FACTS:-

The Defendant was driving a motor car in Rotherham on 9 September 1935 and was stopped for exceeding the speed limit. He was asked to produce his certificate of insurance required by the Road Traffic Act 1930, but he did not have the certificate in his possession as he had entered into an agreement with Mutual Financial Ltd (M F Ltd), to advance to him the full amount of his premium; the Defendant undertaking to repay the premium by instalments.

Until the premium had been repaid in full Mutual Financial Ltd were to retain the policy and the certificate, which were delivered to them by the insurers.  M F Ltd produced the certificate within 5 days. The Claimant took the view that this was not adequate compliance with the Act. The Defendant was charged and convicted of unlawfully using a car without having in force a valid policy of insurance, which had not been delivered within section 36(5) of the Road Traffic Act 1930.

The Defendant appealed the decision on the ground that delivery of the certificate to a person designated by the insured was sufficient compliance within section 36 (5) and alternatively that M F Ltd were the person by whom the policy was effected and delivery to them was a sufficient compliance with that section.

The appeal was heard in the King’s Bench Division before Lord Hewart LCJ, Justice Parcq and Justice Goddard.

HELD:-

Lord Hewart interpreted the relevant sections of the Act very strictly. It was on that ground that he dismissed the Defendants appeal. He quoted section 35, section 36 and section 40. The sections are as follows;

Section 35 (1) provides;

“It shall not be lawful for any person to use, or cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation the user of the vehicle by that person or that other person such a policy of insurance or such a security on respect of third-party risks as complies with the requirements of this part of the Act”

Section 36 (5) states;

“A policy shall be of no effect for the purposes of this part of this Act unless and until there is delivered by the insurer to the person by whom the policy is effected a certificate in the prescribed form”

Section 40 (1) provides;

“any person driving a motor vehicle on a road shall, on being so required by a police constable, giving his name and address and the name and address of the owner of the vehicle and produce his certificate, and if he fails to so shall be guilty of an offence.”

He could not find that the certificate had been delivered to the Defendant by the insurer and that he had ever seen it. The certificate was in fact in the possession of a company called Mutual Finance Ltd who held it for their own safety, both the policy of insurance and the certificate. The insured person and the finance company had entered into a scheme which might have good features from the points of view of both of them, but the uncontroverted feature was that it might render compliance with the Act impossible.

Justice Du Parcq agreed with Lord Hewart, however, addressed the arguments of the Defendant more specifically.

The first argument put forward was that there was delivered by the insurers to the Defendant a certificate of insurance and in order to establish that proposition, counsel relied upon an admission set out in para 5 of the case. It is an admission as to the contents or the effect of the written agreement. Justice Du Parcq stated that for the purposes of today that admission did not go far enough, there was nothing to show that there was a delivery to the Defendant in the sense of a delivery made to his agent. There is no admission that Mutual Finance Ltd, were under a duty to hand over the certificate to the Defendant at any time at his request. On the contrary, there was no such duty upon them and there was a right for them to retain the certificate in order to safeguard their position.

The second argument put forward on behalf of the Defendant was that the policy was effected by Mutual Finance Ltd, and therefore a policy was delivered to the person by whom it was effected because it was delivered to Mutual Finance Ltd. Justice Du Parcq could not accept this stating it is plain that the Act contemplates a person as the assured, and moreover, it appears from this case that the person who did effect the policy was the assured. The proposal form was signed and prepared on behalf of the Defendant.

Goddard J concurred. In his judgement he dismissed the notion that Mutual Finance Ltd was the agent of the Defendants. While accepting that such a relationship could exist, it did not so in the present case. The policy and the certificate were hypothecated to Mutual Finance Ltd, and they held in their own right and were not holding for the assured. The Act requires that the insured person shall produce his certificate in person if required to do so, and if held by Mutual Finance Ltd, he cannot do so.

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