Ng Chiu Wo v. Anglo Starlite Insurance Co Ltd

DCCJ007758/1983

Insurance - Motor vehicle - Condition precedent - Condition requiring writ of summons forthwith - Insured's failure to so give summons - Insurer's receipt of Solicitors' letter warning to enter judgment if insured failed to file defence within 7 days - Insurers, NOT entitled to rely on condition as insurers could still gather information and file defence out of time - Waiver also applied.

Farrell (1970) 2 Lloyd's Law Report p.170 C.A. distinguished.

Lickiss (1966) 1 W. L. R. p.1334 applied.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION N0.7758 OF 1983

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Coram: H. H. Judge E. Li in Court.

Date: 17th November, 1983.

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EX TEMPORE JUDGMENT

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1. This is an Action for $8,553.10 for indemnity suffered as a result of a judgment entered against the Plaintiff arising from a traffic accident which involved the motor vehicle that was covered by accident insurance of the Defendant company as the insurer. It is not in dispute that immediately after the said accident the Plaintiff informed the Defendant of this with the exact time, place and identities of the vehicles involved as admitted in the defence. Any doubt on that has been put beyond a shadow by Exhibit. D.1 motor vehicle claim form that the Defendant company received two days after the accident.

2. The defence is that the Plaintiff failed to produce to them copy of writ of summons taken but by the Plaintiff in the other Action against this Plaintiff in respect of the traffic accident, whether forthwith or at all.

3. P. W. 3, the younger brother of the Plaintiff, gave evidence. He was the one in charge of the vehicle and actually drove the night-shift as a New Territories taxi driver. He says that upon the receipt of Exhibits P.3 and P.4 the copy writ and amended copy writ from his brother P. W. 2, the Plaintiff, and on the lattars' instructions he personally delivered them to the Defendant at its Yuen Long Office one or two days afterwards. It was on one occasion towards the end of November 1982 and about January this year on the other. Two different ladies at the counter of the Yuen Long Office received them and said to him "It's alright, leave it here; I should hand it to the Head Office". Under cross-examination and enquired by the Court for clarification, he did say at one stage that he went once with regard to all the papers Exhibits P. 3 and P. 4 to the Yuen Long Office. After the lunch adjournment, i.e. after the conclusion of his evidence he was recalled by the Court and he re-affirmed his earlier evidence that altogether he went to the Yuen Long Office twice after the traffic accident and all of P.3 and P.4 were personally delivered by him to the Yuen Long Office. He was an extremely unintelligent and very clumsy witness. He had difficulties in expressing himself obviously. On balance, I find as a specific fact that on this apparent inconsistency that the inconsistency was more apparent than real.

4. His evidence that he eventually sometime early this year went to the old Head Office of the Defendant at the Union Bank Building in Central to deliver letter 8 of P.1 would appear to be inconsistent with (a) the stamp on letter 8 that it was received at the Yuen Long Office; and (b) that by then the Head Office of the Defendant company had been removed to the International Building at Des Voeux Road Central, which removal I am sure was true. He said he went there to that address because he referred to the address on the letter-head. He might well have gone up to that address at some stage in connection with this matter or other matters. On the balance of probabilities I find that he must be wrong when he said he went to this address on the occasion of delivering letter 8 of P.1. He was not asked as to whether he had been to that Head Office once or more than once ever.

5. Clumsy and unintelligent as he is, nonetheless I find that he is a truthful witness   specifically that he did deliver copies of Exhibits P.3 and P.4 to the Defendant office at Yuen Long as said in his evidence and amended writ in November last and January this year.   Obviously it would be more convenient to him to do that at the Yuen Long Office rather than to go to Central. He has been a New Territories taxi driver. In all the circumstances of the case, I fail to see why the Plaintiff would not have caused such copy writ and amended writ to be delivered to the Defendant shortly after receipt. The Plaintiff is a detective constable, and surely he is conscious of what had to be done in his own interest; and P.W.3 as a younger brother his New Territories taxi driver, there was no reason why P.W.3 would not have done that on instructions from his elder brother the detective. This is really a question of whether mismanagement on the part of the Plaintiff or mismanagement on the part of the Defendant company's sub-office at Yuen Long who failed to pass them on to the Head Office. The officer-in-charge of that sub-office at Yuen Long was not called. Bearing in mind that the burden is of course on the Plaintiff to prove that notice were given on the balance of probabilities I am inclined to that there was such mismanagement on the part of the sub-office at Yuen Long. I have not over-looked the Defendant's only witness's evidence that in the normal course of business all correspondence from the Yuen Long sub-office would have been passed on to the Head Office nor that which I am sure is true that the sub-office had no authority as neither equipped with nor authorised to deal with claims directly there. However, the witness did admit that the sub-office did receive notice of claim and similar documents. Letter 8 of P.1 would be a good example. As I said there is no evidence from the sub-office itself that they had not received copies of P.3 and P.4 to rebut this direct evidence from P. W. 3 that he did deliver them there. Conn's case (1966) Lloyd's Law Report 1 407 does not assist in this case as that case was concerned with the causation of the accident itself, whereas in this instant case we are concerned with notice with contractual notice.

6. Now Farrell (1970) 2 Lloyd's Law Report 170. Mr. Li for the Defendant places heavy reliance on the headnote whether "insurers must be prejudiced". He specifically refers to the bottom of second paragraph, column 2 at 173 "The plain fact is that the writ was not notified with all reasonable speed. The condition was not fulfilled. The insurance company are entitled to rely on it", per Lord Denning. The obiter just cited in my view fall short of supporting the headnote on prejudice. The case was decided on the factual strength that notification of service of writ was only served on the insurer eight weeks later and only after signing judgment. This case is distinguishable therefrom in that by February the 3rd, 1983, the latest the Defendant company had received letter 8 of P.1 which gave' final notice for filing a defence within 7 days, failing which proceedings will be taken to enter judgment Ex-parte. True, the letter was dated 26th of January 1983 and that might not give sufficient time for the Defendant company to gather full information and for solicitors to be instructed to file a defence in time. Nevertheless as experienced insurer the Defendant company must have known that steps could have been taken to ask for filing defence out of time as that would, normally not be too difficult to obtain. Of course extra costs might be involved but that could be debited to the account of the insured the Plainfiff to be deducted from whatever due to him eventually i.e. really a quantum of set-off. Also true that letter 8 does not amount to a writ but surely it contains all the information necessary to convey knowledge to the Defendant of the vital matter that not only an action was pending but that judgment would shortly be signed if not defended. Really Farrell's case has no application to the instant circumstances. For a better under-standing of the Farrell's case I refer to Wingham's Motor Claims' Cases 8th Edition, pages 886-887. I agree with the learned author when he did not classify prejudicial effect as one or the key issues decided in that case. It was quite unnecessary to bring in prejudice by the Court of Appeal as the requisite notice was never served until after judgment was entered then.

7. In Lickiss v. Milestone Motors Policies (1966) 1 Weekly Law Report, page 1334 at 1340 A and B, per Lord Denning; "The law never compels a person to do that which is useless and unnecessary, if insurers obtain all material knowledge from another source so that they are not prejudiced at all by the failure of the insured to tell them, they cannot rely on a condition to defeat the claim". It was in fact held in that case since the police had told the insurers of pending driving offence proceedings against the insured's driver, it mattered not when the insured failed to reply to a request by the insurer why the insured failed to give contractual notice. I appreciate that intended notice was served in that case whereas it was alleged that the writ itself was not served notwithstanding letter 8 of P.1 but anomalously the necessary information would be the same. It was further held that upon receipt of information of the pending careless driving proceedings, failure to ask for the charge papers from the insured constituted waiver.

8. It would appear from Lickiss as observed by the English Court of Appeal that the question of prejudice is very much relevant to the issue of no notice or insufficient or late notice. I refer to these cases notwithstanding my specific finding of facts merely for clarity of record. Lickiss applies to this instant case.

9. There is an eleventh hours' submission, quite properly I am sure, by Mr. Li ingeniously indeed that no evidence was adduced that the Defendant have actually suffered damages. It is true that no direct evidence was given. However there is the evidence of P.W.3 that he took letter 8 of P.1 to the Defendant after judgment was entered against his brother, the Plaintiff, and execution was being or about to be levied. From his evidence I draw the irresistible inference that judgment was in fact entered and that whether or not the Plaintiff had paid the money, he was bound to pay it at the peril of debtors' imprisonment failing satisfaction or execution before the law is changed as it I understand might be changed.

10. I am satisfied on the balance o?probabilities that the Defendant has proved his case and judgment is entered to the Plaintiff as claimed except cost on which I shall hear solicitors.