INSURANCE CLAIM

Hokitika Guardian, 26 June 1930, Page 8

INSURANCE CLAIM

SU P REA ITO CO i i H'!' JUDCIMKNT

CHRISTCHURCH, June 23

His Honour, Mi- Justice' Ail ants lias given judgment in the ease in which George Hunter Nicholas and Reginald Harnett, trading as Nicholas and Company, Timaru, claimed £1169 9s Id (being a loss alleged to have been suffered through a fire in .Timaru on July 29th. 1929) from the New Zealand Insurance Company. The case was opened in the Supreme Court at Timaru on April 30th. last, and occupied the attention of the Court for four days, when it was adjourned to Christchurch. Mr W. I>. Campbell appeared for the plaintiffs and Mr C. S. Thomas (Christchurch) for the defendant company.

After dealing at length with tiie evidence, and various contradictions, his Honour said:

In my opinion, the result is the same whichever view is taken of the evidence. Nicholas and le Cren are agreed that when the insurance proposal was signed and given to le Crew the space for the answer to the previous fire question was to the knowledge of Nicholas left in blank. It was in that condition when Nicholas signed the proposal and gave it to le Cren. At that stage the question was to be understood as replied to in the negative. The proposal was then sent by le Cren to tbe defendant’s Christchurch office. I>> Cren was then instructed to see Nicholas again about it; the final answer isent to the -Chrisitclnirch office by le Cren was in the negative, and there is no evidence of any further communications. Assuming that Nicholas is right and that he told le Cren of his previous fire, and that le Cren replied a„s stated, “that will have nothing to do with Nicholas and Co. as Barnett was not a partner, and I will let my office know,” le Cren cannot bo said to have been defendant’s agent to

waive the express provision in ! the proposal which J Iwive just read, or to supply a false answer .... 1 I come now to the question of fraudulent misrepresentation pleaded as a defence to the action on the HartParr policy. These are set out in paragraph 10 (<•) and (d) of the amended | statement of defence and are:— (e) The plaintiff firm fraudulently misreprsmitod that "ei-lain .Peter ho rough tractor parts to 1 lie value of £‘B3o 16s 4d damaged by the said fire were new, whereas the said parts were secondhand parts and were of the value of approximately £200; (dY the plaintiffs firm fraudulently misrepresented that certain tractor parts of the value of £116! lJs 7d damaged in the said fire were Hart-Parr true l or parts insured under the policy mentioned in part 6 of the statement of claim herein, whereas of the said tractor parts only certain parts of the value of £169 were Hart-Parr tractor parts. On this | part of the rlasc it must \e home in mind till at the defendant * company j must make out a clear case, excluding 1 the presumption of innocence to the I benefit of which the plaintiffs are enI titled. The Court must lie satisfied -that there was fraudulent intent. There | are many circumstances calculated to arouse suspicion. Nicholas received written notice in October, 1929, and (he company repudiated liability on both policies and should have realised that the books in which the balancesheets and particulars of stock purchases were entered would he called for if the claim against the the insurance company was pressed. The importance of the destroyed evidence is shown by the fact that the ircomps of lo c s staled in the two claims exceed the stock shown in the 1928 balancesheet by upwards of 120 per cent., the respective figures being £l4-12 and £3273, witi'i no explanation of this large increase; and that according to Nicholas, Barnett wnt out of the firm in July. 1929, been use there was nothing in the business for either of them. The accounts destroyed were kept at the end of a loose-leaf ledger and their removal would leave nr trace. He says that he gave up the business and was leaving Timaru in January and burned his hooks, keeping only the shocks he might require to prove his debtors’ accounts. But the claims on the policies were debtors’ accounts, which required proof, and the de «trover I ledger sheets and balance sheets would have furnished most cogeiu evidence as le I lit* stock. Nicholas swore that all the other hooks were destroyed, but the cash hook was pro

duced during the hearing. 1 have looked at this-Took and find that it contains particulars of the purchases j tor the year 1928-29 in a separate column. Nicholas said he did not know whether any copies of balance-sheets had been given to the firm’s hankers, hut on my suggestion enquiry was made and a copy of the balance-sheet tor 1928 was produced from the bank which disclosed the amount of stock in hand on -Tilly 29th. 1928. When Mr Smith orr-Jiis arrival in Timaru asked for the 1929 stock sheets Nicholas said that they had been damaged in the fire- and were wet and wore being dried. This was obviously untrue j as immediately appeared on the oxanij iuation of the book which was undamI aged and had not been wet or soiled His evidence oil cross-examination was very unsatisfactory with frequent lapses of memory. When asked to go through the particulars of the claim, on the Hart-Parr poli y and mark any Hart-Parr parts appearing in it, according to his own evidence, his reply was that it was practically impossible, but he proceeded with Calvert, to mark the list and this was done without apparent difficulty. Notwitlisatuling the able argument of counsel for the-plaintiff, I find myself unable to resist the conclusion that there was intentional and wrongful concealment of facts and misrepresentations in order to obtain a larger smn from the insurance company than they were entitled to under the HartParr policy, which brings the plaintiffs within the terms of the 19th. condition endorsed on the policy. 4 hat condition stipulates that “if the claim be in any respect fraudulent, or if any fal.se declaration be made oi used in support thereof, or if i,11 . v Fraudulent means or devices are used by the insured or anyone acting on Ins behalf to obtain any benefit under this policy, . . . all benefit under this policy shall he forfeited.” AH benefit of the policy has therefore been forfeited. Judgment will be entered for the defendant with costs aecoi cling to scale, including two extra da\s at £ls 15s per day.