Magee v Pennine Insurance Company Ltd

JurisdictionEngland & Wales
Judgment Date21 March 1969
Judgment citation (vLex)[1969] EWCA Civ J0321-2
CourtCourt of Appeal (Civil Division)
Date21 March 1969

[1969] EWCA Civ J0321-2

In The Supreme Court of Judicature

Court of Appeal

Appeal by defendants from judgment of Judge Leigh at Manchester County Court on 1st July, 1968.


The Master of the Rolls (Lord Denning)

Lord Justice Winn and

Lord Justice Fenton Atkinson

Thomas Magee
Plaintiff Respondent
The Pennine Insurance Company Limited
Defendants Appellants

Mr. C.A. CARMAN (instructed by Messrs. Stevensons, Agents for Messrs. Geoffrey Warhurst & Co., Manchester) appeared on behalf of the Appellant Defendants.

Mr. K.J. TAYLOR (instructed by Messrs. Betesh Singer & Co., Mancheste: appeared on behalf of the Respondent Plaintiff.


In 1961 Mr. Thomas Magee, Senior, aged 58, acquired an Austin car. He signed a proposal form for insurance. In it he said that the car belonged to him. He was asked to give details of his driving licence "and of all other persons who to your present knowledge will drive". These were the details he gave:


(1) Thomas Magee" - that is himself - "provisional licence, aged 58".


(2) John Magee" - that is his elder son - "Police mobile driver, aged 35".


He had an annual licence.


(3) John Magee" - that is his younger son - "joiner, aged 18 - provisional licence."


Mr. Magee signed this declaration: "I do hereby declare that the car described is and shall be kept in good condition and that the answers above given are in every respect true and correct and I hereby agree that this Declaration shall be the basis of the Contract of Insurance between the Company and myself."


Those details were not written in by Mr. Magee himself. They were written in by Mr. Atkinson at the garage where he got the car. The details unfortunately were completely wrong. Mr. Thomas Magee had never driven a car himself. He had never had a licence, not even a provisional one. He was getting the car really for his son of 18 to drive. And we all know that a young man of 18 has to pay a much higher insurance than a man of 25 or over. This company said they would not have insured a young man of 18.


The Judge found that Mr. Thomas Magee, the father, had not been fraudulent. He did not himself fill in the details. They were filled in by Mr. Atkinson, the man at the garage. And then Mr. Thomas Magee signed them. It was Mr. Atkinson who made some mistake or other. But there it was. A misrepresentation was made and on the faith of it being true, the insurance company granted an insurance policy to Mr. Magee.


Thereafter the policy was renewed each year and the premiums were paid. In 1964 that car was replaced by another. The policy was renewed for the new car without anything further being said about the drivers or the ownership. The company assumed, no doubt, that the same details applied.


On the 25th April, 1965, there was an accident. The younger son, John Magee, was driving the new car at 4 o'clock in the morning. He ran into a shop window. The plate glass was smashed and the car was a complete wreck. The father, Mr. Thomas Magee, put in a claim form, in which he said that the car was $600 in value. That was clearly wrong because the price new was only $547 the year before. The insurers thereupon got their engineer to look at it. On the 12th May, 1965, the broker wrote to Mr, Thomas Magee a letter, in which he said:- "We have today been advised by your insurers that their engineer considers your vehicle is damaged beyond repair. The engineer considers that the pre-accident market value of the vehicle was $410 and they are therefore prepared to offer you this amount, less the $25 accidental damage excess in settlement of your claim. We should be pleased to receive your confirmation that this is acceptable."


There was no written acceptance, but it was accepted by word of mouth. That seemed to be a concluded agreement whereby the company agreed to pay $385.


But within the next few days the insurance company made further enquiries. One of their representatives saw Mr. Magee and took a statement from him. Then the truth was discovered. Mr. Magee did not drive at all. He had never had a driving licence, not even a provisional one. He said that the car was never his property but was his son's car: and that it was his son, the younger son, who had driven the car and was the only person who had ever driven it. On discovering those facts, the insurance company said they were not liable on the insurance policy.


They had been induced to grant it, they said, by the misrepresentations in the original proposal form; and also by reason of non-disclosure of material facts, namely, that the son aged 18 was normally to be the driver.


Mr. Magee brought an action in the County Court in which he claimed the $385. He said it was payable under the insurance policy, or, alternatively, on an agreement of compromise contained in the letter of the 12th May.


The Judge rejected the claim on the policy itself, because the insurance was induced by misrepresentation. He found that the company were entitled to repudiate the policy because of the inaccuracy of Mr. Magee's answers. That finding was not challenged in this Court. Mr. Taylor, on behalf of Mr. Magee, admitted that he could not claim on the policy.


But the Judge upheld the claim on the letter of the 12th May. He said it was a binding contract of compromise. I am not so sure about this. It might be said to be a mere quantification of the account which should be paid in case the insurance company were liable: and that it did not preclude them from afterwards contesting liability. But, on the whole, I do not think we should regard it as a mere quantification. The letter contains the important words: "in settlement of your claim", which import that it is to be settled without further controversy. In short, it bears the stamp of an agreement of compromise. The consideration for it was the ascertainment of a sum which was previously unascertained.


But then comes the next point. Accepting that the agreement to pay $385 was an agreement of compromise, Is it vitiated by mistake? The insurance company were clearly under a mistake. They thought that the policy was good and binding. They did not know, at the time of that letter, that there had been misrepresentations in the proposal form. If Mr. Magee knew of their mistake - if he knew that the policy was bad - hecertainly could not take advantage of the agreement to pay $385. He would be "snapping at an offer which he knew was made under a mistake": and no man is allowed to get away with that. But I prefer to assume that Mr. Magee was innocent. I think we should take it that both parties were under a common mistake. Both parties thought that the policy was good and inding. The letter of the 12th March, 1968, was written on the assumption that the policy was good whereas it was in truth voidable.


What is the effect in law of this common mistake? Mr. Taylor said that the agreement to pay $385 was good, despite this common mistake. He relied much on the case of ( Bell v. Lever Brothers, Ltd. 1932 A.C. 161), and its similarity to the present case. He submitted that, inasmuch as the mistake there did not vitiate that contract, the mistake here should not vitiate this one. I do not propose today to go through the speeches in that case. They have given enoughtrouble to commentators already. I would say simply this: A common mistake, even on a most fundamental matter, does not make a contract void at law: but it makes it voidable in equity. I analysed the cases in Solle v. Butcher (1950 1 K.3. 671), and I would repeat what I said there at page 693: "A contract is also liable in equity to be set aside if the parties were under a...

To continue reading

Request your trial
41 cases
  • Direct Line Insurance Plc v Fox
    • United Kingdom
    • Queen's Bench Division
    • 10 March 2009 be subject to those terms and conditions. 33 In support of his submission Mr. Collins relied upon some observations in Magee v. Pennine Insurance Co. Ltd. [1969] 2 QB 507. In his judgment in that case Fenton Atkinson LJ said, at page 517:— “Before hearing my Lords' judgments I had been ......
  • Projection Pte Ltd v The Tai Ping Insurance Co Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • 19 April 2001
    ...wall and the question of liability under the Policy remain untested, and they were not in issue.The case of Magee v Pennine Insurance Co [1969] 2 QB 507 relied upon by Mr Low is of no assistance here. In that case, a compromise agreement entered into for settling a claim was set aside on th......
  • Vehicle & General Insurance Company Ltd v Elmbridge Insurances
    • United Kingdom
    • Mayor's and City of London Court
    • Invalid date
  • Ong & Co Pte Ltd v Ong Choon Huat Watson
    • Singapore
    • High Court (Singapore)
    • 17 November 1993
    ... ... , Huddersfield Banking Co Ltd v Henry Lister & Son Ltd , and Magee v Pennine Insurance Co Ltd ... The cases show that the court can not only ... , the plaintiff bank held indentures of mortgage over the defendant company`s fixed plant and machinery at its mills. The company was wound up on a ... ...
  • Request a trial to view additional results
10 books & journal articles
  • The Settlement Process
    • Canada
    • Irwin Books Insurance Law. Second Edition Enforcing Insurance Contracts
    • 23 June 2015
    ...reason for 375 The doctrine of salvage is discussed in Chapter 10, Section F. 376 Bell v Lever Brothers Ltd , [1932] AC 161 (HL). 377 [1969] 2 QB 507 (CA) [ Magee ]. The Settlement Process 435 doing so. Having said this, the court rejected the insurer’s argument on the facts of the case: th......
  • Table of cases
    • Canada
    • Irwin Books Archive Insurance Law Enforcing insurance contracts
    • 1 September 2004
    ...[1933] 2 D.L.R. 462 (C.A.) ........................................................................176 Magee v. Pennie Insurance Co., [1969] 2 Q.B. 507, [1969] 2 All E.R. 891 (C.A.) ..........................................................................................................245......
  • Table of cases
    • Canada
    • Irwin Books Insurance Law. Second Edition Enforcing Insurance Contracts
    • 23 June 2015
    ...CCLI (2d) 142, [1993] ILR 2435, [1993] OJ No 1314 (Gen Div)........................................... 530 Magee v Pennine Insurance Co, [1969] 2 QB 507 (CA) ..............................434, 435 Maher v Lumbermen’s Mutual Casualty Company, [1932] 2 DLR 593, [1932] SCJ No 71 ....................
  • Mistake
    • Canada
    • Irwin Books The Law of Contracts. Third Edition Vitiating Factors
    • 4 August 2020
    ...for development purposes where the parties had failed to appreciate the 158 Above note 150. 159 [1967] Ch 532, [1966] 2 All ER 875. 160 [1969] 2 QB 507, [1969] 2 All ER 891 (CA). 161 [1978] 2 All ER 810, [1978] 1 WLR 1128 (Ch). 162 Associated Japanese Bank , above note 148. 163 Ibid at 266 ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT