Kerekal Farming and Trading Pty Ltd v Queensland Insurance (PNG) Ltd

• Jurisdiction: Papua New Guinea
• Judge: Woods J
• Judgment Date: 22 July 1994
• Citation: [1995] PNGLR 401
• Court: National Court
• Year: 1995
• Judgement Number: N1251

National Court: Woods J

Judgment Delivered: 22 July 1994

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

KEREKAL FARMING AND TRADING PTY LTD TRADING AS UKE TRANSPORT PTY LTD

V

QUEENSLAND INSURANCE (PNG) LIMITED

Mount Hagen

Woods J

25 May 1994

22 July 1994

CONTRACT — Insurance — Proposal form — Non disclosure — Whether material. — Proposal form a lay document.

DAMAGES — Loss of profits — Need for financial statements.

Facts

Plaintiff sued the insurer of its vehicle for the repair costs of the vehicle sustained in an accident on the highway. The defendant repudiated liability on grounds of non disclosure/wrong information in answer to questions in the proposal form.

Held

The proposal document is not a legal document and the standard of care in filling it is that expected of a man in the street.

Counsel

P. Dowa, for the plaintiff.

A. Kandakasi, for the defendant.

22 July 1994

WOODS J: The plaintiff is claiming for the damages caused to a motor vehicle owned by him and insured with the defendant. The motor vehicle, a Hino Truck Prime Mover Registration No AGJ 523, was damaged as a result of an accident near Henganofi along the Okuk Highway on the 18 January 1993. The plaintiff claims that the vehicle was insured against any loss and damage by Policy No 221K8769 0026384/000 with the defendant cmpany. The plaintiff duly notified the defendant of the loss and damage but they have repudiated their liability and refused to meet the repair costs or any sum for the damage.

The defendant in its defence states that the plaintiff failed to make truthful statements and answers in the proposal signed by the plaintiff on 3 November 1992 and therefore this invalidates the policy of insurance.

The defendant further denies liability by alleging that in contravention of the policy the vehicle was in an unsound condition mechanically a fact which the driver or owner knew or ought to have known.

There are two alleged non-disclosures on the policy proposal form. The first is alleged to be in answer to paragraph 8 "what motor vehicles accidents have you had and what claims have you made on a motor vehicle insurer"? The defendant states that the plaintiff failed to answer that the plaintiff had made a claim against a motor vehicle insurer, namely the Southern Pacific Insurance Company (PNG) Limited and untruthfully answered that a claim had been made against an insurer for K20,000 when in fact it had been made for K29,051.40.

The alleged accident on 8 August 1991 refers to an incident where another Hino Truck owned by the plaintiff which was loaded with a front end loader struck the canopy of the Shell Service Station at Mendi, causing damages estimated at K13,750. The Manager of the plaintiff company does not deny that incident involving a company truck on 8 August but states that there was no claim lodged for damages and anyway it did not involve any negligence on the part of the driver and no damage was done to the truck. Apparently the service station did not press any claim against anybody as they pulled the canopy down and rebuilt it to a different and larger design. There is no evidence of any claim being lodged by the plaintiff or settled against the plaintiff or its truck for that incident.

So has there been material non-disclosure in respect of this incident? We are considering here a document called a "proposal for motor vehicle insurance." This document is clearly not in the nature of a legally drafted and stamped and registered agreement or contract, it is no more than a series of questions and answers that a man on the street is expected to answer without any legal advice which the Company will peruse and assess and...