Whyatt & Ors v Powell & Anor [2017] EWHC 484 (QB)

[2017] EWHC 484 (QB)Case No B51YP82S
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of JusticeDate 17/03/2017
Strand. London. WC2A 2LL
Before
THE HONOURABLE MR JUSTICE LEWIS
Between
(1) JAMIE WHYATTClaimants/Appellants(2) GARY REESAppellant(3) ARRON REESAppellant(1) ANTHONY POWELLDefendants/Respondents(2) MOTOR INSURERS’ BUREAURespondent
Mikhael Puar (instructed by Ross Aldrige Solicitors) for ClaimantsRichard Livingston (instructed by BLM Solicitors) for Second DefendantHearing Hearing dates: 03/03/2017
Judgment ApprovedThe Honourable Mr Justice LewisINTRODUCTION
[1]This is an appeal against one part of an order made on 16 August 2016 by HHJ John, sitting in the County Court at Merthyr Tydfil, following the trial of certain preliminary issues concerning a claim for damages arising out a car accident. By that order, the judge determined, amongst other things, that each of the three Claimants ought to have known that the vehicle involved in the accident was being used without there being in force in relation to the use of the vehicle such a contract of insurance as would comply with the relevant statutory requirements. The Claimants contend that there was no material upon which the judge could properly make the finding that he did. They also appeal against the order that they pay the Second Defendant’s costs, summarily assessed in the sum of £10,263.39. THE FACTS The Background and the Accident

THE FACTS

[2]The claim arose out of an accident that occurred on 15 April 2013. The First Defendant, Anthony Powell, and the three claimants had been at the house of another man on 15 April 2013. The First Claimant, Jamie Whyatt, was a 23 year old man. The Second Claimant, Gary Curtis Rees (whom I will refer to as Gary), was 16. The Third Claimant, Arron Rees (whom I will refer to as Arron), was celebrating his 15th birthday on that day.[3]At about 10 p.m., Anthony Powell and the three Claimants left in a car driven by Mr Powell. There was an accident and the three Claimants suffered injuries. Mr Powell was subsequently convicted of a road traffic offence and disqualified from driving as a result of this accident. The Pleadings[4]The three Claimants each brought a claim for personal injuries against Mr Powell contending that he had been negligent. Judgment has been entered against him. He has played no part in this appeal. It transpired that Mr Powell did not have insurance as required by the Road Traffic Act 1988 (“the Act”). The Claimants also brought proceedings against the Second Defendant (“the MIB”) contending that the MIB would be liable to satisfy any unsatisfied judgment obtained against the First Defendant pursuant to clause 5 of an agreement reached between the MIB and the Secretary of State for the Environment, Transport and the Regions dated 13th of August 1999 (“the Agreement”). Clause 6 of the Agreement provides that that obligation is subject to exceptions and the obligation does not apply to claims falling within the categories of claims defined in clause 6. MIB, in its defence, relied on an exception contained in clause 6(l)(e)(ii) of the Agreement. In summary, that provides that the MIB is not obliged to compensate a person in respect of an unsatisfied judgment where the claimant knew, or ought to have known, that the vehicle was being used without the relevant insurance.

(e) (ii) of the Agreement, so far as material, are as follows:

“EXCEPTIONS TO AGREEMENT “6. Clause 5 docs not apply in the case of an application made in respect of a claim of any of the following descriptions…. (e) a claim which is made in respect of a relevant liability ... by a claimant who, at the time of the use giving rise to the relevant liability was voluntarily allowing himself to be carried in the vehicle and either before the commencement of the journey or after such commencement if he could reasonably be expected to have alighted from it, knew or ought to have known that – …. (ii) the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the 1988 Act ” (e) a claim which is made in respect of a relevant liability ... by a claimant who, at the time of the use giving rise to the relevant liability was voluntarily allowing himself to be carried in the vehicle and either before the commencement of the journey or after such commencement if he could reasonably be expected to have alighted from it, knew or ought to have known that – …. (ii) the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the 1988 Act ”
[5]The facts relied upon by the MIB in its defence in relation to the applicability of that exception were set out at paragraph 4 of the Defence in the following terms: “4. The Second Defendant notes that the Claimants were all friends with the First Defendant. They had all been at the home of a mutual friend prior to the accident. The Claimants were informed by the First Defendant that he was not insured to drive the Citroen Saxo. Additionally the Claimants knew that the First Defendant had recently obtained the motor vehicle and that the First Defendant had previous driving disqualifications for driving offences. Alternatively, the Second Defendant will aver at trial that the Claimants (at the very least) “deliberately turned a blind eye” to the issue of whether the First Defendant was insured”.[6]By order dated 25 April 2016, Deputy District Judge Ead ordered, amongst other things, that the question of whether the Claimants knew or ought to have known that the First Defendant was driving without insurance be tried as a preliminary issue.

The Trial

[7]At the hearing, no case was advanced on the basis of any actual knowledge by any of the three Claimants that Mr Powell was not insured. As the judge noted at paragraph 7 of his judgment: “The essence of the case of the MIB at trial today is that in the specific circumstances, these claimants ought to have known because of knowledge of Powell’s past offending, the fact that he had owned so many cars over a relatively short period and at a time in his life when insurance would have been an expensive commodity anyway (even disregarding his history of offending), and he had no apparent means of funding the acquisitions of the vehicles and their insurance”.[8]A significant part of the reasoning underlying the conclusion of the judge, as appears from the rest of his judgment, is that prior to the accident, Mr Anthony Powell had convictions for driving offences and that he had been sentenced to imprisonment for those offences.[9]In that regard, it is relevant to note that the MIB (on whom the burden of proof of establishing that the exception applied) did not adduce any evidence of Mr Powell’s convictions and, in particular, the MIB did not adduce any evidence that Mr Powell had convictions relating to driving which had led to him being sentenced to a period of imprisonment prior to the accident that was the subject of this claim. Mr Powell did not give evidence.[10]The three Claimants gave evidence. The First Claimant, Mr Whyatt, confirmed in his evidence in chief that the responses that he had given to requests for further information made by the MIB were true. In those he said, in response to a question as to whether he knew if Mr Powell had previous convictions for dishonesty offences, that he knew that Mr Powell had been in trouble with the police before but did not know what for. He said that he did not know that Mr Powell had been previously disqualified from driving and that he believed that Mr Powell had some penalty points for speeding. Mr Whyatt said in cross-examination that he had heard that Mr Powell had been in trouble for burglaries and he said that Mr Powell had been in prison. He further said that it did not occur to him that Anthony Powell might not have insurance and he just thought that Mr Powell had insurance. Asked if he was surprised to learn that Mr Powell did not have insurance he said that Mr Powell had told him that the car was “legit”. The judge did not accept that that was a truthful statement and did not accept that Mr Whyatt had been told the car was “legit”.[11]The Third Claimant, Arron Rees, also gave evidence. In cross-examination, Arron said he did not ask Anthony Powell if he had insurance but just assumed that he had. He did not refer in his evidence in chief to him knowing that Anthony Powell had any convictions and, in his responses to requests for information, he said that he did not know that Anthony Powell had previous convictions for dishonesty offences nor that he had been previously disqualified from driving nor that he had convictions for driving offences. In cross-examination, Arron also said that he did not know that Anthony Powell had been to prison.[12]The Second Claimant, Gary Rees gave evidence. In his evidence in chief, he confirmed that the statement he gave to police (which did not refer to any criminal convictions of Anthony Powell) was true. He confirmed that his answers to the requests for information were true and in those he stated that he knew Anthony Powell had been in trouble with the police and he believed it was to do with robbery. There was another statement signed by the Second Claimant. It transpired that that was prepared by the MIB and signed by the Second Claimant but he has difficulties in reading and the statement was not read back to him before he signed. That statement included a sentence in these terms “I knew that he has been in gaol for a number of offences including driving offences”. That statement, however, was not confirmed by him as being true and did not form part of his evidence in chief. In cross-examination, Gary confirmed that he knew that Anthony Powell had been in trouble with the police and he knew that he had been to prison. He thought it was for robbery and a driving offence but he did not know the details. In re-examination, Gary said that he learned about that matter after the accident. The judge, however, did not believe that last assertion. The position was, then, that Gary Rees had given evidence that he believed that Anthony Powell had been to prison for robbery and a driving offence and he knew that information at the time of the accident. In cross-examination, Gary also said that he “thought he had insurance. I wouldn’t jump in someone’s car if they didn’t’ have insurance or anything” and he said that he did not actually ask himself whether Anthony Powell did have insurance before getting into the car.

The Judgment

[13]The judge identified that at the heart of the MIB’s case was reliance upon the exception in clause 6.1(e)(ii) of the Agreement. The judge referred to the decisions of the House of Lords in White v White & MIB [2001] 1 W.L.R. 481 and of the Court of Appeal in Akers & Others v Motor Insurers’ Bureau and another [203] EWCA Civ 18. The judge observed that the MIB was not alleging actual knowledge but was relying on the second category of cases identified in paragraph 16 of White and considered that the question was whether this case “is the type of case where, as applied in the present context, a passenger had information from which he drew the conclusion that the driver might well not be insured but deliberately refrained from asking questions, lest his suspicions be confirmed”.[14]In the light of those passages,

the judge considered that the issues did not relate to actual knowledge but distilled to:

“a central question of whether on the facts of this case these claimants ought to have known in a sense that they were put on inquiry and did not undertake that enquiry. Are these claimants then to be cast as passengers who ought to have known in accordance with that interpretation?”
[15]The judge concluded that the Claimants had not been truthful in relation to a number of matters. He was satisfied that he had not been given a full account of the circumstances relating to the evening of 15 April 2013 and the underlying relationship of the people at the house where Anthony Powell and the three Claimants were immediately before leaving in the car or how it was that the three Claimants came to get into the car. He found that the three Claimants had not been truthful about the amount of alcohol they had consumed that night. Those are findings that the judge was entitled to make having heard the witnesses.[16]In relation to the question of knowledge, the judge noted the frequency of the contact between Mr Whyatt and Mr Powell. He expressly found that Mr Powell had not told Mr Whyatt that the car was “legitimate”. In relation to Gary Rees, he noted that he had said that he knew that Anthony Powell had gone to prison for robbery and driving offences and claimed only to have been told about that later and the judge said:
“It is clear from the statement that he gave to the police in December 2013 which is just a matter of months after the accident, that he knew that Powell had been to prison for driving offences.”
[17]In relation to Arron Rees, he noted that he had said that he had known Anthony Powell all his (that is, Arron’s) fife but he did not know that he had been to prison. The judge also noted that the close connection between Powell and all three Claimants in a small community where they lived in close proximity provided the backdrop against which the issue of what they knew about him had to be assessed. The judge concluded that the three Claimants knew far more than they were prepared to say about Powell and it was “probable that all three knew of his driving convictions” and noted that Anthony Powell had had a number of cars and no job and no readily apparent means of insurance (see paragraph 27 of the judgment).[18]The critical conclusions, on the evidence, come at paragraphs 28 to 30 of the judge’s judgment and are in the following terms:
“28. On those facts, the summary of conclusions I have come to is as follows. “29. The account about Bob is not the full truth. They had been drinking. They all knew more about Powell than they now accept. They knew he had convictions. They knew he had been to prison for driving offences. “30. Inevitably that seriously undermines their credibility about what was happening at the time and also, therefore, their credibility about their understanding of Powell and what they knew at that time. When I stand back from all of that evidence, piece it all together, it leads to the conclusion that they knew more than enough to put them in the category of persons who “ought to have known”
. At the very least they ought to have been put on inquiry within the meaning of the cases that I have identified and in the sense established by White v White. They ought to have known that there was no insurance because there was enough there to put them on inquiry and they did not ask”.

THE LAW

[19]The meaning of “knew or ought to have known” in clause 6(l)(e)(ii) of the agreement has been considered by the House of Lords in the decision in White v White. The House noted that the context in which the phrase occurred was one where an individual was to be able to have compensation for personal injuries caused by vehicles whether the vehicle was insured or not. Clause 6(l)(e)(ii) was an exception to that rule and was to be construed restrictively. The exception was intended to be co-extensive with the meaning of the relevant European Union Directive then in force: see paragraph 23 of the speech of Lord Nicholls of Birkenhead, with whom Lord Mackay of Clashfern, Lord Cooke of Thorndon and Lord Hope of Craighead agreed. In that context, the relevant principles are set out in paragraphs 15 to 17 of the speech of Lord Nicholls, the material parts of which are in the following terms:
“... In this context, knowledge by a passenger that a driver is uninsured means primarily possession of information by the passenger from which the passenger drew the conclusion that the driver was uninsured. Most obviously and simply, this occurs where the driver told the passenger that he had no insurance cover. Clearly, information from which a passenger drew the conclusion that the driver was uninsured may be obtained in many other ways. Another instance would be when the passenger was aware, from his family or other connections with the driver, that the driver had not passed his driving test (“if he'd taken the test, I would have known”). Knowledge of this character is often labelled actual knowledge, thereby distinguishing other types of case where a person, although lacking actual knowledge, is nevertheless treated by the law as having knowledge of the relevant information. “16 There is one category of case which is so close to actual knowledge that the law generally treats a person as having knowledge. It is the type of case where, as applied to the present context, a passenger had information from which he drew the conclusion that the driver might well not be insured but deliberately refrained from asking questions lest his suspicions should be confirmed. He wanted not to know (“I will not ask, because I would rather not know”). The law generally treats this state of mind as having the like consequences as would follow if the person, in my example the passenger, had acted honestly rather than disingenuously. He is treated as though he had received the information which he deliberately sought to avoid. In the context of the Directive that makes good sense. Such a passenger as much colludes in the use of an uninsured vehicle as a passenger who actually knows that the vehicle is uninsured. The principle of equal treatment requires that these two persons shall be treated alike. The Directive is to be construed accordingly. “17 Thus far I see no difficulty. I consider that it is acte clair that these two categories of case fall within the scope of the exception permitted by the Directive. Conversely, I am in no doubt that “knew” in the Directive does not include what can be described broadly as carelessness or “negligence”
. Typically this would cover the case where a passenger gave no thought to the question of insurance, even though an ordinary prudent passenger, in his position and with his knowledge, would have made inquiries. He “ought” to have made inquiries, judged by the standard of the ordinary prudent passenger. A passenger who was careless in this way cannot be treated as though he knew of the absence of insurance. As Lord Denning MR said in Cia Maritima San Basilio SA v Oceanus Mutual Underwriting Association (Bermuda) Ltd. [1977] QB 49, 68, negligence in not knowing the truth is not equivalent to knowledge of it. A passenger who was careless in not knowing did not collude in the use of an uninsured vehicle, and he is not to be treated as though he did. To decide otherwise would be to give a wide, rather than a narrow, interpretation to the exception permitted by the Directive...”[20]Consequently, for that reason, Lord Nicholls concluded at paragraph 23 that “’Ought to have known’ is apt to include knowledge which an honest person who enters the vehicle would have. It includes the case of a passenger who deliberately refrains from asking questions. It is not apt to include mere carelessness or negligence. A mere failure to act with reasonable prudence is not enough”.[21]In White, the injured passenger knew that the driver, his brother, had driven in the past without a licence but he did not know at the time that his brother was driving without a licence and was uninsured. The judge had found that, while the passenger did not know that his brother was uninsured, it “’stands out a mile’ that he ought to have known. He ought to have made sure one way or the other, and he made no effort to do so”. The House of Lords found that this was a finding of carelessness, assessed by the standard of the ordinarily prudent passenger having the knowledge possessed by the particular passenger in that case. That case did not fall within the exception and the MIB was therefore liable to pay compensation (see paragraphs 2, 18 and 19).[22]In Akers and others v Motor Insurers’ Bureau and another [2003] EWCA Civ 18, Keene L.J., with whom the other members of the Court agreed, said this at paragraph 6 of the judgment. “The phrase “knew or ought to have known” has been the subject of recent consideration by the House of Lords in White v White & the MIB [2001] UKHL 9, [2001] 1 WLR 481, where the origins of the MIB are described in the judgment of Lord Nicholls of Birkenhead at paragraphs 4 to 7. Their Lordships emphasised that the purpose of the 1988 Agreement was to give effect to the terms of the second EEC Motor Insurance Directive 84/5/EEC , which simply allows for an exception where the injured passenger “knew” that the vehicle was uninsured. Consequently, the phrase “knew or ought to have known” is to be given the same meaning as “knew” in the directive: see Lord Nicholls at paragraph 23. Moreover, as an exception to a general obligation, this phrase is to be given a narrow interpretation. A mere failure to make enquiries as to insurance, however negligent in the circumstances, is not enough by itself to bring the exception into play. It certainly will apply, however, either if the passenger had actual knowledge of the lack of insurance, or if he had information from which he realised that the driver might well not be insured but he deliberately refrained from asking questions lest his suspicions be confirmed. This was described by Lord Nicholls as a deliberate closing of the mind, with the passenger preferring not to know. It follows that it is not enough for the MIB to show that the passenger failed to make the enquiries which a reasonable person would have made in the circumstances. More than that is required.[23]In that case, two passengers had travelled to the Margate area in a car driven by a man who was arrested there by the police. The two passengers therefore needed transport to return to London. One of the passengers (a Mr Cameron) asked another person (Mr Thorne) to drive them in his car back to London. Mr Thorne gave evidence that he was standing in a close group with Mr Cameron and the other passenger, Mr Akers. His evidence was that he said that he did not have a licence and was not insured. He was offered money and was persuaded to take them. He did so and the car was involved in an accident and Mr Akers was injured. On those facts, the Court of Appeal found that it was difficult to see that Mr Akers had not heard what was said by the driver about not being insured and, if so, he knew there was no insurance but, putting it at its lowest, Mr Akers must have been aware about the problems with insurance and in those circumstances, he must have known in the sense established in White v White that there was no insurance as at “the very least, he was deliberately avoiding specifically inquiring further about that topic” (see paragraph 22 of the judgment). Consequently the Court of appeal held that the claim by the injured passenger, Mr Akers, did fall within the exception and the MIB was not obliged to pay compensation.

THE APPEAL

[24]Against that background, the question is whether, in relation to each Claimant, the judge was entitled on the evidence to reach the conclusion that he did. An appeal court will only intervene if the judgement below was wrong or unjust due to a serious procedural or other irregularity. I bear in mind that, while this court has a full transcript of the trial, including the evidence given by the Claimants, the judge below had the advantage of hearing each of the Claimants give evidence and forming a view of their truthfulness. There is no basis, in my judgment, for this court to depart from the general findings as to the Claimants’ lack of truthfulness in relation to the circumstances of the evening in question, the amount of alcohol they had consumed, the extent of their relationship with Anthony Powell or, in relation to the First Claimant, the claim (which the judge rejected) that the First Claimant had been specifically told that the car was “legit”. Those were matters for the trial judge to assess. The real issue is whether, given the findings of fact, the judge has properly addressed the question of whether each claimant knew or ought to have known that the vehicle was uninsured when they got into it, applying the principles set out in White and in Akers.[25]Dealing first with the Third Claimant, Arron Rees, the position is this. He was 15 years old on the day of the accident (that day was his birthday). The evidence that he gave was that he did not know that Anthony Powell had been in prison before. His evidence was that he just assumed that the car was insured and did not ask. Those circumstances would not, in my judgment, of themselves amount to a situation where it could be said that Arron Rees ought to have known that the vehicle was uninsured, applying the relevant legal principles. At most they would amount to carelessness or negligence in failing to ask questions. The question is, therefore, what information did the judge find that Arron Rees had and from which he realised that the driver might well have not been insured and then deliberately refrained from asking questions lest his suspicions be confirmed?[26]First, in my judgment, the judge was influenced by the belief or assumption that Anthony Powell had convictions for driving offences and had been in prison for those offences. He further inferred, from the circumstances and the fact that this was a small community, that the Claimants (including Arron Rees) would know more about Mr Powell than was admitted and that, therefore, they too would know that he had been to prison for driving offences. The difficulty with this conclusion is, in part, that there was no evidence before the judge establishing that Mr Powell had in fact been convicted, and imprisoned, for driving offences before this accident. He did not have evidence as to the antecedents of Mr Powell. Nor did Mr Powell give evidence. The most that there was by way of evidence was Gary Rees’ evidence that he believed that Mr Powell had been to prison for robbery and driving offences. But the judge did not base his findings on the fact that Gary Rees had told his younger brother, Arron Rees, those facts (and there was no evidence as to whether he had or not). There is, therefore, no basis for any inference from the facts as found by the judge, that Arron Rees had information (or believed) that Mr Powell had been in prison for, amongst other things, driving offences and realised, from that fact, that Mr Powell might not have been insured and deliberately refrained from asking questions.[27]Secondly, and apart from the question of imprisonment for driving offences, a finding that Arron Rees had not told the full truth of what was happening at the house or as to the amount of alcohol consumed would not, of itself, be capable of giving rise to an inference that Arron Rees had information from which he realised that Anthony Powell might not be insured and deliberately refrained from asking about insurance (although it may be relevant to an assessment of his credibility if, for example, he denied knowledge of certain facts).[28]Furthermore, the judge would have needed to address the evidence that Arron Rees gave that he just assumed that Anthony Powell had insurance. The case law establishes that a failure to make the inquiries that a reasonable person would make would not be sufficient to fall within the exception. Even assuming that Arron Rees knew that Anthony Powell had had a number of cars, and limited means, the judge would have had to consider whether Arron realised that meant that Anthony Powell might not have been insured. Simply failing to make inquiries which a reasonable passenger might make, with knowledge of that information, would not be sufficient to bring the case within the exception. The judge did not, however, address this issue. For those reasons, the appeal in relation to the Third Claimant must be allowed.[29]Dealing next with the First Claimant, Jamie Whyatt, the question again is what information did the judge find that Jamie Whyatt knew from which he realised that the driver might well have not been insured and then deliberately refrained from asking questions lest his suspicions be confirmed? It is clear that the judge was influenced by the fact that the judge believed that Anthony Powell had convictions for driving offences and had been in prison for those offences. He further inferred that, given Mr Whyatt’s knowledge of Mr Powell and the fact that this was a small community, that Jamie Whyatt knew more about Mr Powell than he admitted and again he found that Jamie Whyatt knew that Anthony Powell had been to prison for driving offences. The difficulty with this conclusion is, as I have indicated, that there was no evidence before the judge establishing that Mr Powell had in fact been convicted, and imprisoned, for driving offences before this accident. He did not have evidence as to the antecedents of Mr Powell. Nor did Mr Powell give evidence. The most that there was by way of evidence was Gary Rees’ evidence that he believed that Mr Powell had been to prison for robbery and driving offences. But the judge did not base his findings on the fact that Gary Rees had told Mr Whyatt this (and there was no evidence as to whether he had or not). There is, therefore, no basis for any inference from the facts as found by the judge, that Jamie Whyatt had information (or believed) that Mr Powell had been in prison for, amongst other things, driving offences and realised, from that fact, that Mr Powell might not have been insured and deliberately refrained from asking questions. For that reason alone, the appeal in relation to the First Claimant must be allowed.[30]The position in relation to the First Claimant more generally is different from and more complex than that in relation to the Third Claimant. The fact that he had not been truthful about the events of the evening or as to his consumption of alcohol would not of itself amount to the possession of information from which he realised that Anthony Powell might not be insured (although it may be relevant to an assessment of his credibility, for example, if he denied knowledge of certain facts). Similarly, the fact that the First Claimant had not told the truth when he claimed that Anthony Powell had told him the car was “legit” would be relevant to an assessment of his credibility (and would prevent him from advancing any case that he honestly and positively believed that Anthony Powell had insurance for the car). There were also the facts referred to by judge, namely that Jamie Whyatt knew that Anthony Powell had had a number of cars but had no job or apparently any means to pay insurance. Ultimately, however, the judge needed to identify what information existed, and which the First Claimant had, and from which he realised that Anthony Powell might not be insured (particularly bearing in mind that the First Claimant had given evidence that it did not occur to him that Anthony Powell did not have insurance). The reality is, it seems, that the judge considered that all the matters referred to were relevant in assessing the First Claimant’s credibility in deciding whether or not he knew that Anthony Powell had been to prison for driving offences (and the judge then, it seems, found that he did know that and so did have information from which he realised that Anthony Powell might not have insurance). He simply assumed that such information existed (when there was no evidence it did) and addressed his attention to the question of whether the First Claimant knew that information. Given the absence of evidence that Anthony Powell had such convictions (or that Jamie Whyatt believed that he did), the findings of fact made by the judge stop short of establishing that there was such information in existence (that is, information that Anthony Powell did in fact have convictions and imprisonment for driving offences at the time of the accident). For those reasons, the appeal in relation to the First Claimant is allowed.[31]The positon in relation to the Second Claimant, Gary Rees, is different again. He gave evidence that he believed that Anthony Powell had gone to prison for robbery and driving offences. Given that finding, there would have been a legitimate basis for concluding that he had information from which he believed that Anthony Powell might not have been insured and deliberately did not ask questions. There are, however, particular features of this case which, on balance, lead me to conclude that there has been a procedural shortcoming in the trial below which means that it would be unjust to allow such a finding to stand on the evidence. First, Gary Rees did give evidence that he assumed that Anthony Powell had insurance and never asked himself whether he did. Even if he believed that Anthony Powell had been imprisoned for driving offences, and even if that would cause a reasonable person to make inquiries, that would not be sufficient to enable the MIB to rely upon the exception if, in fact, Gary Rees genuinely but negligently failed to make inquiries and simply assumed (even if negligently) that the driver must be insured. The judge did not address this issue. Secondly, the judge was influenced by the fact that he did not believe Gary Rees when he said that he was told after the accident about Anthony Powell’s driving convictions. The difficulty with that conclusion is that the judge based it on the statement that he believed the Second Claimant had given to the police in December 2013 (about 8 months after the accident). If, as seems likely, the judge was referring to the statement dated 9 December 2013, that was a statement taken by the MIB, it was not read back to Gary Rees (who was 16 and had difficulty reading) and was not adopted by him in his evidence in chief. The statement to the police, the contents of which Gary Rees did confirm were true, does not refer to any convictions on the part of Anthony Powell and was given much earlier than December 2013. In the circumstances, the failure to address the direct evidence of Gary Rees’ knowledge at the time of the accident, particularly when set against the assessment of Gary Rees’ evidence by reference to a statement not accepted by him as true, and given the background of the absence of actual evidence of any convictions for driving resulting in imprisonment, does amount to such an irregularity in the trial as would make it unjust to allow the finding that Gary Rees ought to have known that the vehicle was not insured to stand. The appeal of the Second Claimant must therefore be allowed.[32]In the circumstances, that part of the order recording that the court had determined as a preliminary issue that each Claimant ought to have known that the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part IV of the Act will be set aside. That issue will be remitted to the county court and that matter will need to be re-heard. The determination made in respect of four other preliminary issues has not been the subject of any appeal and those four determinations therefore stand.[33]There was also an appeal against the costs order made by the judge. He found that the provisions of CPR 44. 13 did not apply in this case, relying on the decision in Howe v Motor Insurers’ Bureau [2016] EWHC 884 (QB). CPR 44.13 provides for qualified one-way costs shifting in proceedings which include a claim for personal injuries. That confers a degree of protection on a claimant as to the amount that he could be liable for in costs: see CPR 44.14. Mr Puar sought to distinguish the decision in Howe on the basis that the decision applied where a claim was brought against the MIB only pursuant to regulation 13 of the Motor Vehicles (Compulsory Insurance) Information Centre and Compensation Board) Regulations 2003. He submitted that the situation was different where a claim was brought, as here, against both the driver and the MIB as the proceedings would then include a claim for personal injuries (against the driver). He drew attention to paragraph 40 of the judgment of Vos L.J., as the then was, in Wagenaar v Weekend Travel Ltd. (trading as Ski Weekend) (Serradj, third party) [2015] 1 W.L.R. 1968. Further, he submitted that it was not open to the judge to determine, in the alternative, that if CPR 44.13 applied, then the exception in CPR 44.16 applied and the Claimants should be liable for costs as they had been fundamentally dishonest. He submitted that the exception only applied if there had been fundamental dishonesty in relation to the claim for personal injuries not the claim against the MIB. For completeness, I note that Mr Livingstone for the MIB submitted that CPR 44.13 did not apply to a claim against the MIB, even if the proceedings did include a claim for personal injuries against the uninsured driver, and, in any event, that if the claim against the MIB was within the scope of CPR 44.13, then the exception in CPR 44.16 would apply to that aspect of the proceedings and was not limited to fundamental dishonesty in relation to the personal injuries claim. Those are important issues but do not need to be resolved. Both parties agree that if the appeal is allowed (as it will be), the costs order will need to be set aside and the questions relating to qualified costs shifting under CPR 44.13 and 44.16 will not need to be resolved.

CONCLUSION

[34]The appeal is allowed and the determination that each of the Claimants ought to have known that the vehicle in which they were travelling was not insured will be set aside. That issue will be remitted to the county court to be re-heard and re-determined.

Cited in 1 later judgment