The Presidential Insurance Company Ltd v Resha St. Hill
| Jurisdiction | UK Non-devolved |
| Judge | Lord Mance |
| Judgment Date | 16 August 2012 |
| Neutral Citation | [2012] UKPC 33 |
| Date | 16 August 2012 |
| Docket Number | Appeal No 0062 of 2011 |
| Court | Privy Council |
[2012] UKPC 33
Lord Phillips
Lady Hale
Lord Mance
Lord Dyson
Lord Wilson
Appeal No 0062 of 2011
Privy Council
Appellant
Alan Newman QC
Shastri V C Parsad
(Instructed by Simons Muirhead & Burton)
Respondent
Andrew Goddard QC
Simon Crawshaw
(Instructed by William Sturges)
Heard on 30 April 2012
The respondent to this appeal is the innocent victim of a motor accident on 8 June 2005 caused by a collision between the car in which she was a passenger and another car owned by Edwin Hogan but being driven by Dexter Denny with Mr Hogan's consent. The accident was Mr Denny's fault, but Mr Denny himself had no insurance to drive the car, and Mr Hogan's insurance taken out in respect of the car with the appellant insurance company in November 2004 was limited expressly to "The Policy Holder & Carlos Hogan (only)".
When joined as co-defendant by the respondent in proceedings to recover damages for her personal injuries, the appellant relied upon this limit as a defence. The respondent in answer invoked the provisions of s.4(7) of the Motor Vehicle Insurance (Third Party Risks) Act, which in its form as amended in 1996 provides:
"(7) Notwithstanding anything in any written law, rule of law or the Common Law, a person issuing a policy of insurance under this section shall be liable to indemnify the person insured or persons driving or using the vehicle or licensed trailer with the consent of the person insured specified in the policy in respect of any liability which the policy purports to cover in the case of those persons."
On the basis of s.4(7), Gregory Smith J on 25 July 2008 struck out the appellant's defence, and the Court of Appeal (Mendonca, Bereaux and Narine JJA) on 15 February 2011 upheld his decision. The appellant appeals with leave of the Court of Appeal, granted on the ground that the question involved is one that by reason of its great general or public importance or otherwise ought to be considered by the Board. There is no doubt about the importance of the point. Despite public awareness of the issue for at least thirty years, there is in Trinidad and Tobago still no equivalent of the Motor Insurers Bureau or any other facility to ensure that the victims of negligent but uninsured drivers do not go uncompensated.
Prior to the 1996 amendment, the wording of s.4(7) read:
"(7) Notwithstanding anything in any written law, rule of law or the Common Law, a person issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons."
This wording was closely similar to that of s.36(4) of the United Kingdom Road Traffic Act 1930, which provided:
"Notwithstanding anything in any enactment, a person issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons."
The opening wording of s.4(7) of the unamended Trinidad and Tobago statute made it perhaps even better fitted than the English wording to fulfil the section's purpose —since this was to address the common law obstacle (deriving from the doctrines of privity of contract and consideration) which stood in the way of enforcement of an insurance in favour of persons who were purportedly insured under it but were not the policy holder taking out the policy. Some judges had found ways around this obstacle, for example by using the concept of trust, but these were of uncertain reliability.
The position before and after the enactment of s.36(4) in 1930 was explained by Atkinson J in Digby v General Accident, Fire and Life Assurance Corporation Ltd. [1940] 1 KB 643, 648–649:
"Before the Road Traffic Act, I930, the provision in a policy for extended insurance was of very doubtful value. That extended provision conferred no benefit on the policyholder, and the persons it purported to benefit, not being parties to the contract, could not claim under it, That, I think, was finally decided in Vandepitte v Preferred Accident Insurance Corporation of New York. [1933] AC 70".
Atkinson J then cited with approval Branson J's analysis of s.36(4) in an earlier case, to the effect that:
"The section does not, in my opinion, impose any statutory liability upon the insurer. It only gives to 'persons specified' a statutory right to sue upon the contract which, apart from statute, they did not possess."
Atkinson J concluded:
"I entirely agree with that view. It means that an authorised driver claiming by virtue of s.36 is claiming on the contract contained in the policy. Although not a party to the contract, he is given by the statute the rights of a party".
In the House of Lords in Digby [1943] AC 121, Lord Wright at p141 encapsulated the position:
"In any case, any person driving another's car at that other's request would desire and expect to be covered by insurance. It was to meet this desire and expectation that the extended insurance was introduced and was made available to such drivers by sub-s. 4 of s. 36 of the Act, which imposes on the insurer the extended liability in favour of other parties if the policy purports to cover them, as this policy does."
The qualification "if the policy purports to cover them, as this policy does" is important. The purpose of s.36(4) was not to impose on any insurer a liability which it had not purported to undertake. On the contrary, it was to facilitate enforcement of the indemnity which insurers had undertaken to the policyholder to provide to other persons.
When the present policy was taken out in November 2004, there was no authority on the meaning of the amended s.4(7). But on 9 June 2006 Kokaram J decided in Benjamin v Jairam that its "plain and obvious effect" was to write into the insurance policy as persons covered by it a class of persons driving with the consent of the person insured specified in the policy, so that it was "therefore impossible for an insurer…. to avoid liability by asserting the existence of a named driver only policy where the insured has given his consent to a person not specified in the policy to drive the insured's vehicle". That decision was followed by Gregory Smith J and approved by the Court of Appeal in the present case.
Submissions were made below and have been repeated before the Board in relation to two particular aspects of the amended wording of s.4(7). First, the respondent submits that the phrase "specified in the policy" refers to the phrase "the person insured" and no more, on each occasion when the second phrase appears; the first phrase does not, in other words, refer to "persons driving or using the vehicle or licensed trailer…..". Accordingly, it is submitted that the persons driving or using the vehicle or licensed trailer need only to be doing so with the consent of the person insured; they need not be "specified in the policy".
Second, the respondent submits that, in the concluding words "in respect of any liability which the policy purports to cover in the case of those persons", the phrase "in the case of those persons" refers not to "persons driving or using the vehicle or licensed trailer….", but only to "the person insured". The use of the plural "in the case of those persons" does no more, it is submitted, than reflect the fact that there might be more than one person insured under the policy. In support, it is pointed out that s.4(1) provides that, to comply with the Act, a policy must be one which
"insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of any death of or bodily injury…."
The Board cannot agree with the Court of Appeal's view that the respondent's argument on this second aspect is persuasive. Whatever the merits of the submission on the first aspect, the Board considers that the retention of the plural "those persons" at the end of the amended s.4(7) points strongly towards a conclusion that the amended section was (like its unamended predecessor) not intended to impose on any insurer a liability which the policy did not purport to cover in respect of the person insured or the persons driving or using the vehicle with his or her consent. The deletion of the words "or classes of persons" which had appeared at the end of the unamended subsection was appropriate because the subsection as amended no longer refers to "classes of persons specified in the policy". Instead it covers two categories of persons – the person insured and the persons driving or using the vehicle or licensed trailer. The deletion of "or classes of persons" left at the end of the subsection the words "in the case of those persons", which refer naturally to both those two categories. The draftsman cannot sensibly have overlooked this.
The argument that the final phrase "in the case of those persons" refers solely to "the person insured" and not also to the "persons driving or using the vehicle" pre-supposes that the legislator used the plural to refer to a singular concept which he understood in a plural sense, when there is an obvious express plural to which any reader would naturally think he was also referring. It further contemplates that the legislator intended to provide cover to anyone driving or using with the consent of the policyholder or of anyone else in respect of whom the policy purported to grant cover. In the Board's view, however, the phrase "the person insured" refers solely to the policyholder...
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