Desouza v Waterloo [1999]

FACTS:

The appellant was Raymond Desouza and the respondent to the appeal was Malcolm Waterlow, who was sued on his own behalf and on behalf of all other members of the Lloyd’s Syndicate No.508.  The appellant appealed against an order made by His Honour Judge Hunter, sitting in the Wandsworth County Court on 2 April 1996, when he dismissed the appellant’s claim under s 151 of the Road Traffic Act 1988 for indemnification by the respondents in respect of the respondents’ insured person, Dr Susan Bayley, whose car had been in collision with the appellant’s car on 23 August 1990.

The appellant always took the view that Dr Bayley was entirely to blame for the collision which occurred between their two cars.  The appellant’s case was that Dr Bayley was in her car, both were travelling in the same direction, she cut in front of his car quite improperly as he was slowing down to stop at traffic lights, which were against them both.  Two independent witnesses gave very similar accounts in writing of the accident to that was given by the appellant.   

After obtaining the relevant details by the insurers the appellant wrote, shortly after the accident, directly to the claims department of the respondents as the undisputed insurers of Dr Bayley.

Mr Desouza relied upon his letter of 24 April 1991 and his telephone conversation with a member of the respondents claims department on 30 April 1991. He gave evidence of both. The respondents did not call evidence. The Judge held that the letter and the conversation, even assuming the letter had arrived at the respondents’ offices and the conversation took place, were not sufficient to amount to notice of the bringing of the proceedings. 

The issue for this Court of Appeal was whether the Judge reached the correct conclusion.

HELD:

Cazalet J found the question to consider was whether notice in the required statutory form was given through the letter dated 20 December 1990, which showed the awareness of the respondents of the possibility of proceedings, and the communications of 1 January,14 January, 24 April and 30 April 1991. 

Cazalet disagreed with the view of Judge Hunter.  Cazalet J took the view that notice in any particular case was a matter of fact and degree and will turn on the extent to which the insurer has been made aware of the background circumstances and of the position of the claimant in regard to the taking of proceedings.  Such notice can be given orally or in writing.  The essential purpose of the requirement of notice is that the insurer is not met with information, out of the blue, that his insured has had a judgment obtained against him. 

Cazalet found that a very detailed plan and account of the accident had been sent to the respondents within one month of the accident having occurred.  Following that the respondent had authorized their engineer to inspect the appellant’s car.  This had taken place and the respondents had authorized the work to be carried out on that car.  There then had been a sequence of letters and exchanges in the earlier part of 1991, with the appellant making it quite clear that unless his claim was settled he intended to take proceedings.  Thus Cazalet considered the judge was wrong in construing the sub section as he did.  Cazalet found that due notice was given within the meaning of the subsection by the appellant to the respondents and in those circumstances the appeal was allowed. 

Roch LJ

Agreed with Cazalet J.  Roch found that this appeal turned on the meaning and application of s.152(1)(a) of the Road Traffic Act 1988.  Section 151 places a duty on insurers of motor vehicle drivers and users to satisfy judgments obtained against persons covered by their policies.  Section 152 provides certain exemptions from the duty imposed on insurers by s.151.  Section 151(1)(a) is the provision that was relied upon by the respondent insurers in this case. 

Roch further identified that the purpose of the provision was to avoid insurers being asked to satisfy a judgment against their insured in respect of a claim of which they knew nothing which obtained in proceedings that they had no notice or warning. 

Roch LJ found that the onus was on the respondents to prove that they had not had the necessary notice.  Roch held, in the circumstances of the case the respondents fell short of establishing that defence.  Roch LJ allowed the appeal making the respondents liable to the appellant. 

The appeal was allowed.

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