Easter Term
[2018] UKPC 8
Privy Council Appeal
No 0101 of 2016
JUDGMENT
Maharaj
and another (Appellants) v Motor One Insurance Company Limited
(Respondent) (Trinidad and Tobago)
From the Court of Appeal of the Republic of Trinidad
and Tobago
before
Lord Mance
Lord Kerr
Lord Wilson
Lord Sumption
Lady Black
JUDGMENT GIVEN ON
30 April 2018
Heard on 1 March 2018
|
Appellants
|
|
Respondent
|
|
Reeyah Chattergoon
|
|
Shawn A Roopnarine
|
|
Taurean Dassyne
|
|
Helen Lochan
|
|
Prakash Maharaj
|
|
Shanta Balgobin
|
|
(Instructed by Reeyah
Chattergoon & Associates)
|
|
(Instructed by Roopnarine
& Co)
|
LORD WILSON:
1.
On 17 September 2013 Mr Rampersad Maharaj and Mr Radesh Maharaj (“the
claimants”) brought a claim in the High Court against Motor One Insurance
Company Ltd (“the insurer”). On 13 April 2016 the Court of Appeal (Narine JA,
who gave the substantive judgment, and Moosai and Jones JJA, who agreed with
it), in the course of reversing a judgment given in the High Court by Kangaloo
J on 29 July 2015, held that their claim was barred by section 3(1)(c) of the
Limitation of Certain Actions Act (“the Limitation Act”). The claimants appeal
as of right to the Board under section 109(1)(a) of the Constitution of the
Republic.
2.
On 1 August 1988 the first claimant was driving a motorcycle in the town
of Penal. The second claimant was his pillion passenger. Their motorcycle
collided with a motor car, registration number PT 6676, driven by Mr
Parmashwar. The claimants suffered serious injuries.
3.
On 13 February 1990 the claimants sued Mr Parmashwar for having
negligently caused their injuries. Ever since then, the history has been one of
astonishing forensic delay, perhaps testament to the past difficulties of
progressing litigation in the courts of the Republic. It was only on 28 April
1998 that judgment was given for the claimants against Mr Parmashwar, with
damages to be assessed. It was only on 11 August 2005 that the damages were
duly assessed - in substantial sums for each claimant. Mr Parmashwar has not
paid the damages or any part of them.
4.
The claimants’ claim against the insurer is founded on section 10(1) of
the Motor Vehicles Insurance (Third-Party Risks) Act (“the Insurance Act”). It
provides:
“If, after a certificate of
insurance has been delivered under section 4(8) 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 under section 4(1)(b) (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 the
judgment any sum payable thereunder in respect of the liability …”
5.
Were the present claim to proceed to trial, there might be an issue as
to whether Mr Parmashwar was a “person insured by the policy”. It is clear that
he was not the policy-holder; and the insurer (which has assumed the
obligations of a different company which issued the policy) does not appear to
have assisted the claimants or the court to learn whether he was a permitted
driver under the policy and was thus insured by it. Were the claim to proceed,
the terms of the policy in that respect would need to be disclosed. But the
issue before the Board is whether the Court of Appeal was wrong to hold that
the claim was time-barred under section 3(1) of the Limitation Act, which
provides:
“The following actions shall not
be brought after the expiry of four years from the date on which the cause of
action accrued, that is to say:
…
(c) actions to recover any
sum recoverable by virtue of any enactment.”
6.
The insurer contends, at any rate before the Board, that the alleged
cause of action against it under section 10(1) of the Insurance Act accrued on
28 April 1998, when judgment on the liability of Mr Parmashwar to the claimants
was given. It points to the words of section 10(1) and contends that the cause
of action accrues when a “judgment in respect of any … liability covered by the
terms of the policy … is obtained against any person insured by the policy”
even if the “sum payable thereunder in respect of the liability” is identified
only after its accrual; and in that respect it cites the decision of the Court
of Appeal of England and Wales in Hillingdon London Borough Council v ARC
Ltd [1999] Ch 139, in the words of Potter LJ at para 25, that
“for the purposes of limitation, a
cause of action may accrue for ‘any sum recoverable by virtue of any enactment’
although that sum has yet to be quantified by some process of agreement or
adjudication.”
The claimants dispute that their alleged cause of action
under section 10(1) accrued prior to 11 August 2005, when, in the action
against Mr Parmashwar, their damages were assessed; and such was the date of
its accrual accepted by the Court of Appeal. But, were the Board to agree with
the Court of Appeal that the time for bringing the action which the claimants
brought against the insurer on 17 September 2013 was only four years from
accrual of the cause of action, it would be barred irrespective of whether the
cause of it accrued on 28 April 1998 or 11 August 2005.
7.
The main issue therefore is whether, as the Court of Appeal concluded,
the action of the claimants under section 10(1) of the Insurance Act is an
action “to recover any sum recoverable by virtue of any enactment” within the
meaning of section 3(1)(c) of the Limitation Act and is therefore on any view
time-barred.
8.
In challenging the Court of Appeal’s conclusion Ms Chattergoon on behalf
of the claimants makes a variety of submissions which the Board will assemble
in the paragraphs which follow.
9.
The context of her argument is the legislative background to section
3(1)(c) of the Limitation Act. The Act came into force on 17 November 1997, in
other words just prior to the date in 1998 when the claimants obtained judgment
against Mr Parmashwar and thus on any view prior to the accrual of any cause of
action against the insurer. Prior to the Act’s commencement the period of
limitation for the bringing of a claim against an insurer under section 10(1)
of the Insurance Act was governed by section 3 of the Limitation of Personal
Actions Ordinance (“the Ordinance”). This had provided that all “actions …
brought to recover any sum of money secured by any … specialty … shall … be
brought at any time within 12 years next after a present right to receive … the
same shall have accrued …” There is no doubt that under English law the concept
of a right secured by a “specialty” has included a right of recovery conferred
by a statute, to which in the UK is attached the Royal Seal: see the exposition
of Oliver LJ in the English Court of Appeal in Collin v Duke of Westminster
[1985] QB 581 at 601-603.
10.
The Limitation Act does not refer to a “specialty” and Ms Chattergoon
argues that there is a lacuna in the Act which, while providing by section
22(2) for the repeal of the Ordinance, failed to provide any substitute period
of limitation for various actions, including for an action under section 10(1)
of the Insurance Act. She is certainly correct to say that the Limitation Act
failed to cater for one type of action founded on a specialty: for section
3(1)(a) of the Act expressly excludes from the ambit of the section actions
which are founded on contracts made by deed in circumstances in which no other
section applies to them. In Republic Bank Ltd v Peters HCA No S-496 of
2005 Boodoosingh J at paras 41 to 43 declined to accept that Parliament
intended not to apply a period of limitation to such actions and held that, in
not having provided any different period of limitation, it must have intended
that the period of 12 years provided by the Ordinance should continue
notwithstanding the latter’s repeal.
11.
Ms Chattergoon invites the Board to reach a conclusion similar to that
of Boodoosingh J in relation to the different type of action on a specialty now
brought by the claimants. On what basis, however, does she say, generally, that
the Limitation Act provides no period of limitation for their action under
section 10(1) of the Insurance Act and, specifically, that their action is not
“to recover [a] sum recoverable by virtue of any enactment” within section
3(1)(c) of the Limitation Act?
12.
The answer (submits Ms Chattergoon) is that an action under section
10(1) of the Insurance Act is for the recovery of a sum recoverable by virtue
of a contract, not by virtue of an enactment. The contract to which she refers
is the contract between the policy-holder and the insurer; and (so her argument
continues) the effect of section 10(1) is no more than to displace the doctrine
of privity of contract by enabling a judgment-creditor of a person insured by
the policy to sue under the contract as if he had been a party to it. She
likens the effect of section 10(1) to that of section 17(1) of the same Act
under which, when a person liable to a third party but entitled to be
indemnified against the liability under a contract of insurance becomes
bankrupt or in the case of a company is wound up, that person’s rights under
the contract are transferred to the third party.
13.
Ms Chattergoon seeks support in section 3(2) of the Limitation Act,
which provides that an “action shall not be brought upon any judgment after the
expiry of 12 years from the final judgment”. The facility to bring an action
upon a judgment is largely archaic; but it seems that in the past a claimant
was occasionally allowed to proceed to a second judgment in order to take
enforcement proceedings no longer available under the first. At all events, in
circumstances in which Parliament intended that the claimants should have 12
years in which to seek recompense under the judgment by means of a further
action against Mr Parmashwar, how (asks Ms Chattergoon) could it have intended
that they should have only four years in which to seek recompense under it by
means of an action against the insurer under section 10(1) of the Insurance Act?
14.
An initial question is whether Ms Chattergoon’s alleged parallel between
rights under sections 10(1) and 17(1) of the Insurance Act would, even if
valid, avail the claimants. In her rush to escape the coils of section 3(1)(c)
of the Limitation Act by alleging rights under section 10(1) to be contractual,
does she not fall headlong into section 3(1)(a), which provides for a
limitation period of four years for the bringing of actions founded on contract?
15.
But, with respect to her, the alleged parallel is in any event invalid. Section
10(1) does not provide for the transfer of rights under a contract. It is not a
displacement of the doctrine of privity. Claimants under section 10(1) do not
sue insurers under the policy: their right is to sue the insurers for the
amount identified in the judgment obtained by them against the person insured
but it is subject to qualifications set by the subsection which may make their
recovery there under higher or lower than any yield under the terms of the
policy. Thus the subsection provides that any entitlement on the part of the
insurer to avoid the policy should be overridden: this provision may therefore
precipitate a recovery higher than under its terms. Equally, however, the
subsection limits the insurer’s obligation to make payment under the judgment
in respect only of “such liability as is required to be covered by a policy”
under the Act, irrespective of any wider liability actually covered by the
policy: this provision may therefore precipitate a recovery lower than under
its terms.
16.
The invalidity of Ms Chattergoon’s parallel is demonstrated by the
judgment of the Board in Matadeen v Caribbean Insurance Co Ltd [2002] UKPC 69, [2003] 1 WLR 670. Mr Matadeen had sued the insurer under section 10(1)
of the Insurance Act but had secured payment only of a small part of the
judgment which he had obtained against the insured company; indeed, by virtue
of the qualification in the subsection noted above, it was a payment lower than
would have been payable under the terms of the policy. Since the company had
meanwhile gone into liquidation, Mr Matadeen therefore commenced a second
action against the insurer under section 17(1) of the Act. But was the second
action time-barred? His cause of action had accrued prior to the commencement
of the Limitation Act so the period of limitation was governed by the
Ordinance. The Board rejected his assertion that his action under section 17(1)
was an action on a specialty, ie brought under statute, and so could be brought
within 12 years. It held that it was an action in contract which under section
5 of the Ordinance had to be brought within four years and that it was
therefore time-barred. Lord Scott of Foscote, delivering the judgment of the
Board, said:
“39. … an action under section
10 of the Act is an action on a statutory cause of action created by the
section. It is not subject to defences that the insurer might have been able to
raise if sued by the insured.
…
41. In a section 17 case,
per contra, the cause of action derives from the insurance policy. All that the
section does is to transfer the contractual rights. That does not turn a
contractual right of action into an action on a specialty.”
17.
The Board is clear that the action brought by the claimants under
section 10(1) of the Insurance Act is an action to “recover [a] sum recoverable
by virtue of [an] enactment” within the meaning of section 3(1)(c) of the
Limitation Act and that, subject to any postponement of the limitation period
of four years there set, it is thus time-barred.
18.
Albeit faintly, Ms Chattergoon adds a contention that the claimants are
entitled to a postponement of the limitation period by virtue of section 14(1)(b)
of the Limitation Act. This provides that, if a defendant deliberately
concealed from a claimant a fact relevant to his right of action, the period of
limitation prescribed by the Act should run only from the time when the
claimant discovered the concealment or could with reasonable diligence have
discovered it.
19.
What is clear, however, is that within six months of the collision the
claimants had learnt that the motor car driven by Mr Parmashwar had been the
subject of a policy, then in force, issued by the insurer (or, more accurately,
by its predecessor); and that on the date of the commencement of their action
against Mr Parmashwar, they had, by their attorneys, given its predecessor the
notice of the commencement of the action which under section 10(2) of the
Insurance Act is a condition of any later action against an insurer under
section 10(1). The claimants’ action against the insurer was ultimately
commenced only on 17 September 2013, by which time they were presumably aware
of each “fact relevant to [their] right of action”; and they have not
identified any fact of which they were then aware but which at some earlier
stage the insurer had deliberately concealed from them. The Board has already
noticed the insurer’s apparent failure to date to disclose whether Mr
Parmashwar was a “person insured by the policy”. But its failure does not
amount to the deliberate concealment of a fact relevant to the right of the
claimants to have brought the claim against it. In C v Mirror Group
Newspapers [1997] 1 WLR 131 the English Court of Appeal, when construing
the English statutory provision (section 32, Limitation Act 1980) equivalent to
section 14, held at p 138 that a “relevant fact” is one that the claimant will
have to prove in order to establish a prima facie case. If proved, the
facts pleaded by the claimants in their Statement of Case would have established
a prima facie case.
20.
So the Board dismisses the claimants’ appeal, the hearing of which was
conducted, with a reasonable measure of ultimate success, by video-link between
San Fernando and London; and, subject to powerful contrary argument which it
finds hard to conceive, it will order the claimants to pay the insurer’s costs
of the appeal. The constitutional right of litigants in the Republic to appeal
without permission to the Board in prescribed circumstances is no doubt
regarded as precious. But a few of the recent appeals as of right to the Board
from various jurisdictions has led it to regret on behalf of the litigants that
permission to bring them had not been required. Had the Court of Appeal and the
Board been able to rule that the appeal of the present claimants to the Board
was (as is the case) unarguable and so should not be submitted to the Board,
the burden of costs upon them as a result of this appeal would have been
greatly reduced.
