Carpenter v Ebblewhite 1938

FACTS:-

The plaintiffs had been injured in a collision between their motorcycle and a motor car driven by the defendant B. It was in dispute whether the defendant E had sold the car to B, or whether B was driving it as his agent. It was alleged that the injuries was due to the negligence of the driver of the car.  Action was brought against the registered owner of the car, the driver and the insurers.  The insurers had insured the registered owner and any person driving the car with his consent.  The claim was against the registered owner and the driver for damages in negligence and against the insurers a declaration that they were obliged to satisfy any judgment obtained by plaintiffs against the other two defendants or either of them.

The defendants made an application that the plaintiffs’ claim as against the insurers should be struck out and in support of the application they alleged and gave evidence that before the date of the collision the registered owner of the car had sold it to the driver.

The plaintiffs obtained leave to add E’s insurance company as a defendant. In the statement of claim, the plaintiffs claimed, inter alia, a declaration that the insurance company was liable to satisfy any judgment obtained against E or B. An application was made to strike out such portions of the statement of claim as referred to the insurance company as being frivolous and vexatious

HELD:-

It was held that the application should be granted and plaintiffs’ claim for a declaration of liability against the insurers struck out.

Greer LJ held that the claim against the insurance company was frivolous and vexatious, as there could not be any claim for a declaration in view of the fact that there was not at that time any dispute between the plaintiffs and the insurance company.  On the ground that the court had no power to make a declaration of the liability of the insurers to satisfy a judgment for plaintiff’s against defendants where no actual dispute between plaintiffs and the insurers as to that liability had as yet arisen or could arise before such judgment had been obtained.    Greer LJ found that the Court’s decision was right under RSC Ord 19, r27, although disagreed with the reasons why it was right. 

Slesser LJ took the view that the appeal should be dismissed, although the basis of the judgment was different to Greer LJ.  There was a dispute whether s.10 in particular, which might conceivably found an action for a declaration if it were brought as a separate proceeding, applied to this case. Regarding this point Slesser LJ expressed no concluding opinion.  Slesser LJ argued on the ground that to allow plaintiffs to include in the action a claim against the insurers, and thus to disclose at the trial the fact that a defendant was insured, would, in the circumstances ‘tend to prejudice, embarrass or delay the fair trial of the action’ within Order XIX rule 27.  The addition of the insurance company as a defendant would tend to embarrass the fair trial of the action. The old practice, whereby a jury should not be informed that a defendant motorist is insured, has not been altered by the passing of the Road Traffic Act 1934. 

MacKinnon LJ stated the question of the liability of the insurance company depended primarily upon fact. A declaration of future liability is not, in such circumstances, a suitable remedy.  MacKinnon LJ emphasized an alternative claim against the insurance company in that it is a claim for future liability.  Such claim would be permissible but would be with the discretion of the court to deal with declarations of liability on a question of law.  MacKinnon LJ concluded that the appeal failed and should be dismissed. 

The appeal was dismissed with costs

Related posts:

1. Fire, Auto and Marine Insurance Co Ltd v Greene [1964]
2. Croxford v Universal Insurance Co Ltd [1936]
3. Cleland v London General Insurance Co Ltd [1935]