far as third party contracts regarding compulsorily insurable risks are concerned. Sections 8, 9 and 10 of the Act expressly oblige the insurer to pay moneys to injured third parties in a wide range of circumstances even though the terms of the insurance contract release him from any such liability. Section 8 is in fact admitted by Branson J. to invalidate all conditions which take effect after the accident. And, even against the assured, it cancels the accrued rights of the insurer unless the contract expressly provides for repayment by the assured for moneys paid by the insurer to third parties under compulsion from the provisions of the section. It is therefore simply not true to suggest, as Branson J. does that the insurer and the assured may agree to a policy “with any conditions that they chose.” Nor is it true to say that, “if the assured takes the car on the road in breach of these conditions,” all that happens is he becomes liable to criminal punishment. Equally important is the fact that the Act obliges the insurer to pay moneys to third parties in many circumstances of this kind even though he is not liable to do so under the terms of the broken contract. Significantly enough, the passage does not refer to third parties at all, or to the express provisions made for their protection.

It is judgments like this and that of Lord Hewart C.J. in Bright v. Ashfold (supra) that set the trend and pattern of a long line of British decisions. The unfettered freedom of contract which they assert in relation to third party contracts covering compulsorily insurable liabilities is patently incorrect when applied to the interpretation of the express provisions of our Act. Following this assertion of unfettered freedom of contract, these judgments hold in effect that the insurer is not obliged to provide a cover co-extensive with the duty imposed on the owners and users of motor vehicles. They therefore appear to contemplate with equanimity the consequences flowing from the various restrictions and conditions commonly inserted in policies for the purpose of limiting or suspending the cover given by a policy. The direct consequences of such decisions, of course, was that the vehicle owner might often hold a policy allegedly issued in compliance with the Act, that did not in fact insure him in respect of any liability that he might incur in respect of the death of or bodily injury to any person arising out of a compulsorily insurable use of the motor vehicle. And these judgments appear to have regarded as sufficient the fact that the motorist would, in such circumstances, be liable to punishment upon conviction, for they overlooked the other consequence that persons maimed by accidents might be left without resources to face an uncertain future, notwithstanding the clear legislative purpose to place an approved insurer behind every user of motor vehicles and thus ensure protection

[p.364] of [1973] 1 GLR 335 for traffic victims, and notwithstanding also the express provision of certification requirements that vest insurers with statutory duties and powers, and of the sanction of nullity aimed at nullifying the effect of such conditions and restrictions as against third parties. It is of the first importance to remember in this regard the unquestionably and admittedly broad meaning of the word “use” employed in this legislation. From the view point of the victim of a traffic accident which our Act is expressly intended to protect, it matters not at all whether the offending vehicle was being used for pleasure or for business; and it matters not at all who was driving it. And this, obviously, is the reason why the legislation expressly interferes with the consequences, for third parties, of the conditions and restrictions as to user which these judgments appear to suggest may freely be inserted in policies covering compulsorily insurable liabilities. That is to say that even if it were correct to say that there is unfettered freedom to contract for limited user and cover in such policies, it would still be incorrect to infer from this that there is unfettered freedom to contract out of liability to third parties injured as a result of compulsorily insurable uses of vehicles thus under-covered.

In my view these are sufficient reasons for refusing to be persuaded by these judgments. These reasons are reinforced by the persuasive fact that the Motor Insurers’ Bureau Agreement of 1946 constitutes an emphatic rejection of the interpretation placed on the British legislation by these judgments, and reaches a result similar to the interpretation suggested here. That result was reached not out of pure benevolence on the part of British Insurance Companies but importantly because the legislation clearly pointed to it.

It is to be noted further concerning the British judgments thus rejected herein that section 38 of the British Road Traffic Act, 1930, differs from our section 8 in an important detail. The positioning of commas in the British provision which, to some extent, assisted this unsatisfactory interpretation in pre-1946 Britain, was significantly corrected in our section by placing them in such a way as to mark off the two alternative types of condition. The same change was made in the corresponding Kenya Motor Vehicles Insurance (Third Party Risks) Ordinance, 1945. Although section 206 of the British Road Traffic Act, 1960 (8 & 9 Eliz. 2, c. 16), still retains the original commas in their old positions, it has now accepted the correction of the draftsman responsible for the Kenya and Ghana sections by adding a comma in the place where ours is. The result is that grammatically, the words “in the event of some specified thing being done or omitted to be done after the event giving rise to the claim” can properly apply only to the words “any liability so arising shall cease” and not to the words “no liability shall arise.” Commenting on this difference between that section 38 of the British Road Traffic Act, 1930, and the corresponding section in the Kenya Ordinance, Newbold V.-P., in his judgment in New Great Insurance

[p.365] of [1973] 1 GLR 335

Co. of India Ltd. v. Cross (1965) A.L.R. Comm. 449 at p. 461, E.A.C.A. said:

“In any event I cannot see how it is possible to attach the words ‘in the event of some specified thing being done . . . after the happening of the event giving rise to a claim . . .’ to the words ‘no liability shall arise’ for the simple reason that liability would already have arisen before the event: therefore, these words clearly attach and attach only to the words ‘any liability so arising shall cease.’ This logical construction is merely reinforced by the positioning of the comma in the Kenya Act.”

This was a judgment of the East African Court of Appeal in a case involving a suspensory condition in a third party policy, in which the court, with Azu Crabbe J.A. (as he then was) delivering another helpful concurring judgment, ruled that such a condition was rendered ineffective by the equivalent of our section 8. Though I have impliedly disagreed with various dicta particularly in the judgments of Newbold V.-P. and De Lestang J.A., I have found all the judgments in that case very helpful.

It should perhaps be unnecessary to point out that the justification for the interpretation of our section 8 has been based on its express language, grammar and logic; not on its punctuation. It should suffice to observe that the punctuation of our section supports this interpretation and further that by section 3 of the Interpretation Act, 1960 (C.A. 4), the punctuation forms part of the Act and may be used as an aid to its interpretation. This is an argument against adopting the British interpretation which is based on different punctuation. But again the argument against that interpretation is rested on many more substantial grounds.

Of the Ghanaian decisions cited by Mr. Swaniker in support of his proffered interpretation, the one most nearly in point and which, being a decision of this court would be binding on me under existing rules, if it could be said to have squarely decided the issue raised in this appeal, is Royal Exchange Assurance v. Sosu, Court of Appeal, 4 May 1970, unreported.

That, however, was not a decision turning upon a suspensory condition of the kind involved in this case. In Sosu’s case the accident occurred after the insured had ceased to have an insurable interest in the vehicle concerned, i.e. after his title to the vehicle had passed to a purchaser who was not covered by insurance, in whose hands the accident occurred.

As was held by Lord Buckmaster in Rogerson v. Scottish Automobile and General Insurance Co., Ltd. (1931) 146 L.T. 26 at p. 27, H.L., “When once the car which is the subject-matter of the policy is sold, the owner’s rights in respect of it cease and the policy so far as the car is concerned is at an end.” And this was the ratio decidendi of Sosu’s case (supra). In the absence of a valid insurance policy in force

[p.366] of [1973] 1 GLR 335 covering the new owner, there could be no basis for an action by a third party under section 10 of the Act. And the Court of Appeal upheld the insurers’ contention that they were not liable to indemnify the new owner under the policy on the sufficient ground that the insured’s rights under the policy “ceased once the vehicle, which was the subject-matter of the policy, was sold.” The court could have found further support for this holding from section 121 (1) of the British Road Traffic Act, 1930, where the term “owner” in relation to a vehicle subject to a hire-purchase agreement or a hiring agreement is defined as meaning the person in possession of the vehicle under the agreement. (Compare section 2 (1) of our Road Traffic Ordinance, 1952 (No. 55 of 1952)). Admittedly the judgment in Sosu’s case concluded with the following words which can be said to have a bearing on the present case:

“Even if the vehicle had not been sold, the plaintiffs still could not have succeeded in their action against the insurers. The assured was Kwasi Addae, and Ampofo who was driving the vehicle was unknown to the defendants-appellants who considered themselves responsible only when Kwasi Addae drove the said vehicle.”

But these latter words are obviously obiter dicta so far as the present appeal is concerned. The factual issue for decision in that case was this: where an owner driver whose driving of a vehicle is covered by a policy of insurance transfers this vehicle to another person under a hire-purchase agreement, does the policy cover the purchaser of the vehicle and thus render the insurer liable to a third party injured as a result of the negligent driving of the vehicle by the purchaser? And this is the point that was decided by that judgment, the additional words quoted above being obviously unnecessary for the decision of the issue raised by that case. The court was not, except by way of hypothesis having regard to the facts found in that case, faced with the questions raised in this appeal. It was therefore not drawn into the examination of relevant sections of the Act and of the issues of public policy necessary for deciding this appeal. It is significant in this regard that Azu Crabbe J.S.C., who presided on the panel which decided Sosu’s case (supra) did not find it necessary to draw attention to the East African Court of Appeal decision in the New Great Insurance case (referred to supra) which dealt with the issues involved in this appeal, and which he must have done if he had felt that the court was confronted with the present kind of issue.

I turn next to section 9, concerning which it is important to remember that it was introduced with section 10 in the British Road Traffic Act of 1934 to fill in gaps resulting from judicial interpretations of the 1930 legislation of the kind illustrated by Bright v. Ashfold and Gray v. Blackmore criticised above. When this legislation was consolidated in the Road Traffic Act, 1960, the invalidating sections of the 1930 and 1934 Acts were rearranged in reverse order as subsections of one new

[p.367] of [1973] 1 GLR 335 section 206 so that restrictions not caught under section 206 (1) of the British Act (our s. 9) remain liable to be caught by the more generally stated provision in section 206 (2), (our s. 8). This history of section 9 effectively disposes of any argument from the canons of construction that might be reared upon the accidental fact that section 8 precedes section 9, such as was put forward by De Lestang J.A. in his dissenting judgment in the New Great Insurance case (supra) at p. 475, as follows:

“It is a well-known rule of construction that if two sections of an enactment are repugnant the last must prevail. (Wood v. Riley (1867), L.R. 3 C.P. at 27 per Keating, J.). Another well-known rule is that where there are two sections dealing with the same subject-matter, one section being general and the other containing qualifications, effect must be given to the section containing qualifications) (Moss v. Elphick [1901] 1 K.B. at 468, per Pickford, J.).”

From the fact that the original of section 9 was introduced in the amending Road Traffic Act, 1934, it is obviously more reasonable to see the section as attempting to supplement the effectiveness of the earlier provision by tackling the same problem with a different weapon. In any case the two sections are not repugnant, nor, as I shall presently show, is section 9 as narrow or qualified as might at first appear from its enumeration of the matters to which it applies. But first let us look at the section itself which reads as follows:

“9. Where 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 so much of the policy as purports to restrict the insurance of the person insured thereby in respect of any of the following matters—

(a) the age or physical or mental condition of persons driving the motor vehicle; or

(b) the condition of the motor vehicle; or (c) the number of persons that the motor vehicle carries; or

(d) the weight or physical characteristics of the goods that the motor vehicle carries; or

(e) the times at which or the areas within which the motor vehicle is used; or

(f) the horsepower or value of the motor vehicle; or (g) the carrying on the motor vehicle of any particular apparatus; or (h) the carrying on the motor vehicle of any particular means of identification other than any means of identification required to be carried under the provisions of the Road Traffic Ordinance, 1952, shall, in respect of such of liabilities as are required to be covered by a policy under paragraph (b) of subsection (1) of section 6, be of no effect:

[p.368] of [1973] 1 GLR 335

Provided that nothing in this section shall require an insurer to pay any sum in respect of the liability of any person otherwise than in or towards the discharge of that liability and any sum paid by an insurer in or towards the discharge of the liability of any person which is covered by the policy by virtue only of this section shall be recoverable by the insurer from that person.”

It is reasonable to argue from this enumeration of the types of restriction rendered invalid by the section that any type of restriction not specified here or caught by section 8 must be deemed to be permissible under the Act. And it has been so contended in this appeal and the assertion has been made on the strength of it that the named-driver clause is not specified therein and must therefore be deemed to be permissible under the Act.

This assertion, however, only shows that the types of restrictions specified in the section have been read at their face value. The named driver clause involved in this appeal, for example, is not expressly specified; but such a clause necessarily implies a restriction as to “the times at which or the areas within which the motor vehicle is used,” and this is a restriction specified in section 9 (e). For, naming a single person as the authorised driver of a passenger vehicle necessarily implies a restriction as to the times at which the vehicle can be used. The one named driver is bound to fall ill sometimes, or to ask leave to attend a funeral or be on holiday; emergencies can arise when he is not available; he has working hours, and so on. The clause therefore implies the restriction that the user of the vehicle for carrying passengers must be confined to the times when only the named driver is in control, or else there is not the required third party insurance cover, and penal consequences await the temporary employment of a meantime driver, and third parties injured by such user would, but for the avoidance provided by the section, be deprived of the protection intended by the Act.

Viewed in this light, the ambit of the sections turns out to be very much wider than might at first appear. Any type of arrangement that has the effect of resulting in a restriction as to (a) age or physical condition of a driver, (b) the condition of the motor vehicle or (c) of the number of persons or (d) of the weight or physical characteristics of the goods carried by the motor vehicle or (e) the times and places when and where it may be driven or (f) its horsepower or value or (g) the carrying of any particular apparatus or (h) means of identification! It strains neither thought nor language to hold concerning the words preceding the enumeration, that the expression “so much of the policy as purports to restrict” is equivalent to the expression “so much of the policy as has the effect of attempting to restrict.” This, in any case, is what might be expected of the British 1934 amendment in relation to the 1930 provisions. The items listed are the stock-in-trade of insurance policies around which restrictive arrangements and suspensory conditions are commonly fashioned. The enumeration and the use of the

[p.369] of [1973] 1 GLR 335 word “restrictions” neatly escapes the before-and-after problem encountered in section 8, i.e. the previous legislation.

I have already indicated how the side-car issue in Bright v. Ashfold (supra) is disposed of by section 9 (g). No less obviously the suspensory named driver provision, upon which, the respondents rely, necessarily implies a restriction as to the times at which the vehicle in question can be lawfully used. It thus falls foul of the provision in section 9 (e), and must be held to have been rendered of no effect as against the appellant by that section.

It follows from the holding that the suspensory provision in this policy is avoided by both sections 8 and 9 of the Act, as against the appellant, that this policy must be deemed to have remained in force at the time of the accident giving rise to the appellant’s claim. Accordingly the remaining requirement under section 10 is satisfied, and it must be concluded that the appellant was entitled to bring her claim under section 10 of the Act and that the respondents are liable to satisfy it.

Concerning the interpretation of the Act presented here, the fear has been expressed that it is bound to lead to confusion as to what the Act permits or does not permit. With great respect this is far from being the case. Rather it puts an end to the prevailing uncertainty concerning the rights of third parties injured as a result of compulsorily insurable use of vehicles. It says that once the required cover in such cases has been certified by the insurer conformably with the Act, the third party rights conferred by the Act cannot be defeated as a result of conditions and specified restrictions being inserted into the policy by the parties to the insurance contract. That is to say, that whilst the Act does not stop the parties to a third party contract, covering a compulsorily insurable user of a vehicle, from inserting various limiting conditions and restrictions which therefore remain valid as between the parties to the contract, the Act does not permit them to escape from their third party liabilities by such devices.

This contrasts sharply with the view implied in the British decisions upon which unquestioning reliance has hitherto been placed. Whilst agreeing with the position taken here concerning the duty imposed by the legislation on owners and users of motor vehicles, these decisions accord an indulgent permissiveness to insurers which is not warranted by the express terms of our Act. Two such decisions have been criticised above. Other examples are Herbert v. Railway Passengers Assurance Co., Ltd [1938] 1 All E.R. 650 where the policy provided that insurers would not be liable in respect of any accident occurring when the motor cycle was being driven by anyone other than the insured himself and the accident occurred when the driving was being done by the owner’s companion because the owner had on the way caught a severe cold; Bonham v. Zurich General Accident and Liability Insurance Co., Ltd. [1944] 2 All E.R. 573, where liability was excluded when passengers were being carried for hire or reward; Wyatt v. Guildhall Insurance

[p.370] of [1973] 1 GLR 335

Co., Ltd. [1937] 1 All E.R. 792, where there was a term that the insurer was not liable when the car was being used otherwise than for social, domestic or pleasure purposes; and countless others. And there have been decisions in our courts in similar vein mostly based on these decisions. Examples are the judgment of Archer J. (as he then was) in Koah v. Royal Exchange Assurance, High Court, Cape Coast, 26 April 1968, unreported; digested in (1968) C.C. 79 where the facts were similar to the Herbert case referred to above; the leading judgment of Mills-Odoi, J.S.C. in Owusu v. Royal Exchange Assurance (supra), a decision of the former Supreme Court, which was based on Wyatt v. Guildhall Insurance Co., Ltd. (supra) and Bright v. Ashfold (already referred to (supra)).

It seems to me necessary to observe, with all due respect to the eminent judges involved in decisions of the kind referred to above, that the reasoning employed reveals a fundamental under-estimation of the problem sought to be tackled by this kind of legislation. What we are confronted with here is not some minor extension of the general principles of insurance law. The problem on hand is the question of coping with the consequences of the introduction of technology, with the social costs of machines and of motor vehicles. It has become obvious that, given their swift and lethal nature, motor vehicles and machines generally are bound to take a heavy toll of life and limb quite apart from any real fault on the part of any one, and that society must find some answer to the dilemma of the person mutilated by an accident and left uncompensated. Sweeping statutory alterations, such as workmen’s compensation legislation, which make an employer liable for injuries to his employees irrespective of negligence or fault on anyone’s part, represent one of the many kinds of answer that have been evoked. In compulsory third party insurance a paramount social objective is to ensure that a financially responsible defendant is available to provide compensation for the victims of motor accidents, and this is an objective plainly aimed at in our legislation. It operates to require that motorists and the insurers whom they finance shall contribute to the payments required for meeting the social costs of the automobile and not leave an unfair burden on the accident victim. It does so by requiring insurers to be approved for the purpose of making third party contracts covering compulsorily insurable liabilities, compelling motorist to take such insurance on pain of criminal sanctions and making insurers liable to third parties injured as a result of accidents arising from compulsorily insurable uses of their vehicles purportedly covered by them, empowering insurers to issue certificates of insurance covering and rendering operative the policies issued by them, prescribing the cover that such policies must provide, and invalidating as against such third parties the effect of conditions and various restrictions inserted in such policies to avoid the liability required to be covered. Interpretations of this legislation, therefore, which patently ignore its overriding purpose and machinery of implementation should merit our disapproval.

[p.371] of [1973] 1 GLR 335

It so happens, however, that this decision has been arrived at, not on the basis of a general implication from the policy of the Act, or of any foreign agreement, but by virtue of specific provisions which fully implement its expressed purposes. Nevertheless the interpretation given here should afford no reason for complacency regarding our national response to this problem of the accident victim. For our Act leaves many gaps unplugged. There are many risks that are not compulsorily insurable regarding which our section 10 would not be available to third party victims, though a suitable doctrinal development of the common law regarding third party rights by our courts aided by the policies of our Contracts Act, 1960 (Act 25), this Act, and the other legislation referred to above, could bring in much needed help in this area. Meanwhile major gaps remain regarding the victims of uninsured drivers especially (though not exclusively) in respect of risks not required to be covered by insurance, and of hit and run accidents when the offender cannot be traced.

However, concerning the appellant in this case, the beneficiary of a judgment obtained in respect of a compulsorily insurable liability, it is fortunate that there was in existence a policy of the required kind which, by virtue of our Act, can be made to enure to her benefit. It follows from this decision that the named driver limitation should not, as indicated by the prescribed form, have been stated on the certificate of insurance, exhibit A.

The judgment of my brothers Amissah and Sowah were written after mine and substantially in response to mine. After careful study I regret that I do not see my way to agreeing with their reasoning especially as they do not appear to have addressed themselves to the following specific and pivotal issues: (a) Was Bandoh a person specified in the policy exhibit B? If so what is the effect of section 6 (1) (b) on the named driver clause? (b) What are the consequences for the respondents in regard to their statutory responsibilities concerning the issue of the certificate of insurance exhibit A? (c) Of the two possible interpretations of section 8 which is the one that more fully advances the expressed purposes of the Act? And is the court not obliged to adopt that interpretation on the principle well stated by Goddard J. (as he then was) in Tattersall v. Drysdale [1935] 2 K.B. 174 at p. 182, that, “if the words of the section will bear this construction then, although another reading of the words may be possible, there seems to be an excellent and indeed compelling reason for preferring it to any other.” (d) How should section 9 be construed in the light of its legislative history?

I would therefore allow the appeal and reverse the judgment of the circuit court.

JUDGMENT OF AMISSAH J.A.

The appellant, Adjoa Pokua, was injured in an accident caused by a vehicle owned by one Christian Bandoh and driven by Ibrahim Moshie. The appellant brought an action for damages against Bandoh and obtained judgment with costs for ¢2,600. At the time of the accident Bandoh had an insurance policy issued by the respondents,

[p.372] of [1973] 1 GLR 335 the State Insurance Corporation, covering the user of the vehicle. The appellant sued the respondents for payment of the ¢2,600 awarded against Bandoh. The basis of her claim was section 10 of the Motor Vehicles (Third Party Insurance) Act, 1958 (No. 42 of 1958), hereafter called the Act which gave a right to the victim of an accident to proceed directly against the insurance company in certain circumstances to recover the judgment debt due from the assured. The respondents denied liability on the ground that by the terms of the policy taken out by Bandoh it was to be inoperative whilst the vehicle was being driven by any person other than Bandoh’s driver Kwame Amoah, who was not driving the vehicle at the time of the accident. Judgment was given in the circuit court for the respondents. From that judgment the appellant has brought this appeal.

The appeal is founded on a number of grounds which I think are quite unnecessary to set out in detail. It seems to me that the sole issue in the case is whether the respondents were entitled under the Act to limit the operation of the policy they issued to the driver named in the policy. It is an issue of some importance not only to the insurance world but to the public at large. The rights of the parties depend entirely on the construction of the statute. And the decision on the matter depends to my mind, not on a consideration of what that statute should contain but on what it does contain. To the relevant sections of the Act we must therefore now turn to find out what it does indeed provide. We begin with section 3 (1) and (2) which provide as follows:

“3. (1) Subject to the provisions of this Act no person shall use, or cause or permit any other person to use, a motor vehicle unless there is in force in relation to the user of that motor vehicle by such person or such other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the provisions of this Act.

(2) Any person acting in contravention of this section shall be liable on conviction to a fine not exceeding two hundred pounds or to imprisonment for one year or to both such fine and imprisonment and a person convicted of an offence under this section shall be disqualified from holding or obtaining a driving licence.”

There must be in force at any particular time that the vehicle is being used a policy of insurance relating to user in respect of third party risks. The section recognises the fact that a person could himself use a vehicle without a policy of insurance or while himself covered by a policy permit another not so covered to do so. And it seeks to proscribe either type of conduct. The provision admits the possibility of the person responsible for the user of the vehicle covering himself or covering other persons, whether in general or in particular by insurance as regards the use of the vehicle. No other meaning can be attached to the words “no person shall use, or cause or permit any other person to use, a motor vehicle unless there is in force in relation to the user of that motor vehicle by such person or such other person, as the case may

[p.373] of [1973] 1 GLR 335 be, such policy of insurance . . . “ (The emphasis is mine). The onus for obtaining the necessary policy is placed on the person who uses the vehicle or permits it to be used. And sanctions are imposed on him if he uses the vehicle himself without the necessary insurance or causes or permits another to do so whether such user results in harm to third parties or not. The section states that the policy of insurance should be in respect of third party risks “as complies with the provisions of this Act.”

The policy issued by the respondents in this case was made “subject to the terms exceptions and conditions herein or endorsed or otherwise expressed hereon.” The endorsement relevant to this case reads as follows:

“It is hereby agreed and declared that this policy shall be inoperative whilst the motor vehicle described herein is being driven by or is for the purpose of being driven in charge of any person other than Mr. K.

Amoah.”

And the certificate of insurance issued under the policy also contained this limitation. It is accepted that this K. Amoah was the appellant’s driver. The question posed then is whether the policy holder while using the vehicle or permitting it to be used when driven by a person other than Amoah has in force a policy of insurance in compliance with the provisions of the Act? On the face of it the answer seems to be in the negative. Section 3, at least, acknowledges the validity of the endorsement in the policy. But it is suggested that other provisions of the Act make it impossible to take this view. Which are these provisions?

For the next provision of relevance we turn to section 6 which in subsection (1) states:

“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 . . . “

This provision is followed by a proviso which need not detain us at the moment. I will have occasion to refer to it later. The importance of this section lies in the guidance it gives to the person who proposes to take out a policy cover as to the extent of the cover he should take. The proposed policy must be such as would cover any liability which may be incurred by the person or classes of person specified in the policy in respect of death or bodily injury to third parties from the user of the vehicle agreed upon. The provision does not prohibit the restriction of the user. In fact the liability arising from the user accepted by the

[p.374] of [1973] 1 GLR 335 insurer is limited to that “incurred by such persons or classes of person as may be specified in the policy.” Ex hypothesi if there is a specific person or class of persons and liability is incurred in respect of the vehicle by someone outside this class, that liability is not covered by the insurance.

If there is a prohibition on the restriction of the use to which the vehicle may be put by the policy as is suggested in this case, the basis for it must be found elsewhere. Section 8 is pointed out as the provision which prohibits such a restrictive condition. To that section we must now turn. It provides that:

“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 of the security 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.”

On a plain reading of section 8 by itself the clause declaring that the condition “shall be of no effect” governs both the condition providing “that no liability shall arise under the policy or security” and the other condition providing “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.” Although our legislation follows the comparable British legislation on the subject at the time, there is a significant difference in the placing of the commas in the respective positions. It has therefore been suggested, and this suggestion is supported by authority from Kenya where the punctuation is similar to ours, that the shift in the comma in our legislation manifested a definite intention on the part of our legislature that the cases decided on the British provision should not be followed here. I think for a proper appreciation of the argument, and as so much store has in any case been set on the different placement of commas in the two provisions, the British provision of the time ought to be reproduced. Section 38 of their Road Traffic Act, 1930 (20 & 21 Geo. 5, c. 43), provided that:

“Any condition in a policy or security issued or given for the purposes of this Part 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

[p.375] of [1973] 1 GLR 335 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 mentioned in paragraph (b) of subsection (1) of section thirty-six.”

It will be noticed that the material parts of the British provision and ours are identical save in one respect: in their case the comma which in ours appears after the words “policy or security” does not appear in the comparable position. On the other hand the British provision places a comma after the word “cease” whilst ours does not. Thus in the British statute the condition which is invalidated like ours is that which either provides “that no liability shall arise” or “that any liability so arising shall cease” but unlike ours apparently, in either case that condition to come within the scope of the prescription must be one becoming operative “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.” If, therefore a condition in the policy stated that no liability should arise or that liability so arising should cease in the event of something being done or omitted to be done before the event giving rise to the claim, such a condition would not be caught by the British statute cited. It was on this basis that cases like British v. Ashfold [1932] 2 K.B. 153, D.C. and Gray v. Blackmore [1934] 1 K.B. 95 were decided, the condition in the respective policies being tied to an event occurring before the accident which gave rise to the claim. It is therefore said that in our case where there is a comma after “policy or security” but none after the word “cease,” the clause “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” governs only one of the two legs of the type of condition dealt with, namely, that which says that “any liability so arising shall cease.” The clause has no bearing on the other leg which states that no liability shall arise.” Our change in the position of the comma was according to this thinking, intended to effect a change in legislative intendment. Conditions in policies whether made dependent on events before or after the happening of the event giving rise to a claim are equally caught by section 8. The ban on conditions restrictive of the insurer’s liability, in our case, is complete and total. The question is whether this is really so.

Having taken the trouble to deal with the condition which provides for a liability which has already arisen ceasing in the event of a specified thing being done or omitted to be done after the happening of the event giving rise to the claim, as the section does, it could fairly be expected that the legislature in furtherance of its alleged anxiety to provide a total prohibition would also dispose expressly of the type of condition which provides for a liability which has already arisen ceasing in the event of a specified thing being done or omitted to be done before the happening of the event giving rise to the claim. But this the section does not do. If the comprehensiveness which it is suggested the Act

[p.376] of [1973] 1 GLR 335 undertook is to be achieved it must be as important to deal expressly with the cessation of existing liability conditioned on an event before the occurrence of the accident as it is to deal with its cessation after the accident. For just as it can be argued that the second type of condition dealt with in section 8 is not covered by the first type, i.e. the condition providing that no liability should arise at all, and needed to be separately provided for, so can it be as forcefully argued that this new type of condition raised is not covered by that first type and should have been provided for separately. If that is so then where is the case that the section imposes a total ban on all conditions avoiding liability whether determined by an event before or after the accident? But accepting for the moment the argument that the section does apparently impose a total ban, the question then is, how can that construction be reconciled with other sections of the Act? A reconciliation has to be done because section 8 does not stand in isolation. And it is an elementary principle in interpretation that a statute has to be looked at as a whole for the legislative intendment that it sets out to enact.

The construction put on section 8 sows the seeds of its own self-destruction when it is considered in relation to other parts of the Act. This apparent blanket neutralisation of all conditions excluding liability is immediately followed by section 9 which itemises specific conditions in the insurance policy and then proceeds to render those nugatory. It provides that:

“9. Where 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 so much of the policy as purports to restrict the insurance of the person insured thereby in respect of any of the following matters—

(a) the age or physical or mental condition of persons driving the motor vehicle; or

(b) the condition of the motor vehicle; or (c) the number of persons that the motor vehicle carries; or

(d) the weight or physical characteristics of the goods that the motor vehicle carries; or

(e) the times at which or the areas within which the motor vehicle is used; or

(f) the horse power or value of the motor vehicle; or (g) the carrying on the motor vehicle of any particular apparatus; or (h) the carrying on the motor vehicle of any particular means of identification other than any means of identification required to be carried under the provisions of the Road Traffic Ordinance, 1952, shall, in respect of such liabilities as are required to be covered by a policy under paragraph (b) of subsection (1) of section 6 be of no effect:

[p.377] of [1973] 1 GLR 335

Provided that nothing in this section shall require an insurer to pay any sum in respect of the liability of any person otherwise than in or towards the discharge of that liability and any sum paid by an insurer in or towards the discharge of the liability of any person which is covered by the policy by virtue only of this section shall be recoverable by the insurer from that person.”

The liabilities in respect of which this section nullified the specified restrictive parts of the policy are exactly the same as those in respect of which section 8 nullifies the conditions, that is, those required to be covered by the policy under section 6 (1) (b) of the Act. It seems to me that if the intention of the legislature had been to avoid all conditions excluding liability as is suggested by section 8, section 9 which avoids restrictions in particular cases would not have been inserted. All the restrictions set out in section 9 are in that case already safely incorporated in the ban in section 8. Not only is section 9, in that case unnecessary, the insertion is certainly impliedly contradictory. The enactment of section 9, and especially coming immediately after the section alleged to impose a total ban, strongly argues that that construction put on section 8 is mistaken.

If the wide interpretation sought to be put on section 8 is correct then one of the two types of condition it set out to avoid is that which simply provides that “no liability shall arise under the policy.” Why should the legislature trouble to enact such a provision? An insurance policy which stipulates that no liability whatever should arise under it will indeed be a curious document. What one may ask, is the point, as far as the assured is concerned, of entering into such an agreement exempting the insurer from all liability under the policy and paying for this privilege with a premium? But that a person in full possession of his faculties would choose to enter agreement of this kind is the logical conclusion to be drawn from the argument that the provision “no liability shall arise under the policy” stands alone ungoverned by the part of section on the happening of the event after the incident giving rise to the claim.

In the circumstances I find myself in some difficulty in accepting the argument that the change of the comma from its position in section 38 of the British Road Traffic Act, 1930, to its present position in our section 8 is justification for the view that the legislature intended to exclude all conditions, whether the events on which they depend occur before or after the event giving rise to the claim. One is bound to conclude if the provisions of the Act are to be read together and be reconciled with each other that there was an error in the punctuation either through an omission in our section to place another comma after the word cease in order to preserve the balance in the sense which we wanted to adopt from the British legislation, or simply through misplacement of the comma. The expression “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” should govern not only the condition providing that “any liability [p.378] of [1973] 1 GLR 335 so arising shall cease” but also that which provides that “no liability shall arise under the policy or security.” The latest British Act on the subject, the Road Traffic Act, 1960 (8 & 9 Eliz. 2, c. 16), inserts commas in both places. As the view has been expressed that this new provision has changed the British position and now opted for the prescription I consider strange, the provision should perhaps be briefly examined. The relevant part of section 206 (2) of the 1960 Act reads as follows:

“A condition in a policy or security issued or given for the purposes of this Part 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 . . .”

Far from adopting a form which makes the words “in the event of some specified thing being done or omitted . . . etc.” apply as a matter of grammar only to “any liability so arising shall cease,” the utilisation of the two commas confirms that the clause applies to both “any liability so arising shall cease” and “no liability shall arise.” If Bright v. Ashfold [1932] 2 K.B. 153, D.C. and Gray v. Blackmore [1934] 1 K.B. 95 have been overruled by the 1960 provision then this fact seems to have escaped the notice of serious commentators on motor vehicle insurance law like MacGillivray on Insurance Law (5th ed.), Vol. 2, para. 2080 and Bingham’s Motor Claims Cases (6th ed.), p. 635 who continue to use those two cases to illustrate the law on the section. Bingham in that case, commits a gross error by adding the following note immediately after reproducing verbatim the words of section 206 (2) of the Road Traffic Act, 1960:

“Note—This section relates to breach of policy conditions after the accident, such as failure to report an accident, but does not affect breaches before or at the time, such as not having a driving licence in force. It replaces without alteration s. 38 of the 1930 Act.”

MacGillivray at paragraph 2080 puts the point this way, “The effect of the section is that if all was in order between the assured and the insurers when the accident occurred, the position cannot be altered by subsequent breaches or by acts or omissions on the part of the assured.” I think these views are correct. I am quite satisfied that if the cases of Bright v. Ashfold (supra) and Gray v. Blackmore (supra) came up once again for decision under the present British legislation they would go the same way.

But cases of that kind are not likely to come before the British courts any more. The reason for this is the existence of the Motor Insurers’ Bureau agreement which has made it unnecessary for plaintiffs in the predicament of those in the cases cited to seek redress under their Act. By the Motor Insurers’ Bureau agreement, the Motor Insurers’ Bureau

[p.379] of [1973] 1 GLR 335 of London agreed with the British Minister of Transport in 1946, subject to compliance with certain conditions, to satisfy any judgment obtained in a court in Britain in respect of a liability compulsorily insurable against by any person or persons irrespective of whether covered by a contract of insurance or not. I have not been able to get at all the documents on the Motor Insurers’ Bureau, but I have looked at the agreement dated 17 June 1946 which gives the scope of the liability of the Bureau. It does not say what the insurers were to get as consideration for their agreement with the Minister to meet this general liability; a reading of that document does not yield an answer to the question on how the Bureau is financed. Somehow the Bureau has money to meet the claims on it. The memorandum to the agreement refers to an earlier agreement made on 31 December 1945 between the Minister and “Those Insurers Transacting Compulsory Motor Vehicle Insurance Business in Great Britain” as “the Principal Agreement.” May be that agreement gives the terms of the undertaking of the British Government. Unfortunately the Principal Agreement is one of the documents I have been unable to lay hands on. Until answers are supplied to the question on the government’s undertaking or the financing of the Bureau it would be unsafe to assume that the Bureau is a charitable institution or to base any decision on that assumption. But the very existence of the agreement is the strongest argument that in Britain even today the legislation on motor insurance, despite amendments through the years to increase its scope, does not by itself provide comprehensive cover for all victims of motor accidents. Hardy v. Motor Insurers’ Bureau [1964] 2 Q.B. 745, C.A. teaches us no more than this, that where the user of the vehicle is covered by compulsory insurance, a victim of an intentional criminal act may recover under the policy, even though the perpetrator of the act himself cannot as a matter of public policy take advantage of his act to get an indemnity from the insurers. Under the Motor Insurers’ Bureau agreement, therefore, the Bureau had to compensate a victim or a third party who suffered injury through the criminal use of a vehicle as the risk was one which should have been covered by compulsory insurance, the Bureau having undertaken to compensate such victims where there was no insurance cover. Hardy’s case (supra) does not, and cannot be taken to, say that where the user is not covered, as it was not in the instant case, the third party can get at an insurance company. We in Ghana have no Motor Insurers’ Bureau nor is there a comparable agreement between the government and insurers. Our duty in this case calls for the construction of an Act, not a non-existent agreement. I do not think that in Britain an agreement even if made between the government and others amends a statute or otherwise affects its construction. Nor do I think it right or proper to import the provisions of some foreign agreement, however beneficial it appears to be, into the task of interpretation of a Ghanaian Act.

There is, to my mind, no reason why the legislature should not choose to distinguish between conditions excluding liability dependent

[p.380] of [1973] 1 GLR 335 on occurrences after an accident on the one hand and those where the occurrences are before that event takes place. The conduct of the assured before the accident could determine the event of the accident, his conduct after the accident never can. While the assured could by his conduct prevent the accident by doing or avoiding those acts specified in prior conditions, it is a simple truth that he cannot conjure away the fact of an accident which has already taken place by anything he subsequently does. If an accident has occurred and a third party has suffered injury as a result, it would be unfair that an insurer who had been bound by the policy up to and at the time of the accident to meet the liability of the assured should escape liability by virtue of some dissolutive condition which occurs after the accident. But the same cannot be said of a policy which is determined or suspended by an act which occurs before the accident. In such a case at the time of the accident there is no insurance cover. I am convinced that this simple distinction determines the approach of section 8 of the Act to the issue. It should be remembered that though the object of the Act as set out was to “make provision for the protection of third parties against risks arising out of the use of motor vehicles, and for purposes incidental thereto,” it did not in fact provide a comprehensive cover for third parties in all cases. Innocent third parties may under its regime be injured through the use of motor vehicles without recourse to any insurance company for compensation. The most obvious example of such misfortune is the victim of an accident where the vehicle is not insured at all. An even more pertinent example can be found in the words of the Act itself. Section 6 which prescribes what an insurance policy must compulsorily cover, continues in the proviso to subsection (1) as follows:

“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 or bodily injury to persons being carried in or upon or entering or getting on 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.”

Victims of accidents in these cases will clearly not be able to reach an insurance company for compensation unless there is a policy which goes beyond the compulsory requirements to cover their risk. This, surely, must provide a complete refutation of what for convenience I describe as the automatic compensation theory.

[p.381] of [1973] 1 GLR 335

The protection envisaged by the Act is not directed exclusively at calling upon the insurance company to provide compensation in every accident. Some protection must lie in the provisions of the Act designed to stop the uninsured user of motor vehicles which denies the victim the capacity to reach an insurance company. To avoid or minimise the occurrence of this possibility section 3 as I have already pointed out prohibits the use of motor vehicles without an effective third-party policy and visits contravention with a penalty. The onus of taking insurance adequate to cover the contemplated user of the vehicle is placed on the owner or user of the vehicle. The obligation to ensure that the vehicle is used according to the agreed terms of the policy is equally on the assured. The mechanism adopted to ensure that no vehicle is used without a policy is at the same time intended to serve in avoiding or minimising cases of user of a vehicle in contravention of the terms of a policy. Whatever our sympathies for injured third parties, there is no doubt that the medium chosen by the legislature for his compensation is ordinary insurance. The assured pays a certain premium determined by the extent of the cover that by agreement with the insurer he decides to take. Some other solution, perhaps more comprehensive in scope, could have been adopted. For example, a form of national insurance for all accidents on the road paid for through general taxation, or a tax imposed on motorists. That would have ensured that compensation was obtained by all victims of motor accidents. The Act did not choose such a course. Admittedly the Act restricts the freedom of the insurer to include certain terms in the contract. But it does not completely tie his hand in the negotiation of the insurance contract. Where the Act does not expressly prohibit action or nullify terms, the parties are at liberty to enter their own contract. Their respective liabilities are determined by what they see as the advantage they derive from the arrangement. It would be wrong, in my view, to impose ex post facto a liability which was not only not contemplated at the time of the contract but was actually expressly excluded.

As already stated section 8 does not to my mind nullify all conditions avoiding liability in a policy. That interpretation rests entirely on a comma. By section 3 of the Interpretation Act, 1960 (C.A. 4), the punctuation forms part of the Act and may be used as an aid to its interpretation; we are not, however, obliged to allow it to enslave us. If the suggested interpretation is accepted there is bound to be confusion as to what the Act does or does not permit. We are told in this case that the section excludes what is commonly termed the “named driver clause.” In justification, reliance is placed on the construction put on the comparable section, in the Kenya legislation by the majority of the East African Court of Appeal in New Great Insurance Co. of India Ltd. v. Cross (1965) A.L.R. Comm. 449, and especially in the judgment of Newbold V.-P. That case involved the consideration of whether the section nullified a clause in the policy enabling the insurer to avoid liability

[p.382] of [1973] 1 GLR 335 if the person driving the vehicle was not licensed or was disqualified from driving. The court held by a majority that such a condition was invalid under the section. Newbold V.-P. in his judgment explained this on the basis of the shift in the position of the comma from where it then was in the British legislation to the position in the Kenya legislation. The Kenya provision is the same as ours. The suggestion therefore is that the reasoning in this Kenyan case should apply to our situation. The named driver clause is therefore struck down by our section 8 on the ground that it is a condition providing that no liability shall arise under the policy. But Newbold V.-P. in the very same case said the following at p. 458:

“[A]n owner must take out a policy of insurance to cover any liability in respect of injury to third parties which he may incur from the use of the vehicle on the road either by himself or by some other person or persons. He need not cover any conceivable person who could use the vehicle, but he must, to comply with the provisions of section 5 (b), cover some person or persons who must be specified in the policy. Thus the cover required by the section may properly be restricted to the vehicle when used by the owner himself, or to the vehicle when used by any other named person, or, again to the vehicle when used by any specified class of persons; but, whoever is specified in the policy as covered in relation to the user of the vehicle, that cover must be against ‘any liability which may be incurred’ by the owner or the specified person ‘in respect of the death of, or bodily injury to any person caused by or arising of the use of the vehicle on the road’.”

Later on Newbold V.-P. speaking on the Kenyan equivalent of our section 10 under which the present claim is based said at p. 464:

“I accept that this section only applies where both the liability is required under s. 5 (b) to be covered by a policy and the liability is in fact covered by the terms of the policy or would be so covered were it not for the fact that according to the terms of the policy the insurer is entitled to avoid it. A liability may be required under s. 5 (b) to be covered by a policy and yet the liability may not be covered by the particular policy. An example of this is where a policy is taken out relating to the use of the vehicle by the insured only but in fact the vehicle is used by another person.”

Clearly despite the opinion of Newbold V.-P., that the equivalent of section 8 nullified conditions avoiding liability both before and after the event, he thought at the same time that the named driver clause was permissible under the Act. I think the pronouncements of Newbold V.-P. in this respect are correct. It is not suggested that our Act is in these material parts different from the Kenya Act. On the contrary we draw inspiration from the Kenya case on the ground that our Act is the same as theirs. We are asked to say, however, that here the named driver

[p.383] of [1973] 1 GLR 335 clause is not permissible on the basis amongst other reasons, of this Kenyan decision. I am unable to accept that view. Not only do I reject it, I also reject for the reasons already stated the view that section 8 would prevent an insurer from avoiding liability even if he had stipulated that the policy should remain in force only when the vehicle was being driven by a licensed driver and the vehicle was not so driven at the time of the accident.

It is not unreasonable that the owner of a vehicle who takes out the policy of insurance and pays for the cover and who is in a better position to control its user should be fixed with the responsibility for ensuring the user of the vehicle according to the terms of the policy. In any case the tenor of the legislation, as would be seen from section 3 and other sections, is that it is for him to ensure by taking the appropriate insurance that victims of accidents arising from his use of the vehicle are protected. If the owner of the vehicle knows that he has only a named driver policy cover then he is in duty bound to ensure that that driver drives the vehicle when he takes it, if he must take it, to the wayside fitter or that the wayside fitter himself is covered by a separate policy against third party risks, or if the fitter has no separate policy, not to take the vehicle to him at all. Nobody is under any obligation to use a wayside fitter at any time.

With the greatest respect I must confess that I find the view that a named driver clause infringes section 9 (a) and (e) somewhat far-fetched. It does appear to me a desperate strain on language to hold that a policy with such a clause imposes a restriction on the “age or physical or mental condition of persons driving the motor vehicle” or on “the times at which and the areas within which the motor vehicle is used.”

I now come to section 10, the section under which these proceedings were brought. Subsection (1) provides 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 of 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.”

The conditions precedent to the liability of the insurance company to satisfy a judgment debt under section 10 of the Act have been stated by the Supreme Court in Owusu v. Royal Exchange Assurance, 21 June 1965, unreported; digested in (1965) C.C. 152, and have been repeated in State

[p.384] of [1973] 1 GLR 335

Insurance Corporation v. Mansah, Court of Appeal, 23 December 1968, unreported; digested in (1969) C.C. 41. I do not propose here to cover the whole ground again. But two of these three conditions are worth recalling, namely, the judgment must be in respect of a liability which is required to be covered by compulsory insurance and secondly, the liability must in fact be covered by the terms of the insurance policy but for the fact that the insurers may be entitled to avoid or cancel or may have avoided or cancelled the policy. These conditions are spelt out directly from section 10 (1). If though the liability is one which should be covered by insurance it is not in fact so covered no insurance company is liable. The Act restricts freedom of contract, it does not provide a substitute for contract. The only question is whether the term in the present agreement is within the restriction. I do not accept that it is.

If the Act had intended to give comprehensive cover to all victims of motor accidents, it would not have gone to the trouble of setting out in the detail found in sections 6, 8, 9 and 10, the extent of a policy cover, the conditions and restrictions to be avoided and conditions upon which the duty of an insurance company to satisfy a judgment debt to a third party arises. It would have achieved its object much more simply by a few short sentences providing that all motor vehicles must be insured against all risks in respect of death or bodily injury to third parties and secondly that such third parties may proceed directly against the insurance company for recovery of damages. Gone would be the numerous provisoes and exceptions in the Act. With them would go any argument that certain terms or situations entitle an insurance company to avoid liability. The Act chose this set of complicated provisions instead because its objective was more limited.

I do not think that the previous decisions of this court on the liability of insurers to third parties were wrong. I confess I am not sufficiently familiar with French law to say how much better the French do things in this respect. Fortunately lack of knowledge of French law is not an insurmountable disability in this case. What we have and previous courts have had to do is to interprete a Ghanaian statute. Our decisions may not satisfy every third party victim but that is due to the limitations which the legislation we have to construe, and which in my view has been correctly construed, imposes on us. I do have every sympathy for the unfortunate third party injured by a vehicle not covered by insurance. But I think it would be wrong for judges to use their power of interpretation to give a meaning totally different from what a piece of legislation expressly states merely because the court takes a particular view of what is socially desirable. The common law may be more positively developed that way. But as long as we accept the respective functions of the legislature and the courts as regards statutes, we would be running a dangerous course if we were brazenly to usurp the functions of the legislature in making new law under the pretext of interpreting the old. The defects in the Act from a social point of view have to be corrected by the legislature which no doubt will in the course of its

[p.385] of [1973] 1 GLR 335 deliberations consider how the reforms are to be paid for. It has been said that we should approach our task with the consciousness that conditions in Ghana were different. The difference in conditions I find most relevant in this case is that the legislature acts much more speedily in correcting faults found in statutes here than legislatures in most other countries do.

At the time of the accident which resulted in injuries to the appellant the vehicle was being used in a manner not covered by insurance. There was no insurance policy in force in that the vehicle was being driven by someone other than the one through whose driving the insurance policy taken was expressly kept in force. On the previous authorities, notably Owusu v. Royal Exchange Assurance (supra), State Insurance Corporation v. Mansah (supra) and Royal Exchange Assurance v. Sosu, Court of Appeal, 4 May 1970, unreported, this appeal should fail. I have since writing the above read the judgment in Godwin v. Lecky (1945) N.I.L.R. 40 in which the validity of a named driver clause fell specifically for consideration in Northern Ireland. As in this case, the arguments on public policy were raised. I am happy to note that the views expressed therein on the policy and scope of the motor vehicle third party insurance legislation of Northern Ireland are not dissimilar from mine.

I would dismiss the appeal

JUDGMENT OF SOWAH J.A.

I have had the privilege of reading the opinions of my brothers before setting down my own views. I must therefore say from the onset that I find myself in agreement with the opinion of my brother Amissah J.A. and will dismiss the appeal. I do however consider it necessary to say a few words as I am in fundamental disagreement with some of the views pronounced in the divergent opinion.

The purpose of the Motor Vehicles (Third Party Insurance) Act, 1958 (No. 42 of 1958), hereinafter referred to as the Act, is to “make provision for the protection of third parties against risks arising out of the use of motor vehicles and for the purposes incidental thereto.”

The Act, however, is almost a verbatim reproduction of the English Road Traffic Act, 1930 (20 & 21 Geo. 5, c. 43); it incorporated some of the amendments to the English Act which had been found necessary during the passage of time. It ought also to be added that even before the passing of our Act the English courts had been called upon, from time to time, to pronounce upon some of the important provisions of their Act. It seems reasonable to presume that our legislature would exclude those provisions of the English Act which tended to frustrate the intent and purpose of providing coverage for third party victims of accidents occasioned by negligent driving. It ought equally to be presumed that where our legislature had adopted the provisions of the English Act without alteration, it intended that the adopted provisions should carry the same meaning and effect as were given to them under the English Act. The reasonable inference is that our legislature must have had cognisance of the decisions bearing on the English Act before adopting it.

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Its of course correct that our courts are not bound to follow decisions of foreign courts and are free to chart their own course; and so be it; but where the foreign piece of legislation is in pari materia with a similar enactment in our laws and where the words used are similar, it does seem prudent to have regard to the experience of those who have chartered the same course before and to observe in what manner we are in agreement with them or otherwise; and it is in this spirit that our courts should examine foreign decisions bearing upon the Act now under consideration. I do not consider that English words must necessarily alter their meaning simply because the countries using the language might have different social and economic circumstances.

Whatever our views are, the answers to the issues raised depend upon the interpretation of the Act; and it is a cardinal principle of interpretation that a statute ought to be read as a whole to give full effect to all its provisions and in order that any inconsistencies or ambiguities may be ironed out. If there be no such ambiguities or inconsistencies and the language of the statute is clear then the duty of the court is to give the ordinary meaning to words and phrases used. There might be occasions where there could be two or more interpretations to phrases and sentences used in a statute, in which case, a court should adopt that construction which more nearly carries out the intent and purposes of the Act. What a court should not do is by a process of interpretation, alter basic provisions of a statute in accordance with its idea of what is right and just: and this, with the greatest respect, is the attempt being made in the divergent opinion. If the principle is to be accepted that under the guise of interpretation, the court could strain the meaning of language to achieve what it deems the intent of the legislature ought to be indeed to achieve what it considers social justice, the court would be usurping the functions of another state organ and, in the process may find itself in confrontation with the organ. It would be a principle fraught with the danger of conflict. In this regard it is worth observing that within the scope of statutory interpretation the law making function of a judge is extremely limited.

With this preface I pass on to the consideration of some aspects of the Act as my brother Amissah J.A. has covered my thinking on most grounds. The preliminary issues before the learned judge, notwithstanding all that has been said, may be formulated thus: first, whether the policy of insurance issued by the respondents was in conformity with the provisions of the Motor Vehicles (Third Party Insurance) Act, 1958, or offends against it? Secondly, whether the respondents can avoid liability by reason of a condition in the policy specifying that the user of the vehicle shall be limited to the holder of driving licence No. 86889 Kwame Amoah who without dispute was not driving or using the vehicle at the time of the accident. It is further not disputed that one Ibrahim Moshie was in charge of the vehicle at all material times.

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For an answer to these issues it is necessary to turn to the Act and to examine the scheme by which the Act seeks to achieve its purpose. Briefly, it seeks to do so by three main devices:

(a) Total ban on the use of vehicle on the roads without a third party insurance cover.

(b) It stipulates the requirement of a policy which would be valid under the Act.

(c) Finally, it prohibits the incorporation into the policy of certain conditions and stipulations.

We may now examine the actual provisions. Subject to certain exceptions, the Act imposes a total prohibition on the use of a motor vehicle not covered by a third party insurance and provides a statutory penalty for offenders in this respect. Section 3 of the Act provides:

“(1) Subject to the provisions of this Act no person shall use, or cause or permit any other person to use, a motor vehicle unless there is in force in relation to the user of that motor vehicle by such person or such other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the provisions of this Act.”

Subsections (2) and (3) deal with penalties for failure to have that coverage referred to in section 3 (1).

Thus it makes it obligatory on every owner of a vehicle and every person using a vehicle to obtain that insurance coverage for which he intends or proposes to use that vehicle. If the owner contemplates limiting the user of the vehicle to himself and for a particular purpose he is at liberty so to do and the Act does not oblige him to take greater coverage; if he intends to extend the user not only to himself but to others then of course he has to take the coverage which would cover such user. Still further he can take out a policy which could cover any use of the vehicle by an unspecified number of persons. All such coverage is within the provisions of section 3. He will of course be guilty of an offence if having taken out a policy for himself, he permits or allows other persons to use the vehicle, vide Evans v. Walkden [1956] 3 All E.R. 64. The brief facts of that case were that a father was engaged in teaching his son how to drive when he was apprehended by the police. The son was sitting behind the driving wheel with the father sitting by his side and having access to all the controls of the car and he could, in case of any emergency, have controlled the car. The father held a policy against third party risks but the policy contained a condition that the underwriters were not liable on claims arising while the car was being driven by an unlicensed driver. It was held there was no policy in force at the time of the tuition of the son. In the course of his judgment Ormerod J. stated the position at p. 66 as follows:

“It is important to look at the terms of the policy, in which the first respondent was the assured, which was in force at the time these

[p.388] of [1973] 1 GLR 335 events happened. Section A of the policy, dealing with third-party claims, states that the insurance company indemnifies the assured for any claim for which he may become liable by injury causing death or damage, and so on, caused by or arising out of the use of the car. If the terms of the policy stopped there, it might very well be said that this was a case where any injury which had occurred—of course there was none—might have been covered by this policy because it came within the words ‘caused by or arising out of the use of the car’; but the policy does not stop there and there are certain conditions. Condition 3 is as follows: ‘The underwriters shall not be liable for any loss or damage or liability (a) arising whilst the car is being driven by an unlicensed driver.’ It is abundantly clear from that, and counsel for the respondents has not argued to the contrary, that if the only driver of the car at the time was the son, who was clearly an unlicensed driver, the policy was not a cover at the time when he was driving.”

The point sought to be emphasized herein, is that the initial obligation to take out the appropriate coverage of policy under the Act rests with the assured. It is for him to decide to what use or uses his vehicle is to be put and what person or persons he would permit to drive or use the vehicle. For on that decision will depend the quantum of premium that he would be called upon to pay. The greater the risk covered, the higher the premium. It is not for him to take out a policy limiting the user of a vehicle to a single person and thereafter permit other persons to use it. He would not be covered under section 3 of the Act and would be committing an offence.

In this connection reference ought to be made to the following passage in Ellis v. Hinds [1947] 1 K.B. 475 per Lord Goddard C.J. at p. 485, D.C. which I consider very apposite:

“If their liability for accidents was covered, there was in force a policy in relation to the user of the vehicle by another person although that person’s separate liability would not be covered. If the owner of a car who has covered his own liability by a policy lends it to a friend he will commit an offence unless either his own policy extends to cover liability incurred by the friend while driving, or the friend has a policy which will indemnify him while he is driving another person’s car. It is not unusual for an owner to effect a policy which covers only liability incurred either by himself alone or by himself and another named person; in such a case use of the car by any other person would not be covered by the policy.”

See also the case of State Insurance Corporation v. Mansah, Court of Appeal, 23 December 1968, unreported; digested in (1969) C.C. 41, which is binding on this court unless it could be distinguished from or be shown to be given per incuriam. In my view the attempt made in both directions is unconvincing.

[p.389] of [1973] 1 GLR 335

The next important provision in the Act is section 6 (1) and it reads:

“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.”

It is said that the combined effect of sections 3 and 6 (1) (a) and (b) is to restrict the assured’s right of taking out a limited policy under section 3 and to impose upon an approved insurance company a duty of ensuring that the assured takes out a policy which will cover any liability without limitation. That section 6 must be read in relation to 3 (1) is correct. Section 3 (1) requires that a policy be taken out. Section 6 (1) then defines the scope of the policy which would satisfy the requirements of the Act. These requirements are: first, that the policy must be issued by an approved insurer; secondly the policy must insure the persons or classes of person specified in it, against 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.” Bandoh indeed took out a good policy under the Act but limited the user of the vehicle to one person. Thus while Amoah was in charge of the vehicle any liability incurred by him to a third party by reason of his negligent act which occasions bodily harm or death to third parties would be covered. The policy was suspended when Bandoh permitted another person to use the vehicle. Motor policies like all insurance policies contain, in express terms, a definition of the risk the the underwriter has undertaken.

If the interpretation sought to be placed upon section 6 (b) is valid, it would mean that when an assured had taken out a policy on a motor vehicle for the carriage of goods he could without an additional coverage use the vehicle for carriage of passengers and any liability incurred by him to third parties would have to be met by the the insurance company. The company could on no account avoid liability to third parties. This approach seems to ignore the fact that there are several types of policies on motor vehicles. There are policies which cover damage to the motor vehicle itself, liability for damage to property, death of or injury to the assured himself, each carrying with it its several premia. The only requirement in section 6 (1) (b) is that the policy must insure the person or classes of person specified in it against liability to third parties. In my view it is for the assured to take out that coverage which he considers appropriate to his circumstance. If he thinks that at all times the user of the vehicle shall be limited to one person he need not take out a

[p.390] of [1973] 1 GLR 335 policy of greater coverage. This law does not forbid it and any attempt to construe section 6 (1) (b) otherwise would be tantamount to altering the basic principles of the Act and in effect legislating, a function not assigned to the courts.

It is said there would be times when the named driver might be sick or unavailable. The answer is, in either case the law forbids the use of the vehicle on the roads. The user of the vehicle by a person not specified in the policy would constitute an offence under the Act. Subject therefore to the restrictions imposed in the Act I find nothing preventing an owner of a car or an underwriter agreeing to a condition that a specified person would drive his vehicle.

The next important provision in this regard is section 8 of the Act. It reads:

“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 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 of the security 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.”

The section is almost a verbatim reproduction of section 38 of the English Road Traffic Act, 1930. The argument is advanced however that upon a correct grammatical analysis of section 8 its meaning would appear different from the English provision: that the section deals with alternative sets of situations. The first alternative comprises conditions taking effect before the accident and the second ground comprises those taking effect after the accident and that the section be construed as follows:

(a) 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 shall be of no effect in connection with such claims as are set out in paragraph (b) of subsection (1) of section 6.

(b) That any condition in a policy or security issued or given for the purpose of this Act providing “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.”

[p.391] of [1973] 1 GLR 335

Thus read, section 8 prohibits the incorporation of conditions and stipulations in a policy which have the effect of enabling the underwriters to avoid liability if and when an accident occurs.

With respect, the argument being advanced is not new; it came up for consideration in the case Gray v. Blackmore [1934] 1 K.B. 95, where Branson J. at p. 106 said:

“It is said that the clause must be read without a comma in it and, as I understand it, in the following way:

‘Any condition (a) that no liability shall arise or (b) that any liability so arising shall cease in the event, etc., shall be of no effect.’ Now, it seems to me that that is an impossible construction to put upon this clause, whether you put a comma after ‘cease’ or not. The section seems to me to be perfectly clearly expressed as it stands and to provide that any condition in the policy providing that no liability shall arise under it in the event of some specified thing being done or omitted to be done after the event giving rise to a claim under the policy, shall be of no effect; in other words, the words ‘in the event of some specified thing being done, etc.,’ apply equally to the words ‘that no liability shall arise …” as they do to the words ‘that any liability so arising shall cease.’ I think the matter may be tested by leaving out one of the suggested alternatives, and dealing with the other by itself. So treated, the section, according to the plaintiff’s argument, would read, ‘Any condition providing that no liability shall arise under the policy shall be of no effect,’ which is obviously a provision which the statute never meant to enact; and the attempt to break up the words of the section as suggested by the plaintiff leads to what seems to me to be a nonsensical provision in the statute.”

It seems inconceivable that our legislature will adopt this provision without material alteration if it intended it to have a different construction from its English counterparts. In my view section 8 deals with conditions relating to matters which happen after liability had arisen under section 6 (1) (b). A few examples of such conditions would be failure to notify the insurance company of an accident, pleading guilty to a driving charge without the consent of the underwriter or failure to commence an action within specified time, vide Revell v. London General Insurance Co., Ltd. (1935) 152 L.T. 258. It has already been pointed out that if section 8 was intended to place a total ban on all restrictions there would be no need for section 9 in the Act which in fact imposes several restrictions and conditions which would not avail an underwriter in the event of a claim by third parties under policies covering third party liability.

[p.392] of [1973] 1 GLR 335

Bandoh applied for and obtained a policy under the Motor Vehicles (Third Party Insurance) Act, 1958; he was issued with a policy and more important still with the statutory certificate of insurance stipulating clearly the person insured. This court does not know who Bandoh is, he may be a poor illiterate farmer or a wealthy literate businessman or even a lawyer capable of looking after his interest. We do not have to speculate on that. The fact is, that he took out a policy which specified that the user of the vehicle would be limited to Kwame Amoah. The vehicle was without insurance immediately it was handed over to Moshie to drive. For that reason the claim of the third party against the insurance company would founder.

I have refrained from pronouncing on the effect of the June 1946 agreement between the British Minister of Transport and Motor Insurers’ Bureau and the Contracts Act, 1960 (Act 25), as I doubt their relevance to the issue under consideration and further think it undesirable to propound general propositions when specific issues are at stake. For my part I will only observe that the agreement of 1946 is outmoded in the modern context and that more equitable and satisfactory results would be achieved by the introduction of a national insurance scheme on the lines of the British Health Scheme or our social security scheme, which would cover all victims of motor accidents in cases where such victims would be without compensation as a result of the limitation of the Act or where third parties are the causes of their own misfortune. Such a scheme will achieve the dual objective of both keeping the cost of premium down and also the cost of transportation. Premiums are high because of the high incidence of accidents in the country and the consequent payment of compensation to third parties and the cost of transportation rises in direct proportion to the increases in premiums. These are however matters of policy with which we are not concerned. The limitations in the Contracts Act, 1960, are self-evident. A party claiming under it will find that he is merely subrogated to the rights of the assured, such as, they are held under the policy. He would be in no better position than the assured.

DECISION

Appeal dismissed.

S.Y.B.-B.