Leon v Harry Savy Insurance Co Ltd (386 of 2006) [2009] SCSC 28 (17 May 2009);

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IN THE SUPREME COURT OF SEYCHELLES

 

SONNY LEON PLAINTIFF

VERSUS

HARRY SAVY INSURANCE COMPANY LTD

(Rep by its Managing Director Mr Lambert Woodcock) DEFENDANT

 

Civil Side No 386 of 2006

 

 

Mr. F. Bonte for the Plaintiff

Mr F. Chang Sam for the Defendant

 

JUDGMENT

Perera CJ

 

The plaintiff, the driver and owner of motor vehicle bearing registration no. S 12639, was admittedly involved in two traffic accidents. The first, on 10th September 2003 with motor vehicle no. S.1629 belonging to TSS, and the second on 6th January 2006 with a hired vehicle. It is averred that the defendant company, the Insurer, accepted liability and offered Rs.11,978.20 for the first accident and Rs15,729 for the second accident. The plaintiff avers that both offers are not acceptable as his vehicle is now a total wreck. As the vehicle is insured for Rs130,000. He claims the full insured sum, together with Rs.30,000 for loss of use of vehicle and Rs.5400 being air fare to and from Mahe, making a total of Rs165,400. It must here be stated that the insured value is Rs.108,300 and not Rs.130,000.

 

The plaintiff testified that as regards the first accident, the defendant was prepared to settle the claim on a “cost of repairs” basis, and although such repair cost Rs.26,000, the claim was to be settled at Rs.15,000. The balance was to be paid later, but he heard nothing thereafter. However, the defendant produced a letter dated 21st October 2007 (D2) wherein the plaintiff’s broker, agreed to settle the claim at Rs.11,978.20. Consequently a cheque dated 28th October 2004 for that amount was issued in the name of the plaintiff and given to the broker following the usual practice. That cheque was cleared on 4th November 2007. (D10). However, the plaintiff testified that he has not received that money and that he has not signed the “discharge” form sent with the offer letter dated 9th August 2004 (P8).

 

In this respect, Mrs. Nellie Dakar, of the Claims Department of the defendant company testified that the amount payable to the insured for the first accident was Rs.13,979, but after deducting the excess, a sum of Rs.11,978.28 was offered to the plaintiff’s broker. When he agreed, a credit note was sent to him on 22nd October 2009. (D3), and the money was paid to the broker. However on 6th April 2006 (D4) a letter was received from the plaintiff’s lawyer inquiring about the payments for the first and second accidents. He was informed that the first claim was already settled, save for the excess of Rs2000, and that Rs.15,729 has been offered in respect of the second accident, which has not been accepted. In the claim form for that accident (D5), the plaintiff had informed that the vehicle was at the Baie St Anne Garage for inspection. The offer of Rs.15,729 was not accepted by the broker for the plaintiff. He wanted the insured value on a “total loss” basis.

 

As regards the payment for the first accident, she stated that the credit note was proof that payment was made. The cheque was cleared on 4th November 2007. She also stated that since the cheque was written in the name of the plaintiff, the receipt should be with the broker. But from the company point of view, the payment has been effected, and the claim is considered as settled.

 

Mr Lambert Woodcock, the General Manager of the defendant company also corroborated Mrs Dakar as regards the payment for the first accident. As regards the second accident he stated that if the repair cost was above 50% of the insured value, the company would consider settling the claim on a total loss or “written-off” basis. But the repair cost as assed by the valuer was Rs.17,729 and hence, deducting an excess of Rs2000, a sum of Rs.15,729 was offered. (D7). That was about 15 or 16% of the insured value. The vehicle has been in the garage of the plaintiff’s choice since 6th January 2006, the date of the accident. The defendant has made the offer based on a valuation report. By letter dated 10th March 2006 (D11) the defendant informed the broker of the plaintiff that no precautions are being taken by the owner of the vehicle to safeguard the vehicle as per the policy conditions, and that hence the company would not be responsible for further loss or damage that may be caused thereby. A similar letter was sent by Mrs. Dakar on 26th November 2007 (P4). The plaintiff himself produced a letter dated 22nd January 2007from the Baie Ste Anne garage asking him to remove the vehicle which had been lying there since the date of accident on 6th January 2006. The plaintiff has not complied with any of those requests. In fact, his broker, by letter dated 11th May 2006(P3) had informed the lawyer for the plaintiff that he had negotiated with one Mr Bala to sell the vehicle for Rs85,729. He also informed him that as the shortfall from the insured value was Rs.22,571, he “will have to proceed with the claim which has not ended” and that we could get another payment from that previous claim with travel services (TSS) vehicle which you know about. I will be grateful if you could speak to your client Mr. Sony Leon to consider his offer, otherwise there will be a long waiting which will not be in his favour”. The plaintiff still ignored that request and allowed further damage being caused to his vehicle. The reference to “get another payment from the previous claim” confirms that one payment

had already been received. Hence if the plaintiff insists that he has not received that payment, his action is against his own broker and not the defendant who has discharged their liability.

 

As regards the second claim, the Court is satisfied on the basis of the evidence that the plaintiff has no valid claim for the insured value on a total loss basis as the repair cost was below 50% and as the vehicle was not beyond economic repair. If the vehicle has suffered further loss and damage due to it being garaged for such a long time, despite the warnings of the garage owner and the defendant company, he should bear them as they were the result of his own inaction and negligence.

 

In the final analysis, the Court is conscious that the claim is not based on a delictual claim, but on a policy of insurance. Hence it is contractual principles that have to be considered. In that respect, the plaintiff has no claim against the defendant in respect of the first accident as the obligation has been discharged following the practice where the insured person negotiates through a broker. As regards the second accident, the plaintiff will still be entitled to accept the offer of Rs18, 729, under the Policy. The fact that the broker for the plaintiff had found a buyer for Rs85,729 indicates that the vehicle could not have been a total wreck.

 

The plaintiff cannot maintain the claim for loss of use of vehicle for 10 months. However, as the plaintiff’s broker was informed by letter dated 10th March 2006 (D11) that the defendant would not be responsible for any further loss or damage to the vehicle, the Court awards loss of use for 2 months at the rate of Rs100 per day for an average of 20 days per month amounting to Rs4000. No award is made for air fare claimed in the plaint.

 

Judgment entered accordingly.

 

There will be no order for costs.

 

…………………..

A.R. PERERA

CHIEF JUSTICE

Dated this 18th day of May 2009