England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION,
BOURNEMOUTH DISTRICT REGISTRY
(MR JUSTICE NEWMAN)

		Royal Courts of Justice Strand London WC2 Friday, 9th November 2001

Friday, 9th November 2001

1. LORD JUSTICE SCHIEMANN: Lord Justice Rix will give the first judgment.
2. LORD JUSTICE RIX: This appeal arises out of an accident which occurred in Poole Harbour, when a powerboat in the course of a demonstration with two other powerboats collided with a Sea-Doo Explorer, which is a kind of rigid inflatable boat (or RIB). On board the Sea-Doo was a Mrs Helen Caple, a photographer working for a local newspaper. She was injured in that collision and her claim against a number of defendants, includingSowester Ltd, the third defendant and the owner of the Sea-Doo, gave rise to this litigation. In the main action Sowester was found one-third responsible for Mrs Caple's injury. Sowester in turn had brought its insurers into the litigation as third parties.
3. Sowester was insured by a syndicate at Lloyds. Mr Humm, the third party, was the representative insurer. In this appeal we are solely concerned with the issue between Sowester and its insurers. There was at one stage an appeal arising out of the main action but that has been settled.
4. The issue between Sowester and its insurers was essentially this. The insurance policy stated that the Sea-Doo in question was insured "whilst being used for demonstration purposes..." The insurers argued that the vessel was not being used for demonstration purposes at the time of the accident when she was in Poole Harbour with Mrs Caple on board, but was being used as a platform for commercial photography. Sowester submits, on the contrary, that the Sea-Doo was being used for demonstration purposes and that is what the judge, Newman J, found below.
5. With that introduction I must state more details about the facts found by the judge and also about the insurance policy in question.
6. The background to these events was that on 31 January 1994 a press preview was taking place which was designed to generate pre-publicity for a public boat show that was going to occur on the following day. Various commercial concerns interested in the marketing of boats were involved and there was going to be a demonstration of three different kinds of powerboats. Sowester was attending with its Sea-Doo as an exhibitor.
7. The judge found the following facts as being material to the dispute on the insurance policy. Sowester had been invited to attend this preview and to bring the Sea-Doo for demonstration purposes. The proposed program for the 31 January involved Sea-Doo being on static demonstration adjacent to the art centre. There came a time when the event was relocated to Baiter Point and the Sea-Doo was removed from its trailer and placed on the water so as to be available on the shore at Baiter Point next to the slipway from which boats were launched for the purposes of the powerboat demonstration. When this preview event had been advertised in advance, the press had been informed that a trip on the water could be available and that there would be an opportunity to take photographs from the water. This, as the judge remarked, could only have meant from a vessel belonging to one of the participants in the preview. The preview was attended by a number of persons - such as photographers and commercial representatives - having a common interest in seeing such vessels as were there being demonstrated. The judge cited by way of example from the statement of a Mr Davies, a professional photographer who was present, who said that he had wanted a particular photograph of all four boats, by which he intended to refer to the three powerboats and the Sea-Doo, in a staggered formation. It was not in dispute that the accident occurred whilst Mrs Caple was taking photographs of the three powerboats which were engaging in an action demonstration and photocall on the water. The opportunity for Mrs Caple to use Sowester's Sea-Doo for taking photographs arose from the suggestion of one of the organisers of the preview, who had requested Sowester to assist her in that regard.
8. Later in his judgment the judge went into further detail by reference to the evidence given by Mr Christopher Neville-Parry, an executive of Sowester, as to the circumstances under which the photo opportunity had come about. He cited Mr Neville-Parry's evidence as follows:

"After we had been at Poole Park for some time either Mr Sewell or his public relations manager indicated that everyone would move to Baiter Park slipway (which is in nearby Poole Harbour) so that some of the race boats could do some fast runs for demonstration purposes and to be photographed. Mr Sewell said that he intended to run a couple of race boats in the water because the TV cameras were there. I drove to Baiter Park, having arranged to meet Mr Alexander there."

9. Mr Alexander was the Sowester employee who was actually driving the Sea-Doo at the time of the accident.

"He launched the Sea-Doo from a nearby boatyard and arrived at Baiter on the vessel. The Sea-Doo Explorer was landed on the beach at Baiter Park to show people what it looked like and how it handled. Then Mr Sewell's public relations manager asked Mobey Alexander if a photographer, who I now know as Helen Caple and who is the plaintiff in these proceedings, could be taken out on the Sea-Doo a little way out so that she could photograph the boats going by in the water as we all presumed that the camera she had with her did not have a suitable telephoto lens.

I was trying to promote the company's product and to be helpful and therefore agreed to this request as the Sea-Doo Explorer was available."

10. The judge went on to comment about this evidence as follows. He pointed out that it had not been challenged in any way, and that it contained within it two points which he regarded as being particularly material. The first was that the Sea-Doo was on the beach at the slipway for the purpose of being seen by those who were there, and of being seen both in as well as out of the water. In his judgment it was plainly envisaged that as and when the occasion arose the Sea-Doo would go into the water so that people could see how it handled. The second point to which he drew specific attention was that the person on behalf of Sowester who agreed to the vessel going out stated that he did so "to promote the company's product and to be helpful."
11. Those were the judge's essential findings of fact which led to his conclusion that the vessel was being used for demonstration purposes, and that any other use or purpose such as that of carrying the photographer or giving her an opportunity to take photographs was merely incidental.
12. I turn now to the insurance policy. This, as often seems to happen, was made up of two parts which did not fit very well together. The insurance which Sowester, a commercial firm, needed, was insurance which would cover the use of their Sea-Doos for demonstration purposes; whereas the policy schedule incorporated what is called a "personal watercraft insurance", a standard form which is plainly designed to cover not a commercial operator such as Sowester, but an individual owner who uses such a craft for personal and private pleasure.
13. The relevant parts of the policy are as follows. The Assured is stated as Sowester Ltd and the Interest insured is stated to be two Sea-Doos and a trailer. That paragraph goes on:

"Two Sea-Doos owned by the Assured whilst being used for demonstration purposes and whilst in transit to or from the premises of the Assured and/or private dwelling of Authorised Directors or Employees of the Assured."

14. The Conditions paragraph of the schedule then refers to the attached wording, that is the personal watercraft insurance, and continues:

"Warranted adequate supervision of potential purchasers is provided at all times."

15. Mr Passmore, who has appeared on behalf of the insurers, relies on that warranty to indicate what he submits is the essential focus of what is being covered by the reference to demonstration purposes, ie demonstrations to potential purchasers.
16. The Conditions paragraph also made clear that third-party liability was included up to a limit of £1m. The attached terms first defined the scope of cover as follows:

"The underwriters subscribing hereto agree to indemnify you against accidental loss or damage to the Craft and liability, as detailed in this Insurance Certificate which may occur during the Period of Insurance for which Underwriters have accepted your premium."

17. Section 1 of the wording covered loss of or damage to the craft, and additional cover. Section 2 (the relevant section for present purposes) covered legal liability and promised to indemnify the Assured or any person using the Craft with its permission against losses resulting from legal liability for death or bodily injury. Section 3 was headed General Exceptions. It began as follows:

"This insurance certificate does not insure:-

the craft or the trailer if they are used for any purpose other than private pleasure or are let out on hire or charter unless specifically agreed by underwriters"

18. There were other general exceptions but that is the only one I need read.
19. Mr Passmore puts his submissions in the following way. He refers to the case of Seddon v Binions [1978] 1 Lloyds Rep 381 which the judge himself applied, deriving from it the test set out there by Roskill LJ that the question for these purposes is:

"What was the essential character of the journey in the course of which the particular accident occurred?"

20. Roskill LJ went on to talk about a journey possibly having one essential or predominant character. Browne LJ in the same case talked about the essential or primary purpose of the use, and Megaw LJ also spoke of a journey having a primary purpose or an essential character.
21. Mr Passmore submitted that if in applying that test one asked the question - Why was the Sea-Doo launched? Why was it put in the water at all following what had previously been a static demonstration? - the only possible answer was that it was launched for the purpose of providing a platform for Mrs Caple and her photography. He went on to submit (by reference to some evidence given at the trial which was not in itself in dispute) that much or everything about the journey was characterised by Mrs Caple's needs and wishes. Thus she was rather reluctant to go on the water; she did not have any protective clothing, but was dressed in her ordinary clothes; she was very anxious not to get wet; she wished the craft to go at a very slow speed, which it did, about two miles an hour, and she was concerned in general for her own safety. All that I say is not really in dispute.
22. Alternatively Mr Passmore submits that if there was a dual purpose (that is to say both a demonstration purpose and a purpose to provide a platform for Mrs Caple's photography), then in any event Sowester was not covered. Either the Sea-Doo was not being used for demonstration purposes at all or at any rate not primarily for demonstration purposes, and therefore Sowester was not within the policy cover (the result in Seddon v Binions); or it was being used for demonstration purposes and another purpose which was itself excluded from cover and thus again Sowester was not covered (the result in the earlier case of Passmore v Vulcan Boiler General Insurance Co Ltd (1936) 54 LL Law Rep 92). That alternative submission was put on the basis that the effect of reading the schedule's Interest wording and the section 3 exception together was that on its true construction the policy covered only demonstration purposes or private pleasure (we are not concerned with hire or charter) and no other purpose. Therefore if there was a dual purpose, one of those purposes was within an exception and thus in any event Sowester was not within cover at the relevant time.
23. Mr Passmore sought to illustrate his submission by stressing the change of purpose that the Sea-Doo's use had undergone: from its previous demonstration purpose while being static on shore, to its different purpose when being put to sea for the sake of Mrs Caple, and he invoked the following example. If a driver were to drive down to Brighton for his own pleasure and whilst there was asked to take someone to Worthing to a business meeting, the essential character or purpose of the trip would have changed from one of pleasure to one of business, and any pleasure which the driver of the car would have obtained from giving his acquaintance a lift to the latter's business meeting in Worthing would have been a purely incidental pleasure. He submitted that it was not a case of looking at the purposes of individuals - not even that of the assured; but that one had to look at the overall facts and derive the purpose from that. He sought to derive assistance for this analysis from the approach adopted by this court in Seddon v Binions. I will therefore need to go into further detail about that case.
24. Seddon v Binions was complicated by the fact that the point there at issue arose not between an insured and his insurer, but between two insurers. The case involved a father and a son. The son had a carpet-laying business. He had an employee who while at work developed a toothache, which required him to be taken home or to the dentist. The father helped his son out, but was not employed by him. The father had driven to the place where carpet-laying was going on in the son's van; the son had arrived there in a Triumph car, which was also his own. The father in the normal course of events would have gone home for lunch in the van. When the son's employee developed his toothache, however, the son asked his father to use his Triumph car and take the employee home (or to the dentist) at the same time as the father went off for lunch. On the way, the father had an accident. The accident was covered under the son's insurance: the issue was whether it was also covered under the father's insurance, which excluded cover for business use.
25. At the trial Jupp J found that there was a dual purpose involved. The purpose of the journey was both to take the employee home and for the father to go home for lunch, and since one of those purposes, the business purpose of taking the employee back home, was excluded under the father's insurance, the son's insurers could not claim a contribution from the father's insurers.
26. The Court of Appeal, although prepared in the alternative to adopt the dual purpose finding of Jupp J, preferred to apply the test of asking whether one essential or predominant character or one primary purpose for the relevant journey could be found. The court demonstrated some concern that a dual purpose test could too easily lead to lack of cover. It therefore preferred to talk in terms of primary and ancillary purposes, rather than of dual purposes. It so happens that Jupp J had perhaps been influenced in adopting his dual purpose conclusion by the happenstance that the previous case in this area of the law, the Passmore case, had also adopted a dual purpose test: there, however, the finding of a dual purpose had been made by an arbitrator, and Du Parcq J understandably considered himself bound by the finding. Thus Roskill LJ said (at 385):

"What one has to look at in this case is the purpose of the son when he asked his father to take his, the son's, car back, with Hale. It seems to me that, if one asks oneself that question, which is the way in which Mr Desch asks us to approach the problem, the essential character of this journey was the user of the son's car by the father at that time and place, to take an employee either home or to a dentist for that user must be user for a business purpose."

27. Mr Passmore submitted that if one was going to look at the problem through the eyes of the insured rather than in some other way, then one ought to have been looking at the purpose of the journey through the father's eyes rather than that of the son's, because the relevant insurance policy which was in issue for these purposes was the father's policy and not the son's. That is the basis of Mr Passmore's submission that it is wrong to consider the problem through the eyes of the insured.
28. There is some force in Mr Passmore's point. However it looks as though the passage which I have read from Roskill LJ's judgment was influenced by the particular facts and submissions before the court on that occasion and in particular by the fact that the journey was undertaken in the son's car at the son's request. In my judgment, however, when one looks to a particular person's purpose in order to apply the test in Seddon, it must be primarily to the insured purposes more than to anyone else's purposes that one must look, because one is construing a policy between an insured and an insurer. The insurer, of course, is not involved in the journey. Naturally the matter can be complicated as it was in Seddon where the car which was being taken on a journey (whose purpose was being looked into) belonged to someone other than the insured in question; and indeed in a passage from Jupp J's judgment which was read by Roskill LJ, Jupp J emphasised that it was not a case of the father using his own car, but a case of his using his son's car at his son's request to take his son's employee home. That is no doubt why the Court of Appeal in that case looked to the son's purposes in applying its test. In the present case, however, one does not have that complication. Here we are concerned with only Sowester's insurers, Sowester's insurance policy and Sowester's Sea-Doo. If one asks the question, what the purpose of the Sea-Doo being put into the water in this case was, it seems to me that one looks very much to the purpose of Sea-Doo's owner rather than to those of the photographer.
29. But quite apart from that, what the Court of Appeal emphasised in Seddon was that a question such as this had to be decided very much on the particular facts of each case. Roskill LJ went out of his way to emphasise that consideration on a number of occasions in his judgment; and he cautioned against the idea that that case raised any new question of principle as distinct from being determined upon its own facts. For my own part I would add that in finding the essential character or purpose of a journey or use at a given time and place, one should not be blinkered, by which I mean that such a finding may properly depend upon a wider consideration than the narrowest facts relating to the particular journey or use in question. The proper finding may, in all the circumstances, depend in part on context. I think that Seddon bears that out.
30. In the present case the judge has found the facts with great care. He has found that the reason why the Sea-Doo was there at the preview in the first place was for demonstration purposes. He has found that the purpose of taking the powerboats to the water was for demonstration purposes. He has found that the reason why the Sea-Doo went on the water was for demonstration purposes. Is there any reason at all for thinking that the judge has gone wrong? In a case such as this, where, as Roskill LJ emphasised in Seddon, the application of the principle depends very much on the particular facts of the case, it seems to me that this court should not interfere with the findings of the judge at trial unless it is of the view that he has made some error of principle or has gone seriously wrong.
31. I can find no reason at all for thinking that the judge has erred or gone seriously wrong in this case. On the contrary, I think that he has come to the right conclusion for the right reasons. If one looks at the matter in the round, not only does one find the uncontested evidence of Sowester's executive as to the reason why the vessel went out on the water, but it stands to reason that Sowester's interest in having the vessel there either on land or in the water was from beginning to end the desire for publicity. Sowester and its Sea-Doo were there for the marketing opportunities that publicity would bring. Sowester saw the request to take the Sea-Doo out on to the water as being a further opportunity for demonstrating the vessel. It saw the possibility that as part of that demonstration the Sea-Doo would itself be photographed either by still photographers or even better by the TV cameras that were present. That was a good opportunity for marketing the vessel and demonstrating it.
32. It is true that, because Mrs Caple was very concerned to go as slowly as possible, the vessel was not put through its paces. Mr Passmore had submitted in his skeleton argument - although he did not give this particular emphasis in his oral submissions today - that what demonstration purposes in the policy really involved was a demonstration which put the vessel through its paces. Hence his emphasis today that at Mrs Caple's request the Sea-Doo was limited as it were to a sedate walking pace. I understand that submission; but it seems to me that a craft such as this can plainly be used for demonstration purposes in a very large number of ways. It can certainly be put through its paces, which perhaps is the best of all demonstrations; but it can be demonstrated simply sitting on the land, out of its element. No one would doubt that that was a demonstration purpose. It can be demonstrated in a showroom. It can be demonstrated on water without movement and it can be demonstrated on water by going slowly, as well as by going fast.
33. I can find nothing wrong with the judge's careful analysis of the factual situation. I can find nothing wrong with the way in which he applied the test suggested by Seddon, and for these reasons I would dismiss this appeal.
34. LADY JUSTICE HALE: I agree.
35. LORD JUSTICE SCHIEMANN:I also agree.
(Appeal dismissed with costs; such costs to be subject to detailed assessment by a costs judge; application for permission to appeal to the House of Lords refused).