Motor Insurance Policy Claim

Maria Kim Keeley (Widow Of Terence Noel James Keeley, Deceased) V (1) Edward George Pashen (2) Wren Motor Syndicate 1202 At Lloyd's (2004)

[2004] EWCA Civ 1491

CA (Civ Div) (Brooke LJ (V-P), Jonathan Parker LJ, Keene LJ) 10/11/2004

Insurance - Personal Injury

Insurance Policies : Motor Insurance : Psychiatric Harm : Taxis : Third Party Insurance : Limitations Of Use : Use For "Hire Or Reward" Excluded : Use For "Social, Domestic And Pleasure Purposes" Only : S.151 Road Traffic Act 1988

A mini-cab driver who set down his last customers of the night and then drove his car at them to frighten them was not then driving his car "for hire or reward", which was excluded by his motor insurance policy, but was driving it for "social, domestic and pleasure purposes" within the coverage of the policy.

The appellant (K) appealed against the decision on a preliminary issue that the second defendant insurance company (W) was not liable, pursuant to the Road Traffic Act 1988 s.151, to satisfy the judgment K had obtained against the first defendant driver (P), and W cross-appealed. P had been using his own car as a mini-cab and had picked up K's husband and three other men to drive them home. That was P's last job of the night. The men had been drunk and P claimed that they had assaulted him.He had asked them to leave the car and after they had done so P drove the car at them to frighten them

K's husband sustained fatal injuries. K had obtained judgment against P for damages for psychiatric injury arising from her husband's death and sought to enforce it against W as P's insurers. The judge held as a preliminary issue that P's insurance policy, which permitted use only for "social, domestic and pleasure purposes", did not cover him for the incident as he was not using the car for those purposes when he drove it at the men.

K appealed against that finding and W cross-appealed against the judge's further finding that P was not using the car "for hire or reward", which was an excluded use under the policy, at the time of the accident because that use stopped for the night when the men got out of the car.

HELD: (1) The judge was correct to hold that P was not driving his car for hire or reward at the crucial time as his last fare-paying passengers of the day had left the car, Seddon v Binions [1978] 1 Lloyd's Rep 381 applied.

(2) The judge was wrong to hold that P was not driving his car for "social, domestic and pleasure purposes" at the time of the incident. After he dropped the men off, the essential character of his journey was to drive his car home, which was undoubtedly a purpose covered by the policy. Driving the car at the men to frighten them was an incidental episode and not a separate journey of a different character.

Even if P himself could not recover under the policy, K was not disqualified as an innocent third party from enforcing her statutory rights under s.151 of the 1988 Act. Under the 1988 Act, Parliament intended innocent third parties to be able to recover direct from the driver's insurers and, although a motor insurer could impose express limitations on the third party cover it provided, the courts should not be astute to interpret any such limitations benevolently in the insurer's favour.

Appeal allowed, cross-appeal dismissed.
Counsel:
For the appellant: Charles Bourne
For the respondent: William Audland

Solicitors:
For the appellant: Brachers
For the respondent: Liddell & Co
LTL 10/11/2004 (Unreported elsewhere)
Judgment Approved - 7 pages
Document No. AC0101398