Bacchus et Al v Khan
| Jurisdiction | Guyana |
| Judge | Crane, C.,Luckhoo, J.A.,Gonsalves-Sabola, J.A. |
| Judgment Date | 08 April 1982 |
| Neutral Citation | GY 1982 CA 10 |
| Docket Number | No. 24 of 1979 |
| Court | Court of Appeal (Guyana) |
| Date | 08 April 1982 |
Court of Appeal
Crane, J.A.; Luckhoo, J.A.; Gobsalves-Sabola, J.A.
No. 24 of 1979
C. A. F. Hughes for the applicant
Rex McKay, S.C. for the respondent Ali Khan
D. Jagan for the respondents Ramkarran Singh and Mohamed Haniff (dec’d) represented by Rajiham
M. Zephyr and v. Persaud for the respondent Amjad Ali
Contract - Agreement between applicant and insurance company that applicant would not change solicitor — Withdrawal of appeal by litigant without the knowledge of insurance company — Whether appellant had a right to change his solicitor contrary to the agreement between himself and the insurance company — Motor Insurance (Third party) Risks Act; General Conditions Nos. 2 and 9 — Action of respondent tantamount to fraud on insurance company — Withdrawal of appeal notice are nullity — Insured persons having bargained away with insurers for advantages their legal right to change solicitors was thereby extinguished — Appeal allowed.
A novel and unprecedented point in motor insurance law arises for decision in this motion: Can an insured against whom a third party has obtained judgment in a motor accident case, withdraw the retainer he has given to solicitor and counsel under the conduct of litigation clause his insurance policy, substitute his own attorney-at-law with instructions to withdraw the appeal against the judgment, thus leaving remediless the insurance company to whom he has entrusted the conduct of the appeal?
On principle it seems there is every reason why courts should insist on maintaining the rule of public policy that parties should remain ever faithful to their bargains and preserve pacta sunt servanda, by restraining an insured from reneging on the terms of his motor insurance policy. It was Sir George Jessel who said in Printing and Numerical Registering Co. v. Sampson, (1875) L.R. 19 Eq. 462, at p. 465, that “if there is one thing which more than another public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice.” But the situation obviously requires deep insight and analysis and a proper juridical basis on which to ground a decision.
On the 11th February, 1976, an accident occurred on the Kilcoy public road on the Corentyne Coast. Involved were motor-lorry No. GZ 6512 and motor-car No. PZ 2821. One Kalam Azad Mohamed, called Kalam Azad Hassan (hereafter called ‘the deceased’), was killed and several other persons suffered personal injuries. The accident was a risk insured under the provisions of a motor insurance policy issued by the Guyana and Trinidad Mutual Fire & Life Insurance Company, Limited (referred to interchangeably as ‘the insurers’, ‘the applicant’ or ‘the company) in favour of the appellants/defendants Inshan Bacchus, the insured, and his authorised driver, Dookram Singh, and was concerned with motor-lorry GZ 6512.
In the High Court six actions were brought by six plaintiffs against Inshan Bacchus, his lorry-driver Dookram Singh, and Estelene Hassan in her capacity as administratrix of the estate of the deceased driver of motor-car No. PZ 2821.
Immediately on the receipt of notification of the issuing of the writs against the insured and his driver, the company, acting under the terms of the policy, took sole charge of the conduct of the defence and engaged solicitor and counsel to represent both appellants/defendants throughout the entire duration of the action, and so informed them. Entry of appearance and defences were accordingly filed in all six actions, and in a consolidated hearing, judgments in those actions totalling the sum of $191,245.00, with costs $7,200.00, were awarded against the deceased motor-car driver, and Anshan Bacchus and his lorry-driver Dookram Singh, whom the judge found to be the servant of the owner Inshan Bacchus, in the proportion of 80:20%.
Learned counsel advised an appeal. Thereafter the company gave instructions to their solicitor and counsel to file an appeal against the judgments in the Supreme Court Registry, and both the insured Bacchus and his driver Dookram Singh were duly informed. Notices of appeal were filed on June 5, 1979, and sent to all parties. On July 21, 1979 summonses for extension of time were filed and thereafter solicitors and counsel in the Court below appeared in the Court of Appeal. Theses summonses were heard on October 13, 1979, the company's solicitor and counsel appearing when K.S. Messiah, J.A. granted extensions of time.
On September 25, 1980, the company received solicitors’ letters demanding payment of the judgments and interest, and counsel was then instructed to file an application for a stay of execution pending appeal. Summonses in respect thereof were duly filed and served on all for the solicitors for the respondents.
But it was not until October 31, 1980, that counsel for the insurers got to know for the first time that five of the six notices of appeal were withdrawn on the instructions of the insured and his driver to another attorney-at-law (Mr. B.E. Gibson, who was not employed by the company) to file notices of withdrawal of the appeals.
The insurers are insistent that the withdrawal of the notices and substitution of Mr. Gibson by the insured and his driver as attorney-at-law was done without their knowledge, consent or permission, is a fraud on them and done in derogation of their rights under the policy of insurance and the Motor Vehicle Insurance (Third-Party) Risks Act, Cap. 51:03. They contend they have never at any time relinquished their right to prosecute the appeal in the name of the insured, nor their right to choose their attorney-at-law, under General Conditions Nos 2 and 9 of the policy (see below); nor have they at any time authorised Mr. Gibson to act as attorney-at-law for the insured or his driver Dookram Singh. In both their grounds in support of their applications, they strenuously assert their desire to continue the appeals inasmuch as they have paid all legal fees and costs involved in the pursuit of them.
The insurers are ready, willing and able to pay any award finally made by the Court of Appeal in the matter and will duly honour all obligations under the policy and under the Motor Vehicles Insurance (Third-Party) Risks Act, Cap. 51:03. They claim a pecuniary interest in the appeals and contend they will be injuriously affected if not allowed to contest them in the Court of Appeal.
And so the applicant company, who are authorised insurers under the provisions of the abovementioned Act, ask for the following orders:
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(a) An order setting aside the Notice of Withdrawal of Appeal dated the 14th day of August, 1980.
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(b) An order restoring the appeal herein and a direction that the said appeal do take its normal course.
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(c) Alternatively, an order that the appeal be restored and that the applicant herein be permitted to prosecute the said appeal in the names of the appellants (defendants).
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(d) Alternatively, an order that the applicant be joined as a party hereto and be permitted either to prosecute the appeal herein in the name of the appellants (defendants) or be granted leave to appeal in its own name against the decision of the Honourable Mr. Justice Fung-a-Fatt dated the 28th day of April, 1979.
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(e) An order for such consequential directions and extensions of time as may be necessary to pursue the appeal herein.
Learned counsel for the insurers then submitted, (i) that in terms of the policy the company has an undoubted right to control any civil proceeding against the insured in respect of any liability covered by the policy, and that the authorities show that in the exercise of this right they are entitled to choose their attorney-at-law to represent the insured; (ii) that by s. 8 of the Motor Vehicle Insurance (Third-Party) Risks Act, Cap. 51:03, the insurers have a pecuniary interest in the actions brought against the insured and will be injuriously affected by the judgments against the insured; and that (iii) anyone so injuriously affected by a judgment has the right to intervene in proceedings in which the judgments were given. He then referred to General Conditions of the policy Nos 2 end 9 which he contended were judicially considered and confer upon him the right he claims.
“(2) No admission, offer, promise, payment or indemnity, shall be made or given by or on behalf of the Assured without the written consent of the Company which shall be entitled if it so desires to take over and conduct in the name of the Assured all negotiations and the defence or settlement of any claim or to prosecute in his name for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claims, and the Assured shall give all such information and assistance as the Company may require. If the Company shall make any payment in settlement of any claim and such payment includes any amount not covered by this Policy the Assured shall repay to the Company the amount not so covered.”
“(9) The Company shall be entitled, if it so desires, to take sole charge of and conduct in the name of the Assured all negotiations and the defence or prosecution of any claim or action involving the Company's interests, and the Assured shall give the Company his assistance and support the conduct, resistance or prosecution of all such negotiations, claims or actions. The Company may at its own option arrange for representations at any inquest or fatal inquiry in respect of any death which may be the subject of indemnity under this...
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