Burns v Shuttlehurst Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STUART SMITH,LORD JUSTICE MUMMERY,LORD JUSTICE THORPE |
| Judgment Date | 21 December 1999 |
| Judgment citation (vLex) | [1998] EWCA Civ J1221-21 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 1999 |
| Docket Number | Case No: QBENI 98/0881 |
[1998] EWCA Civ J1221-21
IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QBD (STEEL J.) on 24.4.98
Royal Courts of Justice
Strand, London, WC2A 21L
Lord Justice Stuart Smith
Lord Justice Thorpe
and
Lord Justice Mummery
Case No: QBENI 98/0881
AND
Robert Moxon-Browne QC and Charles Dougherty (instructed by Messrs Wansbroughs Willey Hargrave for the Appellants)
John Foy QC and Simon Carr (instructed by Messrs Thompsons for the Respondents)
Introduction
This is an Appeal by General Accident Fire and Life Assurance Corporation PLC ("General Accident") from the order of Mr Justice Steel made on 24 April 1998 when the judge allowed the plaintiff's appeal from the decision of District Judge Cole made on 7 January 1998 dismissing the plaintiff's application for pre-action discovery and/or non-party discovery by General Accident.
The effect of the judge's order was to require General Accident to give discovery of all documents relating to the Employer's Liability and Motor policies issued to the first defendant, including proposal forms and correspondence regarding the first defendant's business, the plaintiff's claim and the provision of an indemnity in respect of it to the first defendant. By their appeal the General Accident seek to set aside the judge's order.
The Factual Background
The plaintiff was employed by the first defendant as a driver. On 22 August 1994 in the course of his employment he was driving his employer's articulated lorry. The vehicle included a semi-trailer loaded with a shipping container bound for Felixstowe Docks as part of the first defendant's business as a haulier. It is alleged that the brakes failed and the plaintiff suffered serious injuries as a result of which he is now paraplegic.
The plaintiff alleged that his accident was caused by the first defendant's negligence in failing to maintain the vehicle properly. On 6 March 1996 the plaintiff obtained judgment against the first defendant for damages to be assessed. In December 1995 the first defendant went into liquidation. There are no assets to meet the plaintiff's claim.
The first defendant was insured with General Accident in respect of both Employer's Liability and Motor risks for a business as motor traders and repairers. On 18 December 1995 General Accident's solicitors, Wansbroughs Willey Hargrave, wrote to the first defendant's solicitors to advise them that General Accident would refuse to indemnify the first defendant on the grounds of non-disclosure and fraud and also because the business operations of the first defendant were outside the scope of the policy. By letter dated 29 April 1996 General Accident confirmed to the plaintiff's solicitors that it would not indemnify the first defendant.
In 1996 the plaintiff amended the Statement of Claim to allege that the second defendant was a director and shareholder of the first defendant and was responsible for the day to day management of the first defendant's business. It was said that the acts or omissions of the first defendant had been authorised, directed and procured by the second defendant and accordingly he was personally liable for those acts or omissions. Those allegations are not material to this appeal.
On 21 July 1997 the Statement of Claim was re-amended. Paragraph 4C read as follows:
"Further, or in the alternative, the second defendant owed a duty of care to the plaintiff which included, inter alia, a duty to obtain, administer and maintain adequate and appropriate policies of motor and employer's insurance policies of the type that would have provided an indemnity to the first defendants and/or the second defendant with regards to any damages awarded for the type of accident which occurred on the 22nd August 1994 in which the plaintiff was injured."
It was then alleged that the second defendant was in breach of the duty of care. Particulars alleged:
(i) Failed to ensure that the plaintiff was at all material times covered by proper and appropriate policies of motor and /or employer's liability insurance;
(ii) Failed to provide the insurers, General Accident Fire and Life Assurance Corporation plc, their servants or agents with all and any information requested or required;
(iii) Failed to ensure that any policy of motor or employer's insurance that had been obtained was maintained at all material times;
(iv) Provided General Accident Fire and Life Assurance Corporation plc with inaccurate, incomplete or misleading information;
(v) Acted in such a way as to allow General Accident Fire and Life Assurance Corporation plc to avoid indemnifying under the relevant policies of insurance that were in operation at the material time.
It is then pleaded that by reason of the second defendant's breach of this duty of care the General Accident declined to indemnify the first defendant under the relevant policy with the result that the plaintiff was unable to recover any damages awarded to him.
The Plaintiff's Applications
By a summons dated 18 April 1997 the plaintiff sought pre-action and non-party discovery from General Accident of all documents relating to the Employer's Liability and Motor policies issued to the first defendant, including proposal forms and correspondence regarding the first defendant's business and the plaintiff's claim against the first defendant. The application for pre-action discovery relates to a postulated future action by the plaintiff against General Accident to enforce the first defendant's insurance policies pursuant to the Third Party (Rights Against Insurers) Act 1930. The application for non-party discovery is for documents to assist the plaintiff in his claim that the second defendant in the current action was negligent in failing to maintain proper insurances.
Pre-action discovery
The Court's jurisdiction to make an order for pre-action discovery is contained in the Supreme Court Act 1981 s.33. Section 33(2) provides:
"On the application, in accordance with rules of the court, of a person who appears to the High Court to be likely to be a party to subsequent proceedings in that court in which a claim in respect of personal injuries to a person, or in respect of a person's death, is likely to be made, the High Court shall, in such circumstances as may be specified in the rules, have power to order a person who appears to the court to be likely to be a party to the proceedings and to be likely to have or to have had in his possession, custody or power any documents which are relevant to an issue arising or likely to arise out of that claim."
The relevant rules of Court are in RSC order 24 r7A. The application must be by summons, supported by an affidavit which must 'state the grounds on which it is alleged that the applicant and the person against whom the order is sought are likely to be parties to subsequent proceedings in the High Court in which a claim for personal injuries is likely to be made' (Rule 7A(3)(a)).
The affidavit must specify the documents sought and show 'that the documents are relevant to an issue arising or likely to arise out of a claim for personal injuries made or likely to be made in the proceedings…..' (Rule 7A 3(b) which applies also to non-party discovery).
'A claim for personal injuries' means a claim in respect of personal injuries to a person or in respect of a person's death" (Rule 7A(7)).
The proposed claim against the General Accident is based upon the Third Parties (Rights Against Insurers) Act 1930. Section 1 provides:
"(1) Where under any contract of insurance a person (hereinafter referred to as the insured) is insured against liabilities to third parties which he may incur, then
(b) in the case of the insured being a company, in the event of a winding-up order…..being made…..if, either before or after that
event, any such liability as aforesaid is incurred by the insured, his rights against the insurer under the contract in respect of the liability shall, notwithstanding anything in any Act or rule of law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred."
Mr Moxon-Browne QC, on behalf of the General Accident, submits that the plaintiff does not have a claim for personal injuries or a claim in respect of personal injuries against the insurers. He has a right, when his claim for damages has been quantified, to be indemnified by them; it is the right to indemnification that is transferred from the insured, the first defendant, to him. He submits that however widely 'claim in respect of personal injuries' is construed it cannot embrace such a claim. It is merely the quantification of the claim for indemnity that is in respect of his personal injuries.
Mr Moxon-Browne further submits that the Third Party (Rights Against Insurers) Act 1930 provides in section 2 its own machinery for discovery, both against the insured and insurer, which the plaintiff will be able to take advantage of once his claim has been quantified. It is wrong therefore he submits to give too extensive a meaning to the words 'claim in respect of personal injury' which in context means no more than claims for personal injury. The reason why Order 24 r7A(7) is necessary is to include in the expression 'claim for personal injury' claims in respect of a person's death.
It is plain in my judgment that the expression 'claim for personal injury' is shorthand for 'claim for damages for personal injury'. The claim in a Statement of Claim is that part...
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