Buultjens V. Ceylon Insurance Co., Ltd

1960 Present: Sansoni, J., and Sinnetamby, J.

E C. V. BUULTJENS, Appellant, and CEYLON INSURANCE CO.,
LTD., Respondent

S. C. 146-D. C. Colombo, 43449/M

    Insurance -Motor car-Third party risks-Proposal Form-Ambiguity in questions appearing therein-Truth of answers-Relevancy of offences in breach of Motor-Traffic Act- Suppression of material facts-Burden of proof.

Where an ambiguity exists in a question put in the proposal Form of a contract of insurance, the contract must stand if an answer has been made to the question on a fair and reasonable construction of that question. Otherwise the ambiguity would be a trap against which the insured would be protected by Courts of Law.

In a motor car insurance policy in respect of third party risks, the answers to the questions in the proposal Form were made the basis of the contract and were warranted to be true. The applicant for insurance, who had been fined Rs. 5 twenty years earlier for driving a, car without a certificate 9f competence, answered in the negative question No.5 which was as follows :-" Have you or any other person, who to your knowledge will drive, ever been convicted of any offence in connection with the driving of a motor car or cycle? ".

Held, that the proposer could not be deemed to have given an untrue or incorrect answer to question No.5. The conviction for non-possession of a certificate of competence did not relate to an offence "in connection with the driving" of a motor car. If the question was intended to cover all offences under the Motor Traffic Act, it was most ambiguous and a Court of Law should protect the insured against such " traps ".

Held further, that the proposer could not be said to have withheld any material information which was likely to increase the risk of the insurer.

APPEAL from a judgment of the District Court, Colombo.

C. Ranganathan, with V. J. Martyn and K. N. Choksy, for plaintiff., appellant.

N. E. Weerasooria, Q. C., with H. Wanigatunga and H. Mohideen, for defendant-respondent.

Cur. adv. vult.

January 21,1960. SINNETAMBY, J.-

The plaintiff, while driving his motor car No. CN-1144, met with an accident and injured his passenger one Mr. Koch, who in D. C. Colombo, Case No. 39,422/M obtained a decree for damages against the plaintiff in the sum of Rs. 21,748'58 and costs, alleging negligence. The car was insured by plaintiff with the defendant company and in the present case the plaintiff sought to obtain judgment against the defendant company in this sum.

In the earlier case brought by Mr. Koch against the plaintiff, the defendant company conducted the plaintiff's defence and in the course of his evidence the plaintiff stated that he had been fined Rs. 5 in 1936 for driving a car without a certificate of competence. It would appear that before the fine was imposed he was asked to furnish certificate of competence, for perusal by the Magistrate within a week and that he obtained one and did so. Upon this evidence being given the defendant company disclaimed liability and wrote letter P 10 to the plaintiff stating that they were not assisting him any further in the action and that the policy was void, giving as their reason the fact that in the proposal form which incidentally was signed in 1955, the plaintiff had not disclosed this conviction. The plaintiff, thereupon, brought this present action after a decree had been entered in Mr. Koch's favour.

The defendant company in seeking to avoid their liability under the policy, based their defence on two grounds. First, they pleaded that in the proposal form, the plaintiff had incorrectly answered in the negative question No.5 which is as follows

" Have you or any other person, who to your knowledge will drive, ever been convicted of ay offence in connection with the driving of a motor car or cycle1 "

It was contended that inasmuch as the answers to the questions in the proposal

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