Case No.:

(HC-CS-184-1959)

Court:

The High Court

Issue No.:

1960

Principles

·  Contract—Assignment of insurance policy Civil practice and procedure—Joinder of parties—Road Traffic Ordinance, s,55

In the absence of provision in the policy, an insurance policy cannot be assigned by the assured to a third party without the consent of the insurers, either in the form of an endorsement of the original policy or by the issue of a new policy.
Peters v. Genera! Accident, Fire and Life Assurance Corporation [ 2 All ER. 267 applied.
Sid Ahmed Mohamed v. Sudan Mercantile (1956) S.L.J.R. 102 cited,

Judgment

(HIGH COURT)

HAMAD SAEED NUR v. MUDAWI BEYHIR AND AHMED ABBAS

(HC-CS-184-1959)

Preliminary ruling

January 10, 1960. T. Cotran Acting I.: —The plaintiff is a poor man (suing in forma pauperis) who injured his leg as a result of a motor accident. The driver of the vehicle, which caused the accident, is second defendant. The first defendant is the owner of the vehicle. First defendant bought the vehicle from a certain Mohamed Au Fadl who has been struck out from the case. The said Mohamed Ali Fadl, the previous owner of the vehicle, had his vehicle insured with the Sudanese Commer cial Company, Ltd., which the plaintiff, on the court’s advice, is seeking to join as a third party. The court, of its own motion, called upon the insurance company to appear, in order to examine if it can be joined as a party In the court s view in cases of death and personal injury but not in cases of damages to property (Sid Ahmed Mohamed v. Sudan Mercantile (I956) S.L.J.R. 102), it is better to join the insurers since they are the party that are ultimately asked to pay, and provided the policy purports to cover the insured.

Although section 55 of the Road Traffic Ordinance states that a judg ment has to be obtained that does not mean the insurers cannot be joinec as third party The reason for joining the insurers as third party defendants is not that there is privity between them and the plaintiffs but because by law if a plaintiff obtains a judgment against a defendant who caused him injury that person has a right conferred on him by contract to call upon his insurers to indemnify In this event and particularly when the plaintiff has no counsel to advise him it is better to join the insurers in third- party proceedings

It trarspired during the pleadings that the original owner of the vehicle, viz., Mohamed Au Fad had sold it to first defendant long before the accident to the plaintiff. It has already been stated that the insurance company had insured only Mohamed Au Fadl When Mohamed Au Fadi sold the vehicle to first defendant he purported to assign to him also his insurance policy. Both of them went to the offices of the insurance companY in order to inform them about the sale and to transfer the policy in the name of the purchaser of the vehicle. They found the offices of the insurance company crowded and they postponed it to another day, which never really came.

Now, unless the policy itself provides to the contrary, an insurance policy cannot be assigned by the assured to a third party. The reason is obvious. In motor insurance the personal history of the assured is of paramount importance. The assured may have been a driver with no accident record for twenty years. If he can assign it at will without the insurer’s assent he may well do so to a person with a very bad accident record who would not be acceptable to the insurers on the same premium paid by the original assured-or indeed he might not be acceptable at all. In many cases, of course, the insurers have no objection to the assign ment, but I think I am right in saying that they ought to be informed and they must accept the assignment either by the endorsement of the original policy or by the issuing of a new policy (with or without the payment of an extra premium) .In this case now before me, unfortunately for the injured, this had not been done and the present owner of the vehicle is not insured. In Peters v. c;eneral Accident, Fire & Life Assurance Corporation [1938] 2 All E.R. 267, where the facts were similar, Sir Wilfrid Greene M.R. said:

“It appears to me to be as plain as anything can be that a contract of that kind is in its very nature not assignable.” [The effect of the assignment according to counsel’s argument in this case would be that the buyer’s name would have taken the place of that of the assured in the policy.] “In other words, the effect of the assignment would be to impose upon the insurance company an obligation to indemnify a new assured, or persons ordered or permitted to drive by that new’ assured. That appears to me to be altering in toto the character of the risk under a policy of this kind.

“The insurance company in this case, as in every case, made inquiries as to the driving record of the person proposing’ to take out a policy of insurance with them. The business reasons for that art’ obvious, because a man with a good record will be received at an ordinary rate of premium, and a man with a bad record may not be received at all or may be asked to pay a higher premium. The policy is. in a scry true sense, one in which there is inherent a personal element of such a character a to make it, in my opinion, quite impossible to say that the policy is one assignable at the volition of the assured” (pp. 269—270).

 The same reasons apply in this case before me. The insurance company is not liable to be joined at all because they covered only Mohamed Ali Fadl. This policy did not purport to cover his assignees. The result may be a little harsh for the injured inasmuch as, if he obtains a judgment, he might find the driver penniless. The remedy is not with the courts but with the legislature. The ideal is to make the law so tight as to enable an injured man always to get the amount he succeeded to obtain in prosecuting to judgment the person who caused him the injury through his negli gence. In the United Kingdom this was achieved by the association of all insurers in the Motor Insurers’ Bureau, who undettake to satisfy any judgment obtained by an injured party. Alas! in the Sudan we are still far off from this ideal. Most insurance companies here try by hook or by crook to escape liability even before they know the facts of the accident. Here the lehislature must step in, not the courts.

I therefore hold that the insurance company are not liable to indemnify the driver (defendant No. 2) and conseouently cannot be joined as defendants.

                                                            (Order accordingly)