COURT OF APPEAL

Otago Daily Times, Issue 21598, 19 March 1932, Page 18

COURT OF APPEAL

THE THIRD PARTY RISK LIABILITY OF INSURANCE COMPANIES. (Feb United Press Association.) WELLINGTON, March 18. A case of considerable importance to insurance companies was before the Court of Appeal to-day in the appeal case of the National Insurance Company v. Joyes. Bernard John CaiTyon Joyes, of Stratford, draper, in October, 1930, whilst driving a ear belonging to his wife, came into collision with another car, owned by the Todd Motor Company. In the collision L. M. Cordery, of Hawera, manager of the Todd Motor Company, was injured, and his employers were deprived of his services for 13 weeks. Proceedings were subsequently brought in the Supreme Court at New Plymouth by the Todd Motor Company against Joyes, claiming the cost of repairs to the car and loss suffered by it on account of bodily injuries to its servant, and judgment was entered for the company in the amount claimed, £540 Gs sd. The National Insurance Company has been nominated as third party insurers in respect of Mrs Joyes’s car, and a comprehensive cover with that company had also been taken out by her. Joyes then claimed to be indemnified in respect of the Todd Motor Company’s, claim by the insurance company, which, whilst admitting liability under the comprehensive policy:in respect of that part,of the Todd Motor Cbmpany’s Claim which consisted : of damage to the motor ear, denied liability on any ground in respect of the. balance of the claim, £248 6s sd, which consisted pf the salary paid, to Cordery whilst injured and the expenses of appointing a temporary manager at Hawera during that period. Joyes thereupon brought an action in the Supreme Court at Wellington, claiming that he was entitled to be indemnified by the insurance company in respect of the balance of the Todd Motor Company’s claim either under the Motor Vehicles (Third Party Risks) Act, 1928, or under the comprehensive policy. The matter was heard before Mr Justice Ostler in December last, who, holding that Joyes ‘was entitled to be indemnified under the Motor Vehicles Act, 1928, held that it was unnecessary to answer the question whether he was also indemnified under the comprehensive policy. An appeal is now brought from that’ decision.

Counsel for the appellant submitted that the liability of the insurance company nominated to carry a third-party risk was restricted to liability to indemnify claims brought by two classes of persons only—(1) in case of death, to those haying claims under the Deaths by Accident Compensation Act, 1908; and (2) in the case of bodily injury, to those suffering injury. The intention of the Legislature was to cover indemnity for liability for damage only directly and immediately connected with personal injury or death, and not consequential damage to property or property rights. In case of injury to a servant there was not, nor was there ever intended to be, any liability to indemnify a negligent driver in respect of claims made by an employer for loss of services. The trial judge had held that there was a liability to indemnify a claim brought by a master for the death of his servant. That was clearly wrong in law, as a master in the case of death of a servant had no right of action against thewrong-doer. The liability of the wrong-doer to the master for loss of services was based on loss of service and not on the actual injury to the servant. Consequently, it could not be said that such liability was indemnified by the Motor Vehicles (Third Party) Insurance Act, 1028, which only indemnified claims made on account of death or bodily injury. Counsel for the respondent Joyes submitted that the language of the Motor Vehicles (Third Party) Insurance Act, 1928, was unambiguous. The indemnity created by that Act clearly covered the liability of negligent motorists to pay damages to a master for loss occasioned by injury to a servant. The court was not concerned with the consequences which might arise from accepting this view, but was bound to give the words their obvious meaning. The liability of the motorist indemnified was the whole liability of the motorist, not part of his liability. Dealing with the question whether the damage before the court was covered by a comprehensive policy counsel submitted that the word “ property ” in an insurance policy covered all forms of- property. The right of a master to the services of his servants was a property right, and when infringed by the negligent driving of a motorist was covered by the indemnity contained in that motorist’s comprehensive policy. The court adjourned until Monday. SHARE CONTRACTS CASE. (Peb .United Pbess Association.) WELLINGTON, March 18., In the case General Mortgage Corporation v. Gibbs and others, after hearing counsel further this morning, the Court of Appeal reserved its decision.