Fire, Auto and Marine Insurance Co Ltd v Greene [1964]
- Reported: [1964] 2 All ER 761
- Year: 1964
- Court: High Court
FACTS:-
An insurance company issued an insurance policy to motorist covering him against third party risks. The motorist was involved in an accident and a third party, who was injured in the accident, commenced proceedings against him. While these proceedings were pending, and within three months of their commencement, the insurance company issued a writ against the motorist, claiming a declaration that they were entitled to avoid the insurance policy because it had been obtained by non-disclosure of a material fact or by misrepresentation.
In accordance with s 207(3)a of the Road Traffic Act, 1960, the insurance company served notice of their action on the third party, who became entitled to be made a party in the insurance company’s action, but did not in fact exercise this right. Under an agreement with the Minister of Transport, the Motor Insurers’ Bureau would become liable to satisfy any judgment obtained by the third party against the motorist in the event of that judgment not being satisfied by the motorist or by the insurance company. This agreement could only be enforced by the Minister of Transport, but in practice when sued by third parties the Motor Insurers’ Bureau did not take the point that the third parties were not privy to the contract. The Motor Insurers’ Bureau applied to be joined as a defendant in the action by the insurance company against the motorist.
HELD:-
The appeal was dismissed. The court had no power under RSC Ord 15, r 6(2)(b)b to add the Motor Insurers’ Bureau as a defendant, there was no legal right enforceable by the bureau against one of the parties to the action, or legal duty enforceable against the bureau by one of the parties, would be affected by the result of the action between the insurance company and the motorist, and all matters in dispute in the action between the insurance company and the motorist could be effectually and completely determined and adjudicated on without the bureau being added as a defendant.
John Stephenson J stated in his judgment that a person who applies for an order under para (2) of RSC, Ord 15, r 6 adding him as a defendant, thought he need not show that the plaintiff has a cause of actions against him, must at least be able to show that some legal right enforceable by him against one of the parties to the action or some legal duty enforceable against him by one of the parties to the action will be affected by the result of the action. That the intervener was able to show both in Amon v Raphael Tuck & Sons Ltd (where he was added) and in The Result (where he was not); that the MIB’s very special position prevents it from showing. It is true that MIB can claim a contractual relationship with a motor insurer who is a party to the domestic agreement made between it and insurers transacting compulsory motor insurance business.
Stephenson J found that the relationship did not confer any right or impose any duty which was directly affected by the result of an action for a declaration, the plaintiffs were not at the material time parties to the domestic agreement, and MIB was unable to show in this case any direct effect on any such right or duty.
The MIB was created and entered into this agreement with the Minister in 1946, yet Parliament re-enacted the proviso without alteration in 1960. Stephenson J took the view that Parliament refrained from introducing into the proviso a right for MIB also to be joined because MIB already had it under RSC, Ord 16, r 11.
Stephenson J came to the conclusion that MIB’s peculiar position did not entitle it to an order under RSC, Ord 15, r 6(2)(b), because all the matters in dispute between the insurance company and the defendant were completely determined and effectually adjudicated without being added as a defendant.
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