The Court of Appeal composed of Chief Justice Silvio Camilleri, Mr Justice Tonio Mallia and Mr Justice Joseph Azzopardi, in the case ‘Charles Grech v Atlas Insurance PCC Ltd’, on February 6, 2015, held, among other things, that the insurance company could still be condemned to pay the judicial costs, even if it had deposited the sum offered in court.

Charles Grech insured his BMW530D with Atlas Insurance under a comprehensive policy for €53,590 in 2006. He had purchased the car in 2001 for €79,390. The car was stolen in Sliema between September 4 and 6, 2006.

Grech made a claim under the policy and expected a payment from the insurance company of €53,590, but Atlas Insurance only offered €37,280. He refused the offer and proceeded to sue Atlas Insurance for €46,600 or such other sum to be liquidated by the court.

Two valuations were produced from two independent surveyors, which valued the car at €44,270 and €46,600 respectively.

On March 18, 2011, the First Hall of the Civil Court decided in favour of Grech and condemned Atlas Insurance to pay him €44,250 with legal interests.

The court considered that the insurance company had relied on its own surveyor to value the car according to its value guide book issued for the industry of car insurers. Atlas Insurance had given a lower value to the car and proceeded to deposit €37,280 in court.

The First Hall of the Civil Court gave more weight to the valuations produced by Grech. It said that while the surveyors of Grech were independent, the surveyor of Atlas Insurance was in its employment and was not independent.

Aggrieved by the decision of the First Hall Civil Court, Atlas Insurance entered an appeal, requesting that the value of the car be reduced to €37,280. In addition, it disputed having to pay legal interests.

Atlas Insurance produced three documents which it had at its disposal before the first court proceedings. These related to the qualifications of its expert surveyor and to the value of the car at the time it was stolen.

The court said that it had discretion to allow parties to bring witnesses and documents which had not been forwarded before the first court. But what could have been produced before the first court should not be accepted by the Court of Appeal, as the Court of Appeal was a court of revision. Re: ‘Dr Eric Mamo noe v J. Muscat’ (CA) dated October 5, 1998.

In this respect, while this court would not order that these documents produced by Atlas Insurance be removed from their file, it accepted the plea of Grech that these documents did not have value as evidence at this stage of the proceedings.

Atlas Insurance pleaded that the court should have considered its expert’s valuation and had incorrectly liquidated the value of the BMW; and that it should not have been condemned to pay interest when it had deposited €37,280 in court. Nor should it suffer the judicial expenses in the circumstances.

Atlas Insurance was aggrieved by the fact that the first court had not considered its expert’s valuation simply because the person was its employee. The Court of Appeal agreed with the first court. It had no doubt that the insurance company’s surveyor was qualified and experienced, but the fact that he was an employee of the insurance company indicated that he was not independent. This did not, however, put in question his professionalism and honesty.

The Court of Appeal would only disturb the first court’s discretion in exceptional cases in its assessment of the facts

The Court of Appeal said it could not disturb the discretion of the first court without justification. In ‘Vella v Tabone’ dated October 22, 2002, it was held that the Court of Appeal would only disturb the appraisal of fact by the first court for serious reasons and in order to correct a manifest error, in order to prevent a clear injustice.

In ‘Phyllis Ebejer v J. Aquilina’ dated January 10, 1995, it was stated that the Court of Appeal would only disturb the discretion exercised by the first court in exceptional cases in its assessment of the facts.

In this case the Court of Appeal felt there was no good reason to revoke the conclusions of the first court. On the contrary, it agreed with the First Hall of the Civil Court. The surveyors produced by Grech also had considerable experience. They had carried out their task professionally and had not simply relied on what Grech was claiming. In fact, their valuation was less than what Grech had sought.

The Court of Appeal noted that reimbursement by Atlas Insurance should be equivalent to the value of the lost item: ‘Chetcuti v Citadel Insurance (CA Inf.)’ dated February 15, 2006.

In ‘Camilleri v Middlesea Insurance (App. Inf.)’ dated May 4, 2005, it was held that the indemnity from the insurance should be compensation for the loss.

Accordingly, the compensation should be the value of the lost object. The amount had to be calculated according to objective parameters in view of its value at the time of the incident. The court agreed with the First Hall of the Civil Court that the loss amounted to €44,250.

In addition, as the amount offered by the insurance company was lower, interests were due by the insurance company. Atlas Insurance was not correct as to the effect of the deposit. Grech could not accept the deposit without renouncing his claims.

If, on the other hand, the court had accepted the pleas of the insurance company, the matter would have been different, and the insurance company would not have been ordered to pay interest, pointed out the court.

Furthermore, once the court did not accept the pleas of Atlas Insurance, there was no reason to vary how the first court had decided the issue of judicial costs.

There was no mathematical formula how costs were to be apportioned, even if the court had awarded a lower sum as compensation: ‘Commissioner of Lands v Emanuel Aquilina’ dated October 5, 2001. The court had the discretion to decide the issue of costs as it deemed appropriate: ‘Chetcuti v Citadel Insurance (CA Inf.).’

For these reasons, the Court of Appeal dismissed the appeal of Atlas Insurance and confirmed the decision of the First Hall of the Civil Court.

Dr Karl Grech Orr is a partner at Ganado Advocates.