110-NLR-NLR-V-69-JAYASEKERA-Appellant-and-THE-CEYLON-INSURANCE-CO.-LTD.-Respondent.pdf
SANSONI, C.J—Jaijasekera v. Ceylon Insurance Co., Ltd.
505
1966 Present: Sansoni, C.J., and Sri Skanda Rajah, J.
JAYASEKERA, Appellant, and THE CEYLON INSURANCECO., LTD., Respondent
S. 0. 67/64—D. C. Colombo, 56408/M
Motor car—Policy of insurance—Passengers in a motor vehicle in which passengersare not carried for fee or reward—Immunity of insurer from liability to them—Motor Traffic Act {Cap. 203), ss. 100 (1) (6), 105.
Section 100 (1; (6) of the Motor Traffic Act should be read along with theproviso which is part of the same sub-section. The proviso restricts the generalwords “ any person ” in section 100 (1) (6), and subsection (ii) of the provisoexpressly omits liability in respect of the death of or bodily injury to personsbeing carried in motor vehicles which do not carry passengers for foo or reward.
An insurance policy was issued by the defendant company to the owner ofa private motor car in respect of any accidents in connection with that car.It included a statement that, in consideration of the payment of an additionalpremium, the insurer undertook to pay compensation for bodily injury sustainedby any person while travelling in the motor car. Plaintiff was injured whentravelling in that car and, having obtained judgment and decree against theowner in an earlier action No. 2,271 for a sum of Rs. 17,000 as damages, suedthe defendant company in the present action for the recovery of that sum andcosts in terms of section 105 of the Motor Traffic Act.
Held, that the decree entered in case No. 2,271 in favour of the plaintiff, whowas a passenger in a motor vehicle in which passengers were not carried for feeor reward, was not a decree in respect of a liability which was required bysection 100 (l) (6) to be covered by a policy of insurance. Section 105 (1),therefore, could not apply to the decree in case No. 2271.
Appeal from a judgment of the District Court, Colombo.
H. W. Jayewardene, Q.C., with L. C. Seneviratne and B. Eliyatamby,for the plaintiff-appellant.
N.E. Weerasooria, Q.C.. with H. IVanigatunga, for the defendant-respondent.
Cur. adv. vult.
September 17, 1966. Sansoni, C.J.—
On the 20th August 1956 the plaintiff was travelling in motor carNo. EL 4830 belonging to S. S. Nagahawatte when it met with anaccident. Nagahawatte had been insured by the defendant in respect ofany accidents in connection with that car. The plaintiff was injuredand he sued Nagahawatte for damages in D. C. Case No. 2271/X aftergiving due notice to the defendant that he was filing action. He gotjudgment, which was affirmed in appeal, for Rs. 17,000 and costs.
LXIX—22
1*—H 6411—1,923 (8/67)
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SANSONI, C.J.—Jayaaekera v. Ceylon Insurance Co., Lid.
The plaintiff did not recover any part of this money and he thereforebrought this action against the defendant claiming the damages andcosts awarded to him in the earlier action.
The defendant pleaded that the plaint did not disclose a cause ofaction and that it was not liable as insurer to pay the plaintiff any partof the sum decreed in the earlier case. When issues were being framedat the trial, Counsel for the plaintiff stated that the liability he sought toimpose on the ^defendant was that set out in s. 105 of the Motor TrafficAct, Cap. 203. After trial, the plaintiff’s action was dismissed and hehas appealed.
It should be mentioned that the first endorsement on the policy issuedby the defendant to Nagahawatte stated that in consideration of thepayment of an additional premium, the defendant undertook to paycompensation for bodily injury sustained by any person while travellingin this motor car. It is this endorsement coupled with the provisions ofthe Act that the plaintiff relies on to make the defendant liable.
Certain sections in Part VI of the Act need to be considered in thisconnection. S. 100 (1) (6) states that a policy of insurance in relation tothe use of a motor vehicle must be a policy, which inter alia “ insures, inaccordance with the provisions of paragraph (c), such person, persons orclasses of persons as may be specified in the policy in respect of anyliability which may be incurred by him or them in respect of the death ofor bodily injury to any person caused by or arising out of the use of themotor vehicle on a highway ”. There is a proviso to subsection (1)which is important:
“ Provided that nothing in this sub-section shall be deemed to
require any such policy to cover—
(ii) except in the case of a motor vehicle in which passengers arecarried for fee or reward or by reason of or in pursuance of acontract of employment, liability in respect of the death of orbodily injury to persons being carried in or upon or enteringor getting on to or alighting from the vehicle at the time ofthe occurrence of the event out of which the claims arise ; or(iii) any contractual liability.”
Section 105 reads :—
“ (1) If after a certificate of insurance has been issued under section100 (4) to the persons by whom a policy has been effected, adecree in respect of any such liability as is required by section. 100 (1) (6) to be covered by a policy of insurance (being aliability covered by the terms of the policy) is obtained againstany person insured by the policy, then notwithstanding thatthe insurer may be entitled to avoid or cancel, or may haveavoided or cancelled, the policy, the insurer shall, subject tothe provisions of sections 106 to 109, pay to the personsentitled to the benefit of the decree any sum payable thereunder
SANSONI, C.J.—Jayaeekera v. Ceylon Insurance Co., Lid.
507
in respect of that liability, including any amount payable inrespect of costs and any sum payable in respect of interest onthat sum under such decree.
(2) In this section, “ liability covered by the terms of the policy ”means a liability which is covered by the policy or which wouldbe so covered but for the fact that the insurer is entitled toavoid or cancel, or has avoided or cancelled, the policy.”
Mr. Jayewardene argued that the words “ in respect of any suchliability as is required by section 100 (1) (b) to be covered by a policy ofinsurance ” occurring in s. 105 (1) must be strictly confined to s. 100 (b)which speaks of “ any liability which may be incurred by him or them inrespect of the death or bodily injury to any person ” ; and that thosewords in s. 100 (1) (b) cannot be controlled or limited by the terms of theproviso which I have earlier quoted. In other words, the argument ran,all persons who are covered by the policy, including the plaintiff who iscovered by the first endorsement, are entitled to enforce the provisionsof s. 105 (1) because the decree entered in the plaintiff’s favour was inrespect of such a liability as is required by s. 100 (1) (b) (unaffected by theproviso) to be covered by a policy of insurance.
Mr. Weerasooria replied that one should read s. 100 (1) (6) along withthe proviso which is part of the same subsection. It then follow's thatthe liability that is required by s. 100 (1) (b) to be covered by a policy ofinsurance in respect of motor vehicles in w'hich passengers are not carriedfor fee or reward, such as the motor car belonging to Nagahaw'atte, doesnot include liability in respect of the death of or bodily injury to personsbeing carried in such a vehicle.
In my view, the proviso restricts the general words “ any person ” ins. 100 (1) (b), and subsection (ii) of the proviso expressly omits liability inrespect of persons being carried in vehicles which do not carry passengersfor fee or reward from the liability which is required to be covered by apolicy of insurance. Therefore, when we come to consider the operationof s. 105 (1) it is clear that the decree entered in case No. 2271/X in favourof the plaintiff, who was a passenger in a motor vehicle in which passen-gers are not carried for fee or reward, was not a decree in respect of aliability which was required by s. 100 (1) (6) to be covered by a policy ofinsurance. If it had not been for the proviso to s. 100 (1) the plaintiffwould have succeeded in this case, because of the first endorsement in thepolicy. But the proviso cannot be overlooked in construing the truemeaning and effect of s. 100 (1) (b). Section 105 (1), therefore, does notapply to the decree in case No. 2271 /X.
Mr. Jayewardene relied on the decision in Barnet Group, HospitalManagement Committee v. Eagle Star Insurance Co., Ltd.1, but the questionconsidered there was different. It was decided there that a policy whichcomplied with all the requirements of the Road Traffic Act, 1930 andincluded any cover beyond that made compulsory by the Act was apolicy issued under the Act.
1 (1959) 3 A. E.R. 210.
6os
Bandiya v. Rajapajcsa
For these reasons, which are substantially the reasons which thelearned District Judge gave, the plaintiff’s action fails and this appealmust be dismissed with costs in both courts.
Sri Skanda Rajah, J.—I agree.
Appeal dismissed.