Charlton v Fisher and another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE KENNEDY,LORD JUSTICE LAWS,LORD JUSTICE RIX |
| Judgment Date | 02 February 2001 |
| Neutral Citation | [2001] EWCA Civ 112 |
| Docket Number | Case No: A2/2000/2053 QBENF |
| Court | Court of Appeal (Civil Division) |
| Date | 02 February 2001 |
[2001] EWCA Civ 112
Lord Justice Kennedy
Lord Justice Laws and
Lord Justice Rix
Case No: A2/2000/2053 QBENF
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM H.H. JUDGE ANTHONY THOMPSON QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Howard Palmer QC (instructed by Fishburn Morgan Cole London EC3A) for the appellant
Michael Norman (instructed by Avis and Cutmore of Bournemouth) for the respondent
Mr S Kennedy appeared to receive judgment
This is the Second Defendant's appeal from a decision of Judge Thompson QC sitting at Bournemouth County Court who, on 12th April 2000, dismissed the Second Defendant's appeal from a decision of District Judge Edwards who on 22nd November 1999 had declared that the Second Defendant is obliged to indemnify the First Defendant in respect of his liability to the Claimant.
Background Facts
On 5th October 1995 the Claimant was a rear seat passenger in a Vauxhall car which was stationary in the car park of the Richmond Park Hotel, Bournemouth when the First Defendant deliberately reversed his Ford Sierra motor car into it. As a result the Claimant sustained significant injury. Although it is clear that the collision was deliberate, indeed the First Defendant subsequently pleaded guilty to causing criminal damage, there is no evidence before us to suggest that he intended to cause injury to the Claimant.
On 29th September 1998 the Claimant commenced proceedings against the First Defendant. The written statement of claim was served on 23rd December 1998 but the First Defendant did not respond. At the material time his Sierra motor car had been insured with the Second Defendant, and the insurers applied to be joined as Second Defendant in the action. That was achieved by means of a consent order made on 19th March 1999, and on 14th April 1999 the Second Defendant served its defence in which it denied that the incident of 5th October 1995 was an "accident" within the meaning of its policy of insurance. It also pointed out that as the incident did not happen on a road there was no statutory obligation on the Second Defendant to indemnify.
On 7th June 1999 the Claimant served her Reply in which she asserted that the incident of 5th October 1995 was an accident within the meaning of the insurance policy. She further contended that the injuries to her "were an accident involving the First Defendant's car discreet from the damage caused to the Vauxhall Astra motor car as a result of the deliberate striking of it."
On 28th September 1999 the Second Defendant, pursuant to CPR Part 24, sought two declarations, namely -
"(1) . that the incident the subject of these proceedings whereby the claimant sustained injuries, was caused by the deliberate act of the first defendant and not an accident, whereby, by reason of the terms of the second defendant's policy of insurance, the second defendant is not liable to indemnify the first defendant in respect of such liability as he may have to the claimant;
(2) A declaration or finding that the incident whereby the claimant sustained injuries as a result of the actions of the first defendant occurred in a car park on private property whereby the second defendant is not obliged to indemnify the first defendant or the claimant pursuant to the provisions of the Road Traffic Act 1988."
In the event of those declarations being made the Second Defendant also sought summary judgment, and an order for costs against the claimant.
Thus there arose what, on the face of it, was a curious state of affairs. The Claimant had not amended her writ or statement of claim so as to formulate any cause of action against the Second Defendant, but the Second Defendant, having been joined in the action at its own request, was seeking to escape from it at the expense of the Claimant. At the start of the hearing before us we sought assistance as to this aspect of this matter and were advised by Mr Palmer QC for the Second Defendant that what happened in this case is not unusual. Where a doubt arises as to whether an insurer will indemnify a defendant the insurer applies to be joined so that the issue of his liability to indemnify can be raised at an early stage. That is obviously in everyones' interests. It saves costs and may lead to an early disposal of the action. In the present case the liability of the First Defendant was never likely to be a live issue, but there was and remains a live issue in relation to quantum, and the alternative to the course adopted by the Second Defendant would have been to incur the expense of litigating that issue, and leave it to the Claimant to seek to recover from the First Defendant. If he was unable to pay and was rendered bankrupt the Claimant could then rely on the Third Parties (Rights against Insurers) Act 1930 to seek to recover from the Second Defendant at which point there would arise the issues which the Second Defendant was seeking to have resolved when on 28th September 1999 it made its application pursuant to CPR Part 24. To facilitate resolution of those issues Mr Palmer was prepared to have us treat the Claimant as the assignee of any benefits the First Defendant is entitled to under the relevant policy of insurance.
Before the Second Defendant's application was heard the Claimant, on 15th October 1999, obtained judgment in default against the First Defendant for damages to be assessed, and the Second Defendant's application was then considered by District Judge Edwards on 22nd November 1999 with the result to which I have already referred at the beginning of this judgment.
Issues
In addition to the issues identified in the defence of the Second Defendant and in the Reply Mr Palmer has raised in his skeleton argument for this court the issue of whether the First Defendant was entitled to an indemnity in respect of deliberate acts, either as a matter of construction or as a matter of public policy. As Mr Norman for the Claimant pointed out, the public policy issue was raised briefly by counsel then appearing for the Second Defendant before Judge Thompson, but on that occasion when Mr Norman pointed out that the issue was not pleaded it was not pursued. Mr Norman submitted that we should not allow that issue to be pursued in this court. Realistically Mr Norman does not now claim to be taken by surprise. He has had ample time to consider and respond to his opponent's skeleton, and he recognises that if a public policy issue is raised the very nature of the issue makes it impossible for the court to ignore it, but he submits that in order properly to adjudicate on the issue we need to know more that we do about the gravity of the conduct and the means of the First Defendant. For reasons which will emerge later in this judgment I consider that we do know enough to deal with all of the issues now raised, and it is nothing to the point that this is, as Mr Norman pointed out, a Second Tier Appeal. The division of this court which gave permission to appeal rightly considered that the appeal raises issues of importance worthy of consideration by the court.
Extent of the Cover
In my judgment the starting point for a consideration for all the issues raised must be the statutory obligation to insure. That is now to be found in section 143(1) and section 145(3) of the Road Traffic Act 1988. The material words read -
Section 143(1)(a) "A person must not use a motor vehicle on a road unless there is in force in relation to the use of the vehicle by that person such a policy of insurance as complies with the requirements of this Part of this Act ."
Section 145(1) "In order to comply with the requirements of this Part of this Act a policy of insurance must satisfy the following conditions.
(3) the policy -
(a) must insure such person as maybe specified in the policy in respect of any liability which may be incurred by him 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 in Great Britain."
It was no doubt in order to comply with those requirements that the First Defendant contracted with the Second Defendant, and the certificate of insurance issued by the Second Defendant makes it clear that the insurers were affording him the cover he required. On that document there appear above the signature of the Chairman and Chief Executive of the Second Defendant these words -
"I hereby certify that the Policy to which this Certificate relates satisfies the requirements of the relevant law applicable in Great Britain "
The form and wording of the certificate is prescribed by paragraph 5(1)(a) and Form A in the Schedule to the Motor Vehicles (Third Party Risks) Regulations 1972 (S.I.1217). It is clear from that prescribed form that the insurer is entitled to lay down "limitations as to use" and in this case familiar limitations are set out on the face of the certificate. Under that heading the certificate reads -
"Use for social domestic and pleasure purposes including commuting to and from a permanent place of work. This policy does not cover use for racing competitions rallies or trials. Use for hiring or for any business purpose."
So, as Mr Palmer points out, it was clear from the outset that although the policy was said to satisfy the requirements of the relevant law the insurer was not agreeing to indemnify the insured in respect of every possible form of use. The obligation imposed by section 143(1)(a) required the First Defendant or other user of his vehicle not to use the vehicle on a road unless there was in force " in relation to the use...
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