White v Kaondo and National Insurance Company Ltd (Civil Cause 953 of 1992) [1993] MWHC 8 (19 October 1993)

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ST DEFENDANT - and - NATIONAL INSURANCE COMPANY LTD . . . . . . . . . . . . 2ND DEFENDANT CO RAM: MWAUNGULU, REGISTRAR Abs e nt, Counsel for the Plaintiff Abs e nt, Counsel for the 1st Defendant Ba nda, Counsel for the 2nd Defendant ,,... 0 R D E R Ord e r 6 , rule 2 of the Rules of the Supreme Court t h e Court at any stage of the proceedings in a ny aut h o rize s cause or ma tter on such terms as it thinks just, either o n its own mo tion or application, to order any person who has b een i mp r ope rly o r unn e c e ssarily made a party or wh o has for a n y reaso n ce ase d to b e a proper or n e cessary party, to cease to be a par ty. Th e second defendant, the National Insurance Co mpany Li mit e d, applies to this Court under this rule to be ordered to cease to b e a party in an action in which Mr. Whj_te, th e the first d e f e nd a nt, the plai nt i ff, h a s sued Mr. Kaondo, seco nd d e f e nd a nt, a s insure rs for of the fir st d e fendant, for damages foll o wing an accident that occurred o n the 29th of Dece mb e r, 199 1. Th e plaintiff wa s a pass e ng e r in th e fir st defe ndant' s mo tor vehicle BG 126, driven at the time by th e firs t ' def e nd a nt. Th e first defendant's motor vehi c le is insured 2/ .... - 2 - by t h e se co nd defendant. defe nd a nt t hat they c annot be sued by the plaintiff. It is contended for the s e cond The question I have to decide, therefore, is whe t h er the seco nd def e ndants being insurers for the first defendan t can be sued by th e plaintiff. The answer is no. On that scor e the sec ond defe ndants must cease to be a party to the action. At co mmon la~, th e re being no privity of contrac t b etween t h e in s ur e r and the victim of a car accident, the victim had no re me dy ag ai nst th e insure r. The victim had a remedy ag a i nst the ins u red . The insured, once liability has been established by acti on, co n s e nt or arbitration, was idemnified by the in surer. Th ere i s n o way, therefore, at common law in which the v ictim of an acci den t could sue th e insurer. This delictuali t y h as now bee n c i rcumve nted by section 65(A) of th e Road Traffi c Act intro du c ed i n 198 8 : "Any person having a claim against a p e rson insure d in r e spect of any liability in regard to which a p ol ic y of i n s uran c e has been issued for the purpo ses of t his Part s hall be entitled in his own name to re co ver direc t ly from the insurer any amount, no t e xc ee ding the amount covered by the poli c y, for wh ich the person insured is liable to the p e rson havin g the c la i m." The r e quir e ments of this part are contained in section 6 1 which provi d es : " I n o rde r to c o mpl y with the requirements of this Part a p o l i cy of insur a nce must be a policy which - (a) i s issued by an insurer approved by the Mini ster; a nd (b) i nsures su c h persons or classes of person as may be specified in the policy in respect of any l iablity which may be incurred by him or them i n respect of - (i) the de a th of or bodily injury to any pers o n ; ( i i ) d a ma ge to property, c au se d by o r a rising out of th e us e of the motor v ehicle o r t railer on a road." Sectio n 6 2(a ) provid e s: "A p o ljcy of j_nsurance shall not be require d to cov er - o r tra iler in wh i ch pass e ngers are ca r ried for hire ... ex ce pt in the case of a motor vehicl e 3/ .... - 3 - or reward or by reason of or in pursuance of a 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 vehicle or trailer at the time of the occurrence of the event out of which the clajms arose." The policy taken out by the first defendant excludes liability for passengers. Although the statement of claim does not state so, in view of the position at common law, under section 65(A) is the only way in which the plaintiff was proceeding in this action. Since the policy of insurance clearly excludes liability for passengers, there is no way in which the second defendant can be joined as a party to this action under section 65(A). Mr. Banda appearing for the plaintiff is right on this 1t aspect. He has cited the case of Connell v. Motor Insurers' Bureau (1969) 3 All E. R. 572. The conclusion I have reached is probably supported generally by the decision. however, the basis of the reasoning in that case. That case proceeded essentially on the question whether under the Road Traffic Act, 1960 it was compulsory to insure for passengers. There was an agreement between Ministry of Transport and the Motor Insurers Bureau that where the owner of a motor vehicle was bound to insure against injury to a victim the Motor Insurers Bureau would pay the damages in every case where the driver is uninsured when he ought to have been insured. The ratio decidendi of the case can be seen from the judgment of Lord Denning, M. R., at page 573: It was not, "The plaintiff's case j_s perfectly good if Mr. EngU.sh was bound, under the statute to insure against injury to the plaintiff; because the Motor Insurers Bureau have agreed with the Minjstry of Transport that they will pay considerable damages in every case where the driver is uninsured when he ought to have been insured. So the question comes down to this; was Mr. English compelled by statute, to insure against injury to the plaintiff? The relevant provisions are contained in section 36 of the Road Traffic Act, 1930, which are now in substance indicated in section 203 of the Road Traffic Act 1960. Summarised, it comes to this. Everyone who is using a vehicle on a road is compelled by law to insure against third party liability; but there is this important exception: he is not compelled to j_nsure against jnjury to passengers." 4/ .... - 4 - In English law there is not the That case did not decide whether the victim of an accident can sue the insurer directly. equivalent of our section 65(A) of the Road Traffic Act. The c onclusion is, however, supported by the case of Weidemann v. Pearl Assurance Co. Ltd. (1963) R. & N. L. R. 482. This case was based on a provision in the Northern Rhodesia Road Traffic Act which is in pari materia with our provision. There, like in this case, the policy of insurance excluded, in accordance with the statute, liability for passengers. Blagden, Acting Chief Justice, correctly, in my view, held that the insurance company was not liable, could not be sued. That rests the matter, but Mr. Banda went further. / Mr. Banda submitted that even if an insurance policy provided for cover against passengers the insurers cannot b e s ued under sectjon 65(A) because such a policy would not have be e n issued under Part V of the Road Traffic Act. He relied ✓ h e avily on the case of Weidemann v. Pearl Assurance Co. Ltd. That decision, as I pointed out earlier, cannot be followed for what Mr. Banda suggests because there the policy specifically excluded liability for passengers. This was consistent with the Act. The Acting Chief Justice pointed out the difficulty in deciding the question whether a policy was issued under the Part of the Act. He did not decide on the question because the particular policy excluded passengers. Said he: / "I think there may well be difficulties in decjding whether the policy has been issued for the purposes of Part IX of the Ordinance or not, but there is no difficulty in the present case, because the endorsement expressly declares and records that: "It is agreed, that the polj_cy shall, subject to the conditions which follow, be a policy for all purposes of the Ordinance " Nor can I see in the conditions that follow anything which runs counter to the provisions of the Ordinance . The defendant company was perfectly entitled to limit their liability to the requirements of the Ordinance. What they have done in effect by their endorsement is to extend their liability under the policy to include liability directly to injured third parties, but at th e same time, they have limited that extension to those classes of third parties in respect of whom third par t y risks cover is required under the provisions of Part I X of the Ordjnance. By so doing they have excluded liability directly to injured voluntary passengers such as the plajntiff." The question, as I understand it from Mr. Banda, is that even if the policy covered passengers they cannot sue directly under 5/ .... - 5 - secti on 65(A) be c aus e th e poli c y would not have be e n i ss u ed under Pa rt V. This situation did not arise in the North ern Rhodesi a c ase . state me nt s are made will be obiter. The question c an b e rese rved for future c onsideration by the Court. It d oe s not arise in this case eithe r. Whatever Th e sec ond defe ndant ceases to be a party to the a ction. Costs t o the second defendant. MADE in Chambers on this 19th day of October, 199 3 at Blanty r e . \ ) REGISTRAR