APPENDIX: WEST INDIAN CASES & MATERIALS ON INSURANCE LAW IN THE COMMONWEALTH CARIBBEAN Worksheet 1 United Security Life And General Insurance Company Limited v. Supervisor of Insurance, the Supervisor of Insurance failed to furnish, in a timely manner, the plaintiff insurance company with a copy of the auditor’s report. In fact, the plaintiff received a copy of the document some 7 days after the Supervisor had intervened and some three months after the Supervisorreceived the Report, The Court, inhearing the action for Judicial Review, interpreted section 65 of the Trinidad Insurance Act which empowered the Supervisor of Insurance to intervene into the affairs of a company where:-(i) the interests of the policy holders are being threatened, (ii) the Supervisor is satisfied that it is necessary to intervene to protect the interests of policy holders (iii) the company is unable to pay its debts(iv), there has been unreasonable delay in the settlement of claims; and (v) the company has furnished misleading or false information. Section 66 of the said Act, places an obligation on the Supervisor to provide written notice prior to the exercise of power. The High Court of Trinidad and Tobago held that the failure by the Supervisor to furnish the appellant with a copy of the report , vitiated the Supervisor's action, Justice Blackman stated, in reference to the dispute as to the amount of the deficit in the statutory fund:- “Ido not think the rules of natural justice and the judicial limitations on the exercise of his powers that the courts should get involved in accounting matters. The courts are not equipped to handle such problems which are better left to the experts. ‘The decision can be seen as reflective of the overall reluctance of the judiciary to intervene in commercial matters and in this regard, administrative law operates as a convenient appropriate device to avoid an in- depth investigation into the minutiae of insurance operations . i Note at p. 419 of the Judgement Citing Re Western Ontario Credit Corporation Limited v. Ontario Securities Commission (1975) 59 D.LR. (3d )SOI at 511 where Justice Hughes stated “Moreover where a regulatory tribunal acting with its jurisdiction, make an order in the public interest with the experience and understanding of what that interest consists of in a specialized field accumulated over many years, the LAWO 2007 1 Ali A similar outcome yas reached in the Barbadian Court of Appeal decision of Narsham Insurance ( Bds } Ltd v. Supervisor of Insurance and Another. Here the applicant, an insurance company, failed to file financial retums in accordance with the Insuzance Act. After the company was in default| for 2% years, the Supervisor ordered the company to refvain from writing any new business, from making any investments and from disposing of any investments. On an application for Judicial Review, the Court of Appeal held that the actions Of the Supervisor amounted'to a breach of the rules of natural justice. It ruled that the Supervisors’ failure to. make the Repost of the actuary available to the company timeously, made his actions vulnerable to review. Guichard et Al v Bank of Nova Scotia Co of Trinidad and Tobago Ltd et Al S- 601 OF 1987 Hight Court of Trinidad and Tobago Facts: The plaintifis effected.a comprehensive fire insurance policy with the second defendant insurers through the first defendant bank, acting as servant / agent, on premises situated in San Femando in Trinidad and Tobago. On the 14" June 1986, the premises were destroyed by fire bat on around the 16" June 1986, the plaintiff received a letter dated 13% June , addressed to the first defendant , purporting to cance] the said policy effective 4.pm on the 13° June 1986. Prior to the fire the plaintiff were not aware of the cancellation and had not received notification. Held: There was a mortgage between the plaintiffs and the first defendant as evidenced by the ‘mortgage deed which established a contractual arrangement between them. In cases of this nature , one’s claim should be in contract and not in tort, Notice of the second defendant to the first defendant was inadequate and unreasonable. ‘The trust company had never accepted cancellation of the contractof insurance. ‘The refused cheque was never accepted in full and final settlement of the matter, The form of notice, oral and written and the length of notice was insufficient to terminate the contract prior tothe destruction by the fire of the plaintiffs’ property. Plaintiffs action failed against the first defendant but were held entitled to succeed on their claim against the second defendant for the insurable value of the plaintiff's property. The first plaintift was entitled to pursue third party proceedings against the second defendant . The sum Tecoverable on the contract td go to the first defendant as provided by the mortgege deed, in >on sewn LAWO 2007 | ;mppoiarycover wasconcidedoraly 2. See generally Carter. Boch (1766) 3 Burr. 1905. Joel v, Law Union & Crown Insurance Co, (1908] 2 KB. 863; Marks v. First Federation Life Insurance Co. Lid. (1963) 6 WAR. 185, 3. (1927. A.C. 139, 4. 1951} 1 Lloyd's Rep. 135; affirming The Times, Joly 5, 1950, 5. (1972) 18 WIR, 220, 6 Peter Persaud and Others y, Pin, Versaittesand Schon Ord Lid. (1970) 17 WLR. 107, 7. 0972) 18 WIR. 220 at p, 226, 8. The point was made by Scranton, LJ. in McCormick and Another v, Na. tional Moror and Accident Insurenae Union, Led. (1934), LL, Rep 36] at thet in certain 1s the: insured might be entitled to 1ake the aninnde “well there is a material fact which you didnotaskaquestion about, ‘sandas you didnotask aquestion about ityou cannot say that ic ought to have 9. (4972) 18 WLR. 220 at p, 225, 10 According to Dr. Malcolm Clarke: (@) waiver looks chiefly to the conduct of erwise have been entitled, so as to deny to him a later election 19 the contrary”; ©) waiver looks 19 the intention and Knowledge of the waivor, while the Knowledge or actual intention of the Petron estopped, is inelevant. It ig ‘ipelevant 19 waiver that the waives ‘as acted in relfence on the waiver ‘while forestoppe reliance sessentia; (©) waiver requires ‘positive acts by the waivor, which estoppel does nat: The Law of Insurance Contracts (Lloyd's of London Press Li, 1989) at pp. 555-556, A. (1951) 1 Lioyd's Rep, 139, ffimming The Times, Tuly 5, 1950, 12. Ibid, at p. 143, 13, (1972) 18 WIR. 220 at p. 225, 14, “The Doctrine of Uberrina Fides in Insurance Law - a Cyitical Evalna- ‘on™ (1969) 32 MLR: 615 at p. 626, 1S, (1927) A.C. 139 at p. 143, 46, [1951] 1 Lloyd's Rep, 139 atp, 142, 17. 1972) 18 WIR. 220 at pp, 225-296, 38, The mutality of the duty, Fest enun- ciated by Lord Mansfeld in Carter», Bockm (1766) 3 Burt. 1905 has been dramatically alfinmed in the recent case ofBangueFinancieredelachey. Westgate Incurance Co,Lid (1990}2 AUER. 947 where the FouseofLards Confirmed that the insurer also was Obliged to disclose all materia facts, 19, (2908]2 KB, 863, 20. (1873) 11M, 351, 22, 11936] 1 KB, 408, 2. See also Mutual Life Insurance Co. of New York v. Ontario Metal Products Co.Ltd. 1925} 4,C.344 0; Zurich GeneratAccidentand Liability Insure ance Co. Lid. v. Morrison and Others 11942] 2KB, 53, 23. Seeeg, see, 18, Marine InsuranceAct 1906 (UX); secs. 22, 23(1), Marine Insurance Act 1973 (Iamaica); secs x. 20,211) Marine insures Barbados). 24, Sec e.g. Merkin (1976) 2 Brooke, [1985] LM.Cr, 25, See generally Donoghue y [1932] A.C. 562, 26. Merkin (op. cit) at p, 479, 27. Command Paper 62 of 195 28, [1975] 2 Lloyd's Rep, 485 Highland inswance Co. v,; tal Insurance Co, (1987] Rep. 109, 29, (1963) 6 WIR. 185, 30, See eg. See. 1450) of t Trafic Act 1972 which requ merely that the undisclosed ‘material but also that it inch Pantcular insuree 10 enter j contact, 31. Seve. Thompson. Occiden Insurance Co. $13 P, 24. 35 * (Cal. 1973 ~ life): Life tasuren of North America v. Capps, 66. 392, 394 (9 Ci, 1981 - life), 32, See generally Statements offnsa Practice, 1971, revised 1986. ( 49MLR 754, 33. Cap. 2 (Gj. See now the Civil L Guyana Act, Cap. 6:07. Sectic ides: provi assurance which are henceforth bros {nthe High Coan or in any compe ‘cour of this country, the taw sdmi tered forthe time by the High Com Justice in England, so fer as that lav ‘Ot repugnant to, oF in conflict w ‘ny Actnow in force in Gayana, sh be the low to be administered by 1 ‘High Courtor other comperent cout4ROSE v. ROSE AND CROWN LIFE INSURANCE CO. Insurance (COMMONWEALTH OF THE BAHAMAS, Supreme Court. Equity Side. Suit Wo, 1558 of 1990 (Strachan, 1); May 15, 1991] LIFE INSURANCE - BENEFICIARY - HUSBAND NAMED BY WIFE AS BENEFICIARY UNDER LIFE POLICY - STATUTORY TRUST CREATED BY VIRTUE OF SECTION 7 OF THE MARRIED WOMEN'S PROPERTY ACT, Cit, 115 - SPOUSES LATER SEPARATED - WIFE ATTEMPTED TO NOWINATE CHILDREN AS BENEFICIARY UNDER POLICY - WILL EXPRESSING “DESIRE” THAT CHILDREN BE BENEFICIARIES - ucts: Section 7 of the Married Women's ‘operty Act provides, inter alia, that where married womeneffectsa policy oaber life ‘pressed to be for the benefit of her hus- ‘ad,a trust willbe createdin ber husband's vou The insured effected a poliey of life ssurance naming her husband as the sole neficiary, The partes later separated and insured sought to effect a change of ‘eneGiciary to her four children. In her wil, “auinsured expressed a “desire” that “all sales from (het) insurance policies be put « tust” for the children, However, at no ‘mg before the death of the Insured did her sband relinquish his right. The court was WHETHER EFFECTIVE, left to evake a determination as to the beni- Counsel for the plain tended that under the provisions ofthe Act and the policy the plaintiff acquireda vested ncerestwhicheculd only bedltered with his cdnsent. Counsel for the defendants (ihe children of the insured) argued that the beneficiary clause ofthe policy gave aright torevokeany appointmentof beneficlary or alter the number of beneficiaries by anctice im writing given to the Head Office of Crown Life to thareffect. twas contended thatthe will in which the insured stated how the proceeds of ber policy should be paid constimted a writen document as required by the poiley. Held: () Under the provisions ofthe Mar. ied Women's Property Act the husband's interest.in the proceeds of the policy vested ‘romits inception, so chat his wife could not remove himas beneficiary oraddbeneficia- vies without his consent, Therefore, the declaration in the will purporting to create amstfor the children bad no effect, andthe proceeds of the palicy were held for the named beneficiary, the husband. Per Strachan, J.:"_the inescapable result (in this case) may well invite legislative reappraisal ofthe law.” EDGAR y. DEMARA MUTUAL LIFE ASSURANCE SOCIETY LTD. (ST. LUCIA, High Court. Suit No, 100 of 1989 (Matthew, I, January 24, February 5, 1992}. LIFE INSURANCE ~ CONTRACT OF INSURANCE ~ ORAL AGREEMENT - VALIDITY OF - WHETHER TERMS OF ORAL AGREEMENT ESTABLISHED. LIFE INSURANCE - PARTIES ENTERED INTO CONTRACT FOR TEN . YEAR TERM POLICY OF INSURANCE - EXPIRY OF POLICY - ACCEPTANCE OF YEARLY PREMIUMS AFTER EXPIRY OF POLICY ~ INSURED BELIEVED THAT HE WAS COVERED FOR ANOTHER TEN- YEAR TERM POLICY OF INSURANCE - COMPANY SUBSEQUENTLY REFUSED TO GRANT COVERAGE - WHETHER VALID INSURANCE POLICY - WHETHER BINDING CONTRACT ON ACCEPTANCE scts: In May 1977 the plaintiff obtained a ‘ency-year foan from a finance company vurchase a home, As ihe loan was condi- sed opon a life insurance policy tocover OF PREMIUMS. the loan péviod the plaintiff applied ta the defendant company for a policy to cover thacperiod, The company granted coverage fora ten-yearperiod sndon May 5,197 the is plaintiff obtained a ten-year level term plat of assurance in the sum of $75,000. The policy expired on May 4, 1987. The plain ‘iff paid two yearly premiums which werted seg signed in July 1988 as the plaints offer wasrejected ina eter dated January 9, 1989; (i) the existence of an oralconvactcould fot be established. The essentials of the agreement, that, the amount of coverage, the nant of te risks and the rate of pre- sium were not agreed on. Further, the plain- tiff aid notestablish the fact ofagreementon mm Insurance policy for a second ten-year teem | Gi) im any case the defendant's agent [ would net have had authority to enver inta such an oral agreement as it was the J company's bead office which decided ped after expiry of the policy and on 16, 1988 he signed a proposal for a and ten-year term policy. However, on vuary 15, 1989 the plaintiff received a + from the defendant company inform- tim that tke company could not grant rage. The plaintiff claimed that the tof the company had indicated that ‘expiry of the initial period the com- would insure him for a consecutive ‘ear period, The issue for detecmina- by the court was whether there was a insurance policy in existence. +) No contract arose on the proposal | i t ‘whether orncttoacceptinsurance proposal (@)ovenifthe defendant’segenthad told the plaintit that after 1987 the company would insure him foraten-yearperiod,ifby 1568 the plaintif’s bcalth had deteriorated, the plaintiff woald have much difficulty in esmblishing the legality of the conzct, (¥) the case of Canning v. Farquhar (1886) 16 Q.B.D. 727 was no authority far the statement that once premiums were paid and accepted there was 8 binding contactof insurance, Claith dismissed with costs to the defen- ant to be taxed if not agreed. artyreduction or repayment of the mortgage debt, “When a mortgagee wishes to safeguard his insurable interest... he acts as an agent as, for the mortgagors. What the mortgagee is doing is protecting its interest in order 10 satisty any purported loss, future loss etc. When than right is purportedly exercised by a mortgagee pursuant to the mortgage deed the onus is upon the mortgagee to take all necessary precautions to get the best possible coverage in the circumstances, and to act fairly. All these are rights and dutis..... In Halsbury’s Laws of England ( 4" edition ) Vol25, para 398, the relevant law as respect the formation of a contract to insure is set out in this way: “Necessity for offer and acceptance. A contract of insurance, like any other contract, is created where there has been an unqualified acceptance by one party of an offer made by the other.” Where a proposal in the normal form is accepted without qualification, the contract is complete and the insurers re bound to issue, and the proposer to accept a policy in accordance with the situations of the proposal. The insurers cannot then seek to introduce variations by issuing a policy containing different terms, although if they do the proposer will probably be bound by the Varied term ifwith their knowledge, he indicates by word or act his assenit to the variation of the terms already agreed.” It was never a term or a condition of the said contract that a survey of he plaintiffs’ building had to be undertaken by the second defendant as a requirement for the continuation in force of the said contract. in fact no mention was made either in the proposal form ( which forms the basis of the first defendant's offer) or in the second defendants’ letter of acceptance of the 16! April 1986 about a survey. There was indeed unqualified acceptance of the offer by the second defendant without any reference whatsoever to any survey... [think that an insurance Company hes a whole has a right always to terminate a contract of insurance for refusal or neglect by the insured to perform or to fulfil some essential term or condition in the contract or for non - compliance with or non- fulfilment by the insured of same, but it seems to me that the absence of agreement by the parties as to the form of notice and the length or period of notice required for cancellation of such contract, reasonable notice of intended find that the notice 6f the cancellation of the contract of insurance by the second defendant to the first defendant was inadequate and cancellation should be given.. LAWO 2007 3 43unreasonable .* Agency “Halsbury's Law of England ( 4° definition) para 701, Vol 1, puts the subject of the nature and formation| of agency in this way agency in this way:- The selation of agency arises whenever one person called “the agent” has authority to act on behalf of another, called the “principal” and consents so to act . Whether the relation exists in any situation depends not on the precise terminology employed by the parties to describe their relationship, but on the true nature of the agreement or the exact circumstances of the relationship between. the alleged principat and agent. Again, at paragraph 715 of the said Volume, the following statement appears:- The relation of agency is created by the express or implied agreement of principal and agent, or by ratification by the principal of the agent’s actions done on his behalf. Expres agency is created where the principal, or some person authorised by him, expressly appoints the agent either by deed, by writing, under had, or orally, Implied agency arises from the conduct or situation of the parties, or by operation of the law, for example from necessity . A case of implied agency between the first defendant and the plaintiffs did arise ( it would seem) in this case from the parties - 2s joint; proposers on the proposal form for the purpose of insuring the property, What then was the extent of that agency. Did it embrace the receipt of the notice by the first defendant for an on behalf of the plaintiffs ? Ido not think so . In the first place, the Trust Company was under no obligation (according to the mortgage deed) to insure the plaintiffs property. It did so out of concem for its own insurable interest Secondly, neither the mortgage deed nor the proposal form or any other document cast on the first defendant the obligation of having to receive any notice of cancellation for or on behalf of the plaintiffs with any such notice. On the other hand, it would bave been both inconceivable and nonsensical for the first defendant to have insured the premises merely in the name of the first defendant only when the plaintiffs still had an interest on the said property by reason of their equity of redemption. It seems to me , therefore, that the first defendant was not the agent of the plaintiffs for the receipt of notice served on them by the second defendant. I'now turn to what I consider - to be a delicate topic. It is this. Did the first defendant and the second defendant owe any duties to the plaintiffs ae LAWO 2007 44s outlined in paragraph 11 of the plaintiff's statement of claim’ Figst , it must be remembered that the proceedings herein were instituted principally in contract, an not in tort, Second, the relationship between the contracting parties is based on contract , and not non tort. Furthermore, a close scrutiny and examination of the factual background and surrounding circumstances of this case will show that the claims by the plaintiffs for relief herein arise out of the contract of insurance herein, and revolve around same. The mere importation and introduction by the plaintiffs of the tort of negligence and breaches of duty akin to the said tort will not per se convert the contract( or what is basicallya case of contract) into the tort of negligence, For that matter, it is inspiring to note what Lord. ‘Scarman had to say in Tai Hing Cotton Ltd v Lui Chong Bank ( supra) on this very point. In deprecating this practice, he commented (at page 957) “Their Lordships do not believe that there is anything to the advantage of the law's development in searching for liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship. ‘Though itis possible as a matter of legal semantics to conduet an analysis of the. rights and duties inherent in some contractual relationships including that of banker and customer either as a matter of contract law when the question will be ‘what, if any, terms are to be implied or as a matter of tort law when the task will be to identify a duty arising from the proximity and character of the relationship between the parties, their Lordships believe it to be correct in principle and analysis: on principle because it is a relationship in which the parties have, subject to a few exceptions, the right to determine their obligations to each other , and for the avoidance of confusion because different consequences do follow according to whether liability arises from contract or tor, e.g. in the limitation of action, Their Lordships respectively agree with some wisé words of Lord Radcliffe in his dissenting speech in Lister v Romford Ice and Cold Storage Co Ltd 1957) A.C. 555 at 587 After indicating that there are cases in which a duty arising out of the relationship between employer and employee could be analysed as contractual or tortious Lord Radcliffe said, LAW© 2007 . 5 45“Sincb in any event, the duty in question is one which exists by impuiption or implication of law and not by virtue of any express negotfation between the parties . I should be inclined to say that these is nota] real distinction between two possible sources of obligation, But is certainly, Tthink, as much contractual as tortious. Since in modem times, the relationship between master and servant, between employer and employed, is inherently one of contract it seems to me entirely correct to aktribute the duties which arise from that relationship to implied contract.” Whether a contract of insurance existed? “ It would be offensive to commonsense and to substantial justice for a court of Jaw to hold that 2 man can be bound by a document (especially one) the contents of which he ig unaware . On the subject of a policy the authors of Halsbuy’S Laws of England( 4" edition) Vo 25, paragraph 406, say this:- “In form, a policy is a unilateral undertaking by the insurers to pay the sum insured on the happening ofthe specified event, and unless and until rectified, it is an exclusive record of the contract.”.At paragraph 410 of the suid edition, the authors again State:- “A policy of insurance is a document ia writing; it is a commercial document, designed to fulfil well recognised commercial habits and practices, Each of the broad propositions produces a number of subsidiary nules governing its interpretation.” .. Worksheet 3 INSURABLE INTEREST American Life Insurance Co v. Sumintra, arising out of the Guyana Court of Appeal, * Discussing the origin, importand nature of the doctrine of insurable interest, Justice Luckhoo states: “Now, it is trite law that one of the three great principles of insurance law is that the insured must have an insurable interest in the subject matter of insurance, ie to effect a valid contract of insurance the insured must have something at stake; he must have something to tose by the happening of the peiil he seeks to insure against, This is a statutory requirement inderthe Life Assurance Act, 1774(UK) provision which applies 2 (ag83)37 war 243. LAWG 2007in Guyana by virtue of section 13 of the Civil Law of Guyana Act, Cap 6: 01. But, generally speaking, any insurance effected by an insured without an insurable interest would be void as gaming or wagering transaction under section18 of the Gaming Act 1845 (UK).” Rambally y Barbados Fire and General Insurance Company Ltd et all No 1179 of 2000.( Unreported decision, High Court St Lucia). Oni 26" May 1997, a building housing the Country Style Bakery and Restaurant at Bexon Castries was destroyed by fire. At the material time there was in existence a policy of insurance, dated 22 July 1996, with Barbados Fire and General Insurance Company Ltd that covered loss cor damage by fie flood and other perils. This policy was effected by the second plaintiff RR. inthe name of his uncle HR who was then one of the registered owners of the property. The other was his wife NR the first plaintiff, Thesecond. defendant acted as the broker. ‘The plaintiffs were. in the process of purchasing the property from the HR and had paid a deposit of $300,000 under asale agreement and where paying monthly payments to the mortgagor Royal Bank of Canada, On the 3* January 1997 HR died. In 1999 Letters of administration were issued by the High Court to NR his widow. RR and SR were not beneficiaries under the policy. RR made a claim under the policy By notice of loss. The insurers refused the claim contending that RR was a stranger to the contract could not claim the proceeds of the insurance policy on the basis that he owned the property or was an assignee of or a beneficiary . The issues that arose for consideration where ,inter alia, the nature of the insurable interest of RR and (ii) whether the insurance brokers were agents of the insurers or the insured? And thus the insurer's were bound by the promises and representations, acts or conduct of the agent. Are the insurers entitled to avoid the policy for non- disclosure and misrepresentation material to the risk and lack of pre- contract good faith. Insurable interest “There is no legal requirement that a policy covering fire risk must contain the names or identity the interests of all the persons who are able to seck indemnity under it Sui v Eastern Insurance { 1994] 1 AlLER 213 approving Mark Rowlands Limited v Berni Inss [ 1985] 3 AIL ER 473... must apply the provisions of the Articles of 945 to 936 of the LAW 2007 7 atCivil Code of St Lucia Chap 242..... Though evidence of intention is clearly aot admissible in aid of fonstruing the insurance contract, such evidence become relevant ‘when insurable intergstis in question ; Hepburn v Tomlinsomn ( Haulier ) Limited [1966}] A.C 451 per Lord Hotison at page 472-F........ Lam fortified authoritatively in my view by the dicta of Lord Haldane in Dunlop Pneumatic Tyre and Company v Selfridge and Company{1915] AC 847; and Lord Wright in Vandepitte v Preferred Accident Insurance Corp of N.Y. (1933] AC 71. Lord Haldane authoritatively expounded that. in the law of England certain principles are fundamental One is that only a person who is a paty toacontract can sue on it. Ourlaw knows nothing of jus quaesitum tertio arising by way of contract. Such a right may be conferred by way of property, as, for example, under a trust, but it cannot be conferred on a stranger to a contract as a tight to enforce the contract in personah.”.., Speaking of this dicta of Lord Huldane, Lord Wright in Vandepitte v Preferred Accident Insurance Corp of N.¥ observed - In that case... only questions of direct contractual right in [aw were in issue, but ord Haldane states the equitable principal which qualifies the legal rule, and which has received effect in may cases, as for instance, Robertson v West (1863) 8 Ex 29! before e that Hezekiah Rambally was expressly authorized ot under a duty to insure on behalf of RR and SR... Articles 1193, 1211 and 1220 of Civil Code of St Lucia , Chap 2A2...uu Article 1211 states that “spouses shall together administer the property of the community” Under Article 1193 ¥ should presunme that Hezekiah Rambally and NR jointly acquired the property the property in community inthe absence of evidence tothe contrary... ‘The lack of clarity in the law was recognised by the House of lords from as far back as 1901 in Keighley Maxsted and Co v Durant [1901] 17 TLR $27. The head note in this case reads that a contract made by a person in his own namo, pot purporting ‘There is no evidence to act on behalf of a principal, but having an undisclosed intention to act for another, though without that other's authority, cannot be ratified by that other so as to enable hi to sue or render him liable to e sued on the contract... Lord Robertson in his Judgement in Keighley case summed it up in this following statement ( at page 528) “Tt seems to be that the whole hypothesis of ratification is that the ultimate raifier is already in appearance the contactor, and that by ratifying he holds as done for him what already LAW 2007 8 4kbore, purported , or professed to be done for him.. Whether the unathorised agent may be mrked out as an agent by what he says, or by what he wears is, of course a mere matter of circumstance and of evidence; but an agent he must be known to be and as agent he must act.” In Hepburn v Tomlinson ( supra [1966] AC PC Pages 476 to 479 . Lord Pearce in reviewing the reason for the lack of clarity in the law, recognized that “the question of the assured’s unilateral intention came into this branch of law by way of public policy and marine Insurance.” He also recognized that there were many cases in which commercial convenience allowed an assured with limited interest in goods as agent of trustee to insure the whole property in the goods and to recover the whole of the money, bolding the balance in trust for those whose loss it represents. This was a case conceming a policy taken out by carriers on the goods which were the property of a third party, The rest of the facts ace unimportant for the purposes of the present case... I therefore accept the law that an undisclosed principal can take the benefit of a contract only where the insurers are aware that the person entering into the contract is a mere agent, of is likely to be insuring other interests as well as his own... Applying these ‘statement of the Jaw to my findings, I conclude that at the time the insurance contract was effected the insurers were never aware that Hezekiah Rambally wes professing to act as agent for RR , NR and SR, or that he was insuring their interests under the policy... Worksheet 5 NON- DISCLOSURE Datkan v Colonial Life Insurance Co Ltd (1967) 12, WIR 133 COURT OF APPEAL OF TRINIDAD AND TOBAGO Insurance Fire— Claim for payment Defence — Breach of express conditions ~Non disclosure of other insurances — Commencement of action out of time — Fraud - Action dismissed — Fraud rejected by trial judge — Finding reversed on cross-appeal, ‘The appellant insured his dwelling-house and its contents with the respondent against loss by fire. He failed to disclose that he had insured against similar loss with another company and in his declaration he misrepresented the value of the property to the respondent. The dwelling- ‘ Boston Fruit Co v British and Foreign Marine Insurance Co Lid [1906] A.C 336, LAW 2067 9 44bouse was destroyed by fire nd the appeliant filed his action claiming $23,500. The respondent pleaded that certain conditions of the policy had been breached and alleged specifically that the appellant, inter alia, had failed to disclose the existence of another policy of insurance and had also falsely declared the vahle of the building was $27,000 when to his knowledge the building ‘was worth no more than $14\000. Judgment was given in favour of the respondent; but the trial Judge found there was no evidence to supgest dishonesty on the part of the appellant, On appeal and cross-appeal, , Hild: (i) thatthe failure to disclose the existence of another policy of insurance was a breach of an express condition and was not a mere non-disclosure or innocent misrepresentation of the facts; : (ii) that on the facts os found by the trial judge the appellant had wilfully misrepresented the value of the property; therefore the allegation of fraud was established and the trial judge came toa wrong decision on that igsue, Appeal dismissed. Cross-appeal allowed, ‘Cases referred to National Protector Fire Insurance Co Lid v Nivert [1913] AC 507, 82 LIPC95, 108 LT 390,29 TLR 363, 6 BW CCN 93, PC North British & Mercantile Insce Co v London, Liverpool and Globe Insce Co (1877), 5 ChD 569, 578, CA, Derry v Peek (1889), 14 App Cas 337, 58 LICh 864, 61 LT 265, 54 JP 148, 38 WR 33, 5TLR 625, | Meg 292, HL i Appeal Appeal from an order giving judgment for the respondent with a cross-appeal by the respondent secking a reversal of the trial judge’s finding on the issue of fraud, The facts appear fully in the judgment. Phillips JA : By a policy of insurance dated 16 January 1958 (hereafter called “the policy”) the respondent company insured the appella}t in the sum of $8,000 against loss or damage by fire in respect of LAW 2007 10 aoa dwelling-house situate at Lange Street, Montrose Village, Chaguanas. By an endorsemeat to the policy dated 9 January 1960, the insurance was renewed for a further period of twelve months from 15 January 1960, and the sum insured was agreed to be as foltows: (a) on the said dwelling house $22,000; (b) on the contents thereof, $1,500. ‘The dwelling - house having been destroyed by fire during the night of 22 August 1960, and the appellant's claim for payment under the policy having been rejected by the respondent, the appellant, by writ of summons dated 22 August 1961, commenced and action to enforce his said claim. It may be of interest to 133 observe that the institution of the action was barely within the period of limitation fixed by clause 19 of the policy in the following tecms: ‘In no case whatever shall the Company be liable for any loss or damage after the expiration of twelve months from the happening of the loss or damage unless the claim. is the subject of pending action or arbitration.” ‘The defence at the trial was that the action was not maintainable as a result of breach by the plaintiff of conditions contained in clauses 3, 11 and 13 of the policy. These conditions were as, follows: “3. The Insured shall give notice to the Company of any insurance or insurances already effected, or which may subsequently be effected, covering any of the property hereby insured, and unless such notice be given and the particulars of such insurance or insurances be stated in or endorsed on this Policy by oz on behalf of the Company before the occurrence of any loss or damage, all benefit under this Policy shall be forfeited.’ “LL, On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company, and shall within 15 days after the loss or damage, or such farther time as the Company may in writing allow in that behalf, deliver to the Company (@) A claim in writing for the toss and damage containing as particular an account as may be reasonably practicable of all the several articles or items of property damaged or destroyed, and of the amount of the loss or LAW® 2007 uw Stame thereto respectively, having regard totheir value at the time of the loss cso not including profit of any kind. {b) Particutars of all other insurances, if any. No claim under this Policy shall be payable untess the terms of this condition have been complied with.” : “13. If the claim be it any respect fraudulent, or if any false declaration be made or used in support thereof, of if any fraudulent means or devices aze used by the insured or anyone acting on hig behalf to obtain any benefit under this Policy; or, if the loss or damage be occasioned by the wilful act, or with the connivance of the Insured; or, ifthe claim be made and rejected and an action or suit be not commenced within three months after such rejection, or (in case of an arbitration taking place in pursuance of the 18th condition of this Poliey) within three months after the arbitrator or atbitrators or umpire shall have made theit award all benefit under this Policy shall be forfeited,” ‘The action was dismissed by Achong J, who held that the plaintiff was in breach of condition 3 as well as one of the conditions contained in clause 13, viz: the requirement that any action for enforcement of the defendant company’s liability should be commenced within three months of its rejection of the claim of the insured. The learned trial judge made no finding in relation to condition 11, and has specifically found that there was no breach of the first condition stipulated vy clause 13, viz: that the claim should not be in any respect fraudulent. In relation to this he held that “there is no evidence to suggest any dishonesty on the part of the plaintiff’. ‘This appeal has been broyght by the plaintiff against the dismissal of the action and by way ‘of cross-appeal the respondent seeks a reversal of the learned judge's conclusion that the plaintiff’s claim was not made fraudulently.... “It seems to me that the fact that the plaintiff was the only person with whom the Ruby Company entered inté the contract of insurance was almost conclusive of the fact that he ‘must have been privy to its formation, for I consider it inconceivable that an insurance ‘company would issue a fire policy without requiring the assured to submit a proposal iving particulars concemning the nature of the risk to be undertaken by the company. i LAW 2007 12 SoSuch particulars would ordinarily include information not merely concerning the nature and value of the insured property, but also the assured’ previous insurance history, a matter that is obviously material to the risk to be undertaken, This brings me to consideration of a submission made by counsel for the appellant to the effect that the plaintiff's non-compliance with condition 3 cannot legally result in forfeiture of alt benefitunder the policy for the reason, it was said, that disclosure of previous insurances ‘was not a material fact. would immediately observe that the question of materiality is relevant only to cases of non-disclosure and/or misrepresentation of facts, and has no application to the determination of the question of breach of an express condition of a policy of insurance. (See Preston and Colinvaux, Law of Insurance (2nd Edn) p 10, and the cases there cited.) The present issue is not merely one of non-disclosure or innocent mistepresentation of the facts, but one of alleged breach of an express condition of the policy. In support of his submission counsel referred to National Protector Fire Insurance Co Lid v Nivert ({1913] AC507, 82 LJPC 95, 108 LT 390, 29 TLR 363, 6 BW CCN 93, PC), which was a case in which:' Under two policies in French the respondent ‘insured against fire a building and its contents, each for £600. The policies provided by Condition IH that if the property should be insured under other contracts, subscribed either before or after the policies attached, he was ‘tenu de le déclarer, per écrit, et dele faire mentionner soit dans ta police meme, soit par un endos inscrit par la compagnie sur Ja dite police’. The respondent had at the time of effecting the policies concurrent insurances with other companies for £600 upon the 136 building and £600 upon the ‘contents, and these insurances were recorded in the policies respectively. Subsequently the concurrent insurances were replaced by other insurances to a slightly larger amount, the excess being due to new decoration of the building and additions to the contents, These substituted insurances were not communicated tothe appellants orendorsed on the policies:Hleld, that Condition Ill in the policies meant only that the fact that the property covered was further insured should be declared, and that the respondent had committed no breach of the condition and was entitled to recover upon the policies.” It should be noted that it was conceded in that case that the stight increase in other insurances effected on the property was not material to the issue under consideration. In delivering the LAW® 2007 1B 63judgment of the Judicial Corpmittee of the Privy Council Lord Atkinson said (ibid, at pp S11- 512): ‘Itis not required that any of the details of the policy should be given, not even its date, the name of the insurers or the agsured or the amount covered by it... Thus the fact of the existence of insurances additional to their own is the matter which really concerns the insurers, Tt can'make no difference to them wither the additional insurances of which they were informed are kept up with the original insurers or are transferred to some other insurers, nor even whether they were allowed to drop if new policies for the same amount were effected to replace them... These considerations are to be borne in mind when the meaning and object of a condition such as this third have to be determined....” and at p $13: ‘Conditions such as this third condition are always in courts of law construed strictly against insurance comnpanies and should always be interpreted in a reasonable sense ‘having regard to the: business nature of insurance transactions. Their Lordships so construing and interpreting the condition are of opinion that its requirements have been, complied with and that it affords no defence to the plaintiff's claim,’ Itis, in my opinion, manifest from these passages that Nivert’s case (National Protector Fire Insurance Co Ltd v Nivert [1913] AC 507, 82 LIPC 95, 108 LT 390, 29 TLR 363,6 BW CCN 93, PC) is no authority for the proposition for which it was cited by counsel and can give no support to the appellant, wio, on the clearest evidence, failed to comply with any of the requirements stipulated by condition 3. For these reasons I am of the view that the trial judge tightly rejected the appellant's claim on the ground that he was in breach of condition 3 of the policy. : of condition 11 of the policy, whereby he was required to make a claim in writing within fifteen .Asto the submission of counsel for the respondent that the appellant was in breach days of the happening of any loss or damage, it would not, in my judgment, be proper for this, court to make a pronounceinent upon an issue on which the trial judge has expressed no opinion-possibly for the reagon that he was of the view that the defendant company was not placing any reliance om it, The conduct of the case was remarkable for the fact that, according to the record of the proceedings, not only did counsel for the plaintiff not make any opening statement at the trial, but counsel for neither party thought it necessary to address the judge on the conclusion of the evidence. The result of this unsatisfactory state of affairs has been that LAWG 2007 14 st |while itis beyond dispute that the plaintiff did not submit a claim in writing in connection with his loss within fifteen days of its occurrence, the question might well have arisen atthe trial as to whether the conduct of the defendant company had been such as to amount toa waiver of strict, compliance with condition 11. During the course of the argument counsel for the respondent suggested that in order to be available to the plaintiff any issue of waiver would have had to be specifically pleaded. This may well be so; ut it must be home in mind that an application for Teave to raise any issue arising on the evidence, may, in proper circumstances, be granted to a party during the hearing of an action. I now tmm to the consideration of the respondent's contention, raised by way of cross-appeal, that the trial judge’s finding that the plaintiff's claim was not fraudulent is unreasonable and against the weight of the evidence. In relation to this issue the learned judge expressed his conclusion as follows: “It is patent that the insured value of the ssid building was exaggerated, butas itis stated in Preston and Colinvaux, Law of Insurance (2nd Edn), at p 157, ‘mere exaggeration is not conclusive of fraud, for value is often a matter of opinion, though such exaggeration will amount to fraud if t is dishonestly made’. And in this case there is no evidence to suggest any dishonesty on the part of the plaintiff.” Jn my opinion, this last mentioned expression of view on the part of the leamed trial judge ‘was contrary to the findings of fact which he has himself expressly made, and which were not in any way challenged before this court. I consider it useful to set these out verbatim as they appear in his reasons for judgment: ‘Let me say at once that Ido not believe the plaintiff when he seid he spent $14,000 on the construction of the said building, and have little hesitation in rejecting the evidence ofhis witness. When the plaintiff gave evidence he swore that building operations began in November of 1958 and were completed in January 1959. Later he was forced to admit thathe was mistaken and that the true dates of commencement and completion of those ‘operations were November 1957 and January 1958, respectively. All thet would have been unknown to his witness who came along and swore quite glibly that he had kept records of these operations and was quite certain that the said building was erected between November 1958 and January 1959, From all the evidence it seems that the cost of erection must have been somewhere between $8,000 znd $9,000.” LAWO 2007 15 55It seems to me that there,is no question here of mere exaggeration based on the appellant’s honest opinion of the valle of the insured property, but that this is a case of wilful mistepresentation made with full knowledge of its actual value. Having regard to the fact that some depreciation in the original value of the house would ordinarily have taken place during the two and a half years 138 of its existence, it was, in my judgment, unreasonable in the circumstances to hold that there was ao dishonesty on the part of the appellant in claiming that its value was $27,000. It is also worthy of observ: i appears to have erroneously paid regard merely to the insured sum of $22,000, and notte the sum claimed by the appellant as Heing the value of the house, namely, $27,000. that in considering this issue the judge Moreover, there is one important aspect of this issue which, in my view, the learned judge wrongly failed to consider. It is only fair to add, in parenthesis, that it appears that he did not receive all the assistance which might have been expected from counsel in a case of this nature. However, what appears to me to be material for present purposes is the wilfully false representation that the interest insured by that policy was that of the mortgagee, Mr Carvalho, and not the appellant's own interest in the dwelling-house. ‘The materiality of such representation lies in the fact that it affects the question of the respondent's right to claim contribution from the Ruby company in respect of the loss sustained by the appellant. This well-Known principle, which springs from the fact that @ contract of fire insurance is one of indemnity only, is referred to in MacGillivray on Insurance Law (Sih Bén), Vol 2, para 1862, as follows; “Where there are two or more insurances on any one risk the principle of contribution applies as between tie different insurers. Apart from any condition in the policies, any one insurer is bound to pay to the assured the full amount for which he would be liable if his policy stood alone; but having ‘paid he is entitled to an equitable contribution from his co-insurers on the same principle as co-sureties are bound to contribute infer se when any one is ealled upon by the cxeditor to pay...” See also North British 4 Mercantile Insce Co v London, Liverpool and Globe Insce Co ((1877), 5 ChD 569, 578, CA), (1877), 5 ChD 569, 578, at p 583). (One of the elements that i essentiat to the applicability ofthe principle of contribution is that the concurrent insurances thust cover the same interest in the property insured. Thus, the LAWO 2067 16 5bappeltant’s representation that the Ruby policy covered only the mortgagee’s interest in the dwelling-house was such as, if true, would have had the effect of denying the respondent company the right to claim contribution from the Ruby company in respect of the loss. ‘This misrepresentation was only in harmony with the appellant’s conduct in relation to the Ruby It seems to me that these circumstances are such company after the occurrence of the fite. . a5 to lead ieresistibly to the inference that the appellant's intention was to endeavour to secure payment of the total sums insured by the respondent as well as by the Ruby Company, and, in my judgment, his conduct falls clearly within the definition of fraud finally settled by the House of Lords in the leading case of Derry v Peek ((1889), 14 App Cas 337, 58 LICh 864, 61 LT 265, $4 JP 148, 38 WR 33, 5 TLR 625, 1 Meg 292, HL). Iam of opinion that the cl made by the appellant on the respondent company reeked with fraud, and that the trial judge came toa wrong decision in relation to this question. I, therefore, hold that the appellant was in breach of condition 13 of the policy; and I would allow the cross-appeal and reverse the trial judge's finding on that point. For the foregoing reasons I have come to the conclusion that this appeal fails and must be dismissed with costs. McSHINE JA. Tagree, FRASER JA. [also agree, Appeal dismissed, Cross-appeal allowed. Worksheet 2,5 and 6 INTERMEDIARIES Forde v The British Guiana And Trinidad Mutual Fire Insurance Co Ltd ‘The plaintiff insured her dwelling-house with the defendant against damage by fire, The policy of insurance was subject to the condition that the policy was of no effect if the building became unoccupied and remained so for a period of more than thirty days. ‘The plaintiff's building was damaged by fire after remaining unoccupied for thirty days. It was submitted on behalf of the plaintiff that since a fire had occurred on 5 Novembér 1960, and the defendant's agenthad visited LAW 2007 7 Stthe dwelling-house and assessed the damage, therefore when a second fire occurred on 8 November 1960, the defendant by its agent had waived the forfeiture, Held: (i) The policy of insuypnce had ceased to attach to the dwelliag-house; (i) the agent had no authority express or implled to waive the forfeiture. Judgment for the defendant., HANSCHELL J. In this action under a policy of insurance dated 1 August 1956, the plaintiff claims $1,000 for loss and damage to a dwelling-house at Ebenezer in the parish of St Philip in this Island, which was destroyed by fire on 8 or 9 November 1960. ‘The defence is thatthe policy of insurance had ceased to attach to the said dwelling-house at the time when it was burnt, under condition 7 of the said policy. This condition reads as follows:‘Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the insured, >efore the occurrence of any loss or damage, obtains the sanction of the company signified by endorsement on the policy by or on behalf of the Company-(b) if the building insured or containing the insured property becomes unoccupied! and so remains for a period of more than thirty days.” } Agency “All that remains to be decided is whether by his conduct Edward Evelyn, the local agent’s clerk, had waived the forfeiture of the policy on behalf of the defendant company and re-attached the seid policy to the house in the course of his visit to Ebenezer on the evening of 7 Novemier 1960, so that when this house was finally consumed by fire at 2 am on the moming of the 8th it was covered by this policy of insurance issued by the defendant company, In Bowstead’s Digest Of The Law Of Agency (11th Eda) at p 53, art 38, the learned author has stated the law of implied authority of general agents, as follows: “Every agent who is authorised to conduct a particular trade or business, or generally to dot for his principal in matters of a particular nature, or to do a particular clais of acts, has implied authority to do whatever is incidental to the ordinary conduct of such a trade or business, or of matters of that nature, or is LAW® 2007 18, 38within the scope of that class of acts, and whatever is necessary for the properand effective performance of his duties; but not to do anything that is outside the ordinary scope of his employment and duties.’ Referred to as an authority for the last statement “but not to do anything that is outside the ordinary scope, etc” is the case of Linford v Provincial Horse & Cattle Insurance Co (1864), 34 Beav 291, 5 New Rep 29, 11 LT 330, 28 JP 803, 10 Ju:NS 1066, 55 ER 647, 29 Digest (Repl) 72, 244), which case is the authority for stating that an ordinary local agent of an insurance company is not, without special authority, authorised to bind the company by a contract to grant apolicy. Local agents are employed to obtain proposals and forward them to their principals end to accept premiums on policies which have been issued by their principals, An agent for an insurance company has no ieptied suthority to waive a forfeiture of a policy. See British Industry Life Assurance Co v Ward (1856), 17 CB 644, 27 LTOS 81, 20 JP 391, 139 ER 1229, 29 Digest (Repl) 72, 241), Inthe case of Wing v Harvey ((1854), 5 De GM & G 265, 2 Eq Rep 533, 23 LICh S11, 23 LTOS 120, 18 Jur394, 2 WR 570, 43 ER 872, LIJ, 29 Digest (Repl) 72, 242), the facts were that on a policy of life insurance there was endorsed a condition that the policy should be void if the insured should go beyond the limits of Europe without the license of the directors. ‘The condition was infringed by the insured going to Canada, where he died, ‘After the breach the local agent of the company continued to receive premiums with notice of the breach which he represented as not invalidating the policy. It was held that the notice to the agent was constructive notice to the company and they were precluded by the conduct of their agent from insisting on the forfeiture upon the death of the insured, This was explained and distinguished in the case of Newsholme Bros v Road Transport & General Insurance Co Lid ({1929] 2 KB 356, [1929] All ER 442, 98 LIKB 751, 141 LT 570, 45 TLR 573, 73 Sol Jo 465, 34 Com Cas 330, 24 LILRep 247, CA, 29 Digest (Repl) 71, 236), in the judgment of Greer Li, where he says, in referring to Wing v Harvey ((1854), SDe GM & G 265,2. Bg Rep 533, 23 LICh SLL, 23 LTOS 120, 18 Jur 394, 2 WR 570, 43 ER 872, LIJ, 29 Digest (Repl) 72, 242) ({1929] 2.KB at p 383): “The case is only an authority for the proposition that if an event has happened after the issue of the policy which would make the policy void, and the company with notice of the event which avoids the policy renews the contract by receiving the premium to cover a further period of insurance, it will be deemed to have effected the insurance on the term thi the LAWS 2007 9 a4conditions will not be insisted on,” Clearly Wing v Harvey ((1854), 5 De GM & G 265,2 Eq Rep 533, 23 LICh S11, 23 LTOS 20, 18 jur 394, 2 WR 570, 43 ER 872, LIT, 29 Digest (Repl) 72, 242) has no application to this case. Stokes & Bynoe, Lid, had ao implied authority to waive condition 7 relied om by the défendant and of which the plaintiff was in breach. Judgment for the defendant. Rambally v Barbados Fire and General Insurance Company Ltd et al No 1179 of 2000.( Unreported decision, High Court St Lucia). PACTS : On 26% May 1997, a building housing the Country Style Bakery and Restaurant at Bexon Castries was destroyed by fire. At the material time there was in existence a policy of insurance, dated 22 July 1996, with Barbados Fire and General Insurance Company Ltd that covered loss cor damage by fire flood and other perils. This policy was effected by the second plaintiff RR in the name of his uncle HR who was then one of the registered owners of the property. The other ‘was his wife NR the first plaintiff. The second defendant acted as the broker. The plaintiffs were in the process of purchasing the property from the HR and had paid a deposit of $300,000 under sale agreement and where paying monthly payments to the mortgagor Royal Bank of Canada, On the 3" January 1997 HR died. In 1999 Letters of administration were issued by the High ‘Court to NR his widow, RR and SR were not beneficiaries under the policy. RR madeaclaim under the policy By notice of loss. The insurers refused the claim contending that RR was a stranger to the contract could not claim the proceeds of the insurance policy on the basis that hhe owned the property or was an assignee of or a beneficiary . The issues that arose for consideration where ,inter alia, the nature of the insurable interest of RR and (ii) whether the insurance brokers were agents of the insurers or the insured? And thus the insurer’s were bound, by the promises and representations, acts or conduct of the agent. Are the insurers entitled to avoid the poliey for non- disclosure and misrepresentation material to the risk and lack of pre- contract good faith, Judgement Agency } LAWO 2007 | 20 i { | }“The claimants alleged that the insurers gave Mr Jean application forms, authority to ‘ollect premiums for the insurers he was paid a 10 percent commission for business placed with the company establishing an agency relationship . [The] Burden of proof is ‘pon the claimants fo establish on the balance of probabilities thatthe brokers were Serving Iwo masters... Counsel relied on the dicta ofthe dissenting Lord Wilbecforee in Brawshite v Worcester Work Finance Limited (1969) 1A C $52, 587. ‘There Lord Wilberforce said that “ while agency must ultimately derive from consent, the consent needno necessary be to the relationship of principal and agent itself{ indeed theexisience of it may be denied ) but it may be to a state fact upon which the law imposes the Consequences which result from agency. ... Counsel provided the court with 31 tuifhorkes ftom the USA which are not binding Authorities in this jurisdiction. Article 917 A (1) of the Civil Code of St Lucia Cap 242 to apply the law of England for the time being relating to contract and quasi contract, inthe absence of local statutory provision, ~» Atcommon law, the general role is that a broker is the agent ofthe ssuted and not ‘he insurer., The law was stated with clarity and precision by Scrutton LI a get master of commercial law and a former professor of law in that subject at London University England in Fullwood v Hurley [1927] All ER Rep 610 at 611: “No agent who has sccepted an employment from one principal can in law accept an engagement inconsistent with his duty to the fist principal, from a second principl, unless he makes fhe fillest disclosure to each principal of his interest, and obtains the consent of each principal to the double employment.” ‘The principle is expressed in this way in BOWSTEAD ON AGENCY (138 ed.)p 144: As [broker}...he may not act for both parties toa transaction unless he ensured ‘athe fully discloses all material facts ro both parties and obteins thei informed consent to his so acting... any custom to the contrary will not be upheld.” "Fan insurance broker, before he accepts instruction to place an insurance, discloses to his lientthathe wishes tobe free tact ina way suggested {accepting instructions from “nsurers 0 obtain arepor from Assessors to the claim], and ifthe would be assured, fully {informed asf the broker's intention to accept such instructions from insures and as to LAW 2007 21 élthe possible implicatin of such collaboration between his agent and the opposite party, is prepared to agree that the broker may so act, good and dell. Inthe absence of such express and fell infomfed consent, in my opinion it would bea breach of duty onthe part of the insurance broktr to so act.” Per Megaw J in Anglo- African Merchants v Bayley [1969] 2 All BR 421 9¢ 429." ‘A summary of the tr¢ position is expounded n Halsbury’s Law of England (4"ed ) Vol 25 para 397 thus “fa person wishing to obtain insurance of a non- marine character employs an insurance broker as distinct from going direct to the insurers oftheir agents, the broker is his 4gent and the ordinary law of agency governs the responsibility of the proposer forthe aots and omissions of the broker.” thas nevertheless been recognised by the Courts that in certain maters a broker may ‘undestake responsibility to the insurer, and that is @ question of fact in each situation whether the broker ig acting for the insurer or the assured ( Colinvaux’s Law of Insurance (qed) At page 325, pat. 15-27) [The court ruled that the broker was the agent of the insured and that this fact had not be disturbed by the collection of premiums by Mz Jean from RR , the payment of commissions, *) Section 2 of the Insurance ‘Act No 6 of 1995 St Lucia defines insurance broker to mean any individual , who oF any firm or company which for compensation as an independent contractor in any manner solicits, negotiates or procures insurance or the renewal or contimuance of it on behalf of existing or prospective policy holders. .. —_ , nis along stinding rule of English Law thatthe broker is remunerated not by the assured but by the insurer, by means of deduction of commission from the premium and that comission ie eatned wher® the broker is responsible for arranging insurance, The rule is anomalous » in tharitcomavenes the general equitable principle thatthe agent mast not receive payment from the third party, batt is well established despite occssional deta to the contrary The Tevel of comission is agreed between ie insuzer andthe broker although the assured can ‘apparently defrand tobe informed of what has besn agreed and ean object o excessive tenuneration and where the Financiel Services Act 1986[UK] applies he has a statutory tight qe know. As the cule i derived either from custom of implied term, itcen accordingly be busted by an express arrangement to the contrary, Colvinaux’s Law of Insurance Supr®) et p. 330 para 15-47." LAW® 2007 22 6eAnticles 1603 to 1661 ofthe Civil Code Chap 242 (St Lucia) ar the statutory provisions dealing with ageney, Article 1604 states that the agent can do nothing beyond the ‘tuthority given or implied by the agency. He may do all ncts which are incidental t such authority and necessary fora cetain profession or calling to do anything in the ordinary ‘course of the business which they follow, need not be speifieds they are inferred from the nature of such profession or calling.” A ticle 1608 A states that subject to the statutor lw Of St Lucia, the law of England for the time being relating to the contract of ageny shall extend and apply to St Lucia, . ‘Usual authority , consists of authority that an agent of the status in questions would ‘normally possess but which is restricted in the particular case by private instructions not revealed to the other party- here private instructions cannot prevent the agent from Binding the principal , although limitations expressly brought to the other party's attention are binding . Apparent authority, which involves a power that an agent of the class would not normally be expected to have, bt which the principal hes held out this particular agent as having this is also kmown as agency by estoppel, and rests on the statements or conduct by the Principal, that of the agent necessarily not being sufficient, The basis of the rule is that where a third party deals in good faith with an agent in reliance om the credentials with ‘which he has been entrusted by his principal, his principal i estopped from denying his agent's authority. An insurance company may be estopped by reason of ostensible authority from denying ‘hat an agent has pessed on information to themn thus, in Wing v Harvey ( 1854) 5 De GM and G 265. An agent who had authority to do so accepted premiums on his company’s behalf and paid them to his directors, He knew at the time that the insured hed broken a condition ofthe policy. It as held thatthe assured was entitled to zely on the agent passing on his knowledge to the directors, and that by accepting the premium through heir authorized agent tine company has therefore toe taken to have affirmed the Policy: Those who deal in good faith with an agent are entitled to tke it for granted that he does his duty. In Evans v Employer's Mutual (1936) 1 KB 50S) it was bela that, LAWO 2007 23 63where it must have béen clesr to a cleck of the insurer, from perusing a claim , that an answer in the proposal form was untrue, his knowledge amounted to knowledge ‘amounted to knowledge by the company and that they had then to elect whether to 6 continue with the contract. There are many other illustrations, (1) There is no stipulation to the contrary in the contract ;( section 47 (2)(). (2) The consent of the insurers, if required ,is obtained. The policy may contain a condition giving the benefit of the policy to any purchaser and rendering the consent of the insurers unnecessary; section 47(2) (b}; (3) The purchaser pays the proportionate part of the premium from the date of the contract: Section 47(2) c) See Halsbury's ( Supra) Hypolite v. Demerara Mutual Life Assurance Society Ltd CIVIL APPEAL NO 25 OF 1993{ 95-03-20] unreported decision from Saint Vincent and The Grenadines, ‘The appellant engaged the respondent as an insurance consultant agent and /or broker to secure insurance coverage for certain contract works. The respondent issued to the appellant a cover slip purporting to provide the said insurance coverage, The cover slip contained the following statement “, Principal: To be advised as required by contract." There was no principal in existence for whom the defendant acted. During the currency of the cover slip, the appellant's property was damaged by flood causing special damages of over $700,000 In disputing liability, the defendant insurers contended inter alia thatthe premium had not been paid and disputed the degree of damage alleged to have been suffered. On the issue of whether the defendant as a mere broker could be sued successfully for losses as if he were a principal insurer, the court beld that the respondent can be sued for breach of warranty that he had authority 10 make the contract. HELD The defendant, as a broker, could be sued as an agent for an undisclosed or non: eRistent principal forthe breach of wasranty that there was a principal , and is equally liable where an undisclosed principal has nbt consented or authorised the contract to be made on his behalf. On —— . “Avery v Britigh Legal Assurance {1918} | KB 136; Holdsworth v Lands and Yorks Instirance (1907) 23 5.1.8 521 and Blackley v Nasional Mutual Life Association of Australsia (1972) N.ZLR 1038, LAWO 2007 24 oe