England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		8 July 2008

1. MR JUSTICE BLAKE: This is an appeal by way of case stated from a decision of the Bishop Auckland Magistrates' Court on 21 November 2007 whereby they acquitted each of the two respondents of counts of using or permitting the other to use a motor vehicle without insurance. The principal offence is specified in Section 143 of the Road Traffic Act 1988 as follows:

"(1) Subject to the provisions of this Part of the Act -

(a) a person must not use a motor vehicle on a road or other public place unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act, and

(b) a person must not cause or permit any other person to use a motor vehicle ..... unless there is in force in relation to the use of the vehicle ..... such a policy of insurance ..... "

2. The factual basis for the decision of the justices is set out as follows in the case that they have filed with the court. Paragraph 2a) of the case reads as follows:

"2a) At the time of the alleged offence, James Crowe and Ashley Crowe [those are the present respondents] were the proprietors of Horndale Taxis. Mrs Ashley Crowe was the sole person registered as proprietor of the vehicle used for the alleged offence, namely Hackney Carriage Vehicle HV144 registration number KY51 MJK. James Crowe was driving the vehicle which is the subject of the charge, at the time and place alleged by the prosecution.

b) The vehicle at that time was registered as a Hackney Carriage Vehicle. At the time of the alleged offence, James Crowe did not hold a Hackney Carriage Driver's Licence for the Sedgefield area.

c) James Crowe and Ashley Crowe, trading under the name of Horndale Taxis, had an insurance policy with Illium Insurance. The policy number was [given]. The policy type was Taxi fleet. The policy was in place on the date of the alleged offence. The policy provided for social, domestic and pleasure purposes and for private and public hire including the carriage of passengers and goods for hire and reward. No witnesses were called by the appellant [the prosecutor]. All of the evidence was accepted in the form of Section 9 statements. These statements were read to the court. It was contended by the appellant that because James Crowe did not have a Hackney Carriage Licence when he drove the vehicle on 12 December, the insurance policy in place did not cover the risk. Furthermore, as a result of Ashley Crowe authorising James Crowe to drive the vehicle on the day in question, she committed the offence of permitting driving with no insurance."

3. I interpolate at this point to indicate that it was not suggested that James Crowe the driver was using the vehicle as a public hire vehicle or was plying for hire on the occasion of these events in December 2006. He was however convicted of driving a hackney carriage vehicle without being the holder of a hackney licence. That conviction is not the subject of dispute in this appeal. That conviction moreover is founded on the reasoning of this court in Yates v Gates [1970] 1 All ER 754.
4. However the issue in the present case is whether the fact that Mr Crowe was committing the offence that he was by driving the vehicle at all automatically put him outside the scope of his insurance certificate.
5. Before us the appellant has relied upon Borough of Telford & Wrekin v Ahmed [2006] EWHC 1748 (apparently otherwise unreported), a decision of the Divisional Court, in which the principal judgment was given by Mr Justice McCombe on 21 June 2006. Telford was a matter where those who were permitted to use vehicles for private hire used them to ply for public hire. This was a purpose specifically not covered in the insurance certificates in those cases (see paragraph 3 of the judgment). It was therefore nothing to the point that the insurers in those (?) cases had indicated that they did not intend to void the certificates and would cover third party claims (see paragraph 4 of that judgment).
6. The reasoning in Telford is summarised at paragraphs 9 and 10 in the judgment of Mr Justice McCombe:

"In my judgment, the learned District Judge's second thoughts in this matter are entirely correct. Whether a policy covers a particular risk and therefore whether there is in force a valid insurance covering that risk will usually be a matter of construction of the insurance policy in question, rather than a matter of evidence. That was certainly so in the present case. In my view, it is entirely clear that the limitations to the insurance in each of these cases demonstrated that the vehicle was not covered when being used on 'ply for hire' operations. The note at the foot of the certificate does not affect what was in fact covered by the policies. It merely gives notice, in layman's terms, of the consequences of arrangements made under the aegis of the Motor Insurance Bureau for the compensation of third parties for the liabilities of an uninsured driver. Equally it demonstrates that notwithstanding the absence of insurance, there is nothing to prevent such a third party making a claim against the driver. The note does not affect at all the extent of the cover afforded to the insured under the policies themselves.

10 It may be true that the policy in each of these cases remained in force notwithstanding any breach of its terms by the relevant respondent until avoided by the insurer. However the fact remained that such policy, in its unavoided form, did not cover the risk in question. In Adams v Dunne the risk was covered, notwithstanding that the policy was voidable for misrepresentation by the insured; it had not in fact been avoided at the relevant time. That is not the issue in this case."

7. It is clear that the question in the present case is not whether the insurer thought that the respondent was covered by the insurance certificate but whether in fact he was covered.
8. The quotation from the justices' case already summarises the material terms and difficulties, but in the light of the arguments that have been pursued before us I shall read the following paragraphs of the certificate of insurance which is annexed to the stated case. Under clause 1 of the certificate - "Description of Vehicles" - it is said to apply to -

"1 ..... any private motor car or licensed taxi the property of the policyholder or in their custody or control and for which they are legally responsible."

In [clause] 2 the policyholder is defined as -

"Mr James Crowe & Mrs Ashley Crowe T/A [trading as] Horndale Taxis."

Under clause 5 it states:

"5 Persons or classes of persons entitled to drive.

Any person who is driving on the order or with the permission of the policyholder."

In italics there is a proviso -

"Provided the person driving holds a licence to drive the vehicle or has held a licence and is not disqualified for or prohibited by law from holding or obtaining a licence.

6 Limitations as to use

Use for social domestic and pleasure purposes and for private and public hire including the carriage of passengers and goods for hire and reward.

The policy does not cover use for hiring, the letting on hire, the carriage of passengers or goods for hire or reward, racing, pacemaking, track days, use in any contest, reliability or speed trial, or use for any purpose in connection with the motor trade, except where included in 6 above."

9. Two submissions were advanced before us by the appellant. First, that because Mr Crowe did not hold a hackney carriage licence to drive a hackney carriage vehicle he could not comply with clause 5 of the insurance policy where the proviso is -

"Provided the person driving holds a licence to drive the vehicle ..... "

10. It appears to us that this was not the principal construction or argument advanced below since it does not appear to have been specifically cited in the part of the case stated already quoted. Nevertheless there is an argument in response to this first limb of this submission that the reference to licence must, in context, be a reference to the ordinary driving licence and not in addition to the special licence that may be required by the driver of a hackney carriage vehicle.
11. In my judgment, that first submission fails for the following reasons. First, it is apparent that this certificate of insurance covers a variety of vehicles, private and taxi vehicles, in the possession of the policy holders and one would not expect to see terms that are specific to hackney carriage vehicles unless they were spelt out in very clear terms. Secondly, the proviso in italics relied upon itself has alternative provisions -

"Provided that the person driving holds a licence to drive the vehicle or has held a licence ..... "

So it is sufficient that one has held a licence and is not disqualified or prohibited by law from holding or obtaining a licence. That must indicate that the licence being referred to is a driving licence rather than a hackney carriage licence; a licence to drive such a vehicle.

12. The answer, in my judgment, to the first submission advanced before us is that the policy does not require that as a matter of express specification a person who drives a hackney carriage vehicle must hold, in addition to a driving licence, a hackney carriage licence. The words in the proviso would say something different to the effect of "holds a licence or all necessary licences to drive the vehicle". Moreover although - for reasons already dealt with in referring to Telford v Ahmed - the attitude of the insurer is not conclusive as to what the law is, the insurer might be expected to have some understanding of the terms used in the policy. Mr Crowe was able to put before the justices a letter from Illium Insurance dated 19 October which stated:

"It is not a requirement of our policy that the driver holds a valid taxi badge."

That is to say, a hackney carriage licence.

13. I accept letters from insurers do not indicate what the law is but it may be a helpful piece of evidence indicating what the terms of the policy mean. It would be unusual if the insurers had completely misunderstood the terms of their policy.
14. That leads to consideration of the second submission which appears to be the principal submission advanced by the County Court Justices below; that is that clause 6 of this insurance policy - Limitations and Use - were breached in this particular case therefore requiring the justices as a matter of law to convict.
15. I turn to the case stated for the evidence that the justices found on this issue. At paragraph 4a) of the case stated it recites the following:

"4a) James Crowe was the only witness called to give evidence on behalf of the respondents. The full insurance policy was not submitted as evidence. A copy of the certificate of insurance was submitted ..... The respondent James Crowe stated that the purpose he was driving the vehicle was two-fold. Firstly, he was delivering forms to the council offices relating to the registration of a different Hackney Carriage Vehicle which was also owned by Horndale Taxis. He gave evidence that he did not feel that this constituted using the vehicle in the course of a business. He stated he was using the vehicle for his own use.

b) The respondent said the second reason he was driving the vehicle that day was to check it for a mechanical fault. He stated that there was a fault with the brakes and he had to ensure that the vehicle was safe to carry passengers.

c) The respondent in evidence said he was insured to drive the vehicle for these purposes. He produced to the court, a letter from his insurance agents ..... 'confirming' he does hold insurance [for the car]."

A total of three such letters were produced.

16. Having referred to the authorities cited to them the justices then concluded their fact-finding in the case as follows:

"6a) We were of the opinion that the respondent was driving the vehicle on the day in question and was doing so in the course of business. We were satisfied that the respondent had taken out an insurance policy which covered him for driving this vehicle during the course of his business, as well as for social, domestic and pleasure purposes. The respondent, at the time of the alleged offence, no longer held a valid Hackney Carriage Drivers Licence. However, the respondent produced in evidence a letter from the Illium Insurance stating that, it was not a requirement of the policy that the driver holds a valid taxi badge. Accordingly, we found that the respondent was validly insured at the time of the alleged offence. We therefore found James Crowe not guilty of driving with no insurance and Ashley Crowe not guilty of permitting driving with no insurance."

17. The appellant submits that once it was found as a fact that the use of the vehicle was for business purposes, then it necessarily fell outside the permitted use in clause 6 of the insurance certificate. However as the justices point out, whatever else clause 6 was saying it was not restricting use of the vehicle solely for pleasure or domestic purposes.
18. In my judgment, even if the justices were entitled to characterise the delivery of a form by the owner of a business in a vehicle of which he was a part-owner as being a business purpose, they were certainly entitled to conclude that this was not a purpose outside the permitted use outside the insurance policy. If ever a decision did fall on whether a particular term of an insurance policy that contrasted business use with social and domestic use was required to be taken by the court and, according to the construction in terms of the policy, the issue fell whether delivery of a letter was a business as opposed to a social purpose, speaking for myself, I would need great persuasion that the nature of the letter being delivered would determine the nature of the use in question.
19. One can certainly imagine a self-employed person delivering a number of letters to the post office, some purely personal and some relating to his or her business, but that would not necessarily decide the nature of the activity engaged in. It is not necessary to decide any such issue extrapolated (?) in this case. It is not a case where the evidence demonstrated that the respondents were running a courier service for delivery of business documents or that Mr Crowe was acting as an employee of his partner - or his wife - for that purpose. In particular this was not a case of plying for public hire by contrast to Telford, but delivering documents direct to the council.
20. In my judgment, there is nothing in the terms of the certificate of insurance to suggest that this was a prohibited purpose. In those circumstances the fact of the conviction for not having a hackney carriage licence did not automatically create criminal liability on the second charge of using such a vehicle without insurance. I recall that the respondents' skeleton argument also drew attention to the statutory defence (?) under Section 143 (1) (a) of the Road Traffic Act, but that was perhaps predicated on the mistaken assumption that Mr Crowe was the employee of his wife in the course of this particular transaction, whereas they were both joint owners of the business and the vehicle was apparently owned or used in that business. So no assistance, on the facts of this case, is to be derived from that particular defence (?).
21. However for the reasons I have sought to give in the light of the particular terms of this insurance certificate and the absence of any evidence to suggest that a prohibited use was being put under the terms of the insurance certificate, I would answer the questions posed by the justices as follows. In the first question -

"Can a driver of a Hackney Carriage ever be validly insured to drive the vehicle if he no longer holds a Hackney Carriage Drivers Licence ..... " -

I would pose the answer yes. To the second half of that first question -

" ..... will a driver's insurance policy to drive a Hackney Carriage fail to cover the risk if he no longer holds a Hackney Carriage Drivers Licence?" -

I would answer no.

22. The second question, after a recital of the factual findings in this case, is:

" ..... Could any bench of justices properly directed upon the facts and upon the law have reached the conclusion that the respondent was validly insured?"

In my judgment the answer to that question is yes.

23. For those reasons I would dismiss this appeal.
24. LORD JUSTICE MAURICE KAY: I agree. The appeal is therefore dismissed.