Scottish Sheriff Court Decisions

SHERIFFDOM OF NORTH STRATHCLYDE AT GREENOCK

A119/11

 

JUDGEMENT

of

SHERIFF THOMAS WARD

 

in causa

 

JOHN PATON SKILLING (Assisted Person), residing at 11K Killearn Road, Greenock, PA15 3DD

PURSUER

against

 

ZENITH INSURANCE PLC, a company incorporated in Gibraltar and having a place of business at Chester House, Harlands Road, Haywards Heath, West Sussex, RH16 1LR

 

DEFENDER

----------

 

 

Greenock, 31 January 2013.

 

The Sheriff, having resumed consideration of the proof, productions and whole cause, Finds in Fact:

 

1. On 13 November 2009 the pursuer entered into a contract of motor insurance with the defender.

2. The effective date of the contract was 30 November 2009 with a period of insurance of twelve months, expiring on 30 November 2010.

 

3. In terms of the contract the defender provided comprehensive motor insurance cover to the pursuer for his Audi A4 2 litre model registration number EX06 DTF.

4. The Audi A4 had a stated value of £20,000.

5. The motor insurance cover provided cover against the theft of the vehicle.

6. The premium payable by the pursuer was £1,440.29.

7. During the evening of 31 May 2010 and the morning of 01 June 2010 the pursuer's Audi A4 was stolen.

8. Following the theft of the pursuer's vehicle he submitted a claim to the defender under the contract of insurance for recovery of the value of the vehicle.

9. The defender voided the policy and refused to indemnify the pursuer.

10. The defender refunded the premium paid by the pursuer of £1,440.29.

11. The proper specification of the pursuer's vehicle was an Audi A4 DTM FSI QUATTRO.

12. On 08 November 2008 the pursuer completed an on-line questionnaire through a comparison website called Quotezone.co.uk to obtain a quotation for insurance for his motor vehicle.

13. The only information which the pursuer gave when completing the on-line questionnaire was that his vehicle was an Audi A4 2 litre model registration number EX06 DTF.

14. When completing the on-line questionnaire the pursuer did not disclose that the vehicle in question was an Audi A4 DTM FSI QUATTRO.

15. The pursuer, when completing the on-line questionnaire, indicated that the car he wished to insure was an Audi A4 2 litre model registration number EX06 DTF.

16. In November 2008 neither Quotezone.co.uk nor Insure Your Motor.com had a facility which would automatically recognise the full specification of a vehicle by reference to the vehicle registration number.

17. By failing to give the correct specification of his vehicle the pursuer induced the defender to enter into a contract which the defender would otherwise not have entered into.

 

Therefore

 

Finds in Fact and Law;

 

(1) That the pursuer having failed in his duty to act with the utmost good faith the defender is entitled to void the contract;

(2) The defender is not in breach of it`s contract with the pursuer;

(3) The defender, being induced by the pursuer's misrepresentation of material facts to enter into the contract of insurance, is entitled to void the contract;

 

THEREFORE:

 

Repels the pursuer's first and second pleas in law; Repels the pursuer's third plea in law for want of insistence; Sustains the defenders' fourth and sixth pleas in law; Repels the defenders' first, second, third, fifth and seventh pleas in law for want of insistence; Finds the defender entitled to Decree of Absolvitor; Finds the defender entitled to the expenses of the action.

 

NOTE

 

(1)  The focus of argument in this case essentially came down to whether the pursuer had given an accurate description of the motor vehicle which he intended to insure with the defender. I have come to the conclusion, without much difficulty, that the pursuer misrepresented material facts in relation to the description of the motor vehicle and having done so induced the defender to enter into a contract which it would otherwise not have entered into. The reasons for my conclusion are as follows.

 

(2)  It is not disputed that the pursuer entered into a contract of motor insurance with the defender on 30 November 2009. The pursuer completed an on-line questionnaire through a car insurance comparison website called Quotezone.co.uk. When he completed the questionnaire he confirmed that the vehicle which he sought to insure was an Audi A4 2 litre. The insurance quote which the pursuer obtained was based on the details which he had entered on the comparison website. Insure Your Motor.com contacted the pursuer. The pursuer confirmed that the car to be insured was an Audi A4. He was thereafter given a quotation with Haven Insurance at a premium of £1,724.50. On 18 December 2008 the pursuer was issued with a certificate of motor insurance by Haven Insurance. The vehicle insured was an Audi A4. That certificate of insurance was effective from 30 November 2009 to 29 November 2010.

 

(3)  Insure Your Motor.com wrote to the pursuer with a renewal notice on 17 November 2009. The pursuer's insurance was about to expire. The pursuer was told that Insure Your Motor.com had sourced a better insurance quotation with the defender at an annual premium of £1,490.29. That renewal notice stated that the vehicle to be insured was an Audi A4. There was no further specification of the vehicle. On 27 November 2009 Insure Your Motor.com sent the pursuer his new policy. The cover note confirmed that the car insured was an Audi A4.

 

(4) The defenders' insurance proposal form was signed by the pursuer on 26 January 2010. The proposal form showed the vehicle to be insured as an Audi A4 registration number EX06 DTF. The proposal form had a "specification" box. That would have allowed the pursuer to indicate the exact type of model which he was wishing to insure. He failed to put in that box that the vehicle was an Audi A4 DTM FSI QUATTRO.

 

(5) An Audi A4 DTM FSI QUATTRO is a limited edition car. It`s power has gone from 197 bhp in the normal car to 217 bhp and a top speed of 152 mph. As its name implies the car is a four wheel drive vehicle. The A4 DTM FSI QUATTRO bears a little resemblance to the standard A4 two litre. It has major differences in its interior and exterior. It has sports suspension. The A4 DTM FSI QUATTRO costs substantially more than a standard A4 2 litre vehicle. Only 250 DTM models were made.

 

(6) The pursuer's car was stolen between 31 May 2010 and 01 June 2010. The pursuer claimed for the total loss of the car. The defender refused to pay to the pursuer the value of the vehicle because of what they said was a material misrepresentation. That misrepresentation was that the pursuer failed to disclose that the vehicle was of a particular specification.

 

(7) The pursuer gave evidence. I did not find him to be an impressive witness. I did not believe crucial aspects of his evidence. I did not believe the pursuer when he claimed that he had put full details of his vehicle into Quotezone.co.uk, a comparison website. I am satisfied that the pursuer did not disclose the exact specification of his vehicle when he completed the on-line questionnaire. I am also satisfied that at that time Quotezone.co.uk did not have the facility to ascertain the exact details of a car from the registration number. I am also satisfied that Zenith Insurance did not have the number plate recognition facility either. Jeff Brooks of Zenith Insurance confirmed that. In addition Cassim Saleh, who at the time was a sales assistant for Insure Your Motor.com confirmed that neither Quotezone nor Insure Your Motor had the recognition facility in November 2008. I accepted what Mr Brooks and Mr Saleh said. I did not accept the pursuer's evidence that when he input the vehicle registration number the full model name appeared.

 

(8) As was pointed out by Mr Edwards in his submissions this was not the pursuer's case on Record. According to the Record the pursuer did not disclose the exact specification of the vehicle since he was unaware of there being a requirement to do so. That was not the import of his evidence before me which was the exact opposite.

 

(9) The defender produced as productions, two transcripts of the pursuer calling Insure Your Motor on 08 November 2008 and 27 November 2008. The pursuer's position in his evidence before me was that he had told Insure Your Motor what the full specification of the vehicle was. He claimed in his evidence that there were bits missing from the transcript. He claimed that the transcript on 08 November 2008 had parts missing. These parts related to details which he had given regarding the specification of the Audi A4. He was adamant that he had discussed the specification with Chris who turned out to be Cassim Saleh. Cassim Saleh used Chris as a name during working hours as it was easier for people to remember and pronounce. The pursuer was adamant that parts of the conversation had been excised. However under cross examination some time later, the pursuer accepted that the transcripts had not been doctored but that they were accurate and passages had not been excised. His position eventually, as I understood it, was that there were other calls which were not recorded in which he told the recipient of the call about the specification of the car. I did not believe the pursuer's evidence with regard to that. I have looked at both of the transcripts carefully. Nowhere in any of the transcripts is there any mention of the car being anything other than an Audi A4 2 litre.

 

(10)I am prepared to accept that there may have been some other calls because it is clear from the transcripts that a method of payment was discussed with the pursuer. However looking at the pursuer's evidence in the round I am satisfied that he never at any time made any mention of the specific details of his Audi A4.

 

(11)Mr Dunn, in his submissions, made mention of the fact that the pursuer had been involved in an accident with the same car. His insurance company at that time was Haven Insurance. The details of the accident were dealt with by an accident management company. The pursuer was not at fault. Apart from the fact that the defenders were not the insurance company involved I cannot see how the fact that the pursuer had a previous accident could in some way impute knowledge to the present defenders of the exact specification of his motor vehicle. I am satisfied that Insure Your Motor would not have been involved in the resolution of that issue. It was clear that the pursuer was not at fault in the accident and in any event the claim seems to have been dealt with by the accident management company.

 

(12) The pursuer claimed that he dealt with Chris (Cassim Saleh) in connection with the renewal of his insurance on 17 November 2009. The pursuer again claimed that he spoke to Chris. He claimed that he went over the car specification again. The pursuer claimed that Chris was aware that the pursuer's car was a special edition Audi. However, when Mr Saleh gave evidence before me he confirmed that as at 17 November 2009 he did not deal with renewals and therefore would not have spoken to the pursuer. Again I preferred the evidence of Mr Saleh to that of the pursuer.

 

(13) The pursuer completed a proposal form on 26 January 2010. The pursuer failed to complete the box headed "specification (GTI etc). In my opinion he did that because he knew that if he filled in the correct specification the insurance would be much more expensive.

 

(14) Jeff Brooks of Zenith Insurance confirmed that if the pursuer had divulged the correct specification of the vehicle the price of insurance would have been £2,024.49. He also stated that the excess applicable to the vehicle would have been higher as well. An A4 2 litre is classed as an executive saloon and is in the insurance group 25. The A4 DTM FSI QUATTRO is classed as a sports car with an insurance grouping of 35. The A4 DTM FSI QUATTRO was a performance car. The premium would take into account that fact and the driver's age.

 

 

 

 

DECISION

 

(15) As I understood Mr Dunn, he did not dispute that if the pursuer had misrepresented the specification of the vehicle to the defender that was misrepresentation of a material fact. In my opinion, if the defenders were aware of the correct specification of the vehicle, they would not have entered a contract on the terms in which they did. I have no doubt that the pursuer did realise that the undisclosed fact was material to the policy. I have no doubt that he concealed a material fact to obtain insurance at a much lower rate. The specification of the car was in my opinion material. The standard Audi A4 2 litre and the Audi A4 DTM FSI QUATTRO are very different vehicles. Only 250 of the A4 DTM FSI QUATTRO were made. As such it is a limited edition with four wheel drive. It is a much more powerful car with a higher top speed. It is classed as a sports car in insurance terms whereas the A4 2 litre is an executive saloon.

 

(16) The defender would not have made the contract on the terms agreed had it known the correct specification of the vehicle. On that basis it was induced into making the contract by the pursuer's non-disclosure. In those circumstances the defender is entitled to avoid the contract and treat it as void ab initio. Mr Edwards referred me to a number of cases in relation to the question of material misrepresentation and inducement. However I did not understand Mr Dunn on behalf of the pursuer to argue that if material misrepresentation was present and that the defender was induced thereby to enter into the contract of insurance, that the defender was not then entitled to treat the contract as void ab initio. That is my finding.

 

(17) Mr Dunn's submissions on behalf of the pursuer suggested that the pursuer made a full disclosure regarding the specification and value of the car. The pursuer may have been correct with regard to the value of the car but he certainly, in my opinion, did not make any disclosure of the exact model which he was insuring. I do not accept that he gave the broker information with regard to the specifics of the vehicle. It was suggested to me that the pursuer was conscious of the need to make a full disclosure. He may well have been conscious of the need to make the full disclosure but I am satisfied on the evidence before me that he decided not to do so so that he could get insurance at a cheaper rate. Although I accept, as was accepted by Mr Saleh, that mistakes can be made, I am satisfied in this case that no mistakes were made by or on the part of the defender. I am satisfied there was no full disclosure by the pursuer. Nor am I satisfied that because the pursuer had a previous accident therefore a different insurer would be aware of the exact specification of the pursuer's car. I do not see that as a natural consequence of the pursuer having an accident. The defender is entitled to decree of absolvitor.

 

(18) The parties were agreed that expenses should follow success. There may be some question of modification of expenses because the pursuer is an assisted person and if that is the case the matter can be put down for a hearing in due course.