Smith (Plant Hire) Ltd v D.L. Mainwaring
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE O'CONNOR,LORD JUSTICE KERR,SIR DAVID CAIRNS |
| Judgment Date | 09 June 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0609-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 86/0515 |
| Date | 09 June 1986 |
[1986] EWCA Civ J0609-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SWANSEA COUNTY COURT
Royal Courts of Justice
Lord Justice O'Connor
Lord Justice Kerr
Sir David Cairns
86/0515
MR C. S. HOLLANDER, instructed by Messrs Stitt & Co., London Agents for Messrs D. O. Thomas & Co. (Swansea), appeared for the Appellants (Defendants).
MR W. L. WILLIAMS, instructed by Messrs Hugh James Jones & Jenkins (Cardiff), appeared for the Respondents (Plaintiffs).
In 1980 a company known as M. H. Smith (Plant Hire) Limited hired a boat from the defendants in order to transport a dumper on the River Llwchwer in South Wales. Unfortunately when the dumper was loaded into the boat it sank. The British Engine Insurance Company insured the dumper, and in due course they paid out the claim. They claimed that the boat had sunk as a result of the negligence of the defendants, their servants or agents, and in July 1985 they began an action against the present defendants in the name of their assured. Unfortunately the company, M. H. Smith (Plant Hire) Limited, had been wound up and finally dissolved in March 1985 so that it did not exist at the date of the particulars of claim. This was not immediately known to anybody, apparently, at the time. There was an authority to the insurers to take proceedings in the name of the assured dated July 1984, and I have no doubt that the solicitors, in perfectly good faith, issued the proceedings as a result of that authority in the name of the assured. They did not enquire or know that the company no longer existed. So too as far as the defendants were concerned. They delivered a defence and counterclaim, and it was only in November 1985 that they discovered that the company had been wound up. Thereafter the plaintiffs applied to the court for leave to substitute the insurers as plaintiffs. The defendants applied to the court to have the action struck out and for the solicitors to be ordered to pay the costs, as is the rule, because (this is nothing to do with good faith or otherwise) they must be deemed to have launched proceedings without any instructions.
Those matters came first of all before the registrar, and the registrar made an order substituting the insurers as plaintiffs. An appeal was made to the learned judge, and the learned judge came to the conclusion that the argument addressed to him by Mr Williams for the insurers was well founded, namely that this was only a matter of form and it did not really matter what name the claim was brought in. He ordered that both the summons to strike out and the summons to substitute the insurers as plaintiffs should be dismissed and that the action should go forward as originally constituted. Against that order the defendants appeal.
In my judgment the learned judge fell into error in this case. It has long been the law, where insurers have paid a claim, that they stand in the shoes of the assured in order to recover anything which is relevant to that claim. The law has long been that subrogation entitles the insurers to bring an action in the name of the assured against the wrongdoer to recover anything that is recoverable. The reason for that is that the right of action is vested in the assured. The cases show that an action can be brought by the insurer in its own name where it has taken a legal assignment of the cause of action from the assured. That has not been done in the present case. Thus the insurers were entitled to instruct solicitors to bring this action in the name of their assured as long as the assured existed, but in March of 1985 the assured ceased to exist when the company was dissolved. There was no company in whose name any action could be started. In my judgment that has got nothing to do with the right of subrogation. It is a straightforward...
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