Digby v General Accident, Company, Assurance Corporation
| Jurisdiction | UK Non-devolved |
| Judge | The Lord Chancellor,Viscount Maugham,Lord Atkin,Lord Wright,Lord Porter |
| Judgment Date | 06 August 1942 |
| Judgment citation (vLex) | [1942] UKHL J0806-1 |
| Date | 06 August 1942 |
| Court | House of Lords |
[1942] UKHL J0806-1
Lord Chancellor.
Viscount Maugham.
Lord Atkin.
Lord Wright.
Lord Porter.
House of Lords
After hearing Counsel, as well on Tuesday the 9th, as on Thursday the 11th and Friday the 12th, days of June last, upon the Petition and Appeal of Sidney James Digby, of 6 Killarney Road, Wandsworth Common, S.W.18, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 5th of June 1940, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioner might have such other relief in the premises, as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the General Accident Fire and Life Assurance Corporation, Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 5th day of July 1940, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the judgment of the Honourable Mr. Justice Atkinson, of the 26th day of February 1940, thereby Varied, be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellant the Costs incurred by him in the Court of Appeal, and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
This appeal raises a short but difficult point of construction, as to which opinions have differed in the Courts below, on a standard form of motor-insurance policy known as the "General European Travel Comprehensive Automobile Policy" issued by the Respondents. The policy in the present case was issued to a lady known as Miss Merle Oberon, but the claim under the policy is not made by the policy-holder but by her chauffeur, the present Appellant, and is a claim to be indemnified by the Respondents in respect of a liability to pay to Miss Oberon herself the sum of £5,693 IS. 9d. as damages for negligence.
The claim arises in the following circumstances. While Miss Oberon was being driven in her car by the Appellant there was a collision with another motor, in which Miss Oberon sustained personal injury. She issued a writ against the owner of the other car, claiming that the accident was caused by the negligence of the driver of that car. Before the trial of the action, as I understand, a second defendant was added, namely, Miss Oberon's own chauffeur, Digby, the present Appellant. The claim against him was on the alternative ground that it was his negligence which caused the injuries. At the trial, the learned Judge found that both Defendants were to blame and consequently the original Defendant got off, under the plea of the contributory negligence of the chauffeur, and judgment was entered against the present Appellant alone. The question now is whether, under the terms of Miss Oberon's policy, the Appellant is entitled to be indemnified by the Respondents against Miss Oberon's claim.
If this claim is sustainable, it arises under section 2 of the policy, which is described in the margin as dealing with "third party liability." This side note cannot be disregarded; whether it appears as a side note or as a heading, it is part of the material to be considered in reaching a correct construction of the section. Moreover, a Proposal Form which was signed by the policy-holder is, by the recital in the policy, expressly stated to be incorporated in it, and this Proposal Form refers to this section of the policy under the title "Third party indemnity. Public liability and property damage", and describes the nature of the indemnity as "unlimited indemnity in respect of claims by the public (including Passengers, subject to exclusions) for Personal Injury etc." Nevertheless, the main guide to the correct interpretation of the policy is the language of section 2 itself.
Section 2 of the policy, so far as material, runs as follows:—
"(1) All sums which the Policyholder shall become legally liable to pay in respect of any claim by any person (including passengers in the Automobile) for loss of life or accidental bodily injury or damage to property (including animals) caused by, through, or in connection with such Automobile, and in addition the Law Costs payable in connection with such claim when incurred with the consent of the Corporation.
(2) The Policyholder will also be indemnified here under whilst personally driving a Private Automobile not belonging to him and not hired to him under a Hire purchase Agreement provided the Policyholder's own Automobile is not in use at the same time and provided that there is no other Insurance in force in respect of such other Automobile whereby the Policyholder may be indemnified.
(3) The Insurance under this Section shall also extend to indemnify in like manner any person whilst driving any Automobile described in the Schedule hereto on the order or with the permission of the Policyholder, provided there is no other Insurance subsisting under which such person may be indemnified, and that such person shall as though he were the Policyholder observe fulfill and be subject to the terms exceptions and conditions of this Policy in so far as they can apply, provided also that such person is a competent driver and holds a licence to drive such Automobile or has held and is not disqualified for holding or obtaining such a licence, and has not been convicted of driving to the danger of the public or of any criminal charge in connection with the driving of an Automobile or been declined for Automobile Insurance by any Insurance Company or Underwriter."
The first and main subsection is clear enough. It provides for what is ordinarily called, in this connection, third-party insurance. In the Road Traffic Act, 1930, s. 35, which provides for compulsory insurance, the expression used is "third-party risks." Whichever phrase is used, I think that the governing conception is that the insurer is one party to the contract and the policy-holder another party, and that claims made by others in respect of the negligent use of the car may be naturally described as claims by third parties. If a passenger in a car is injured by negligent driving for which the policy-holder is responsible, the passenger would have a claim to be compensated by the policy-holder, and an indemnity against this claim is provided by the sub-clause. It is to be noticed that the policy expressly excludes from the liability of the Corporation "death of, or bodily injury to, any person where such death or injury arises out of and in the course of the employment of such person by the policy-holder": such claims would presumably be covered by Workmen's Compensation, and the policy-holder's liability in regard to them would be separately insured against. Section 36 of the Act of 1935 contains a proviso exempting this sort of liability from compulsory insurance under the Act.
The difficulty in the case arises under subsection (3), which extends the insurance "to indemnifying in like manner any person whilst driving" the car "on the order or with the permission of the policy-holder", subject to the provisoes there stated. Such a person is, therefore, not the policy-holder and, not being a contracting party, would not be able to compel payment from the Insurance Company at common law. It has been held, however, and I am content to accept it in the present case, that a person who falls within the language of such a clause enjoys, by virtue of subsection (4) of section 36 of the Act of 1930, a statutory right to sue the Insurance Company for an indemnity. If, for example, the Appellant were sued for damages arising from his negligent driving as chauffeur by a member of the public who was injured or by a passenger in the car, other than the policy-holder, it is conceded that the indemnity would cover the case. The whole question, therefore, is whether, in applying subsection (3), a claim established against the Appellant by his own employer, who is the policy-holder, attracts the indemnity.
Lord Justice MacKinnon and Lord Justice Goddard take the view that it does not; Lord Justice Luxmoore takes the view that it does. On the whole, I prefer the majority view of the Court of Appeal. The main provision of section 2 is that contained in subsection (1); subsection (3) is subsidiary. Under subsection (1) it is manifest that the policy-holder could have no claim to indemnity. Does the range of persons whose claims may lead to indemnity under section 2 of the policy change because of the extension in subsection (3)? I think not. I do not see how a claim by the policy-holder herself against her chauffeur can be regarded as a "third-party risk" under the policy. It was at one time argued that the construction which I reject was to be preferred because otherwise the policy would not satisfy the requirements of section 36 of the Road Traffic Act, 1930. But I do not think that this is so. Section 36 (1) (6) ends with a proviso to the effect that the statutory policy is not "required to cover… (ii) except in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, liability in respect of the...
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