April 11, 2017

Court considers ‘knowledge’ under Uninsured Drivers Agreement

The court set aside an order finding the Claimants ought to have known that the vehicle they were travelling in was uninsured. The Claimants' appeal was allowed and the matter was remitted to the county court to be re-heard.

The Facts

On 15 April 2013 the First Defendant, Mr Anthony Powell, and the three Claimants had been at the home of a third party. At 10pm Mr Powell and the three Claimants left in a car driven by Mr Powell. He did not have insurance for the vehicle. An accident occurred and the three Claimants suffered injuries.

Criminal proceedings were brought against the First Defendant. He was convicted of a road traffic offence and disqualified from driving.

The three Claimants issued a claim for personal injuries against Mr Powell and the Second Defendant, the Motor Insurers' Bureau (MIB), on the basis Mr Powell had been negligent. Furthermore, they contended that the MIB would be liable to satisfy any unsatisfied judgment obtained against Mr Powell pursuant to Clause 5 of the Uninsured Drivers' Agreement.

The MIB defended the claim and relied on the exception to Clause 5 contained in Clause 6; that the MIB would not be liable to compensate a claimant who has suffered personal injuries where the claimant "knew, or ought to have known", that the vehicle being used was uninsured.

The MIB argued the Claimants ought to have known the Defendant did not have insurance as they knew he had previous convictions for driving offences and had been imprisoned for those offences. In addition he had owned a number of cars over a short period of time when he was in no position to be able to fund the insurance for the vehicle. The burden of proof fell on the MIB to establish the exception applied.

Deputy District Judge Ead ordered the question of whether the Claimants ought to have known the vehicle was uninsured to be tried as a preliminary issue.

At first instance

The MIB did not adduce any evidence to show Mr Powell had previous convictions, nor that he had been imprisoned for driving offences. Mr Powell did not give evidence.

The three Claimants gave evidence. The First Claimant said he was aware Mr Powell had been in trouble with the police but he did not know why. He went on to say he thought Mr Powell had insurance for the vehicle and Mr Powell had told him the car was "legit".

The Second Claimant said he knew Mr Powell had been to prison for robbery and a driving offence but did not know the details.

The Third Claimant said he was not aware Mr Powell had previous convictions and had been imprisoned. He did not ask Mr Powell whether he had insurance but just assumed he had.

The judge took a dim view of the Claimants' credibility generally. He concluded the Claimants had not been truthful about their knowledge of Mr Powell's previous convictions. He noted that given the close connection between Mr Powell and the Claimants and they all lived in a small community within close proximity it was probable that all three Claimants knew of Mr Powell's driving convictions and they knew enough to make inquiries with Mr Powell regarding his insurance, but chose not to ask.

The Claimants appealed and contended there was no evidence presented to the judge upon which he could properly make the finding that he did.

On Appeal

The High Court allowed the Claimants' appeal and concluded the evidence given by each Claimant was insufficient to establish they ought to have known the vehicle was uninsured.

The High Court held the judge at first instance was influenced by the belief or assumption that Mr Powell had previous convictions for driving offences and that given the relationship between Mr Powell and the Claimants; they ought to have known Mr Powell would not have had insurance for the vehicle. However, no evidence was adduced by the MIB to establish that Mr Powell had previous convictions for driving offences. The judge had not been provided with the antecedents of Mr Powell and Mr Powell did not give evidence.

Furthermore the finding that the Claimants had been untruthful in their evidence regarding the circumstances of the night and the amount of alcohol they had consumed at the house prior to the accident did not amount to an inference that they had information from which they realised Mr Powell might not be insured and deliberately refrained from asking about insurance. It merely would be relevant to the Claimants' credibility if they, for example, denied knowledge of certain facts about the night.

In relation to the Third Claimant the court held there had been an irregularity at trial which would make it unjust to allow the finding that the Third Claimant ought to have known the vehicle was uninsured. Rather than relying on the direct evidence of the Third Claimant and the statement he adduced, the judge at first instance had relied on a statement taken by the MIB which was not read back to the Third Claimant who was 16 and had difficulty reading and was not adopted by him in his evidence in chief.

The order was set aside and the matter is to be remitted to the county court to be re-heard and re-determined.

What can we learn?

  • The case is an example of how the courts will interpret the provision 'ought to have known'. The provision will include cases where the passenger has information from which they realise the driver may not have insurance but deliberately refrains from asking questions to confirm or quash his suspicions.
  • It will not include cases where the passenger has been merely careless or negligent in failing to ask questions regarding the driver's insurance.
  • It is not enough for the MIB to show that the passenger failed to make enquiries which a reasonable person would have made in the circumstances.