Abdullah Sahin v 1) Cassandra Havard (First Defendant) 2) Riverstone Insurance (UK) Ltd (originally known as Brit Insurance) (Second Defendant and Respondent)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore,Lord Justice Kitchin,Lord Justice Floyd |
| Judgment Date | 30 November 2016 |
| Neutral Citation | [2016] EWCA Civ 1202 |
| Docket Number | Case No: B2/2014/4140 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 November 2016 |
[2016] EWCA Civ 1202
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HER HONOUR JUDGE BAUCHER
Royal Courts of Justice
Strand, London, WC2A 2LL
The Right Honourable Lord Justice Longmore
The Right Honourable Lord Justice Kitchin
and
The Right Honourable Lord Justice Floyd
Case No: B2/2014/4140
Mr M Engelman and Mr Robert Whittock (instructed by Lucas Law Ltd T/A Lucas & Co Solicitors) for the Appellant
Mr John McDonald (instructed by BLM) for the Respondent
Hearing dates: 15 th November 2016
Approved Judgment
Introduction
On 24 th January 2008 at 9.30 p.m. Mr Sahin was travelling along Clarence Road E5, a short distance north of London Fields, in a motor car with registered number Y238 CDC when a Vauxhall Vectra car with registered number YL06 FZV collided with him. Mr Sahin says the driver of the Vauxhall negligently caused damage to Mr Sahin's vehicle and caused him to suffer loss, in respect of that damage and hiring a substitute vehicle, in a sum which is, rather surprisingly, said to exceed £100,000. The driver of the other car has never been identified (I shall call him "Mr X"). One might, therefore, have thought that this was a case to which the MIB Untraced Drivers Agreement of 2003 would have applied. Instead Mr Sahin has instituted two sets of proceedings.
The vehicle was owned by a car hire company, Local Contract Hire Leasing Ltd, which had hired the car to Ms Cassandra Havard. The car insurance policy insured both the hire company as owner and Ms Havard as a person driving with the permission of the car hire company. For the purposes of this appeal it is accepted that Ms Havard permitted Mr X to drive the vehicle; it is also accepted that Mr X had no insurance of his own.
Mr Sahin first obtained a default judgment against the car hire company on 23 rd July 2009 but the proceedings were discontinued because by that time the car hire company had gone into liquidation.
He then began proceedings on 31 st August 2011 against Ms Havard on the basis that she had permitted the driver to drive when the driver had no insurance. This was a breach of the statutory duty imposed by section 143 of the Road Traffic Act 1988 ("the 1988 Act") which provides that a person must not cause or permit any other person to use a motor vehicle on a road unless there is in relation to the use of the vehicle by that other person a policy of insurance in respect of third party risks which complies with the insurance requirements of the Act.
Mr Sahin again obtained a default judgment, this time against Ms Havard, on 28 th November 2011. The insurer of the car hire company then applied to be joined as a second defendant to the proceedings and to have the default judgment set aside. Those applications came before DJ Sterlini on 17 th April 2013 who granted the insurer permission to be joined in the proceedings but declined to set aside the default judgment given against Ms Harvard.
On 20 th February 2014 Mr Sahin was granted permission to amend his particulars of claim to make a claim against the insurer. That he has now done alleging that the insurer should have paid him the amount of the default judgment pursuant to the 1988 Act but has failed to do so. He then applied for summary judgment against the insurer but DJ Parker adjourned that hearing to the trial.
When the matter came on for trial the judge, Her Honour Judge Baucher, sitting in the Central London County Court, with the help of the parties, formulated two issues for decision and left over the question whether the case should proceed to trial, until those issues had been decided. The second of these issues was whether the insurer was liable directly to Mr Sahin which in turn depended on the answer to two questions:-
1) whether Ms Havard's liability to Mr Sahin was a liability which was statutorily required to be covered pursuant to section 145 of the 1988 Act which sets out the statutory requirements for motor insurance policies; and
2) whether Ms Havard's liability was in fact covered by the terms of the insurance policy.
She answered both these questions in the negative and dismissed the claim. There is now an appeal with the permission of Arden LJ.
The statutory provisions
The relevant provisions are sections 143, 145, 148 and 151 of the 1988 Act as amended which are to be found in Part VI which deals with Third-party Liabilities. The most fundamental provision is section 143 which provides that it is a criminal offence to use, or cause or permit another person to use, a motor vehicle without insurance:-
" 143 Users of motor vehicles to be insured or secured against third-party risks.
(1) Subject to the provision of this Part of the Act –
(a) a person must not use a motor vehicle on a road or other public place unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act, and
(b) a person must not cause or permit any other person to use a motor vehicle on a road or other public place unless there is in force in relation to the use of the vehicle by that other person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act.
(2) If a person acts in contravention of subsection (1) above he is guilty of an offence.
(3) A person charged with using a motor vehicle in contravention of this section shall not be convicted if he proves –
(a) that the vehicle did not belong to him and was not in his possession under a contract of hiring or of loan,
(b) that he was using the vehicle in the course of his employment, and
(c) that he neither knew nor had reason to believe that there was not in force in relation to the vehicle such a policy of insurance or security as is mentioned in subsection (1) above."
Section 145 sets outs the requirements of a motor insurance policy:-
" 145 Requirements in respect of policies of insurance.
(1) In order to comply with the requirements of this Part of this Act, a policy of insurance must satisfy the following conditions.
(2) The policy must be issued by an authorised insurer.
(3) Subject to subsection (4) below, the policy –
(a) must insure such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person or damage to property caused by, or arising out of, the use of the vehicle on a road or other public place in Great Britain. …"
Section 147 provides for insured persons to be provided with certificates of insurance (or certificates of security) and section 148 makes provision for the avoidance of certain exceptions in policies (or securities):-
" 148 Avoidance of certain exceptions to policies or securities.
(1) Where a certificate of insurance or certificate of security has been delivered under section 147 of this Act to the person by whom a policy has been effected or to whom a security has been given, so much of the policy or security as purports to restrict –
(a) the insurance of the persons insured by the policy, or
(b) the operation of the security,
(as the case may be) by reference to any of the matters mentioned in subsection (2) below shall, as respects such liabilities as are required to be covered by a policy under section 145 of this Act, be of no effect.
(2) Those matters are –
(a) the age or physical or mental condition of persons driving the vehicle,
(b) the condition of the vehicle,
(c) the number of persons that the vehicle carries,
(d) the weight of physical characteristics of the goods that the vehicle carries,
(e) the time at which or the area within which the vehicle is used,
(f) the horsepower or cylinder capacity or value of the vehicle,
(g) the carrying on the vehicle of any particular apparatus, or
(h) the carrying on the vehicle of any particular means of identification other than any means of identification required to be carried by or under the Vehicle Excise and Regulation Act 1994."
Section 151 is the provision which makes the insurer directly responsible for satisfying judgments obtained by third parties against the insured:-
" 151 Duty of insurers or persons giving security to satisfy judgment against persons insured or secured against third-party risks.
(1) This section applies where, after a certificate of insurance or certificate of security has been delivered under section 147 of this Act to the person by whom a policy has been effected or to whom a security has been given, a judgment to which this subsection applies is obtained.
(2) Subsection (1) above applies to judgments relating to a liability with respect to any matter where liability with respect to that matter is required to be covered by a policy of insurance under section 145 of this Act and either –
(a) it is a liability covered by the terms of the policy or security to which the certificate relates, and the judgment is obtained against any person who is insured by the policy or whose liability is covered by the security, as the case may be, or
(b) it is a liability, other than an excluded liability, which would be so covered if the policy insured all persons or, as the case may be, the security covered the liability of all persons, and the judgment is obtained against any person other than one who is insured by the policy or, as the case may be, whose liability is covered by the security.
…
(5) Notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or...
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