ROYAL EXCHANGE ASSURANCE vs. KOOMSON [1966]DLHC10243

Date	1966-10-24
Suit No.	G L R 678 – 683
Citation No.	[1966]DLHC10243

ARCHER J.

ESSILFIE-BONDZIE FOR THE APPLICANTS.

CARSON FOR THE RESPONDENT.

[1966]DLHC10243
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													<main id="main" class="content" style="min-height: 60rem" >ROYAL EXCHANGE
ASSURANCE<o:p></o:p>vs.<o:p></o:p>KOOMSON<o:p></o:p>[HIGH
COURT, CAPE COAST]<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

<p class="MsoNormalCxSpMiddle" align="center" style="margin-bottom:0cm;margin-bottom:
.0001pt;mso-add-space:auto;text-align:center;line-height:150%;border:none;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm">G L
R 678 – 683&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE: 24TH OCTOBER, 1966<o:p></o:p>

</div>COUNSEL:<o:p></o:p>ESSILFIE-BONDZIE FOR THE APPLICANTS.<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

CARSON FOR THE
RESPONDENT.<o:p></o:p>

</div>CORAM:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

</div>&nbsp;<div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

JUDGMENT<o:p></o:p>

</div>&nbsp;<o:p></o:p>ARCHER
J.<o:p></o:p>&nbsp;The applicants, Royal Exchange Assurance,
were served with third party notice at the request of the defendant who has
been sued by the plaintiff claiming ¢72,000 (seventy-two thousand cedis) for
loss, pain and suffering as a result of the alleged negligent driving by the
defendant of Vauxhall car No. AS 4511 on 16 August 1965; the said car having
been insured with the Royal Exchange Assurance against third party risks.<o:p></o:p>&nbsp;[p.680]<o:p></o:p>&nbsp;The Royal Exchange Assurance has applied to
the court under section 8 of the Arbitration Act, 1961,1 to stay the third
party proceedings.&nbsp; Section 8 of the Act
reads:<o:p></o:p>&nbsp;“If any party to an arbitration agreement, or
any person claiming through him, commences any legal proceedings in any court
against any other party to the agreement, or any person claiming through him,
in respect of any matter agreed to be referred, any party to those legal
proceedings may apply to that court to stay the proceedings, and that court, if
satisfied that there is no sufficient reason why the matter should not be
referred in accordance with the agreement, and that the applicant was, at the
time when the proceedings were commenced, and still remains, ready and willing
to do all things necessary to the proper conduct of the arbitration, may make
an order staying the proceedings.”<o:p></o:p>&nbsp;The language in this section clothes the
court with unfettered discretion and the question I have to ask myself is
whether this is one of those cases in which I have a discretion.&nbsp; The Royal Exchange Assurance by paragraphs
(4), (5) and (6) of their affidavit in support of the motion depose as follows:<o:p></o:p>&nbsp;“(4) That the company admits issuing to the
defendant the said policy in respect of his vehicle registration No. AS 4511
but that the same was issued subject to the terms and conditions contained
therein.<o:p></o:p>&nbsp;(5) That condition 8 in the said policy
provides that all differences arising out of the said policy shall be referred
to arbitration and that an award of such arbitration shall be a condition
precedent to any right of action against the insurance company.<o:p></o:p>&nbsp;(6) That when this claim was brought by the
plaintiff against the defendant the insurance company repudiated liability to
indemnify the defendant on the ground that the policy herein only covers a
private car and excludes liability to passengers travelling or carried on the
vehicle."<o:p></o:p>&nbsp;The applicants therefore rely on condition 8
in the policy and insist that the defendant is bound by that condition and that
the matter should be referred to arbitration as a condition precedent to any
court action to be taken by him.<o:p></o:p>&nbsp;It has been argued by the respondent's
learned counsel that as the Royal Exchange Assurance have repudiated liability,
they have repudiated the policy itself and cannot rely on any condition in the
policy [p.681] which they have repudiated.&nbsp;
I must say right now that I do not share this view because the policy
has not been repudiated, the contract is still in force.&nbsp; The applicants have only repudiated liability.&nbsp; It is settled law that where an insurance
company is repudiating a contract in the sense that they are disputing the
existence of any binding contract at all, then, on the authority of Jureidini
v. National British and Irish Millers Insurance Co., Ltd.2 the repudiation of
the claim on a ground of going to the root of the contract precludes the
company from pleading the arbitration clause as a bar to an action to enforce
the claim.&nbsp; On the other hand, where the
company is repudiating liability under the contract but is accepting the
existence of the contrast as a binding one, then the company is entitled to
rely on any conditions in the contract: see Stebbing v. Liverpool and London
and Globe Insurance Co., Ltd.,3 and Woodall v. Pearl Assurance Co., Ltd.4 where
Warrington L.J. made the following analysis:<o:p></o:p>&nbsp;“A</main>