National Insurance Company Limited v Tarraf (CIV. 6/2000) [2003] SLCA 9 (18 December 2003);

CIV. 6/2000






MOHSON TARRAF                           -  RESPONDENT


HON MR. JUSTICE M.E. T. THOMPSON               - JA HON MR. JUSTICE A.B. RASCHID             — .J


DR. A. RENNER-THOMAS with A. BANGURA ESQ;                     for RESPONDENT



This is an appeal against the Judgment of Stronge J. (as he then was) delivered on 12 April 2000. Against this judgment, the appellants have appealed on five grounds.

(1)  That the Learned Trial Judge erred in finding that though the cover note was a contract between plaintiff and defendant the exclusion clause was not part of the contract and so the defendant cannot rely on the said exclusion clause.

(2)  The Learned Trial Judge failed to consider the "war and civil war exclusion clause" in the circumstances of the alleged theft of 26th May 1997.

(3) The Learned trial Judge failed to consider adequately or at all the defendant's documentary evidence tendered in Court on behalf of the defendant but preferred to rely only on the oral evidence of the plainliff.

(4) The Learned Trial Judge erred in ordering the exchange rate to be as on the day of the judgment.

(5) The Learned Trial Judge had no basis for ordering 12% in foreign currency.

FACTS On the 11th October 1996, the insured ,Mohson farraf took out an insurance policy with an Insurance Broker Roland J. Hamilton to cover the risk against Fire and Burglary. He paid the Broker the premium of 460 U.S. dollars for a period of one year, that is to say from 11 October 1996 to 1lth October 1997. In the interest of clarity, I will quote she receipt he received from Mr. Hamilton.


I, Roland J.Hamilton of R G H Insurance Broker, 139 Circular road Freetown received the sum of USD 460.00 (Four Hundred & Sixty Dollars) being overseas Insurance (fire and bar


glary) Insurance for the period 11th October 1996 to 11th October 1997.

Sign                            Serial Nos. of V. S. D.

11/10/96                   ACI041633A







I see on the receipt the expression "Being Overseas Insurance" what the import of this expression and its implication for the insurance are, I would consider later. The insured en-tered into an insurance contract with the National Insurance Company Limited (hereinafter referred to as the Insurers) By virtue of a Proposal Form (1) for Burglary and House breaking and (2) for fire Insurance. These proposals cover the same period as that agree be-tween the Brokers R.J. Hamilton and the insured - that is to say 11th October 1996 to the October 1997.

The proposal form shows clearly that the value of the goods insured was 40,000 US Dollars.

This transaction becomes more interesting with the introduction of a third party - Harris and Dixon Insurance Brokers Limited Non-marine division. This company issued Cover Note to the Insurers dated 2nd December 1996. This is about two and a half months after the proposals were effected and the payment of 460.00 US Dollars to the Brokers in Freetown had been made. The Cover Note FIN No. TR96063G to the Insurers states in small print.

"In accordance with your instructions we have effected Insurance / Reinsurance with underwriters on terms and


conditions detailed herein"

" It will be useful to spell out the contents of the Cover Note in Full, judgment).

Having stated the relationship between the parties involved in the transaction, I will now ex-amine the evidence which was before the learned trial judge.

Only two witnesses testified. insurers. The insured, Mohson Tarraf testifies that he arranged with one Insurance Broker, Mr. Roland J. Hamilton to have his goods in his store, known as Ashobi Store insured. The Insurance Broker, Mr. Hamilton and the Insured agreed on a premium of 460 US Dollars, which he paid. The witness said he did not receive any proposal. He was only told that he had effected the Insurance which will commence on 11 October 1996 for a period of one year. He said he did not receive any Insurance Policy but after three months Mr. Hamilton gave him a Cover Note - this was on the 1st of December 1996. The

witness said it was addressed to the National Insurance Co. of Sierra Leone. The The witness went on to say he had business with the National Insurance Company and was never told about the contents in the Cover Note. He asked for the insurance policy, he received none The witness said he had never been told of the terms and conditions showed him by the brokers Hamilton. He continued that on the 26th May 1997 at about 2. a.m. he was called by telephone to be told that his store Ashobi store was being burgled. He went to his store and what he saw made him to collapse. He reported the matter to the police. The witness said he tried to contact the N. I. C, with no success; he tried to 4 (Included in the One on behalf of the insured and the other on behalf of the contact Hamilton, no success. He added that the stock on the 24th May 1997 was 40,000 U.S. Dollars. The witness said be subsequently made a claim to the N. I. C. through his solicitor who wrote three letters, which were tendered in evidence. He added that the N. I. C. did not honour his claim. He therefore claimed from the N. I. C. the sum of US40.000 plus interest from the date of loss to the elite of pay ment. The witness in answer to cross examination said he filled out a proposal form and signed it. The witness said he had Exh. B, the Cover Note in his possession since 1st December 1996. He agreed that he did not complain about Exh. B.


The appellants called one witness. He was Mr. Dennis Patrick Lambert who testified he was the Claims Manager for the National Insurance Company (S.L.) Ltd. He spelt out his duties which, inter alia, include handling claims and processing them and settling such claims where necessary. He said he knew an Insurance Broker by the name of R. J. H. Brokers and went on to say he did not know the plaintiff/ respondent in this matter. He went on to say he received a notification of a Claim from R. J. H. Brokers in respect of the Respon dent on the 8th October 1997. This notification was by way of a letter, which was tendered in evidence. The witness said he called R J H Brokers and informed them that the claim will not be honoured because of certain conditions in the Insurance Policy; and he added that these conditions related to War and Civil war conditions. The witness testified also that they placed original proposal with Harrison and Dickson (International Insurance Brokers) in London and that the company issued a cover Note to his company in respect of stores. The witness went on to describe what a Cover Note is. He states "A Cover Notes is a document normally issued to our client. On issue that client is notified whatever risk is pro-posed is covered There is a difference between a Cover Note and an Insurance Policy A Cover Note is a document indicating that the Insurance contract is effective. An Insurance Policy gives details of the Insurance contract. On reinsurance, a Cover Note or a policy is issued to the insured." The witness went on to say that a Cover Note was issued to the plaintiff/ respondent in which there is a war and Civil war exclusion clause and the sum insured was 20,000 US Dollars for risk of burglary and theft. He further said that the plaintiff/respondent's claim is in excess of the sum insured. In cross-examination, the witness admitted that his company did not 5 issue a Cover Note. In cross-examination the. wit-ness admitted that his company did not issue a Cover Note nor an Insurance Policy to the plaintiff/respondent. The witness said when the Cover Note is issued the policy becomes effective and the intention of the parties was that the Insurance should take effect on 11th October 1996. He added that the policy took effect on that date. The witness went on to say that Re-insurance took effect at the same time as the Insurance Policy. The witness agreed with Counsel that the exclusion clause referred to in the Cover Note is only contained in the


Cover Note, which was given to the plaintiff/ respondent after the Insurance became effec-tive.

In re-examination the witness had this to say. "For local Insurance the cover Note is handed to the Insured on the date the policy takes effect for external policies a Cover Note is also issued but the client is informed of the effective date of the policy. It was R J H which made the proposal on behalf of the plaintiff."

During the addresses, more particularly the address of Mr. Franklyn B. Kargbo Counsel for the Defendants / applicants, Dr. Renner-Thomas Counsel for the plaintiff / respondent sought an amendment on the Particulars of Claim by deleting No. TR9630630017 in para graph, 3, of the Statement of Claim. Counsel promptly objected to the amendment on the grounds "that we have conducted ourselves on the basis of the pleadings we have closed our case and any amendment now will occasion an injustice"

The judge in his ruling stated:

"Court: I do not see how the deletion of the number will do any injustice to the defendants. Objection overruled."

It is appropriate to state what is left of the paragraph which quote: "By a Cover Note Policy of Insurance the Defendant in consideration of the premium of USD4.0,000 paid by the plaintiff the defendant agreed for a period of I year from 11th October 1906 to insured and indemnity. The plaintiff against 6 has been amended loss inter alia by theft and / or burglary of the plaintiff stock-in-trade at his said business, premises up to the value of U.S.D) 40,000.00."

Can the Policy on which the claim is based be identified. I do not think so; but be that as it may, the Learned trial Judge made his findings on the sum total of the evidence before him. So it should be, and this Court will do the same and evaluate the evidence.


I will restate the ratio decidendi and the findings of the trial Judge. I quote: "The defendants rely on the above clause for exemption from liability; particularly Civil War. The defendants led no evidence to show that when the peril occurred there was a civil war, which directly or indirectly caused it. I hold that defendants cannot avail themselves of the exclusion clause. His Claim however, should be limited to USD20, 000 as 1st loss."

In the result I find in favour of the plaintiff and enter Judgment as follows "........."

The findings seem to be inconsistent with the ratio decidendi which the Learned trial Judge used in making his findings.

However, I will now consider the arguments of Counsel for the appellants. Ground (1) Mr. Shears-Moses, Counsel for Appellants submitted that the Insurers were not parties to the ac-tion, and that both parties were bound by exhibit "B" which is the Cover Note. He urged that there are no terms on Exhibits Gland G2, which form the proposal. He submits that Ex. A which is the receipt for payment of the premium and Exhibit Gland G2 were supersedet by Ex. "B" which form the proposal. He further submitted that Ex. G1 and G2 were in no way part of the agreement.

Counsel submitted that Ex. C forms the contract between the parties and they are both bound by it, and they were also bound by all the clauses in Ex. B., and as a result, in view 7 " it as follows" of the military having seized power on 25 May 1997, the Court should uphold ground 1 of the appeal.

As regards grounds 2 and 3, counsel submitted that the incidence leading to the loss is one of the excepted perils. The peril excepted is as a result of the military usurpation of power, he added.

Counsel then referred to the case of Spinneys v. Royal Insurance Co. Ltd. 1 Lloyds L R.. (1980) 406 et seq. Counsel then addressed the Court on the doctrine of usurped power He submitted that there was a de facto Government vide Ex. C. He argued that there was no


constructive treason. There was treason and refers to McGillivray's on Insurance 7th Edition page 790 para. 1893. He referred to the Military and usuq)ed power. Counsel also referred to Spinneys case on the exclusion clause which he says applies p.407 Col. n p.-408 p439 - p..440.

He submitted that the loss complained of was as result of the usurped power by the military therefore the claim should not have succeeded and there was no special cover which included insurrection or rebellion - vide 3 Halsburys Vol. 22. Page 328 para. 67 and what the perils are spelt out.

Counsel further submitted that there was a rebel war raging since 1991 and concluded that the learned trial Judge having failed to consider all the evidence, therefore erred in arriving at a just decision.

Counsel sought leave to abandon ground 4.

On ground 5 Counsel submitted that there was no evidence before the court for the Learned Judge to award 12% interest per annum in foreign currency and referred to two  cases Williams v. George Pratt (176) 3 A.E.R. 599 and Civ.App.23/91 Commercial Enter-prises v. Whitaker 16/2/2000 unreported.