ASUNKE v. JAJA AND ANOTHER [1968] GLR 993

DIVISION: HIGH COURT, TAMALE

DATE: 7 NOVEMBER 1968

BEFORE: EDUSEI J.

NATURE OF PROCEEDINGS

APPLICATION by a judgment debtor for a stay of execution and release of his attached vehicle. The facts are stated in the ruling.

COUNSEL

E. O. Appiah for the plaintiff.

J. Allotei-Cofie for the first defendant-applicant.

JUDGMENT OF EDUSEI J.

On 29 April 1968, the plaintiff obtained judgment against the defendants in a running-down action and was awarded damages of N¢5,684.00 together with N¢350.00 costs. The defendants have appealed against the judgment, and on 14 May 1968, the court on the application of the first defendant granted a stay of execution as to the sum of N¢2,250.00 only.

The State Insurance Corporation, the insurers of the first defendant’s vehicle, after the judgment entered into negotiations for settlement, and it was agreed that the sum of N¢3,350.00 should be paid by them to the plaintiff in full settlement of the judgment debt and costs. The payment of the settled sum would be in further consideration of the abandoning of the appeal filed by the defendants. The settled figure of N¢3,350.00 has not been paid, and in the meantime the plaintiff, relying on her judgment, proceeded to execution in respect of the amount which was not affected by the stay of execution granted on 14 May 1968. The first defendant’s vehicle No. GF 673 [p.995] of [1968] GLR 993 was thus attached on or about 30 August 1968. The first defendant therefore brought this instant application praying for a stay of execution and also asking for the release of his vehicle.

There are two matters upon which the first defendant-applicant relies for a stay of execution. Firstly, it was argued on his behalf that the parties have agreed on the figure of N¢3,350.00 in full settlement and a discharge certificate had been signed by the plaintiff; secondly, the plaintiff has not produced a tax clearance certificate in terms of the Income Tax Decree, 1966 (N.L.C.D,. 78), para. 81A (3) as inserted by paragraph 4 (1) (a) of Income Tax (Amendment) Decree, 1968 (N.L.C.D. 265), and so payment has not been made to the plaintiff. Both counsel admit that though a discharge certificate had been signed by the plaintiff actual payment has not been made to her in terms expressed in the discharge certificate (exhibit A). I shall deal with the more important matter first and it is this: Whether the plaintiff should produce a tax clearance certificate before payment of the N¢3,350.00 is made to her by the State Insurance Corporation. The determination of this question calls for the construction of N.L.C.D. 78, para. 81A (3) as inserted by paragraph 4 (1) (a) of the Income Tax (Amendment) Decree, 1968 (N.L.C.D. 265). The said section is couched in these words:

“81A. (3) No insurance company shall pay any money in respect of any claim made under any policy issued by that company unless the person to whom the money is payable under the policy produces to the company a tax clearance certificate issued in respect of himself and valid for the year of assessment in which the money is to be paid.”

The burden of the first defendant’s complaint is that without the production of a tax clearance certificate by the plaintiff the State Insurance Corporation are precluded from making payment to her. Counsel for the plaintiff does not accept the interpretation placed on the paragraph in question by the first defendant’s counsel.

It is an elementary principle of construction of statutes that the words used therein must be given their ordinary meaning, and it is only when the words so used are not clear that resort is made to the rules governing interpretation of statutes, and Decrees of the National Liberation Council in my view for all practical purposes come under the rubric of “statutes.” Thus Bayley J. in R. v. Ramsgate (Inhabitants) (1827) 6 B. & C. 712 at p. 715 said: “It is very desirable in all cases to adhere to the words of an Act of Parliament, giving to them that sense which is their natural import in the order in which they are placed.” In 132 Lord Warrington of Clyffe approved of this principle in Barrell v. Fordree [1932] A.C. 676 at p. 682, H.L. when he stated [p.996] of [1968] GLR 993 that, “the safer and more correct course of dealing with a question of construction is to take the words themselves and arrive if possible at their meaning without, in the first instance, reference to cases.”

I propose therefore, in my attempt at construing paragraph 81A (3) of N.L.C.D. 78 as inserted by N.L.C.D. 265, para. 4 (1) (a) to adopt the course suggested by Lord Warrington of Clyffe.

It is to be observed, however, that a contract of insurance is an agreement between the insurance company and the insured, and the rights and duties of the parties are contained in the policy of insurance. The rights of a third party, like the plaintiff herein, vis-a-vis the insurance company are statutory. This is to say that the statutory rights, as against the insurers, of the injured third party are governed by the Motor Vehicles (Third Party Insurance.) Act, 1958 (No. 42 of 1958). By section 10 of the Act of 1958 a third party is given a right against the insurers when he obtains judgment against the insured, and he must satisfy certain conditions. The requirements are:

(a) a certificate of insurance (or security) must have been delivered to the policy holder under subsection (4) of section 6 of Act No. 42 of 1958;

(b)judgment must have been obtained against any person insured in respect of liability under section 6 (1) (b);

(c) such liability must be covered by the terms of the policy.

If the third party satisfies these three requirements the insurer is bound to pay him (i) any sum payable under the judgment in respect of the insured’s liability; (ii) any amount payable in respect of costs; and (iii) any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

And now to paragraph 81A (3) of N.L.C.D. 78 as inserted by N.L.C.D. 265, para. 4 (1) (a). The claim of a third party against the insurers is not made under a policy issued by these insurers but rather it is a claim made under a statute and this seems to be the interpretation that ought to be placed on the first leg of N.L.C.D. 78, para. 81A (3) as inserted by paragraph 4 (1) (a) of N.L.C.D. 265 which is under consideration i.e. “No insurance company shall pay any money in respect of any claim made under any policy issued by that company . . . “ (The emphasis is mine.) It is the statute (i.e. section 10 of the Motor Vehicles (Third Party Insurance) Act, 1958 (No. 42 of 1958)) that brings into existence the claim of the third party. The second leg of the paragraph makes the position even clearer when it states “unless the person to whom the money is payable under the policy produces to the company a tax clearance certificate . . .” (The emphasis is mine.) The question to be asked is this: To whom is the money payable under the policy? The answer to this is, of course, the insured. It is the insured with whom the insurance company has a contract and [p.997] of [1968] GLR 993 therefore he is the person to whom the money is payable under the policy. The privity of contract exists between the insured and the insurance company, but no such privity does exist between the third party and the insurance company, for any right that the third party has against the insurance company is statutory whilst the insured’s right against the insurance company is a common law right as evidenced by the policy of insurance.

There is no dispute that the plaintiff (the third party) has satisfied the requirements of (a), (b) and (c) specified above because if it were not so the State Insurance Corporation would not have taken it upon themselves to negotiate settlement on behalf of their insured after judgment had been obtained against him. In fairness to them they do not dispute satisfaction of those requirements by the plaintiff. On the contrary they agree that the plaintiff has satisfied them in view of the content of exhibit A.

I decide therefore that since the plaintiff is not claiming under any policy but under a statute she is not under any legal obligation, statutory or otherwise, to produce a tax clearance certificate to the State Insurance Corporation before payment is made to her, which payment they are statutorily bound to pay in the circumstances.

I wish to say in connection with this matter that it is my view that the words in that paragraph are demonstrably clear and admit of no ambiguity. If the legislative organ of the Republic (National Liberation Council) had intended something else I am afraid that the draftsman has not, in my view, succeeded in achieving that result and it is not the function of the courts to make good what was intended but is not there. Such a duty is within the sole competence of the legislative authority; it is within the special preserve of the law-making agency in the State. It is no wonder therefore that in Magor and St. Mellons R.D.C. v. Newport Corporation [1951] 2 All E.R. 839 at p. 841, H.L. Lord Simonds reiterated the well-established principle in the following words: “It appears to me to be a naked usurpation of the legislative function under the thin disguise of interpretation, and it is the less justifiable when it is guesswork with what material the legislature would, if it had discovered the gap, have filled it in. If a gap is disclosed, the remedy lies in an amending Act.”

The whole tenor of the argument of learned counsel for the first defendant-applicant showed that he wanted the court to fill in the gap so as to include a third party who makes his claim not under a policy but under a statute. Perhaps learned counsel might have had in his mind what Denning L.J. (as he then was) said in Magor and St. Mellons R.D.C. v. Newport Corporation [1950] 2 All E.R. 1226 [p.998] of [1968] GLR 993 at p. 1236, C.A.: “We sit here to find out the intention of Parliament and of Ministers and carry it out, and we do this better by filling in the gaps and making sense of the enactment than by opening it up to destructive analysis.” With the greatest respect I do not share the learned judge’s view on the matter, though I have a great personal admiration for this eminent English judge whose judgments I have always read with relish and I have cited quite a number of them in my own judgments. The first part of the passage appears to be an echo of what was said by Sir Edward Coke in Heydon’s Case (1584) 3 Co. Rep. 7a over 300 years ago, and so regarded it is not objectionable, for the intention of Parliament or any law-making authority is gleaned from the words used in an enactment. But the second part is obviously out of tune with the modern rules of interpretation, and the way the passage is stated by the learned Lord Justice might well induce grave misconception of the function of the court. I draw comfort, however, from the fact that when the case went to the House of Lords the law lords were unanimous in rejecting that proposition. Be that as it may, if the construction I have placed on the section in question is wrong, the Court of Appeal is there to set me right, for after all it is trite saying that on a question of construction different minds may come to different conclusions; but if on the other hand my construction is proved to be correct I shall derive some satisfaction from the fact that I have not, by my interpretation, placed any uncalled for burden of producing a tax clearance certificate, on the innocent injured third party.

In conclusion I should refer to the other argument advanced by counsel for the first defendant-applicant. He pointed out that in view of the agreement reached about the payment of the settled figure of N¢3,350.00 it was wrongful for the plaintiff to attach the vehicle No. GF 673 of the first defendant.

Counsel in support of this argument referred to exhibit A (the discharge certificate) and he therefore pressed on the court to order the release of the vehicle. Exhibit A is in these words:

“Received by Muniratu Asunke from State Insurance Corporation, Accra, the sum of N¢3,000.00 (plus N¢350.00 costs awarded by court) in full satisfaction, liquidation and discharge of all claims competent to me upon the said State Insurance Corporation in respect of all loss, injury or damage sustained by me whether now or thereafter to become manifest, arising directly or indirectly from the accident which occurred to me on or about the . . . day of . . . Nineteen hundred and Sixty-eight . . . in or near . . . I acknowledge that this payment is made without any admission of liability. This payment is in satisfaction of the [p.999] of [1968] GLR 993 judgment and in consideration of the abandonment of the appeal in respect of suit No. 46/1966, High Court, Tamale.”

A careful reading of exhibit A shows that payment has been made to the plaintiff, and that “the payment was made in satisfaction of the judgment and in consideration of the abandonment of the appeal in respect of suit No. 46/1966, High Court; Tamale.” It is admitted that payment of the settled figure has not been made to the plaintiff, and this is clear from paragraphs (6), (7), (8), (9) and (10) of the first defendant’s affidavit and there is nothing in his affidavit to show that the appeal mentioned in exhibit A has been abandoned. Counsel for the first defendant frankly admitted in the course of his argument that the two matters of payment and abandonment of the appeal had not been carried out by the State Insurance Corporation and the first defendant. He, however, contends that it is so because the plaintiff has not produced a tax clearance certificate. It is abundantly clear therefore that exhibit A, the discharge certificate, does not represent the true position of what took place between the parties. What I can see the plaintiff intended was that on payment of the agreed figure of N¢3,350.00 by the State Insurance Corporation to her, she the plaintiff would have no claim whatsoever against the said State Insurance Corporation because the payment would be in satisfaction of the judgment she obtained against the first defendant, the insured of the State Insurance Corporation. The receipt of this sum by the plaintiff would also be in consideration of the first defendant abandoning the appeal he has filed against the judgment given in favour of the plaintiff by the High Court, Tamale on 29 April 1968. Indeed the first defendant’s own affidavit supports the plaintiff’s contention. Exhibit A does not bear out the intention of the plaintiff. The document, exhibit A was prepared by the State Insurance Corporation and it is of a totally different description or character from what the plaintiff intended it to be. It is false in every particular, and such a document being void against the plaintiff cannot be relied upon by the first defendant whose insurers are the State Insurance Corporation: see Gallie v. Lee [1968] 2 All E.R. 322. If, nevertheless, the clear intention of both the plaintiff and the State Insurance Corporation was that on payment of N¢3,350.00 by the latter to the former it would be in full satisfaction of the judgment debt and costs and as consideration for the first defendant abandoning his appeal against the judgment given in favour of the plaintiff, [p.1000] of [1968] GLR 993 then it is my view that the concept of “accord and satisfaction” does not enure to the benefit of the first defendant because the State Insurance Corporation has not paid the agreed amount to the plaintiff. There is, however, no evidence as to the specific time when payment should be made but it would appear from the rival affidavits that the negotiations to settle the figure took place before 11 July 1968 and on that day the plaintiff signed exhibit A (the discharge certificate) which was given to the representative of the first defendant’s solicitor for delivery to the State Insurance Corporation, Accra. What then would be the reasonable time for the payment of the amount in the circumstances? The amount had been agreed upon; a discharge certificate had been executed by the plaintiff on 11 July 1968 and handed to the representative of the first defendant’s solicitor for delivery and who left the same day for Accra, presumably by air. In these circumstances, I fail to understand why payment was delayed until the promulgation on 20 July 1968 of the Income Tax (Amendment) Decree, 1968 (N.L.C.D. 265), which, in the opinion of the insurance company, made the production of a tax clearance certificate by the plaintiff a sine qua non for payment of the agreed figure. On the discharge certificate, exhibit A, the office date stamp shows its receipt by the State Insurance Corporation on 2 September 1968. There has not been any explanation from any source why exhibit A allegedly got to the corporation’s office on 2 September 1968, about six weeks after it got to the possession of the representative of the first defendant’s solicitor for delivery. The cause of the delay ought to have been explained by somebody like the first defendant, or his solicitor or such solicitor’s representative or the State Insurance Corporation but no explanation has been proffered. There is no burden at all on the plaintiff to explain the cause of the alleged delay. Indeed there was negligence somewhere but surely not on the part of the plaintiff and she must not suffer for this state of affairs. N.L.C.D. 265 was published in the Gazette on 20 July 1968 and came into force retrospectively on 1 July 1968. In my view the important date for the purposes of this case was the date of the promulgation of the Decree and this was on 20 July 1968. Having regard to all the circumstances of this case my view is that a period of seven days from 11 July 1968 would have been a reasonable time within which payment of the sum of N¢3,350.00 should have been made, for all that it remained for the State Insurance Corporation to do was to issue a cheque for the agreed amount.

Since payment of the agreed sum of N¢3,350.00 has not been made to the plaintiff by the State Insurance Corporation or the sum of N¢3,784.00 in respect of which no stay of execution was granted on 14 May 1968, by the High Court, Tamale, the plaintiff, in my

[p.1001] of [1968] GLR 993 opinion has every legal justification to proceed to execution, and the attachment of vehicle No. GF 673 was not wrongful.

In the result I dismiss the first defendant’s application.

DECISION

Application dismissed.

F. S. T.