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Friendly society continues court fight to offer motor insurance

A friendly society told a court yesterday that a police investigation should be launched into the reasons it was denied permission to provide motor insurance.

Craig Walls, a member of the Bentley Friendly Society, told the Supreme Court: “It is scandalous and vexatious that the Attorney-General and the Bermuda Government would mount this level of opposition to a registered friendly society.

“We also believe the case should be referred to the police and the Department of Public Prosecutions for criminal prosecution.”

Mr Walls claimed: “This was not a mistake, this was a co-ordinated effort to harm a registered friendly society.”

He was speaking as the society asked Puisne Judge Larry Mussenden for a declaration in its favour after the Government admitted an “error” had been made in legislation.

The case started last month, but was adjourned.

Mr Walls asked for an “immediate reversal” of a 2014 ruling on the advice of the Attorney-General that prevented the Transport Control Department from accepting Bentley motor insurance policies.

The society maintains that the Friendly Societies Act 1868 and the Insurance Act 1978 allowed Bentley to offer motor insurance.

Mr Walls told the hearing last month: “If there is to be justice in this country, there has to be an acceptance that this was wrong.

“This started wrong, it harmed us financially and it cannot be allowed to stand.”

But Melvin Douglas, the lawyer for the Ministry of Finance, asked the court to strike out the claim and argued it was an attempt to re-litigate a case the society had already lost.

Mr Douglas said: “There is no doubt that what is proposed to be litigated here are the same facts that were litigated previously.”

He said that the Supreme Court earlier found that the policies issued by the society were third-party motor vehicle insurance, but they were not valid because the society had not been authorised to provide them.

Mr Douglas admitted that there was an error in the law at the time of the first judgment, after it was said that applications must be made to the Governor for permission.

He added the law was clarified last year to say that applications should go to the Minister of Finance.

Mr Douglas said the society’s application was an unsustainable collateral attack on a previous judgment of the court and should not be allowed to proceed.

But Mr Walls said that the society had always maintained that they did not need the approval of the Governor and the 2020 corrections showed they were correct.

He said “erroneous advice” from the Attorney-General had cost the society for years and the Minister of Finance should have done his due diligence.

Mr Walls added: “It is basic law that when the Minister of Finance was injected into this it became his responsibility. If he is not going to question advice from someone, then how professional is he?”

He also argued that the Supreme Court’s ruling had been based on the error in the legislation and so the case should be reconsidered.

Mr Walls highlighted that the Transport Control Department had accepted policies for almost 50 society members, which indicated they were approved.

He told Mr Justice Mussenden: “The court is respectfully invited not to strike out the plaintiff’s specially endorsed writ of summons.”

Mr Walls also asked Mr Justice Mussenden to grant the society costs in the case.

But Mr Douglas, said the society had failed to raise points that should have been dealt with earlier, including “matters of the minister acting under the misunderstanding of the law”.

He added: “That would have been, assuming he had pleaded such a case, a matter for public law for he could have taken the action he needed to take by way of judicial review.

“It is not open to it now to try to raise things that are essentially public law issues.”

Mr Mussenden reserved judgment on the case and said it would not be released for at least six weeks.

The Bentley Friendly Society went to court in June 2016 and asked for declaratory relief to force the Transport Control Department to accept its motor insurance policies.

The society claimed existing laws – the Friendly Societies Act 1868 and the Insurance Act 1978 – allowed Bentley to offer motor insurance.

Section 57 of the Insurance Act says that “insurance business carried on by a friendly society registered under the Friendly Societies Act 1868 … shall be deemed not to be insurance business within the meaning of this Act”.

The Friendly Societies Act allows a society to make good “any loss sustained by the members by fire, collision, tempest or shipwreck, or by any contingency whereby they sustain any loss or damage to their motor bikes, autos, real estate or boats” as long as the investment of each member accumulates or be employed for the sole benefit of the investing member, their spouse or their beneficiaries.

Puisne Judge Stephen Hellman turned down Bentley's application, but said there was no reason in principle why friendly societies should not be able to conduct insurance business as long they had authorisation from the Governor.

Mr Justice Hellman added in his judgment that before granting approval, the Governor would be likely to consider whether Bentley would be able to satisfy a large third-party claim – such as one in the region of $1 million.

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