Edgar George Cole v NEM (West Indies) Insurance Ltd - Reasons for Ruling

¶ IN THE GRAND COURT OF THE CAYMAN ISLANDS CAUSE NO: 132 OF 2008 IN THE MATTER OF THE MOTOR VEHICLE INSURANCE (THIRD PARTY RISKS) LAW (2007 REVISION) BETWEEN: EDGAR GEORGE COLE Plaintiff AND: N.E.M. (WEST INDIES) INSURANCE LIMITED Defendant Coram: The Hon. Mr. Justice Foster (Actg) Appearances: Mr. Hector Robinson and Mr. Murali Ram of Mourant du Feu & Jeune for the Plaintiff Mr. Shaun McCann of Campbells for the Defendant Heard: 2nd April 2009 REASONS FOR RULING Background

¶ [1] The Plaintiff was injured in a road traffic accident in the evening of 19th January 2005. He was a passenger in a motor vehicle being driven by a Mr. Dwight Diedrick ("the Driver"). The Driver was killed in the accident and the Plaintiff suffered very serious injuries as a result of which he has been rendered quadriplegic.

¶ [6] The Insurers did not instruct attorneys for the hearing of the Plaintiff’s claim for liability against the Estate of the Driver. On 31st March 2008 the Plaintiff obtained a default judgment on liability against the Estate of the Driver with damages to be assessed.

¶ [7] It is the Plaintiff’s position that the judgment obtained against the Estate of the Driver in Cause 313 of 2007 is in respect of such liability as is required to be covered by the Insurers’ policy and that pursuant to the Motor Vehicle Insurance (Third Party Risk) Law ("the Law") the Insurers are required to pay to the Plaintiff any damages assessed in Cause 313 of 2007 against the Estate of the Driver.

¶ [8] In light of the dispute between the Plaintiff and the Insurers as to the interpretation of the relevant insurance policy, on 17th September 2008 the Plaintiff issued the present proceedings against the Insurers by way of Originating Summons. In his Originating Summons the Plaintiff seeks declarations against the Insurers as follows: "1. That pursuant to the Motor Vehicle Insurance (Third Party Risks) Law (2007 Revision) the Defendant was the person who issued the Policy of Insurance and the Insurer of motor vehicle registration number 98-036 as at 19 January 2005 under an Insurance Certificate number: CAYX1 24727 and an Insurance Policy number: C8AOG1933972 in favour of its Policyholder Robert Watler Jr. ("the Defendant’s Policy");

¶ [2] That pursuant to the terms of the Defendant’s Policy, Dwight Diedrick, [the Driver] deceased, was a person insured by the Defendant’s policy;

¶ [3] That pursuant to the Motor Vehicle Insurance (Third Party Risks) Law (2007 Revision) the Defendant shall pay to the Plaintiff any judgment sum obtained against the Personal Representatives of Dwight Deidrick, deceased, in Cause No. 313 of 2007 payable thereunder in respect of the liability, including any amount payable in respect of costs and interest on that sum," The Plaintiff also seeks the costs of the proceedings and such further or other relief as the Court may deem fit.

¶ [9] The Insurers duly acknowledged service of the Originating Summons and gave notice of intention to defend the Plaintiff’s claim. The Originating Summons was duly listed to be heard before me on Thursday 2nd April 2009. At the start of the hearing counsel for the Insurers intimated that he wished to make a preliminary application, namely for a declaration that the claims which the Plaintiff seeks in his Originating Summons are statute barred pursuant to Section 17 of the Law. It was agreed that I should hear and rule on this preliminary application first, since if I granted the Insurers’ application that would be conclusive of the Plaintiff’s Originating Summons. I should say that the Insurers did not dispute the declaration sought in paragraph 1 of the Plaintiff’s Originating Summons, namely that they had issued the relevant policy of insurance in favour of Mr. Watler. The Insurers’ preliminary application related to paragraphs 2 and 3 of the Originating Summons. The Issues

¶ [10] Section 17 of the Law provides as follows: "Notwithstanding anything contained in any other law or in any rule of law or equity, no action shall be brought in any court by or on behalf of any person after the end of the period of three years from the date on which a cause of action accrued for any injury or damage against or in respect of which a motor vehicle is required to be insured under this Law".

¶ [11] Counsel for the Insurers contended that the Plaintiff's cause of action accrued on the date of the accident, namely 19th January 2005 and that accordingly the limitation period specified by Section 17 expired on 18th January 2008. He submitted that therefore the Plaintiff cannot now bring an action under the Law and in particular an action under Section 15 (1) of the Law. That section provides as follows: "15.(1) If, after a certificate of insurance has been issued under section 4(3) in favour of the person by whom a policy has been effected, judgment in respect of such liability as is required to be covered by a policy under paragraph (b)of section 4(1) (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 this section, pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any law relating to interest on judgments".

¶ [12] The Insurers' counsel contended that the wording of section 17, in referring to "no action shall be brought in any Court", extended to the Plaintiff's action brought by his Originating Summons and that the Plaintiff's cause of action in these proceedings had accrued on 19th January 2005. He argued that the limitation period for personal injury claims is established by the Limitation Law, which provides by section 39 for the extension of the 3 year period in certain circumstances. The Law contains no such provision. Counsel also submitted that the Plaintiff’s application was premature anyway since there was an issue whether the Driver was a person insured by the policy through acting in the course of his employment or with Mr. Watler’s authority at the time of the account, which, he contended, required to be determined in Cause 313 of 2007, where the issue of Mr. Watler’s vicarious liability is raised. Counsel for the Plaintiff argued that section 17 of the Law is the source of the 3 year limitation period in respect injury or damage as a result of motor vehicle accidents. He contended that the intent of section 17 of the Law was to make it clear that the limitation period in respect of a motor vehicle accident is 3 years. He argued that the opening words of the section “Notwithstanding anything contained in any other law …” was a reference to the Limitation Law which was thereby superceded in respect of injury as a result of a motor vehicle accident. He accepted that in the Law there is no equivalent to section 39 of the Limitation Law (allowing discretionary extension of the limitation period in certain circumstances). He submitted that the Law creates a comprehensive statutory structure to deal with motor vehicle accidents, which it expressly provides are subject to a 3 year limitation period, and the position of Third Party insurers. Conclusions

¶ [14] In my opinion section 17 of the Law is not intended to create two limitation periods in respect of motor vehicle accidents. The section, in my opinion, clearly relates to a cause of action arising from injury or damage in respect of a motor vehicle required to be insured under the Law, which, pursuant to section 3 of the Law, is all motor vehicles. I accept the argument that the section supercedes the provisions of the Limitation Law in relation to personal injuries sustained in an accident involving a motor vehicle required to be insured pursuant to the Law. I do not consider that the section is intended to or does create a 3 year statutory limitation period in respect of actions brought under the Law once liability has been established through a personal injury claim brought within the 3 year limitation period, as is the case here. In the present case the accident occurred on 19th January 2005 and the Plaintiff’s proceedings in Cause 313 of 2007 claiming damages for negligence as a result of the accident were issued on 19th July 2007, well within the limitation period. In my view the intention of section 17 of the Law is not to create a further limitation period in respect of claims made pursuant to section 15(1) of the Law, such as the Plaintiff makes in the present proceedings.

¶ [15] An application under section 15(1) of the Law cannot be made until judgment on liability is obtained against any person insured by the required policy. The Plaintiff obtained judgment on liability against the Estate of the negligent party, the Driver, on 31st March 2008. There is an issue between the Plaintiff and the Insurers as to whether the Driver was insured by the policy, which is the very issue which the Plaintiff seeks to determine by his Originating Summons in these proceedings. Counsel for the Insurers argued that the relief which the Plaintiff seeks in these proceedings is premature but I do not agree. The Plaintiff argues that under the wording of the policy the Driver was covered by the policy by virtue of his employment by the policyholder, Mr. Watler. There is no dispute that the Driver was employed by Mr. Watler. There is, on the face of the pleadings in Cause 313 of 2007, a dispute as to whether the Driver was acting in the course of his employment at the time of the accident but that is not the subject of the dispute over the construction of the policy, which is raised as a result of the Plaintiff’s claim under section 15 of the Law in these proceedings. The dispute is simply over the interpretation of the policy, the construction of the wording, on facts which are agreed, namely that the Plaintiff was employed by Mr. Watler, which is what the Plaintiff seeks to have determined in these proceedings. That is not the issue in Cause 313 of 2007. The Plaintiff has very limited resources and understandably needs to know whether the Insurers will be required, pursuant to the Law, to pay the substantial damages which he is likely to be awarded in Cause 313 of 2007 before he embarks on a costly hearing to assess damages which the Estate of the Driver is most unlikely to be able to pay.

¶ [16] Having considered the arguments of counsel I was satisfied that section 17 of the Law does not establish a limitation period of 3 years from the date of the relevant motor vehicle accident for claims of the nature made by the Plaintiff in his Originating Summons pursuant to section 15 of the Law in the present circumstances. I therefore rejected the interpretation of section 17 of the Law submitted on behalf of the Insurers and dismissed their application for a declaration that the Plaintiff's claims are time-barred by limitation. Since time did not then permit the substantive hearing of the Plaintiff's Originating Summons, I adjourned that to be heard as soon as possible with a time estimate of 3 hours. Dated 10th June 2009 The Hon. Mr. Justice Angus Foster Judge of the Grand Court (Acting)