GUARDIAN ASSURANCE CO., LTD. vs. APPIAH [1967]DLHC1501

Date	1967-02-07
Suit No.
Citation No.	[1967]DLHC1501

EDUSEI J.

AKIWUMI FOR THE PLAINTIFF COMPANY.

DEFENDANT ABSENT.

[1967]DLHC1501
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													<main id="main" class="content" style="min-height: 60rem" >GUARDIAN ASSURANCE CO., LTD.<o:p></o:p>&nbsp;vs. <o:p></o:p>APPIAH <o:p></o:p>[HIGH COURT, ACCRA]<o:p></o:p>[1967] GLR 47<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

DATE:
7 FEBRUARY
1967.<o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

AKIWUMI FOR THE PLAINTIFF COMPANY.<o:p></o:p>

</div>CORAM:
<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

EDUSEI J.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF EDUSEI J.<o:p></o:p>The
plaintiff company are an insurance company carrying on business in Ghana and by
a proposal form dated 21 March 1966 and signed by the defendant a policy of
insurance bearing No. KU/751037 was issued by the plaintiffs to the defendant,
Kwame Appiah, covering a Chevrolet commercial truck No. CP 7808. The said
proposal form which is exhibit A contains certain questions which were answered
by the defendant, and the answers, so argue the plaintiffs, form the basis of
the contract of insurance entered into between the plaintiffs and the
defendant. In exhibit A the following questions and answers appear: “(i) Is the
vehicle used for (a) carriage of fare-paying passengers?” The defendant stated;
No” “(b) Carriage of goods?” The defendant stated “Yes.” (ii) When asked to
state all types of goods carried, the defendant stated “General goods.”<o:p></o:p><o:p>&nbsp;</o:p>There is
evidence that vehicle No. CP 7808 was licensed on 13 June 1966 as a private car
whereas the defendant did state in exhibit A that the said vehicle was licensed
to carry cargo only. There is further evidence as disclosed in exhibit A that
the defendant answered “No” to the question whether the vehicle which was to be
insured had been altered or adapted from the original design in any way
whatsoever. In actual fact the vehicle No. CP 7808 had been adapted to carry fare-paying
passengers and this fact emerged from inquiries made by the plaintiffs as a
result of an accident involving the said vehicle.<o:p></o:p><o:p>&nbsp;</o:p>The
plaintiffs are contending therefore that failure by the defendant to disclose
such material facts as are stated on exhibit A gives them the right to recoil
from the contract and are seeking a declaration or this court to avoid the
insurance policy No. KU/751037 dated 21 March 1966. This court before coming to
any rational decision must examine what facts are considered material in such
circumstances.<o:p></o:p><o:p>&nbsp;</o:p>In
Preston and Colinvaux on The Law of Insurance (2nd ed.), the following passage
appears at p. 102 “Everything is material which will guide a prudent insurer in
determining whether he will take the risk, and, if so, at what premium and on
what conditions.” Thus Mr. John Commodore, claims superintendent, who
represented the plaintiffs stated in evidence that:<o:p></o:p><p class="MsoNormal" style="margin-top:0in;margin-right:0in;margin-bottom:5.0pt;
margin-left:.5in;text-align:justify;mso-pagination:none;border:none;mso-padding-alt:
31.0pt 31.0pt 31.0pt 31.0pt;mso-border-shadow:yes">“On the
strength of these answers thus given the plaintiffs would decide whether or not
to accept the risk of insurance. These questions in exhibit A were answered by
the defendant and on the strength of the answers so given in exhibit A the
plaintiff company agreed to enter into a contract of insurance with the
defendant.”<o:p></o:p><o:p>&nbsp;</o:p>It is
significant to note the statement of Viscount Haldane in Dawsons Ltd. v. Bonnin
[1922] 2 A.C. 413, H.L. that not every fact which increases the risk is a
material one: there must be a probability that the insurers would attach some
importance to it in assessing the premium. It was therefore held to be
immaterial that a lorry was garaged in a wooden shed which had been used to
store hay, the insurance being a comprehensive motor vehicle one, and the
percentage of the premium allocated to the fire risk being very exiguous. But
it might have been held otherwise had the insurance been against fire only
knowing fully well the combustibility of a mixture of hay and petrol. The
question of materiality is a pure question of fact and this fact must be
disclosed before the contract is entered into. There can be no dispute that
vehicle No. CP 7808 was insured to carry cargo only but it was used after
adaptation for carrying fare-paying passengers when the defendant had
categorically stated in exhibit A that it would not be used for this latter
purpose, and that it had not been altered or adapted from the original design
which was a private car. Misrepresentation even if innocently made by the
assured which misled the insurers might give the right to avoid the contract of
insurance. Finally in exhibit A appears the following declaration:<o:p></o:p><p class="MsoNormal" style="margin-top:0in;margin-right:0in;margin-bottom:5.0pt;
margin-left:.5in;text-align:justify;mso-pagination:none;border:none;mso-padding-alt:
31.0pt 31.0pt 31.0pt 31.0pt;mso-border-shadow:yes">