Croxford v Universal Insurance Co Ltd [1936]
- Reported: [1936] 1 All ER 151
- Year: 1936
- Court: Court of Appeal
FACTS:-
The defendant company insured Herbert Davidson on 20 December 1933, against liabilities to third parties in respect of a motor lorry and delivered a certificate of insurance to him.
An accident occurred on 13 June 1934. Mr J W Croxford, on whom the plaintiff’s were dependant, was killed by reason of the negligence of the insured. On 29 June the insurance company repudiated the policy on the ground of misstatement or concealment of material facts by Davison and demanded the return of the certificate of insurance. On 12 July this was returned and cancelled by the company on 12 July.
On 31 July the Road Traffic Act 1934, received Royal Assent, although the operation of s.10 was postponed. On 3rd August 1934 an action was commenced against the assured. On 1 January 1935, the Road Traffic Act 1934, s.10 came into operation. The plaintiff’s in the action then sought a further action to render the insurance company liable to pay the damages awarded.
On 6 February 1935, Horridge, J heard the action under the Fatal Accidents Act and awarded the plaintiffs £3000 damages plus costs.
The widow and dependants then brought, against the insurers of Davidson (the appellants) an action under s.10(1) of the Act of 1934, claiming a declaration that the defendant company were liable to pay the plaintiff’s the amount of the judgement against Davidson, with interest and costs. The learned Judge gave judgement for the plaintiffs for the amount claimed, on the ground that the 1934 act was known, as it had received Royal Assent on 31 July 1934, and the defendants could have taken proceedings under s.10(3) to obtain protection. Even if proceedings could not have been taken the plaintiff’s could have recovered, because the judgement was obtained since s.10 coming into operation.
The defendants then appealed to the Court of Appeal.
HELD:-
In the Court of Appeal it was held there was no policy in existence after 12 July 1934, on which the Road Traffic Act 1934 could operate and the act could have no possible effect in such a case.
Slesser LJ found that this case depended on the interpretation of the Road Traffic Act 1934 as the liabilities of the Insurance Company arose by the operation of certain statutes. The original rights of action of the plaintiff was against the person who had caused the injury, but by the operation of the law, beginning with the Third Parties (Rights Against Insurers) Act 1930 and the Road Traffic Act 1934 those liabilities in certain circumstances are transferred to the insurance company who therefore become the defendant in the case.
The insurance company argued that there was non-disclosure of material facts. Slesser LJ found that before the 1934 Act would in the circumstances have justified the insurance company in saying that they were immune from any liability to the third party. In the circumstances of the case, Slesser LJ found the insurance company liable by reason of the new legislation in the Road Traffic Act 1934.
Slesser LJ found that it was impossible at any time for the insurance company to avail themselves of the machinery from exempting themselves from s.10. Slesser LJ did not agree with the reasoning of Horridge and allowed the appeal, directly reversing the previous decision.
Scott LJ agreed with the judgment of Slesser LJ. Scott LJ found that the appeal should be allowed. Scott LJ stated ‘I cannot see how, if the person who had been insured ceased to be insured because the contract of insurance was actually cancelled, rescinded, by reason on non-disclosure, before the Royal Assent was given to the Act on July 31, it could possibly be said that when the Act was passed had nothing to do with the case.’
Eve J agreed.
The appeal was allowed.
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