[1940] 1 All ER 613

Insurance - Motor insurance - Third-party risks - Policy issued upon proposal form containing false statements - Policy subsequently avoided by court - "Cause or permit" an uninsured car to be driven - Road Traffic Act 1930 (c 43), s 35(1).

The defendant WEB, with the knowledge of the defendant HAB, signed a proposal form for a policy to satisfy the Road Traffic Act 1930, in the name of the defendant HAB as proposer and registered owner of the van, the vehicle to be driven by WEB. The purchase price of the van had been lent to WEB by HAB, but thereafter HAB had no concern with the user of the van, which was employed by WEB in his business. On 26 August 1938, the plaintiff's husband was fatally injured by the negligent driving of the van by WEB. On 12 May 1939, at the suit of the insurance company, the policy was avoided by reason of misrepresentation in the proposal form. An action was subsequently brought against WEB, whose negligence was not denied,613and against HAB, on the ground that, by reason of the circumstances in which HAB assisted or permitted WEB to obtain an insurance which turned out to be valueless, HAB had caused or permitted WEB to use the van in breach of the Road Traffic Act 1930, s 35(1):-

Held - in the circumstances, HAB had not caused or permitted the user of the van by WEB.
   Decision of Hilbery J ([1939] 4 All ER 107) affirmed.

Notes
The appellant, having obtained a barren judgment against one defendant in a running-down action, and the third-party policy of insurance having previously been declared void on the application of the insurance company, sought to establish liability against the respondent, on the principle in Monk v Warbey, on the ground that he had caused or permitted the user by a third person of an uninsured vehicle. It was held, however, that, as the respondent was not the owner of the vehicle, he could not have so caused or permitted its user. This case emphasises the fact that, contrary to general belief, not every driver of a vehicle involved in an accident is necessarily covered by insurance in respect of third-party liability.
   As to Duty to Insure, see Halsbury (Hailsham Edn), Vol 18, pp 561-563, paras 908-912; and for Cases, see Digest, Supp, Insurance, Nos 3217r-3217ee.

Appeal
Appeal by the plaintiff from a judgment of Hilbery J, dated 9 October 1939, so far as the decision related to H A Buck, and reported [1939] 4 All ER 107. The facts are fully set out in the judgment of MacKinnon LJ. The appellant asked that judgment be given against H A Buck for the same amount as the judgment of Hilbery J against W E Buck, and that it should be in addition thereto.
   Donald McIntyre for the appellant.
   The respondent, H A Buck, appeared in person.
   McIntyre: It was decided by Hilbery J that, where there is a policy of insurance in existence at the time of the accident, but the insurers obtain a declaration that at all material times they were entitled to avoid the policy, there is at the time of the accident a policy of insurance in force in relation to the user of the vehicle. The judge arrived at that conclusion because he felt that, at the time of the accident, there was in force a voidable, as distinct from a void, policy. That is the point which I wish to challenge. The insurers were never at risk in this matter, because there never was a contract. The proposal form was signed, not by H A Buck, but by W E Buck, who signed it in his brother's name. H A Buck, however, was aware of the fact, and lent his name and his credit to the scheme. There is evidence of causing and permitting the car to be used in contravention of the pro-614visions of the Road Traffic Act 1930, s 35. The decision in Monk v Warbey is not limited to the case of an owner. Moreover, it is not necessary for Monk v Warbey to apply to show that the tortfeasor knew that the vehicle was being driven uninsured. There was not, at the time of the accident, a valid policy of insurance as regards this particular vehicle. Either H A Buck was the owner of the vehicle or he was sufficiently identified with it, in that he caused or permitted it to be upon the road. H A Buck assisted W E Buck to procure a policy which was valueless. [Counsel referred to Watkiss v O'Shaughnessy, Richard v Port of Manchester Insurance Co Ltd and Daniels v Vaux.]
   The respondent was not called upon.

23 February 1940. The following judgments were delivered.

MACKINNON LJ. This is a very hard case, and one in which I should have been glad if we could have assented to the very careful and very able argument of counsel for the appellant. The action was brought by the widow of a man who was knocked down, and so badly injured that he died, by a Ford van, BXD 883, which was being driven by one William Edward Buck. The action was brought both against William Edward Buck and against H A Buck, his brother. There was no question that the accident was due to the negligent driving of William Edward Buck, and the judge gave damages amounting to a sum of £2,500 against him. William Edward Buck, however, was utterly impecunious. What was still more disastrous was that, at the time when he was recklessly driving this van, he had not an effective policy of insurance covering him against third-party risks. He had procured a policy by putting forward a proposal to the Zurich General Accident Insurance Co, but in earlier proceedings the Zurich company had brought an action against William Edward Buck and Henry Albert Buck claiming that it had a right to avoid that policy. That action was tried by Branson J, who came to the conclusion-and he had no option but to come to the conclusion-that the insurance company had made out that the whole business in connection with the proposal was utterly fraudulent, and he set aside that policy. The result was that, when the accident happened, there was no effective policy of insurance, and the plaintiff, who had sustained damage assessed at over £2,000, had the prospect of having no one to answer her claim against William Edward Buck.
   In those circumstances, not unnaturally, she sought to find somebody else with sufficient money to pay, at least, a part of these damages. She sought to find that person in H A Buck, the brother of the driver of the van. Her claim against H A Buck is based upon the principle laid down in Monk v Warbey-namely, that, where there has been a breach by the owner of a motor car of the provisions of the Road Traffic Act 1930, s 35(1), not only is the person committing a breach of that section liable in the criminal courts to the penalty provided by615 that section, but he is also liable in damages civilly to a third person who has been injured as a result of his negligence.
   The Road Traffic Act 1930, s 35, provides as follows:

   The claim here made is that, though the van had been driven by W E Buck, H A Buck, his brother, was liable to a prosecution under s 35 as having caused or permitted W E Buck to use this van on the road without there being in force any effective policy of insurance. It is said that H A Buck could have been successfully prosecuted and fined £50 under that section, and, therefore, it follows, under the principle of Monk v Warbey, that he is also liable to pay the damages sustained by the plaintiff.
   The whole question is whether or not H A Buck could have been successfully prosecuted under this section. The offence is "to cause or permit any other person to use." There are two different verbs. The second one, "permit," I think, is much easier to construe and to interpret than the first one, "cause." In order to make a person liable for permitting another person to use a motor vehicle, it is obvious that he must be in a position to forbid the other person to use the motor vehicle. As at present advised, I can see no ground on which anybody can be in a position to forbid another person to use a motor vehicle except in a case where the person charged is the owner of the car. If one is the owner of a car or of a van, one can forbid or one can permit another to use it. It was no doubt for that reason that considerable effort was made to establish that in this case H A Buck was really the owner of this car. It was in truth registered with the London County Council in his name. It appears on investigation, however, that the truth of the matter is that W E Buck, being impecunious, and having a judgment against him for some other car which he had had under a hire-purchase agreement, in respect of which he could not continue the payment of the instalments, wanted to get the use of a car in his business of a greengrocer in such circumstances that it would not be liable to be taken in execution by his creditors. He therefore got this brother of his, H A Buck, by a wholly discreditable manoeuvre, to lend him a sum of £20, with which he, W E Buck, could buy this second-hand Ford van. The only connection between H A Buck and the van which might show the ownership of the van was that H A Buck had lent his brother £20 in order that the brother should buy this van. The brother did buy the van, and registered it in the name of H A Buck. The truth was, however, that it never was H A Buck's van. It was at all times the property of W E Buck. That being so, the attempt to616 make H A Buck liable under that limb of the section which makes it an offence to permit any other person to use a motor vehicle on the road without a proper insurance policy fails in limine, because it is not established that there was any right in H A Buck to forbid W E Buck to use the car. He could have that right to forbid him to use it only if he were the owner of the car, and he was not.
   There remains the question whether or not it could be charged against H A Buck that he caused W E Buck to use the motor vehicle on a road. What happened with regard to that was that H A Buck, also in a very discreditable way, assisted his brother in obtaining from the Zurich company this policy which the Zurich company succeeded in getting set aside in the proceedings before Branson J. With the knowledge of H A Buck, W E Buck put forward to the Zurich company a proposal in which he put forward the name of H A Buck as the proposer and as the owner of the vehicle. There is no evidence that H A Buck ever saw this document, but he made a statement, which has been put in and acted upon, in which he agreed that he knew all about it, and he assented to his brother's account of this transaction. It was, therefore, with the approval and permission of H A Buck that W E Buck went to the insurance company and forged the name of H A Buck as the proposed assured. The proposal signed "H A Buck" was in fact signed by W E Buck. The following details of the proposal may be mentioned: "Full name of proposer, Henry Albert Buck; trade or business, fruiterer and greengrocer." In fact, H A Buck was a butcher, and it was W E Buck who was the greengrocer. "Business address, 56, Brewery Road, Plumstead." That in fact was not the business address of H A Buck; though he had a butcher's shop next door at No 58. "Purpose for which the vehicle was to be used: own goods." That was untrue, because it was to be used, not for H A Buck's butcher's business, but for W E Buck's greengrocery business. "Are you the actual owner of the vehicle? Yes." Then the named driver who, as agent and servant of the proposer H A Buck, is to drive the van is put as William Edward Buck. With regard to this matter, what H A Buck did was this. He assisted or permitted or stood by while to his knowledge his brother W E Buck was putting forward this grossly misleading and inaccurate statement to the insurance company, with the result that his brother did obtain from the insurance company an insurance policy purporting to cover Henry Albert Buck, carrying on the business of fruiterer and greengrocer, in respect of this van. That was the policy, with an indorsement stating that it was agreed that it should always be driven by William Edward Buck, as the servant or driver of H A Buck. That was the policy which, by reason of gross concealment and misrepresentation in the proposal, had, at the suit of the insurance company, been set aside. That was the connection which H A Buck had with this insurance. He stood by, knowing that his brother was going to put forward617 this preposterous and fraudulent document to the insurance company.
   In those circumstances, can it be said that H A Buck caused W E Buck to use the motor vehicle on the road without there being in force an effective insurance policy against third-party risks? I do not think that it can. As I have said, I would have been only too glad to be able to decide this appeal in favour of this unfortunate plaintiff, who is apparently left with nothing but a useless claim against W E Buck. All that can be said, however, is that H A Buck assisted his brother in getting a worthless piece of paper in place of an effective insurance policy. Yet, even if he did that, and it was proved that he did that, I do not see how he can be prosecuted successfully upon an allegation that he had caused W E Buck to use the vehicle on the road without an effective policy. In the result, I think that the decision of Hilbery J was correct, and that this appeal fails. The respondent to this appeal, H A Buck, has appeared in person, and, in those circumstances, the order of the court will be simply that the appeal will be dismissed without costs.

CLAUSON LJ. I agree.

CHARLES J. I agree.

Appeal dismissed, without costs.

Solicitors: Evill & Coleman (for the appellant).

end of selection