The Supreme Court has delivered a landmark judgement overturning a recent legal precedence that insurers of Compulsory Third Party policies are not able to rely on policy conditions in declining compensation to Third Party's.
The court has granted Sun Insurance Company Limited special leave to appeal against a judgement earlier delivered by the Fiji Court of Appeal.
The case is in relation to Mukesh Chandra who received injuries when the van he was travelling in collided with another vehicle.
He took action against Sun Insurance Company as both vehicles involved in the accident had third party insurance with Sun Insurance.
Sun Insurance was ordered to pay Chandra $233,295 by the Court of Appeal.
Sun Insurance then made an application to set aside the judgement on the basis that the decision raised a major policy consideration in the most likely event that the public in Fiji will not be able to afford compulsory insurance as the decision will no doubt cause insurers to revise their premiums to provide unrestricted cover.
The Supreme Court now states that it has been proved that the driver of one of the vehicles involved in the accident was driving without a licence.
It said the driver has been charged and convicted for same as well as for driving a motor vehicle in contravention of the third party policy risk.
The judges say with the contravention of the condition in the policy issued by Sun Insurance, the company cannot be held liable in respect of the claim of the third party.
The vehicle that Mukesh Chandra was travelling in was also a vehicle for private purposes as stated in Sun's third party policy.
However the court said it did not cover fee paying passengers.
The Supreme Court said the Certificate of Insurance prescribed gives two categories of conditions - a person or class of persons entitled to drive and limitations on the use of a vehicle.
The Supreme Court said if the vehicle is used in breach of any of the conditions, the insurer is exempted from third party liability.
Supreme Court Judges, Justice Anthony Gates, Justice Suresh Chandra and Justice Sriskandarajah Sundaram have allowed the special leave to appeal and set aside the Court of Appeal ruling for Sun Insurance to pay Chandra.
Meanwhile, Sun Insurance Company Chief Executive Officer Lolesh Sharma said insurance companies will now be able to decline third party claims when there is a breach.
Story by: Vijay Narayan and Praneeta Prakash
