CIVIL CAUSE NO. 66 OF 2000
NATIONAL INSURANCE COMPANY .........................DEFENDANT
MISS A. RASHID...............................................................3RD PARTY
CORAM: KAPANDA, J.
“The Defendant was at all material times the insurer of minibus Reg. No. MH 1671 Toyota Hiace under certificate of insurance No. A 55374 issued on 3/5/99 to 12/5/2000 which was at the material time being driven by Chipiliro Kankhuni.”
The Defendant filed a Notice of intention to defend on the 25th day of January, 2000 and proceeded to plead in its defence that it was not liable to indemnify the insured because the minibus in question was being driven by a person who had no valid or relevant driving licence. In so far as it is relevant to quote, the pertinent paragraphs of the Defence in relation to this denial of liability to indemnify, it was averred by the Defendant as follows:-
“6. The Defendant estates that it was the term of the policy of insurance between the Defendant and the insured that the liability of the Defendant would only extend to indemnify any licenced driver whilst driving the
vehicle herein referred to on the order or with the permission or consent
of the insured.
7. At the time of the accident referred to in the statement of claim, the driver of the said Toyota Hiace registration No. MH 1671 had no valid or relevant driving licence for a minibus contrary to the policy of insurance.
8. In the premises and by reason of the said breach of the policy of insurance the Defendant is not liable to indemnify its insured or at all.”
At the hearing of the Summons for Directions, before the Deputy Registrar on 28th June, 2000, it was prayed for by the Defendant and ordered, amongst other orders, that the following question of law be tried as a preliminary issue viz:-
On the 17th day of October, 2000 the hearing of this preliminary point of law was before me and Counsel for the Defendant addressed me at length on what position the Defendant is taking regarding the said preliminary point of law. Despite being served with the Notice of hearing, for the inquiry into said preliminary point of law, Counsel for the Plaintiff did not appear to argue the Plaintiffs’ position regarding the said preliminary point of law. I proceeded to hear the matter because there was proof that Plaintiffs’ Counsel had been ordered with the said Notice of hearing.
In his submission learned Counsel for the Defendant has argued that
the requirement that a person driving must have a valid driving licence
is a stipulation of the Road Traffic Act and that a person commits an offence
if he/she drives a motor vehicle without a valid licence in respect of
a particular class of a vehicle. Thus an insured can not be indemnified
where his/her vehicle is involved in an accident when such vehicle, at
the time of the accident, was being driven by a person who had no valid
driving licence for such type or class of a vehicle.
The Defendant has further argued that in terms of Section 148(1)(a) of the said Road Traffic Act the rights of the Plaintiffs are not greater than those of the insured. Consequently, since in this case the insured can not successfully claim for an indemnity under the policy in view of the fact that the driver was not a person authorised to drive, in terms of the clause in the policy, then the Plaintiffs’ claim against the Defendant as an insurer should also fail on that ground. It appears Cousel is reading the said Section 148(1) (a) of the Road Traffic Act in isolation. In my view this section must be read with the provisions of Section 148(2) of the Act for one to get a full meaning of what this section is all about.
“The insured or any person driving with the insured’s permission provided that the person driving holds a licence to drive the motor vehicle--- The term “licence” means a licence or other permit required by the licencing or other laws or regulations.”
The Plaintiffs, in their letter from their legal practitioners dated 4th October, 1999, exhibited in the affidavit of the Defendant filed in support of its application herein, contended that although the driver had no valid driving licence to drive a minibus the insurers were still liable. The Defendant submits that an insurer can not be held liable to indemnify an insured where the insured’s vehicle was being driven by a person with no valid driving licence, like in the instant case, due regard being had to the terms of the insurance policy
Before proceeding to interprete the provisions of the said Section 148 of the said Road Traffic Act it is necessary that the terms of the said section be stated in extensio. The section provides that:-
“(1) Any person having a claim against a person insured in respect of any liability in regard to which a policy of insurance has been issued for the purposes of this Part shall be entitled in his own name to recover directly from the insurer any amount, not exceeding the amount covered by the policy, for which the person insured is liable to the person having the claim:
(a) the rights of any such person claiming directly against the insurer shall, except as provided in subsection(2), be not greater than the rights of the person insured against such insurer;
(c) the expiration of such period as is mentioned in paragraph (b) of this proviso shall not affect the validity of any legal proceedings commenced during such period for the purpose of enforcing a right given under this section.
(2) In respect of the claim of any person claiming directly against the insurer by virtue of subsection (1), any condition in a policy purporting to restrict the insurance of the person insured thereby shall be of no effect:
Provided that nothing in this section shall require an insurer to pay
any sum in respect of the liability of any person otherwise than in or
towards the discharge of that liability, and any sum paid by an insurer
in or towards the discharge of any liability of any person which is covered
by the policy by virtue only of the operation of this subsection may be
recovered by the insurer from that person.”
“--- In our Legislation, the third party has been given the right to sue not only for damages, but also to establish his case before the courts which he could not do before. We are fortified in our reasoning by the fact that Section 65(1) and (2) specifically provides that the insurer can not disclaim liability for breach of conditions of the policy of insurance. This being the case, therefore, it appears to us that whether the third party sues the insured or the insurer, neither of them can disclaim liability except, perhaps, the quantum of damages---”
It was put in argument by learned Counsel for the Plaintiff that in terms of Section 147 as read with Section 148 of the said Road Traffic Act the rights of a third party can not be greater than those of the insured. Thus where the insured can not recover damages against the insurer, if the insured is in breach of the conditions of the insurance policy, it follows therefore that the third party can not recover damages against the insurer. This argument by Counsel, with due respect, is not in conformity with the interpretation that has been given to this type of a section in other countries which have a similar section like our said Section 148 of the Road Traffic Act.
The position at law is that if a person drives a vehicle, with the authority
or consent of the insured, the insurance is not operative or the insurance
is invalidated at the time such person is driving the vehicle without a
valid driving licence but this is only as regards the insured and not third
parties. An in instructive authority on this position of the law
is the case of Pioneer General Assurance Ltd -vs- Mukasa A.L.R. Comm. 188.
In this case the court was concerned with interpreting Section 102 of the
Traffic Act of Uganda which provided as follows:-
In explaining the meaning of this Section 102 of the Traffic Act of Uganda, in the case of Pioneer General Assurance Ltd -vs- Mukasa , cited above, Law Ag. V.P. had the following to say, at page 191, which is very illuminating:-
“The liabilities to be covered--- are liabilities in respect of third parties. Such a third party, in a claim against an Insurance Company, is not affected by the conditions in the policy which may relieve the company of liability towards the insured, but those conditions remain effective contractually between the company and the insured--- third parties are enabled to recover their damages from the insurer notwithstanding such conditions. Such conditions are not void, but in relation to third parties the insurer can not rely on them. He can however seek to enforce them against the insured---”
“It made the insurance of motor vehicles compulsory and in order to protect the public made the insurer directly liable in damages to a person who was injured through negligence or other unlawful act, in respect of a motor vehicle.”
In my view, even though the driving of a motor vehicle by a person who has no valid driving licence or no licence at all is an unlawful act still the insurer would be liable to third parties notwithstanding the clause in the insurance contract disclaiming liability. The intention of Parliament, when it regulated that an insurance policy that purports to restrict the policy of the insured shall have no effect, was that even in cases where there is an unlawful act, on the part of the insured or an authorised driver the third party should still be in a position to sue and recover damages directly from the insurer.
“The right to proceed against the insurer directly is purely a statutory provision given to a claimant who issues process in respect of a statutory policy--- By enactment of Section 25 of the Act and by making the insurer liable directly for the death or bodily injury of a third party the legislature introduced a new form of vicarious liability, which in certain circumstances absolves the person who would otherwise be liable to compensate a third party---”
The above observation holds as well for the position, at law, in Malawi for I see no reason why I should depart from it in view of the fact that our Section 148 of the Road Traffic Act is similarly worded. It is the correct exposition of the law on compulsory third party insurance as engendered by our statute.
Lastly, I would like to make some remarks in passing regarding the procedure
that was adopted in this matter concerning the preliminary issue that has
just been decided above. It is my opinion that the provisions Order
14A of the Rules of the Supreme Court were not considered at the time the
order for the determination of the preliminary issue was being prayed for
by the Defendant. I am of this view because it is evident from the
case file that, even though this court has made a determination on the
question put before it, there will be no finality to the entire cause or
matter. It is as if the court was given an academic question to answer.
That is not the purpose of this procedure. In future it would be
advisable that before an application for order is made for the determination
of a preliminary point of law, like in the instant case, the provisions
of the said Order 14A of the Rules of the Supreme Court should be borne
in mind so that once a determination is made there is finality to the entire
cause or matter.