PORT OF SPAIN, Trinidad, CMC – The Caribbean Court of Justice (CCJ) on Wednesday ruled that the Barbados company – Consumers’ Guarantee Insurance Co. Ltd (CGI) v Valentine Stevenson and Vicent Anthony Thomas, the administrator of the Estate of Sherleen Ordeen Thomas, Deceased, dismissed the appeal and cross appeals against a judgment of the Court of Appeal of Barbados and held that the insurer of an owner/driver of a motor vehicle must satisfy the judgment obtained against its insured by a third party.
The CCJ also ordered that the insurer pay the costs of the appeal.
On November 29, 2007, Valentine Stevenson, owner and driver of a motor vehicle, accidentally hit and killed a pedestrian, Sherleen Thomas.
At the time of the accident, there was a current policy of insurance in respect of the vehicle, but Stevenson’s driver’s licence had expired. He renewed his licence on the first working day after the accident by paying the necessary renewal fee.
In 2010, Thomas’ estate commenced an action in the High Court and on March 32, 2023, obtained a money judgment against Stevenson.
However, before that judgment, CGI brought separate proceedings in the High Court seeking declarations that it was not liable to satisfy any judgment obtained by Thomas’ estate against Stevenson because a term of the policy excluded coverage if ‘[t]he driver does not hold or is disqualified from holding or obtaining a valid driver’s licence or if the driver is entitled to indemnity under another policy.’ CGI was unsuccessful at all three levels of the court system – The High Court, the Court of Appeal, and the CCJ.
At the CCJ, all judges unanimously agreed that the terms of the insurance policy were sufficiently ambiguous to apply the contra proferentem rule, which allows the Court to interpret a vague contract against the party that drafted it, namely CGI. As a result, the Court found that the policy did not exclude coverage for Stevenson in the circumstances.
The Court, however, was divided on whether the Road Traffic Act (RTA) in Barbados created ‘automatic’ insurance for the benefit of third parties. CCJ President, Justice Anderson, and Justice Ononaiwu were of the view that the Act did not create automatic insurance and affirmed that an insurer may, subject to certain statutory restrictions, exclude certain risks from coverage under an insurance policy.
The insurer’s exposure is therefore restricted to the liability covered by the terms of the policy.
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