Ian Stych v Anthony Malcom Dibble and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stadlen |
| Judgment Date | 14 June 2012 |
| Neutral Citation | [2012] EWHC 1606 (QB) |
| Docket Number | Case No: 1BM90101 |
| Court | Queen's Bench Division |
| Date | 14 June 2012 |
[2012] EWHC 1606 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Stadlen
Case No: 1BM90101
Mr Bruce Silvester (instructed by Irwin Michell) for the Claimant
Mr Stephen Worthington QC (instructed by Weightmans LLP) for the Defendants
Hearing dates: 2nd and 3rd April 2012
This is a tragic case. It arises out of a car accident in the early hours of 29 June 2008 in which the Claimant Ian Stych ("Ian") sustained a spinal cord injury leading to tetraplegia. Ian was a rear seat passenger in a Range Rover driven by a friend of his, the first Defendant Anthony Dibble ("Anthony"). A third friend, Peter Evans ("Peter"), was in the front seat. Ian was 19 years old. The other two were 18 years old. The car did not belong to any of them. It belonged to a customer at the garage at which Anthony did part-time work who had not authorised or given permission to Anthony to drive it at the time of the accident. As a result Anthony was not covered by a valid insurance policy.
Anthony was convicted of aggravated vehicle taking and sentenced to 14 months imprisonment. In this action Ian sues Anthony for damages for negligent driving. Anthony did not enter a defence and judgment in default was entered against him on 12 March 2012.
Ian also sues the second Defendant, Tradex Insurance Company Ltd ("Tradex") for damages and a declaration that it is liable to meet the judgment obtained against Anthony pursuant to section 151(2)(b) of the Road Traffic Act 1988 ("the 1988 Act").
At the time of the accident the Range Rover, which was owned by a Mr and Mrs David Burn, was covered by a valid road traffic policy insurance with Tradex, an authorised insurer, against third party risks as required to be covered under section 145 of the 1988 Act. The policy covered the time when the accident occurred.
Section 151 (1)(2)(4)and(5) of the 1998 Act provides as follows:
(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.
(3) In deciding for the purposes of subsection (2) above whether a liability is or would be covered by the terms of a policy or security, so much of the policy or security as purports to restrict, as the case may be, the insurance of the persons insured by the policy or the operation of the security by reference to the holding by the driver of the vehicle of a licence authorising him to drive it shall be treated as of no effect.
(4) In subsection (2)(b) above "excluded liability" means a liability in respect of the death of, or bodily injury to, or damage to the property of any person who, at the time of the use which gave rise to the liability, was allowing himself to be carried in or upon the vehicle and knew or had reason to believe that the vehicle had been stolen or unlawfully taken, not being a person who—
(a) did not know and had no reason to believe that the vehicle had been stolen or unlawfully taken until after the commencement of his journey, and
(b) could not reasonably have been expected to have alighted from the vehicle.
In this subsection the reference to a person being carried in or upon a vehicle includes a reference to a person entering or getting on to, or alighting from, the vehicle.
(5) Notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy or security, he must, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment—
(a) as regards liability in respect of death or bodily injury, any sum payable under the judgment in respect of the liability, together with any sum which, by virtue of any enactment relating to interest on judgments, is payable in respect of interest on that sum,
(b) as regards liability in respect of damage to property, any sum required to be paid under subsection (6) below, and
(c) any amount payable in respect of costs.
Because Anthony was not authorised by Mr and Mrs Burn to drive the Range Rover at the time of the accident he was not insured by the Tradex policy. Accordingly Tradex is not liable to pay Ian such sums as he will recover in this action against Anthony pursuant to Section 151 (2)(a) and (5)(a). The default judgment obtained against Anthony was not a judgment obtained against the person who was insured by the Tradex policy as required by Section 151(2)(a).
However provided that Anthony's liability to Ian is not an excluded liability for the purpose of section 151 (2)(b), it is a liability which would be covered by the Tradex policy if it insured all persons. Since Ian's judgment against Anthony was obtained against a person other than one who is insured by the policy it follows that by reason of subsection 2(b) subsection (1) would apply to Ian's judgment against Anthony and Tradex would be required pursuant to subsection 5 to pay Ian any sums payable under the default judgment obtained against Anthony.
The question whether Tradex is liable to pay Ian the sums recovered under his default judgment against Anthony thus turns on whether Ian's judgment against Anthony relates to an excluded liability as defined by section 151 (4).
The legal test of "excluded liability"
It is not suggested that Ian acquired knowledge that the Range Rover had been stolen or unlawfully taken after the commencement of the journey which led to the accident. Thus the provisions of section 151(4)(a) and (b) do not fall for consideration.
The question whether Tradex is liable to Ian thus turns on the answer to the question whether at the time of the accident when Anthony was driving the Land Rover Ian, who was allowing himself to be driven in it, "knew or had reason to believe that the vehicle had been stolen or unlawfully taken" within the meaning of section 151(4). It was accepted by Mr Worthington QC on behalf of Tradex that the burden of proof on this issue rests with Tradex and that the standard of proof is the balance of probabilities. Although he did not spell out the basis of that acceptance, and it does not reflect any express language in section 151, it reflected his acknowledgement that section151, along with other provisions of the 1988 Act, was brought in to effect to seek to give effect to the United Kingdom's obligations under Council Directive 72/166/EEC and the Second Council Directive 84/85/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles ("The Second Directive"), (as subsequently consolidated in Council Directive 2009/103/EC)..
Article 2 of The Second Directive provides as follows:
"Article 2
1. Each Member State shall take the necessary measures to ensure that any statutory provision or any contractual clause contained in an insurance policy issued in accordance with Article 3 (1) of Directive 72/166/EEC, which excludes from insurance the use or driving of vehicles by:
— Persons who do not have express or implied authorization thereto, or
— persons who do not hold a licence permitting them to drive the vehicle concerned, or
— persons who are in breach of the statutory technical requirements concerning the condition and safety of the vehicle concerned,
shall, for the purposes of Article 3 (1) of Directive 72/166/EEC, be deemed to be void in respect of claims by third parties who have been victims of an accident.
However the provision or clause referred to in the first indent may be invoked against persons who voluntarily entered the vehicle which caused the damage or injury, when the insurer can prove that they knew the vehicle was stolen." (emphasis added)
Thus the obligation imposed on Member States including the United Kingdom by Article 2 (1) of The Second Directive was to take the necessary measures to ensure that any statutory provision or contractual clause contained in an insurance policy which excludes from insurance the use or driving of vehicles by persons who do not have express or implied authorisation thereto shall be deemed to be void except in the case of persons who voluntarily enter the vehicle which caused the damage or injury provided that the insurer can prove that they knew the vehicle was stolen. Thus the burden of proof under the Directive is on the insurer to prove that the victim knew that the vehicle was stolen.
In Churchill Insurance Company Limited v Wilkinson [2010] EWCA Civ 556 Waller LJ, in a judgment with which the other members of the Court of Appeal agreed, held:
"There is no dispute that the Road Traffic Act 1988 seeks to give effect to the United Kingdom's obligations under Community Law. That being so, there is an obligation...
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