Coward v. Motor Insurers\' Bureau. [1959 C. No. 1491 PDF

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Date and Time: Wednesday, 25 December, 2019 9:00:00 PM MYT Job Number: 106028814

Document (1) 1. COWARD v. MOTOR INSURERS' BUREAU. [1959 C. No. 1491.] [1963] 1 Q.B. 259, [1963] 1 Q.B. 259 Client/Matter: -NoneSearch Terms: case-name(Coward v. Motor Insurers' Bureau) Search Type: Natural Language Narrowed by: Content Type UK Cases

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Coward v Motor Insurers' Bureau Overview Sol Jo 34

| [1963] 1 QB 259,

| [1962] 1 All ER 531,

| [1962] 2 WLR 663,

| [1962] 1 Lloyd's Rep 1, 106

COWARD v. MOTOR INSURERS' BUREAU. [1959 C. No. 1491.] [1963] 1 Q.B. 259 [COURT OF APPEAL] Sellers, Upjohn and Diplock L.JJ. 1961 Nov. 27, 28; Dec. 20. Road Traffic — Third party insurance — "Hire or reward" — Workman carried to factory on fellow — workman's motor — cycle — Evidence of some arrangement for payment — No intention to enter into legally binding contract — Whether a passenger "carried for hire or reward" — Whether obligation to insure — Road Traffic Act, 1930 (20 & 21 Geo. 5, c. 43), s. 36 (1) (b) (ii). Contract — Formation — Intention to create legal relationship — Arrangement whereby worker carried fellow — worker to work on motor — cycle. Road Traffic — Third party insurance — Motor Insurers' Bureau — Agreement with Minister — Action on agreement by third party — Not necessary for court to object on ground of no privity. Contract — Parties — Enforcement by third party — Jurisdiction of court if defendant to action by third party does not object — Motor Insurers' Bureau. Evidence — Deceased's statement — Declaration against pecuniary interest — No admission of legal obligation to pay — Whether admissible.

Held, (1) that the evidence as to the statements by Coward was admissible, for the test was not whether a declaration amounted to a recognition of a legal or contractual obligation but whether it was against the pecuniary interest of the declarant, and the admissibility of a declaration against interest must be judged at the time when it was tendered. Whether there was a contractual obligation could only be established when the whole of the relevant admissible evidence has been considered (post, p. 269). Dicta of Lord Campbell in the Sussex Peerage Case (1844) 11 Cl. & Fin. 85, 113, H.L. and Parke B. in Rex v. Inhabitants of Lower Heyford (1830) 1 B. & Ad. 75 applied. (2) That, notwithstanding that there was admissible evidence of an arrangement whereby Coward paid a weekly sum to Cole for his transportation, on the probabilities, neither party contemplated that the one was legally bound to carry, and the other to be carried, to work, or intended to enter into a legal contract (post, p. 271). (3) That, on its true construction, the expression "carrying passengers for hire or reward" in section 36 (1) (b) (ii), meant carrying passengers for a monetary reward legally recoverable by the carrier under a contract express or implied by the mere act of entering the vehicle; and that, since Coward and Cole never intended to enter into a legally binding obligation of carriage, Coward was not a passenger whom Cole was bound to insure under Part II of the Act of 1930. The Motor Insurers' Bureau, therefore,

Page 2 of 10 COWARD v. MOTOR INSURERS' BUREAU. [1959 C. No. 1491.] [1963] 1 Q.B. 259 1 Road Traffic Act, 1930, s. 36 (1): "In order to comply with the requirements of this Part of this Act, a policy of insurance must be a policy which … (b) insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle on a road: Provided that such a policy shall not be required to cover … (ii) except in the case of a vehicle in which passengers are carried for hire or reward … liability in respect of the death of or bodily injury to persons being carried in … the vehicle …"

[*261] were not bound to satisfy the judgment and the judge was right in dismissing the action (post, pp. 274-275). Bonham v. Zurich General Accident and Liability Insurance Co. Ltd. [1945] K.B. 292; 61 T.L.R. 271; [1945] 1 All E.R. 427, C.A. distinguished. Decision of Edmund Davies J. affirmed. APPEAL from Edmund Davies J. On December 7, 1953, James Coward was riding as a pillion passenger on a motor-cycle owned and driven by James Dermot Cole, when, owing to the admitted negligence of Cole, there was an accident and both men were killed. The plaintiff, Louie Irene Coward, the widow and administratrix of Coward, brought an action for damages against Esther Reid, the administratrix of Cole, for damages in respect of the death of Coward. That action was heard at Gloucester Assizes and on June 21, 1958, judgment was given for the plaintiff for £7,850 19s. That judgment was unsatisfied because the policy of insurance taken out by Cole did not cover his liability for injuries to pillion passengers. The plaintiff brought the present action against the Motor Insurers' Bureau alleging that, in consequence of an agreement made between them and the Minister of Transport dated June 17, 1946, they were legally bound to satisfy the judgment on the ground that it was in respect of a liability which was required to be covered by a policy of insurance under Part II of the Road Traffic Act, 1930. The agreement of June 17, 1946, contained, inter alia, the following clause: "If judgment in respect of any liability which is required to be covered by a policy of insurance or a security … under Part II of the Road Traffic Act, 1930, is obtained against any person or persons in any court in Great Britain whether or not such person or persons be in fact covered by a contract of insurance and any such judgment is not satisfied in full within seven days from the date upon which the person or persons in whose favour the judgment was given became … entitled to enforce it the Motor Insurers' Bureau will [subject to the provisions of clauses 5 and 6 of these presents] satisfy or cause to be paid any sum payable [under the said judgment]." It was the contention of the plaintiff that since about June, 1952, Coward had been in the habit of travelling on the pillion of Cole's motor-cycle from Aylesbury to the works of the Pressed Steel Company near Oxford, where both men were at the time employed. The house in which Cole lived at Aylesbury was about five minutes' walk from that of Coward [*262] and it was common ground that the reason for travelling together was because of practical convenience to both. It was further alleged by the plaintiff that Coward was in the habit of making regular payments to Cole to cover the cost in part of the daily journeys. The evidence as to those payments which was given at the trial was classified as follows: (a) statements made by Coward to his wife; (b) statements made to Cole by Coward in the hearing of his wife; (c) statements made by Coward to his sister-in-law, Mrs. Collingridge, as to the terms on which Coward was being carried by Cole. There were in addition declarations made by Cole to fellow-workmen which were rejected by the judge as being hearsay and res inter alios acta. The judge in considering the evidence of the wife and sister-in-law took the view that whereas the evidence amounted to the recognition of a moral obligation on the part of Coward to pay Cole, in order to be admissible the declarations must proceed on the basis and must amount to the recognition of a legally enforceable contractual obligation: that element, the judge found, was absent; he rejected the evidence of the plaintiff and her sister as to statements made by Coward in their presence and to Cole, and statements by Cole to his fellow-workmen, and held that, as Coward was not being carried "for hire or reward," there was no obligation to insure under section 36 of the Road Traffic Act, 1930. He therefore gave judgment for the defendants on May 9, 1961. The plaintiff appealed.

Daniel Brabin Q.C. and B. W. Budd for the plaintiff. There are three main points: (1) Was the judge correct in

Page 3 of 10 COWARD v. MOTOR INSURERS' BUREAU. [1959 C. No. 1491.] [1963] 1 Q.B. 259 excluding certain evidence? (2) Was Cole carrying passengers "for hire or reward" under section 36 of the Road Traffic Act, 1930? (3) Was Cole bound to insure? First, as regards the evidence, the judge rejected the evidence of the plaintiff and that of the deceased's sister-inlaw, Miss Mundey, which was to the effect that it was the practice of the deceased when he returned from work to put some money on one side and that the deceased told the plaintiff that he was putting it aside for Cole for taking him to work. This evidence was corroborated by Miss Mundey. Other evidence was that the deceased had made statements on several occasions to Cole, in the hearing of the plaintiff and Miss Mundey, offering to "settle" with Cole and that he had handed him money. The judge rejected this evidence because, as he found, the statements by the [*263] deceased did not amount to the recognition of a contractual obligation. The judge was satisfied that the statements were made, but he held that it was an essential part of a declaration against pecuniary interest that there should be a legal liability to pay and not merely a moral obligation to do so. This, it is submitted, is an incorrect view of the law and is not supported by the authorities and textbook writers. In the Sussex Peerage case1 Lord Campbell L.C. makes it clear that the only test of admissibility is whether the declaration is against the interest of the person making it. The existence of a legal obligation is not vital. There is nothing to suggest the contrary in Cross on Evidence and Nokes on Evidence (1952), p. 265, where nothing is said about legal obligations, the qualifications being competence, personal knowledge and contemporaneity. All of these factors are present here. The observations of Sir George Jessel M.R in Taylor v. Witham2 support this view. On the authorities the evidence as to statements made by the deceased when putting the money on the shelf and as to "settling" with Cole are admissible as being declarations against his pecuniary interest. Both the deceased and Cole had been travelling together for a long period and Cole looked to the deceased for payment. It was not a casual journey. There was regularity, frequency and the same method was adopted in every case when the journey was made. Assuming, however, that there was no legally enforceable contract of carriage, a passenger may nevertheless be carried for "hire or reward" within section 36 (1) of the Road Traffic Act, 1930. Bonham v. Zurich General and Liability Insurance Co. Ltd.3 is binding on this court and there is no distinction in principle between that case and the present. Even if the deceased here was not "hiring" the motor-cycle he was a passenger being carried for "reward" because regular payments were being made to Cole. Marvell Everett Q.C. and Tudor Evans for the defendants. Declarations by a deceased person cannot be admissible unless there is some legally enforceable liability. On the evidence here it cannot be said that there was any legal obligation or indeed that the declaration was against the pecuniary interest of the 1 (1844) 11 Cl. & F. 85, 113, H.L. 2 (1876) 3 Ch.D. 605, 607. 3 [1945] K.B. 292; 61 T.L.R. 59, 271; [1945] 1 All E.R. 427, C.A.

[*264] deceased. In Lloyd v. Powell Duffryn Steam Coal Co.4 Hamilton L.J. says "it must be to his immediate prejudice." There is no such immediate prejudice here. [In re Adams5 was also referred to.] There may have been some moral or equitable obligation on the deceased to pay money to Cole for his expenses in running the motor-cycle, but that is quite a different matter from finding that they both intended to enter into a contract. But even if it were to be found that there was a contract it does not follow that there was a hiring. [The Road Traffic Act, 1930, s. 36 (2), was referred to.] Wyatt v. Guildhall Insurance Co. Ltd.6 was a case of habitual carrying; in McCarthy v. British Oak Insurance Co. Ltd.7 various persons shared expenses of a car going to Scotland - no hiring - and Branson J.8 approved the way in which section 36 (2) was construed in Wyatt v. Guildhall Insurance Co. Ltd.9 East Midland Traffic Commissioners v. Tyler10 and Newell v. Cross11 underline the necessity of proof by the plaintiff of a contractual relationship. It is submitted that for the purposes of the Road Traffic Act, 1930, s. 36, a motor-cycle is not a vehicle, because no one would suppose that a motor-vehicle could be used for the carrying of passengers for "hire or reward" - it is absurd to suppose that a pillion passenger was contemplated by the Act. Further, the general scheme of the Act is to ensure that owners of vehicles do not have to insure against risks incurred by their passengers. This court should be unwilling to approve the need for a person, who wished to carry persons on his pillion, to obtain a licence from the Traffic Commissioners. Section 36 (2) of the Act of 1930 is a penal provision and must be construed in that light:

Page 4 of 10 COWARD v. MOTOR INSURERS' BUREAU. [1959 C. No. 1491.] [1963] 1 Q.B. 259 Wyatt v. Guildhall Insurance Co. Ltd.12 Bonham v. Zurich General Accident and Liability Insurance Co. Ltd.13 is distinguishable on the facts, and this court is not bound to follow it. Cur. adv. vult. December 20. SELLERS L.J. I will ask Upjohn L.J. to deliver the judgment of the court. 4 [1913] 2 K.B. 130, 137, 140; 29 T.L.R. 291, C.A. 5 [1922] P. 240. 6 [1937] 1 K.B. 653; 53 T.L.R. 389; [1937] 1 All E.R. 792. 7 [1938] 3 All E.R. 1. 8 Ibid. 9 [1937] 1 K.B. 653. 10 [1938] 3 All E.R. 39. 11 [1936] 2 K.B. 632. 12 [1937] 1 K.B. 653. 13 [1945] K.B. 292.

[*265] UPJOHN L.J. This is an appeal from the judgment given on May 9, 1961, by Edmund Davies J. when he dismissed the plaintiff's action against the defendants. The present action arose in this way. James Coward died on December 7, 1953, when he was a pillion passenger on a motor-cycle owned and driven by one, James Dermot Cole, both of them being killed in a collision which was admittedly due to the negligence of Cole. The plaintiff, who is Coward's widow and administratrix, therefore brought an action against the administratrix of Cole and judgment was given in her favour at Gloucester Assizes on June 21, 1958, in the sum of £7,850 19s. and costs. Unfortunately, it was found that the policy of insurance which Cole had effected did not cover pillion passengers against accident and as he had no other estate the judgment went unsatisfied. In those circumstances the plaintiff claims in this action against the defendants, the Motor Insurers' Bureau, in reliance upon an agreement made between the defendants and the Minister of Transport on June 17, 1946. It is unnecessary to review that agreement in any detail; it is sufficient to say that by that agreement the defendants undertook to satisfy a judgment in respect of any liability which was required to be covered by a policy of insuranceunder Part II of the Road Traffic Act, 1930, whether or not such persons were in fact covered by a policy of insurance provided certain conditions precedent were satisfied. It is not in dispute that such conditions were satisfied, so that the basic problem is whether Cole was bound to insure his passenger Coward against accident while carrying him on the pillion seat of his motor-cycle. No point is taken by the defendants that the plaintiff was not privy to that contract or that the Minister of Transport should have been a party. As we understand other actions have been maintained in circumstances similar to this in the High Court, this court has not thought it necessary to raise any such objection independently and the appeal has been entertained accordingly. The question whether Cole should have insured his pillion passenger Coward against injury involves two quite separate points. First, what were the terms upon which Cole was carrying Coward upon his pillion when the accident occurred. In the circumstances of this case that involves an interesting question as to the admissibility of declarations by deceased persons. Secondly, when the terms of the arrangement (if any) between Cole and Coward are ascertained, was Cole bound to insure Coward under section 36 of the Road Traffic Act, 1930, as one [*266] who was carried for "hire or reward" within the meaning of the Act? It may be noted at this stage that the Act has in fact now been repealed by the Road Traffic Act, 1960.

Page 5 of 10 COWARD v. MOTOR INSURERS' BUREAU. [1959 C. No. 1491.] [1963] 1 Q.B. 259 Briefly the facts were these. Coward for some two years before his death had been an employee of the Pressed Steel Co. Ltd., whose works are at Cowley in the neighbourhood of Oxford. He himself with his wife and children lived at Aylesbury. The distance between the two towns is about 23 miles. At the beginning of his employment it was his custom to travel to and from his work by some bus provided for the workmen, though by whom or upon what terms did not emerge at the trial. Cole also worked with the Pressed Steel Company at Cowley and he also lived at Aylesbury at a house about five minutes' walk away from Coward's house, and for about 18 months before the accident, fatal to both of them, Cole took Coward on his 600 c.c. Panther solo motor-cycle to the Pressed Steel Co.'s works and back during the working week. The undisputed evidence was that during the first 13 months that they travelled together between Cowley and Aylesbury they were on night-shift and it was the custom for Coward to walk to Cole's house in Aylesbury at about 7 p.m. in the evening; they would then go on to Cowley and next morning they would return home, when Cole would drop Coward at the latter's house at about 8.30 a.m. in the morning. For the last five months before the accident they were both on day-shift. Coward would then leave home at 6.30 a.m., walk to Cole's house, and Cole would drop Coward back at the latter's house at about 5.45 p.m. except when they were both doing overtime, when they would arrive at about 8.30 p.m. Evidence, plainly admissible, was tendered that Coward was seen to hand money to Cole from time to time, but that per se was no evidence of any monetary arrangements between them for the carriage of Coward by Cole and the first question to be determined, therefore, is what evidence of statements or declarations by Coward on the one hand or Cole on the other, made to one another or to third parties (both of them being dead), is admissible for the purposes of ascertaining the terms of carriage between them. The judge heard much evidence of such declarations de bene esse before ruling upon admissibility. These declarations may be classified as follows: (A) Declarations by Coward: (1) Statements made by Coward to his wife. The judge in his judgment summarised these thus: "The plaintiff has said, and [*267] it is right that I should make it clear that I accept what she says, namely, that it was a practice of her husband, when he arrived home on a Friday morning after night-shift, almost immediately to take out his unopened pay packet. He would then put some money aside on a top shelf in a cupboard in the living-room, always in the same place. I accept that, and I accept further, although of course not on every occasion but on quite frequent occasions, that he would say words to the effect that he was putting money aside for Mr. Cole, that she was not to touch it, and furthermore that he was putting it aside for Cole for taking him to work." Miss Mundey, Coward's sister-in-law, gave evidence and supported this. (2) Statements made by Coward to Cole in the hearing of his wife or Miss Mundey when he was getting off the motor-cycle on arriving home after the day-shift. The judge summarised them thus: "The other evidence about the payment of money between the two is derived firstly from the plaintiff, who says that on one Friday evening she saw her husband get off the deceased Cole's motor-cycle giving him some money and saying, 'I'd bet...