Interpretation of section 11 of Insurance Decree 40 of 1988 and Section 54 of the Insurance Act, Cap. 183, Laws of the Federation, 1990 as to the conditions precedent for joining insurer in a suit against the insured and the rationale for permitting such joinder
"...It needs not have done so. Because that has been stated in Section 54 of the Insurance Act, Cap. 183, Laws of the Federation, 1990. The Section provides: "54(1) Where Civil proceedings are taken in court in respect of any claim under a policy of insurance and judgment is obtained against any person insured by a policy of insurance, then notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall subject to this Section, pay to the persons entitled to the benefit of any such judgment the sum payable (including costs and interest on such sum) not later than thirty days from the date of delivery of such judgment.
(2) No sum shall be payable by an insurer under the provisions of subsection (1) of this Section -
(a) in respect of any judgment unless or before or within seven days after the commencement of the proceedings in which the judgment was given the insurer had notice of the bringing of the proceedings."
The right to join an insurer to a suit as given by Section 11 of Decree No. 40 1988 is only to enable a third party reach directly the insurer instead of just waiting for judgment to be given before asking the insurer to settle as provided in Section 54(1) of Cap. 183 above.
If section 54(1) of Cap. 183 (reproduced above) were not in existence before the promulgation of Section 11 of the Insurance Decree 1988, the right conferred by Section 11 would be incomplete and barren for there would have been no prize to claim for a third party who brings a claim against an Insurer.
However, under section 54(2)(a) of Cap. 183 (1990 Laws,) a third party cannot claim against an insurer "unless before or within seven days after the commencement of the proceedings in which judgment was given" a notice of the bringing of the proceeding has been served on the insurer.
It seems to me that a third party who wants to join an insurer to a suit brought against the insured must first show that the insurer has been served with the requisite notice under Section 54(2)(a) or Cap. 183. To hold otherwise is to allow the third party reap a benefit given by the statute without first fulfilling or satisfying the condition precedent attached to the realization of that benefit.
In the appellant's brief, Professor G.A. Olawoyin of Counsel argued at pages 7 to 8 thereof thus: "It is contended that whilst it is true that by virtue of Section 11 of the Insurance (Special Provisions) Decree of 1958, the Insurer can now be made a defendant in an action against the insured at the instance of the third party, compliance with Section 43(2)(a) of the Insurance Act, 1976 is still mandatory. This is because in the absence of any clear indication to the contrary, parliament can be presumed not to have altered the common law further than is necessary. See Black-Clawson International Ltd. v. Papier Werke Waldh of Aschaffenburg A.G (1975) 1 All E.R. 810 at 814(e) per Lord Raid. There is also no presumption that by legislating parliament intended to change the law. See Planmouth Limited v. Republic of Zaire. (1981) 1 All E.R. 1110 at 1114."
I am entirely in agreement with the views of appellant's counsel reproduced above. It has not been necessary for me to interpret the provisions of either Section 54 of Cap. 183 (1990 Laws of the Federation) or Section 11 of the 1988 Decree. It is only necessary to consider and relate the provisions in both Sections one to the other.
The provisions of each of both Sections are clear and require no interpretative effort on my part. The argument of respondents' Counsel in the main is that the court should take Section 11 of Decree No. 40 1988 on its own as complete and independent of Section 54 of Cap. 183.
Further it was the submission of the respondent that the court had the duty to just join the appellant and not concern itself with the question whether or not at the end of the day the plaintiffs would be able to get a satisfaction of the judgment. I need to say that on the present situation, the plaintiffs would not be able to get judgment against the appellant nor compensation against it. That being the position why should the court assist the plaintiffs in a futile exercise that can only waste time and money. The court does nothing in vain. See Odufuwa v. Johnson (1971) 1 All NLR 142 and Agbaje v. Agboluaje (1970) 1 All NLR 21.
The approach of the trial Judge was that as Section 11 of Decree 40 of 1988 provides that an insurer could be joined to the suit, he would join the appellant; and that the appellant was free later in the proceedings to raise special defences including one founded on non compliance by the plaintiffs with section 54(2)(a) of Cap. 183 (1990 Laws). I think that the learned trial Judge adopted a rather simplistic approach which failed to recognize that the plaintiffs could not get the compensation provided under section 54(1) of Cap. 183 without complying with section 54(2)(a) of the same Act."
Per OGUNTADE, J.C.A. in Unity Life & Fire Ins. Co. v. Ladega (1996) 1 NWLR (Pt. 427)
