Tang Siu Ling v. The Pacific Insurance Co Ltd

HCA004910/1983

Action No. 4910 of 1983

Road Traffic - Liability of insurers to third parties - notice of commencement of proceedings - Motor Vehicles Insurance (Third Party Risks) Ordinance.

A notice to an insurer under Section 10(2) (a) of the Motor Vehicles Insurance (Third Party Risks) Ordinance giving warning of an intention to bring proceedings is good even though it precedes the issue of the writ by several months since the main object of the provision is to give the insurer an opportunity to repudiate liability.

Decision of Cons, J. in Law Dor v. The National Insurance Co. Ltd. [1977] H.K.L.R. - distinguished.

Action No. 4910 of 1983

IN THE HIGH COURT OF JUSTICE

BETWEEN

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Coram: Hon. Mantell J.

Date of Hearing: 14th June, 1984.

Date of Delivery of Judgment: 14th June, 1984.

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JUDGMENT

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1. Section 10 of the Motor Vehicles Insurance (Third Party Risks) Ordinance reproducing a provision in the 1934 English Road Traffic Act allows a successful Plaintiff direct recourse against the insurer of a defendant where damages have been recovered against that defendant as a result of a traffic accident. The procedure is subject to a number of statutory conditions. I am concerned in this case with that under section 10(2)(a) which provides that no sum shall be payable by an insurer under section 10(1) in respect of any judgment, unless before, or within 7 days after the commencement of the proceedings in which the judgment was given, the insurer had notice of the bringing of the proceedings.

2. In this case, the plaintiff had been injured in a traffic accident on 10th September 1978. On 7th December 1982, she obtained judgment against the driver in the sum of $54,558.33 with costs which have been taxed out at $23,522.86. The defendant was unable to meet the judgment and now, in separate proceedings, the plaintiff seeks to recover the amount of that judgment from the insurer of the vehicle who is the defendant in the present action.

3. Several months before any writ was issued in the original action, Mr. Turnbull for the Director of Legal Aid sent, what is said to be, a sufficient notice under section 10(2)(a). It was a notice in what I gather has become, so far as the Director of Legal Aid is concerned, standard or common form; that is to say, it is a printed letter with blanks which are filled in as is deemed appropriate to the particular case. This one was addressed to the Pacific Insurance Co. Ltd., the defendant. It is headed with the registration number of the motor vehicle, the policy number and the date of the accident. The body of the letter reads:

Following the sending of that letter, there was, between 7th July 1980 and the following January, an exchange of correspondence between Mr. Turnbull and solicitors acting on behalf of the Pacific Insurance Company. The last was written by the solicitors for the defendant which refers to a previous letter dated 21st January 1981 from Mr. Turnbull and to a telephone conversation which had taken place on 24th December 1980 and it asks the Director of Legal Aid to note that owing to a breach of duty by the proposed defendant in relation to his conditions of insurance, Pacific Insurance Co. Ltd. will not be taking up the conduct of the proposed action save and except that it is proposed to make application to be joined as defendant with regard to damages. Then this paragraph occurs:

"In relation to section 10 of the Motor Vehicles Insurance (Third Party Risks) ordinance, please be so good as to inform us upon commencement of proceedings. "

Well, notwithstanding that letter and I am sure entirely due to an over-sight, no one in the Legal Aid Department was informed when the writ was issued on 11th February 1981 nor was any letter sent after that on either side before judgment was given on 7th December 1982, something like 22 months later. Not surprisingly, the defendant was dismayed at having missed the opportunity to intervene or to take over the conduct of the case with regard to damages. It is common ground that even at that stage, the defendant could, had it wished, have applied to have had the judgment, in so far as it related to quantum of damages, set aside and might have applied to be joined as a party. From what I have been told of this matter, it has to be said, I think, that they must have had some reasonable prospect of succeeding in such an application.

4. Now, it is said by Mr. Merry for the defendant and said very well, if I may say so, that the notice in the terms which I have read out is not a sufficient notice within section 10(2)(a), or if it was, he says, and by virtue of what followed, the plaintiff ought to be estopped from succeeding in the present claim. A number of other possibilities have been canvassed but I think those are the two main submissions. I was referred to a decision of Mr. Justice Cons, sitting at first instance in the case of Law Dor v. The National Insurance Co. Ltd. ⁽¹⁾ where this very provision fell to be considered. The circumstances in that case were somewhat different to those with which I am concerned. In that case, there had been a notice in proper form. Proceedings had been started and then discontinued and after discontinuance, fresh proceedings were started in relation to the same accident. Mr. Justice Cons took the view that the notice related to the first proceedings to be commenced. Once those proceedings had been discontinued the notice must be deemed to be spent. I respectfully agree with the basis for that decision which was that the provision is intended to avoid an insurer being taken by surprise. In that case if not advised of the second action, the insurer might very well have been taken by surprise. I do not think that the decision helps greatly in the present case. I was also invited to consider the decision of the Privy Council in Ceylon Motor Insurance Association Ltd. v. P.P. Thambugala⁽²⁾. There the Judicial Committee had to construe a provision in similar terms to that in the present case. The argument was advanced that because the notice was not specific and in particular with regard to venue it was insufficient. That argument was rejected by the Privy Council. Mr. Merry sought to distinguish the decision. Mr. Chan says that by analogy it is relevant. In my judgment, the decision does give valuable guidance.

5. It is said that to avoid surprise there should be some correlation between the notice and the issue of the writ. At least the notice should indicate when the writ is to be issued. Otherwise, insurers would have no way of knowing if and when proceedings had been started - not unless, that is, they were to attend daily at the Registry. I can see the force of the argument particularly where there is a considerable lapse of time between notice and issue of writ. The insured may not advise his insurer that proceedings have commenced and the insurer may lose an opportunity to take over the conduct of the action. It might have been more sensible in the case where a plaintiff asserts a right of direct recourse against the insurer to insist either that the insurer be made a party to the action or, at least, that the insurer be given notice of the issue of the writ.

6. But the main object of the sub-section is to give the insurer an opportunity to act under section 10(3) to repudiate liability and it is effective to secure that purpose. Moreover the wording is plain. The only limit as to time imposed is that the notice should be given not later than seven days after the commencement of proceedings. There is no time within which notice must be given before proceedings are commenced. This was a good and sufficient notice.

7. Mr. Merry takes some point as to the final sentence of the notice which reads: "No further warning of intention to commence proceedings will be given. " That may seem to introduce an element of uncertainty, but, reading the letter as a whole, I do not think that any body receiving it could be under any misapprenhension as to what it was.

8. Mr. Merry's second and interesting submission is that the plaintiff is estopped in his claim by having represented that the Legal Aid Department would inform Edmund Chow if and when the writ was issued. He asks me to read the letter of 30th September as containing such a representation. I cannot find any such representation in that or any other letter and I do not think that there is any duty between solicitors to make known that the writ had been issued such as might convert silence into a representation. I find no estoppel.

9. The claim must succeed.

(1)    [1977] H.K.L.R. 119

(2)    [1953] A.C. 584

Representation:

Warren Chan assigned by D.L.A. for Plaintiff.

Malcolm Merry (Edmund W.H. Chow & Co.) for Defendant.