Court dismisses claim against insurer for failure to strictly comply with statutory notice requirements.

[*444] 1972 March

(STYLIANIDES, AG. P.D.C., BOYADJIS, D.J. )

IN THE DISTRICT COURT OP PAPHOS

Anthoulla Christodoulou Kokkinou,

Plaintiff,

v.

General Accident Fire and Life Assurance

Corporation Ltd. , by their Agents

Y. Shukuroglou & Sons Ltd. ,

Defendants

(Action No. 156/71).

Insurance - Motor Insurance - Third party risks - Action against insurance company to satisfy judgment against insured - No notice of proceedings to insurers - And no proof that plaintiff was at the material time a passenger carried for hire or reward or by reason of or in pursuance of a contract of employment - Motor Vehicles (Third Party Insurance) Law Cap. 333 sections 4(l)(b)(ii) and 10(1)(2)(a).

Motor Vehicles (Third Party Insurance) Law Cap. 333 -

Requirement of notice of proceedings to insurers under section 10(2) (a) of the Law - To be strictly adhered to.

E. Panayides, for the Plaintiff.

A. Myrianthis for the Defendants.

JUDGMENT

The judgment of the Court was delivered by:-

BOYADJIS D. J, : By this action plaintiff claims [*445] under section 10(1) of the Motor Vehicles (Third Party Insurance) Law, Cap. 333, recovery from the defendant insurance Company of the amount of the damages, legal interest and costs awarded to her on 22.11.1966 by the District Court of Paphos in civil action No. 2044/63 filed against a certain Socratis Ioannou, of Mesoyi.

The history of the matter is this:- On 14.11.1961 the plaintiff was travelling as a passenger in bus No. TAS.440 owned and driven at the time by the said Socratis Ioannou from Mesoyi to Paphos. The bus overturned and the plaintiff sustained several injuries.

On 13.11.1963 the plaintiff filed against the bus driver civil action No. 2044/63 claiming special and general damages for the injuries she had sustained presumably on the ground that the bus overturned due to the driver’s negligence.

On 22.11.1966 judgment was entered by default against the driver and in favour of the plaintiff for the sum of £433.400 mils with interest thereon at the rate of 4% per annum from 22.11.1966 to date of payment and £40.900 mils costs. Certified copy of this judgment was by consent produced as exhibit and is before us marked Exhibit No.1.

The plaintiff did not take any steps ever since to execute this judgment which remains unsatisfied till to-day. [*446]

On 5,2.1971 the present action was filed against the defendant insurance company for the recovery of the whole amount of the judgment debt and costs.

In her indorsed statement of claim the plaintiff inter alia alleges that:-

(a) At the material time the bus in question was insured with the defendant company against third party risks including its passengers;

(b) at the material time the plaintiff was travelling in the bus as a passenger for payment having actually paid her fare for the trip from Mesoyi to Paphos town:

(c) by a letter through her advocate dated 19.11.1963, the plaintiff gave notice to the defendant insurance company of the bringing of the proceedings which eventually resulted in the judgment dated 22.11.1966.

The statement of defence was in essence a general denial of all material facts contained in the statement of claim; only the fact that a judgment was issued by default against the bus driver was admitted.

Eventually the action was set for hearing and evidence was heard on 14.3.1972, The plaintiff closed her case after giving evidence herself and after calling 3 other witnesses, namely:- [*447]

1) Georghios Vladimirou was the agent of the insurers at Paphos at the time,

2) Socratis Ioannou the bus driver, and

3) Nicolaos Germanos, the registered clerk in the law office of the advocate who filed in 1963 action No. 2044/63 and who gave evidence as P.W.2,P.W. 3 and P.W. 4- respectively.

The defendants did not adduce any evidence and finally both counsel addressed the Court in the afternoon. Judgment was reserved till to-day.

During the hearing it was conceded by the defendants that at all material times there was in force a policy of insurance for third party risks in accordance with the law in respect of the use of the aforementioned bus which was issued by them to P.W. 3. Whether a proper or any notice was given under section 10(2)(a) of Cap.333 and whether the plaintiff was at the time a passenger on payment in the bus remained in issue.

Perusing the record of the evidence adduced we could find no material at all justifying the making by the Court of a finding on either of the aforesaid issues in favour of the plaintiff. On these every important pleaded facts no evidence at all was adduced.

In his final address, counsel for the plaintiff invited the Court to presume in favour of the plaintiff that the statutory notice was in fact given to the insurers [*448] by plaintiff’s advocate on 1 9.11.1963, i.e. within 7 days after the commencement of the proceedings. He argued that the Court should reach at this conclusion or presume as above from the mere fact that the allegation of giving the statutory notice is pleaded in the statement of claim and no evidence is necessary. We are of course unable to accept this unprecedented proposition. Allegations of material facts are made in the pleadings for the purpose of formulating the issues and unless admitted by the opponent or substantiated by evidence are of no help at all to the party alleging them.

Learned counsel for the defendants has submitted in his final address that the failure of the plaintiff to prove that:

(a) plaintiff was at the time a passenger for payment in the bus, and

(b) notice,

was given to the insurers under section 10(2) (a) of Cap, 333, is fatal for her case which should consequently be dismissed.

Counsel for the plaintiff on the other hand has submitted that such failure does not affect his client's case as such statutory provisions should be construed as mere directions and the legislature never meant to deprive a successful plaintiff in a "running down" case from recovering the amount of the judgment from the insurers. [*449]

At common law a person injured by reason of another person's wrongdoing has no right of action against insurers who have undertaken to indemnify the wrongdoer; his only cause of action is against the person who has committed the wrong, whether the wrong falls to be regarded as a tort or as a breach of contract: Vide Halsbury's Laws of England, 3rd Edition, Vol. 22, para. 762. This principle was first invaded in England by the passing of the Third Parties (Rights against Insurers) Act. 1930, which recognised and allowed to third parties certain limited rights under the Policy, These rights were extended later by subsequent legislation including the Road Traffic Act, 1934. In Cyprus the matter is governed by the Motor Vehicles (Third Party Insurance) Law, Gap. 333, which came into operation on 15.12.1954, and the relevant provisions of which are the same to those of the last aforementioned English Act.

Section 10(1) of Cap. 333 reads as follows:-

"If after a Certificate of insurance has been issued under

the provisions of subsection (4) of section 4 in favour of 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 issued under the provisions of

paragraph (b) of subsection (1) of section 4, 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 [*450] provisions of this section, pay to the persons entitled to the benefit of such judgment any sum payable thereunder in respect of the liability, including any sum payable in respect of costs and any sum payable by virtue of any Law in respect of interest on that sum or judgment."

From the contents of this sub-section it follows that the obligation of the insurers is subject inter alia to the condition that the judgment must be in respect of a liability which is required to be covered by compulsory insurance; in other words the only person who can maintain a right of action directly against the insurers is a person falling within the limited class of third parties whose bodily injury or death is required to be covered by a motor policy. The policy of insurance must be issued in respect of liability which is required to be covered under the provisions of paragraph (b) of subsection (1) of section 4 which reads as follows:-

"A policy for the purposes of this Law must be a policy which –

(a)……………………………………………..

(b) insures such person or persons, or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of a motor vehicle on a road covered by the policy. [*451]

Provided that such policy shall not be required to cover –

(i) liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment; or

(ii) except in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of the contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting on to or alighting from the motor vehicle at the time of the occurence of the event out of which the claims arise; or

(iii) any contractual liability."

The plaintiff, being a passenger in the bus as she has herself stated, must prove that she was beingcarried therein for hireor reward or by reason of or in pursuance of a contract of employment. The mere fact that she was a passenger in the vehicle is not enough.

In Baker v. Provident Accident and white Cross Insurance Company Ltd., (1939) 2 All E.R.690 the injured third party was an employee carried in her employer s van by reason of or in pursuance of a contract of employment, [*452] but the transport provided was within certain limits, and the accident occurred beyond those limits, and when she sought to recover the judgment obtained against the driver from the insurers it was held that, since the accident occurred beyond the certain limits of the transport provided by the employer, the carriage of the plaintiff at the material time was not a carriage in pursuance of her contract of employment, and, therefore the liability in respect of which the plaintiff had obtained judgment against the driver was not a liability required by the Act to be covered by a policy and the insurers were left immune.

The obligation of the insurers is further affected by, inter alia, the qualification provided by paragraph (a) of subsection (2) of section 10 of the Law which reads as follows:-

"No sum shall be payable by an insurer under the provisions of subsection (1) –

(a) in respect of any judgment, unless before or within seven days after the commencement of the proceedings in which the judgment was given, the insurer had notice of the bringing of the proceedings."

Our above subsection peproduces verbatim paragraph (a) of subsection (2) of section 10 of the English Road Traffic Act, 1934, and the English case law on the matter is, therefore, of valuable assistance and guidance to us. [*453]

In Herbert v. Railway Passengers Assurance Company (1938) 1 All E.R. 650, an action against the, insurance company to satisfy the judgment obtained by a third party against the insured, the notice of the proceedings was given orally to an agent of the insurers during a casual conversation and it was held that such notice must be something more formal than a casual mention of the proceedings in a conversation and the action failed.

In Cross v. British Oak Insurance Co. Ltd (1938) 1 All E.R. 383, an injured person was added as a third party by the defendant in an action filed by another person as plaintiff. The third party counterclaimed against the defendant for damages for personal injuries and obtained judgment on his counterclaim and subsequently claimed satisfaction thereof against the insurers who were held not liable because, although they had notice of the leave of the Court granted to defendant to issue a third party notice to the third party, yet, the third party failed to give them notice of his counterclaim filed against the defendant in that same action.

To the suggestion of counsel for the plaintiff to the effect that these statutory provisions are mere directions for guidance and plaintiff need not strictly adhere thereto, we quote, in lieu of any other answer to him, the following words of Porter, J. from his judgment in the aforesaid Herbert case at pages 650 and 654 of the report: [*454]

From page 650; "This is a case in which one feels considerable sympathy for the plaintiff, and Mr. Elkin (plaintiff’s counsel) had said everything that could be said on her behalf. Nevertheless, I am afraid that the law is too strong to give effect to his contentions."

From page 654: "………….. where an act of Parliament stipulates that recovery shall not take place except in certain events, those events must take place before the plaintiff can recover. "

This is one of those unfortunate

cases in which a passenger in an omnibus is injured, its driver found to be liable to her, the driver was insured at the time in accordance

with the law, and yet, the plaintiff cannot have her judgment against the driver satisfied by the insurers in view of her failure to prove compliance with certain pre-requisites or conditions to which the insurer's obligation towards her is subject.

For the reasons stated above the action is dismissed with costs against the plaintiff to be assessed by the Registrar.

Action dismissed

with costs.