FREE LANKA INSURANCE CO., LTD., Appellant, and A. E. RANASINGHE

099-NLR-NLR-V-63-FREE-LANKA-INSURANCE-CO.-LTD.-Appellant-and-A.-E.-RANASINGHE.pdf


Free Latde<t Insurance Co., Ltd. v. Ranasinghe
529
1961Present: Gunasekara, JT-, and Sinnetamby, J.FREE LANKA INSURANCE CO., LTD., Appellant, andA. E. RANASINGHE, Respondent
S. C. 144 of 1959—D. C. Colombo, 42073
Motor vehicles—Lorry—Insurance against third party risks—Action instituted byinjured person against owner of lorry—Notice to insurer in terms of s. 134 ofMotor Car Ordinance, No. 45 of 1938—Repeal, pending action, of Motor CarOrdinance, No. 45 of 1938, by Motor Traffic Act, No. 14 of 1951—Effect onliability of insurer in a later action—-Maximum amount payable by insurer—Motor Car Ordinance, No. 45 of 1938, ss. 127 (J), 128 {1), 128 (4), 133 (1),134, 138—Motor Traffic Act, No. 14 of 1951, ss. 99 (2), 100 (2), 100 (4), 105(1), 106—Interpretation Ordinance {Cap. 2), s. 6 (3)—Courts Ordinance{Cap. 6), s. 36.
Plaintiff instituted action No. 22727 on the 27tb March I960 against theowner of a lorry for recovery of damages in respect of the bodily injury sustainedby him in consequence of the negligent driving of the lorry. An insurancecompany had previously issued a policy insuring the owner of the lorry againstthird party risks up to the limit of Rs. 20,000. On the 29th March 1960plaintiff gave the insurance company notice of action in terms of section 134 ofthe Motor Car Ordinance, No. 46 of 1938. Pending the action and before heobtained decree in his favour awarding damages for the sum of Rs. 30,000 andcosts of action, the Motor Car Ordinance, No. 46 of 1938, was repealed by theMotor Traffic Act, No. 14 of 1961, which, however, contained no relevanttransitional provisions applicable to pending actions.
On the 17th September 1957 plaintiff instituted the present action seekingto recover from the insurance company the amount payable to him under thedecree obtained by him against the owner of the lorry in Case No. 22727.
Meld, (i) that, at the time of the repeal of the Motor Car Ordinance No. 45 of1938, the plaintiff had acquired a right to be paid by the insurer any sum thatmight be payable to him under the decree in Case No. 22727, which was thenpending, and by virtue of section 6 (3) of the Interpretation Ordinance thatright was not affected by the repeal.
that the fact that, in the case of a lorcy, the liability of the insurer needbe covered only up to Rs. 20,000 in respect of any one accident has no bearingon the question of the amount payable under the decree in respect of it.
that it was open to the trial Judge to order that the defendant companyshould pay whatever sum was taxed in Case No. 22727 as being payable byway of costs but that the plaintiff would not be entitled to obtain a writ ofexecution until he furnished a certified copy of the bill of costs as taxed.
23—lxitt
2S 2534—2,033 (5/62)
530
GTJNASEKARA, J.—Free Lanka Insurance Co., Ltd. v. Ranasinghe
Appeal from a judgment of the District Court, Colombo.
V. Perera, Q.G., with H. W. Jayewardene, Q.C., and A. C. M. Uvais,for Defendant-Appellant.
D. S. Jayaurickreme, Q.C., with K. N. Ckofcsy, for Plaintiff-Respondent.
Cur. adv. vult.
September 27, 1961. Gohasekaea, J.—
•. The defendant appellant, an insurance company, had issued a policyinsuring the owner of a lorry, one A. M. Appuhamy, against any liabilitythat he might incur in respect of death or bodily injury to any personcaused by or arising out of the use of the lorry on a highway. On the29th March 1948, while the policy was in force, the lorry, which wasbeing driven on a highway by a servant of its owner acting within thescope of his employment, collided with a motor car that was being drivenby the plaintiff respondent and caused bodily injury to him. The colli-sion had been due to the negligence of the driver of the lorry. On the27th March 1950 the plaintiff respondent instituted an action againstAppuhamy, Case No. 22727 of the District Court of Colombo, for therecovery of damages in respect of the bodily injury he had sustained,and on the 29th March 1950 gave the appellant notice of that action.On the 24th September 1951 the District Court gave judgment awardinghim damages in a sum of Rs. 15,000 and the costs of the action. On the17th May 1956 the Supreme Court varied the decree of the District Courtby enhancing the amount of the damages to Rs. 30,000, and awardedhim the costs of the appeal. Thereafter, on the 17th September 1957,be instituted the action that has given rise to this appeal seeking torecover from the appellant the amount payable to him under the decreeobtained by him against Appuhamy in .Case No. 22727. The DistrictCourt gave judgment in his favour, ordering the defendant appellant topay him a sum of Rs. 30,000 together with whatever sum might betaxed in Case No. 22727 as the costs payable to him by Appuhamy.Jt is contended on behalf of the appellant that he was under no legalliability to pay the respondent any sum at all, that if he was liable hisliability must be held to be limited to Rs. 20,000, and further that it wasnot open to the learned district judge to order the payment of anunspecified sum as the costs payable in Case No. 22727.
The question whether the appellant is liable to pay the respondentthe amount of the decree obtained by the latter against Appuhamyturns on the effect of the repeal of the Motor Car Ordinance, No. 45 of1938, which was in force on the 29th March 1948 and was repealed by theMotor Traffic Act, No. 14 of 1951, when that Act came into operationon the 1st September 1951. The Ordinance of 1938 was still in forcewhen Case No. 22727 was instituted and when notice of that action wasgiven to the appellant company, but it had been repealed and the Actof 1951 was in force when the decree was entered.
GUNAS.EKLARA, J.—Free Lanka Insurance do.. Ltd. v. Ranasinghe
531
The provisions of the 1938 Ordinance relevant to this question occurin a group of sections contained in Part Vlfl, which is entitled InsuranceAgainst Third-Party Risks. They read as follows :—•
S. 127 (1)…. no person shall use or drive, or cause or permit
any other person to use or drive, a motor car * on a high-way unless there is in force in relation to the use of thecar by that person or that other person, as the casemay be, a policy of insurance, or a security, in respectof third-party risks, in conformity with the require-ments of this Part.
S. 128 (1). In order to conform to the requirements of this Parta policy of insurance in relation to the use of a motorcar must be a policy which—
…
insures, in accordance with the provisions of
paragraph (c), such person, persons or classesof persons as may be specified in the policyin respect of any liability which may be incurredby him or them in respect of the death of orbodily injury to any person caused by or arisingout of the use of the motor car on a highway ;and
(i) . . .
(ii) in the case of a lorry, covers any liability whichis referred to in paragraph (6) and which may beincurred in respect of any one accident, up toan amount which shall not be less than twentythousand rupees ;
S. 128 (4). A policy of insurance shall be of no effect for the purposesof this Part unless and until there is issued by theinsurer to the person by whom the policy is effected acertificate in the prescribed form containing suchparticulars of any conditions subject to which thepolicy is issued and of such other matters as may beprescribed.
S. 133 (1). If after a certificate of insurance has been issued undersection 128 (4) to the persons by whom a policy hasbeen effected, a decree in respect of any such liabilityas is required by section 128(1) (b) to be covered by apolicy of insurance (being a liability covered by theterms of the policy) is obtained against any personinsured by the policy, then notwithstanding that theinsurer may be entitled to avoid or cancel, or mayhave avoided or cancelled, the policy, the insurershall, subject to tbe provisions of sections 134 to 137,
* The term “ motor car ” is defined in the Ordinance so as to include a lorry.
632
GUNASEILAR-A, J.—Free Lanka Insurance Co., Ltd. v. Fanaeinghe
pay to the persons entitled to the benefit of the decreeany sum payable thereunder in respect of that liability,including any amount payable in respect of costs andany sum payable in respect of interest on that sumunder such decree.
S. 134. No sum shall be payable by an insurer under the provi-sions of section 133—-
(а)in respect of any decree, unless before or within
seven days after the commencement of theaction in which the decree was entered, noticeof the action had been given to the insurer bya party to the action ; or
(б)in respect of any decree, so long as execution
thereof is stayed pending appeal.
These provisions are re-enacted, practically verbatim and withoutany material difference of language, in sections 99 (1), 100 (1), 100 (4),105 (1) and 106 respectively of the Act of 1951.
The Act contains no relevant transitional provisions. The learneddistrict judge holds, however, that “ the rights of the plaintiff as againstthe defendant under section 133 were kept alive by virtue of section6 (3) (c) of the Interpretation Ordinance ”. Section 6 (3) of the Interpre-tation Ordinance (Cap. 2), reads :
Whenever any written law repeals either in whole or part a formerwritten law, such repeal shall not, in the absence of any expressprovision to that effect, affect or be deemed to have affected—
(а)the past operation of or anything duly done or suffered under
the repealed written law ;
(б)any offence committed, any right, liberty, or penalty acquired
or incurred under the repealed written law ;
any action, proceeding, or thing pending or incompleted whenthe repealing written law comes into operation, but everysuch action, proceeding, or thing may be carried on andcompleted as if there had been no such repeal.
The learned judge takes the view that Case No. 22727 “ was a proceedingwhich automatically would give rights to the plaintiff as against thedefendant immediately the decree was entered ”, and that “ on the enter-ing of the decree automatically a statutory obligation is cast upon thedefendant by virtue of section 133 of the 1938 Ordinance to satisfythat decree and costs ”.
It is contended for the appellant that the learned judge has taken anerroneous view of the effect of section 6 (3) of the Interpretation Ordinance.The argument is that section 133 of the Motor Car Ordinance of 1938had no provision for a “ proceeding ” and it could operate only if there
GUNAS EJLAJRA, J.—Free Lanka Insurance (Jo., Ltd. v.. Ranasinghe
53 ?•
was a decree, so that its repeal while Case No. 22727 was still pendingprevented the respondent from acquiring any right against the appellant. -He could acquire no right under section 105 (1) of the Act of 1951, whichcorresponds with section 133 (1) of the Ordinance of 1938, for a condition •precedent that had to be satisfied was that there was a decree obtainedby him after a certificate of insurance had been issued under section .100 (4) of the Act, and no relevant certificate could have been issuedunder the Act before the 1st September 1958.
It is not now in dispute that there was in existence on the 29th March1948 a certificate of insurance duly issued by the appellant to Appuhamyunder section 128 (4) of the Ordinance of 1938 in connexion with the policythat was in force at the time of the accident. On that day Appuhamyincurred a liability to pay the respondent damages for the bodily injurysuffered by him, and the liability was one that was required by section128 (1) (6) of that Ordinance to be covered by a policy of insurance andwas in fact covered by the policy in question. Under these circumstances,once the respondent obtained a decree against Appuhamy in respect ofthat liability, then, if the provisions of section 133 of the Ordinancecontinued to be operative, the appellant was under an obligation to payto the respondent any sum so payable under the decree, provided thatthe respondent had given him notice of the action against Appuhamyas required by section 134. At the time of the repeal of the Ordinancethe action against Appuhamy had been instituted and due notice of ithad been given to the appellant. In my opinion the respondent thereforebad at that time an accrued right to be paid by the appellant whateversum might be decreed to be payable to him by Appuhamy in respectof the liability that was covered by the terms of the policy. Theobtaining of a decree was,- to adopt the language of Scrutton L. J. inHamilton Gell v. White 1, a condition not of the acquisition of the rightbut of its enforcement.
In the case just cited the landlord of an agricultural holding, beingdesirous of selling it, gave his tenant notice to quit. Such a noticegiven in view of a sale entitled the tenant to compensation upon the termsand subject to the conditions of section 11 of the Agricultural HoldingsAct, 1908. One of these conditions was that he should within a specifiedperiod give the landlord notice of his intention to claim compensation,and another was that he should make his claim within three monthsafter quitting the holding. He gave due notice of his intention to claimcompensation, but before the tenancy expired section 11 of the Act wasrepealed. He nevertheless made his claim within three months afterquitting. It was held that notwithstanding the repeal of section 11 ofthe Act of 1908 he was entitled to claim compensation under that sectionby virtue of section 38 of the Interpretation Act, 1889, which providesthat where any Act repeals any other enactment the repeal shall notaffect any right acquired under any enactment so repealed. What gave
1 (1922) 2 K. B. 422 at 430.
2*—R 2534 (5/62)
634
GTJNASEKARA, J.—Free Lanka Insurance Co., Lid. v. Ranasinffhe
him the right to compensation was the fact of the landlord having givena. notice to quit in view of a sale. “ The conditions imposed bysection 11 were conditions, not of the acquisition of the right, but of itsenforcement. ”
The decision in the case of Hamilton Gell v. White (supra) appears tome to support the view contended for by counsel for the respondent.At the time of the repeal of the Ordinance of 1938 the respondent hadaoquired a right to be paid by the appellant any sum that might bepayable to him under the decree in Case No. 22727, which was thenpending before the court, and by virtue of section 6 (3) of the Inter-pretation Ordinance that right was not affected by the repeal.
Our attention has been called by the learned counsel for the appellantto the decision of the Privy Council in the case of Director of Public Worksv. Ho Po Sang1 as one that throws light on the present question. Undercertain provisions of the Hong Kong Landlord and Tenant Ordinancea Crown lessee was enabled to evict his tenants if he had been given arebuilding certificate by the Director of Public Works, but a tenantcould appeal by way of petition to the Governor against a proposal ofthe director to give a certificate and the landlord could present a cross -petition. The Governor, after consideration of every such petition andcross-petition, could direct that a certificate be given or be not given“ as he may think fit in his absolute discretion ”. These provisions wererepealed on the 9th April 1957, but there was no express provision inthe repealing Ordinance which enabled consideration to be given to anypending petitions or cross-petitions or which permitted the subsequentgiving of any rebuilding certificate. By section 10 of the Hong KongInterpretation Ordinance the repeal of any enactment was not to affectany right acquired under any enactment so repealed. At the time ofthe repeal of the provisions in question there were before the Governorpending petitions from the tenants of a Crown lessee and a cross-petitionfrom him. In October 1957 the Governor ordered that a rebuildingcertificate be given and a certificate was issued by the director. Thelessee then served his tenants with a notice to quit, and they thereuponsued him and the director for a declaration that after the repeal thedirector had no legal authority to issue a rebuilding certificate. It washeld that on the 9th April 1957 the lessee had no accrued right to begiven a rebuilding certificate ; for the director was under no obligationto issue a certificate in accordance with his declared intention even ifthere had, been no appeal to the Governor against his proposal, and ifthere had been no repeal of the relevant provisions there had to be anexercise of discretion by the Governor.
The present case is distinguishable. Under the repealed Motor CarOrdinance the injured third party could acquire a right to recover fromthe insurer any sum payable under a decree obtained against the insured
* {1961) 2 AU B. R. 721 (P. (7.)-
OUNASEKARA, J.—Free Lanka Insurance Co., Ltd. v. Ranaeinghe
535
and the acquisition of that right was not dependent on the exercise of.a discretion vested in some authority. In Ho Po Sang’s Case (supra)“ the lessee had no right. He had no more than a hope that the Governorin Council would give a favourable decision ** x.
The insurance policy limited to Rs. 20,000 in respect of any one acoidentthe appellant’s liability to indemnify Appuhamy in respect of third-partyrisks. It is contended on the appellant’s behalf that that is the maximumamount that he could become liable to pay to a third party under section133 of the Ordinance. What that section requires'the insurer to payto the third party is any sum payable under the decree in respect of aliability such as is required by section 128 (1) (6) to be covered by a policyof insurance and is in fact a liability covered by the terms of the policy.The kind of liability in respect of which insurance is required by section128 (1) (b) is liability in respect of the death of or bodily injury to anyperson caused by or arising out of the use of a motor car on a highway.
If the vehicle is a lorry, the policy must—in terms of the same provisionread with paragraph (c) which is incorporated in it by reference—coverthat liability up to an amount of at least Rs. 20,000 in respect of anyone accident. It is contended that in the use of the term “ covered ”in section 133 there is a reference to the quantum and not merely the kindof liability that is contemplated in the section and that it is impliedthat the insurer’s liability under it is restricted to the amount of thecover, apart from the costs of the action.
I do not agree. The quantum that is contemplated in the use of theterm “ covered ” is the amount of the insurer’s liability to the insured.The liability to which the decree relates is that of the insured to the thirdparty. It is the amount payable under the decree in respect of thisliability that section 133 requires the insurer to pay to the third party.The fact that the liability need be covered, and is in fact covered, onlyup to Rs. 20,000 in respect of any one accident has no bearing on thequestion of the amount payable under the decree in respect of it. Thepossibility that an insurer may become liable under section 133 to payto a third party a sum in excess of the amount of the cover is recognizedin the Ordinance ; for section 138 provides that in such an event heshall be entitled to recover the excess from the insured.
In Case No. 22727 A. M. Appuhamy was ordered to pay the presentrespondent’s costs in both courts. In terms of section 133 of the Ordinancethe appellant company is liable to pay to the respondent any sum payableunder the decree in that case, “ including any amount payable in respectof costs ”. At the time of the trial of the present case these costs hadnot been taxed. The learned district judge made order that the appellantshould pay whatever sum was taxed in Case No. 22727 as being payableby way of costs, but that the respondent would not be entitled to obtaina writ of execution until he furnished a certified copy of the bill of costs
* (1961) 2 All E. R. at p. 730.
630 The Ceylon Workers' Congress v. StiperintenderU, Rallebokka Estate
as taxed. It is contended for the appellant that the “ amount payablein respect of costs ” can only be the amount ascertained after taxation,and that the respondent, having failed to have his costs taxed, was notentitled to recover any sum on that account. The order made by thelearned judge ensures that the respondent will not be able to recovermore than the taxed costs and that no prejudice will be caused to theappellant. In terms of section 36 of the Courts Ordinance (Cap. 6),no judgment, sentence or order pronounced by any court shall on appealor revision be reversed, altered, or amended on account of any error,defect, or irregularity which shall not have prejudiced the substantialrights of either party. There appears to be no sufficient ground forinterfering with the learned judge’s order on this point.
In my opinion the appeal must be dismissed with costs.
Sinnetamby, J.—I agree.
Appeal dismissed.