Trial over a $100,000 insurance claim to go ahead

The Supreme Court has denied a strike out motion filed by National Pacific Insurance in relation to a $100,000 claim by Vaivaimuli Corporation.

Vaivaimuli Corporation, which owns a bakery in Sataua Savai’i, has sued the National Pacific Insurance [N.P.I.] and seeks judgment in the sum of $100,000 as well as costs.

The bakery was damaged in 2017 when its roof collapsed onto the oven rendering it non-operational. The plaintiff alleges that it was as a result of an earthquake and filed a claim of $100,000 with the N.P.I. 

But the N.P.I. declined the claim on the basis that the loss, damage or destruction arose from wear, tear, scratching and denting, and instead gave the plaintiff an ex-gratia payment of $10,000 in good faith due to their long standing relationship.

However, the plaintiff filed a statement of claim on 22 January 2019 and in response the N.P.I filed a strike out motion.

The statement of claim disputes the position of the N.P.I. in rejecting the claim, and says that the N.P.I. has breached the insurance contract, by erroneously claiming the damage was a result of wear and tear, whereas the actual causation of the collapsed roof was earthquake.

But Presiding Supreme Court Justice, Tafaoimalo Leilani Tuala-Warren, in her ruling last week said the insurance company’s motion discloses no reasonable cause of action against the N.P.I. and cannot possibly succeed.

“The S.O.C. [statement of claim] is frivolous, vexatious and an abuse of process on the grounds that there is no arguable cause of action based on breach of contract.”

The insurance firm further claimed the proximate cause of the damage to the oven was gradual deterioration due to age, and wear and tear, exacerbated by earth tremors. Loss or damage arising from such matters are specifically excluded from the contract for insurance and that the earthquake that occurred on 4 November 2017 was not a proximate cause of damage to the bakery oven that occurred on 30 October 2017.

The plaintiff submitted that its claim is founded on a breach of contract.

“The plaintiff submits that they have consistently paid for their insurance policy with the defendant for 16 years without default,” the Justice ruled. 

“They submit that the matter should go to a substantive hearing to fully review the number of earthquakes during this period and for expert evidence to be called.

“They say that the affidavit evidence given by the defendant does not mention the earthquake on 27 October 2017.

“The plaintiff submitted to the Court a print out from what appears to be the facebook page of the Samoa Meteorological Service dated 27 October 2017 which shows that a 5.8 magnitude earthquake was felt in Samoa at 12.51 pm that day.

"The plaintiff submits that the strike out application should not be granted.”

Justice Tafaoimalo said the counsel for the plaintiff – in submitting a print out of a Facebook page without an affidavit – did not follow proper procedure and process.

She said proper process should be followed when tendering evidence in court by way of an affidavit. 

Counsel should be mindful of this, as counsel’s lack of preparation may ultimately be at the expense of the client, she added.

“My starting point is that the plaintiff’s pleadings are assumed to be true. The plaintiff has maintained through its documentary evidence that the oven ceiling collapsed on 30 October 2017 at 4pm, caused by earthquake tremors,” said Justice Tafaoimalo.

“The submission that the damage could not have been caused five days before the earthquake on 4 November 2017, is logical and sensible.

“But it is not a position or argument which was at any point advanced by the plaintiff. The plaintiff pleads in the S.O.C. that it was caused by earthquake tremors but dates of those earthquake tremors are not specified. The S.O.C. is cursory at best. Admittedly, the best evidence has not been put forward by the plaintiff at this stage.”

Justice Tafaoimalo reiterated that there is a cause of action disclosed, although it should be better particularised. 

“The defects identified in the S.O.C. can be cured by amendment. I will allow the plaintiff to amend its S.O.C. to better particularise its cause of action. The causation of the damage being earthquake tremors that they plead in the S.O.C., needs to be fully particularised.”

Justice Tafaoimalo ruled the court is not satisfied that the plaintiff’s claim is so clearly untenable that it cannot possibly succeed or is certain to fail.

“I am mindful that a litigant’s right of access to the Court is not to be lightly denied. The ex-gratia payment of $10,000 which was accepted by the plaintiff, was given voluntarily by the defendant in recognition of the long relationship with the plaintiff, without admitting any legal liability or obligation.

“It should be put to one side for the moment while the substantive matters are dealt with. It will no doubt feature in any final determination of this case.

“The application to strike out the S.O.C. is denied. The plaintiff to amend its S.O.C. to better particularise its cause of action; an amended S.O.C. should be filed and served by 10 August 2020 when the matter will be mentioned in the Supreme Court,” ruled Justice Tafaoimalo.

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