Section 11, The Motor Vehicles (Third ~~~rt title arty Insurance) Ordinance

(1) If after a certificate of insurance has been issued infavour of the person by whom a policy has been effected or a certificate of security has been issued in favour of the person whose liability is covered by such security judgment in respect of any such liability as is required to be covered by a policy security issued for the purposes of this Ordinance, being a liability covered by the terms of the policy or security,· is obtained against any person insured by the policy or whose liability is covered by the security, as the case may be, then, notwithstanding that the insurer or the giver of the security may be entitled to avoid or cancel or may have avoided or cancelled the policy or the security, as the case may be, the insurer or the giver of the security shall, subject to the provisions of this section, pay to the persons entitled to the benefit of such judgment any sum payable thereunder in respect of the liability including any sum payable in respect of costs and any sum payable by virtue of any law in respect of interest on that sum or judgment. (2) No sum shall be payable by an insurer or the giver of a security under the provisions of sub-section (1)- (a) in respect of any judgment unless before or within fourteen days after the commencement of the proceedings in Motor Vehicles (Third Party Insurance) [Cap. 133 1355 ----hich the judgment was given the insurer or the giver of the ':curity had notice of the bringing of the proceedings; ors . (b) in respect of any judgment so long as execution thereon is stayed pending an appeal; or (c) in connection with any liability if before the happening f the event, which was the cause of the death or bodily ?njury giving rise to the liability, the policy or security was ~ancelled by m~tual c~nsent or by virtue of any provision contained therem and either- (i) before the happening of such event the certificate of insurance or the certificate of security, was surrendered to the insurer or the giver of the security, as the case may be, or the person to whom such certificate was delivered made a statutory declaration stating that such certificate had been lost or destroyed and so could not be surrendered; or (ii) after the happening of such event but before the expiration of fourteen days from the taking effect of the cancellation of the policy or of the security the certificate of insurance or the certificate of security, as the case may be, was surrendered to the insurer or the giver of the security or the person to whom such certificate was delivered made a statutory declaration that such certificate had been lost or destroyed and so could not be surrendered; or (iii) either before or after the happening of the event, but within a period of fourteen days from the taking effect of the cancellation of the policy or the security, the insurer or the giver of the security had commenced criminal proceedings under section 15 of this Ordinance in respect of the failure to surrender the certificate of insurance or the certificate of security, as the case may be. (3) No sum shall be payable by an insurer or the giver of a security under the provisions of this section if in an action commenced before or within three months after the commencement of the proceedings ·in which the judgment was given he has obtained a declaration that apart from any provisions ?onta~ed in the policy or the security, as the case may be, he Is entitled to avoid it on the ground that it was obtained by the no~-disclosure of a material fact or by a representation of fact whiCh was false in a material particular or, if he has avoided the policy or the security on that ground, that he was entitled to do so apart from any provision contained in it: Pr.?vided that an insurer or the giver of a security who has obtamed such a declaration in an action shall not thereby be S.L.-VoL. III-II* 1356 Cap. 133] Motor Vehicles (Third Party Insurance) Interpretation. Duty to give information to third parties. entitled to the benefit of the provision of this sub-section in respect of any judgment obtained in any proceedings commenced before the commencement of that action, unless before or within fourteen days after the commencement of that action he has given notice thereof to the person who is plaintiff in the said proceedings specifying the non-disclosure or false representation on which he proposes to rely and any person to whom notice of such action is given shall be entitled, if he thinks fit, to be made a party thereto. (4) If the amount which an insurer or the giver of a security under the provisions of this section becomes liable to pay in respect of the liability of a person insured by a policy or covered by a security, as the case may be, exceeds the amount for which he would, apart from the provisions of this section, be liable to pay under the policy or the security in respect of that liability, he shall be entitled to recover the excess from that person. (5) In this section- " liability covered by the terms of the policy or security " means a liability which is covered by the policy or the security, as the case rna y be, or which would be so covered were it not that the insurer or the giver of the security is entitled to avoid or cancel or has avoided or cancelled the policy or the security, as the case may be; and "material" in respect of an insurance policy means of such a nature as to influence the judgment of a prudent insurer in determining whether he will accept the risk and if so, at what premium and on what conditions, and, in respect of a security, means of such a nature as to influence the judgment of a prudent person giving such securities in determining·whether he would give such security and if so, on what conditions.