APPEAL JUDGE OVERTURNS FINDINGS OF KNOWLEDGE IN AN ACTION AGAINST THE MIB

March 21, 2017 · by · in Appeals, Civil evidence, Witness statements

In Whyatt -v- Powell & the Motor Insurers Bureau [2017] EWHC 484 (QB) Mr Justice Lewis overturned the findings of the trial judge that three claimants had knowledge that a driver was not insured.  The judgment considers what inferences a judge can, and cannot, properly draw from evidence before the court.

THE CASE

Three claimants were injured whilst passengers in a car driven by the the first defendant. The first defendant was not insured. The MIB were liable to compensate the claimants unless they could demonstrate that the claimants knew that the first defendant was not insured. The trial judge found the claimants knew.  The claimants appealed.

THE LAW

The judge reviewed the law.

    1. Akers and others v Motor Insurers’ Bureau and another [2003] EWCA Civ 18, Keene L.J., with whom the other members of the Court agreed, said this at paragraph 6 of the judgment.
“The phrase “knew or ought to have known” has been the subject of recent consideration by the House of Lords in White v White & the MIB [2001] UKHL 9, [2001] 1 WLR 481, where the origins of the MIB are described in the judgment of Lord Nicholls of Birkenhead at paragraphs 4 to 7. Their Lordships emphasised that the purpose of the 1988 Agreement was to give effect to the terms of the second EEC Motor Insurance Directive 84/5/EEC , which simply allows for an exception where the injured passenger “knew” that the vehicle was uninsured. Consequently, the phrase “knew or ought to have known” is to be given the same meaning as “knew” in the directive: see Lord Nicholls at paragraph 23. Moreover, as an exception to a general obligation, this phrase is to be given a narrow interpretation. A mere failure to make enquiries as to insurance, however negligent in the circumstances, is not enough by itself to bring the exception into play. It certainly will apply, however, either if the passenger had actual knowledge of the lack of insurance, or if he had information from which he realised that the driver might well not be insured but he deliberately refrained from asking questions lest his suspicions be confirmed. This was described by Lord Nicholls as a deliberate closing of the mind, with the passenger preferring not to know. It follows that it is not enough for the MIB to show that the passenger failed to make the enquiries which a reasonable person would have made in the circumstances. More than that is required.”
OVERTURNING THE JUDGE’S FINDINGS ON THE FACTS OF THIS CASE

The trial judge had found that each of the three claimants knew that the first defendant driver was not insured.

THE APPEAL

  1. Against that background, the question is whether, in relation to each Claimant, the judge was entitled on the evidence to reach the conclusion that he did. An appeal court will only intervene if the judgement below was wrong or unjust due to a serious procedural or other irregularity. I bear in mind that, while this court has a full transcript of the trial, including the evidence given by the Claimants, the judge below had the advantage of hearing each of the Claimants give evidence and forming a view of their truthfulness. There is no basis, in my judgment, for this court to depart from the general findings as to the Claimants’ lack of truthfulness in relation to the circumstances of the evening in question, the amount of alcohol they had consumed, the extent of their relationship with Anthony Powell or, in relation to the First Claimant, the claim (which the judge rejected) that the First Claimant had been specifically told that the car was “legit”. Those were matters for the trial judge to assess. The real issue is whether, given the findings of fact, the judge has properly addressed the question of whether each claimant knew or ought to have known that the vehicle was uninsured when they got into it, applying the principles set out in White and in Akers.
  2. Dealing first with the Third Claimant, Arron Rees, the position is this. He was 15 years old on the day of the accident (that day was his birthday). The evidence that he gave was that he did not know that Anthony Powell had been in prison before. His evidence was that he just assumed that the car was insured and did not ask. Those circumstances would not, in my judgment, of themselves amount to a situation where it could be said that Arron Rees ought to have known that the vehicle was uninsured, applying the relevant legal principles. At most they would amount to carelessness or negligence in failing to ask questions. The question is, therefore, what information did the judge find that Arron Rees had and from which he realised that the driver might well have not been insured and then deliberately refrained from asking questions lest his suspicions be confirmed?
  3. First, in my judgment, the judge was influenced by the belief or assumption that Anthony Powell had convictions for driving offences and had been in prison for those offences. He further inferred, from the circumstances and the fact that this was a small community, that the Claimants (including Arron Rees) would know more about Mr Powell than was admitted and that, therefore, they too would know that he had been to prison for driving offences. The difficulty with this conclusion is, in part, that there was no evidence before the judge establishing that Mr Powell had in fact been convicted, and imprisoned, for driving offences before this accident. He did not have evidence as to the antecedents of Mr Powell. Nor did Mr Powell give evidence. The most that there was by way of evidence was Gary Rees’ evidence that he believed that Mr Powell had been to prison for robbery and driving offences. But the judge did not base his findings on the fact that Gary Rees had told his younger brother, Arron Rees, those facts (and there was no evidence as to whether he had or not). There is, therefore, no basis for any inference from the facts as found by the judge, that Arron Rees had information (or believed) that Mr Powell had been in prison for, amongst other things, driving offences and realised, from that fact, that Mr Powell might not have been insured and deliberately refrained from asking questions.
  4. Secondly, and apart from the question of imprisonment for driving offences, a finding that Arron Rees had not told the full truth of what was happening at the house or as to the amount of alcohol consumed would not, of itself, be capable of giving rise to an inference that Arron Rees had information from which he realised that Anthony Powell might not be insured and deliberately refrained from asking about insurance (although it may be relevant to an assessment of his credibility if, for example, he denied knowledge of certain facts).
  5. Furthermore, the judge would have needed to address the evidence that Arron Rees gave that he just assumed that Anthony Powell had insurance. The case law establishes that a failure to make the inquiries that a reasonable person would make would not be sufficient to fall within the exception. Even assuming that Arron Rees knew that Anthony Powell had had a number of cars, and limited means, the judge would have had to consider whether Arron realised that meant that Anthony Powell might not have been insured. Simply failing to make inquiries which a reasonable passenger might make, with knowledge of that information, would not be sufficient to bring the case within the exception. The judge did not, however, address this issue. For those reasons, the appeal in relation to the Third Claimant must be allowed.
  6. Dealing next with the First Claimant, Jamie Whyatt, the question again is what information did the judge find that Jamie Whyatt knew from which he realised that the driver might well have not been insured and then deliberately refrained from asking questions lest his suspicions be confirmed? It is clear that the judge was influenced by the fact that the judge believed that Anthony Powell had convictions for driving offences and had been in prison for those offences. He further inferred that, given Mr Whyatt’s knowledge of Mr Powell and the fact that this was a small community, that Jamie Whyatt knew more about Mr Powell than he admitted and again he found that Jamie Whyatt knew that Anthony Powell had been to prison for driving offences. The difficulty with this conclusion is, as I have indicated, that there was no evidence before the judge establishing that Mr Powell had in fact been convicted, and imprisoned, for driving offences before this accident. He did not have evidence as to the antecedents of Mr Powell. Nor did Mr Powell give evidence. The most that there was by way of evidence was Gary Rees’ evidence that he believed that Mr Powell had been to prison for robbery and driving offences. But the judge did not base his findings on the fact that Gary Rees had told Mr Whyatt this (and there was no evidence as to whether he had or not). There is, therefore, no basis for any inference from the facts as found by the judge, that Jamie Whyatt had information (or believed) that Mr Powell had been in prison for, amongst other things, driving offences and realised, from that fact, that Mr Powell might not have been insured and deliberately refrained from asking questions. For that reason alone, the appeal in relation to the First Claimant must be allowed.
  7. The position in relation to the First Claimant more generally is different from and more complex than that in relation to the Third Claimant. The fact that he had not been truthful about the events of the evening or as to his consumption of alcohol would not of itself amount to the possession of information from which he realised that Anthony Powell might not be insured (although it may be relevant to an assessment of his credibility, for example, if he denied knowledge of certain facts). Similarly, the fact that the First Claimant had not told the truth when he claimed that Anthony Powell had told him the car was “legit” would be relevant to an assessment of his credibility (and would prevent him from advancing any case that he honestly and positively believed that Anthony Powell had insurance for the car). There were also the facts referred to by judge, namely that Jamie Whyatt knew that Anthony Powell had had a number of cars but had no job or apparently any means to pay insurance. Ultimately, however, the judge needed to identify what information existed, and which the First Claimant had, and from which he realised that Anthony Powell might not be insured (particularly bearing in mind that the First Claimant had given evidence that it did not occur to him that Anthony Powell did not have insurance). The reality is, it seems, that the judge considered that all the matters referred to were relevant in assessing the First Claimant’s credibility in deciding whether or not he knew that Anthony Powell had been to prison for driving offences (and the judge then, it seems, found that he did know that and so did have information from which he realised that Anthony Powell might not have insurance). He simply assumed that such information existed (when there was no evidence it did) and addressed his attention to the question of whether the First Claimant knew that information. Given the absence of evidence that Anthony Powell had such convictions (or that Jamie Whyatt believed that he did), the findings of fact made by the judge stop short of establishing that there was such information in existence (that is, information that Anthony Powell did in fact have convictions and imprisonment for driving offences at the time of the accident). For those reasons, the appeal in relation to the First Claimant is allowed.
  8. The positon in relation to the Second Claimant, Gary Rees, is different again. He gave evidence that he believed that Anthony Powell had gone to prison for robbery and driving offences. Given that finding, there would have been a legitimate basis for concluding that he had information from which he believed that Anthony Powell might not have been insured and deliberately did not ask questions. There are, however, particular features of this case which, on balance, lead me to conclude that there has been a procedural shortcoming in the trial below which means that it would be unjust to allow such a finding to stand on the evidence. First, Gary Rees did give evidence that he assumed that Anthony Powell had insurance and never asked himself whether he did. Even if he believed that Anthony Powell had been imprisoned for driving offences, and even if that would cause a reasonable person to make inquiries, that would not be sufficient to enable the MIB to rely upon the exception if, in fact, Gary Rees genuinely but negligently failed to make inquiries and simply assumed (even if negligently) that the driver must be insured. The judge did not address this issue. Secondly, the judge was influenced by the fact that he did not believe Gary Rees when he said that he was told after the accident about Anthony Powell’s driving convictions. The difficulty with that conclusion is that the judge based it on the statement that he believed the Second Claimant had given to the police in December 2013 (about 8 months after the accident). If, as seems likely, the judge was referring to the statement dated 9 December 2013, that was a statement taken by the MIB, it was not read back to Gary Rees (who was 16 and had difficulty reading) and was not adopted by him in his evidence in chief. The statement to the police, the contents of which Gary Rees did confirm were true, does not refer to any convictions on the part of Anthony Powell and was given much earlier than December 2013. In the circumstances, the failure to address the direct evidence of Gary Rees’ knowledge at the time of the accident, particularly when set against the assessment of Gary Rees’ evidence by reference to a statement not accepted by him as true, and given the background of the absence of actual evidence of any convictions for driving resulting in imprisonment, does amount to such an irregularity in the trial as would make it unjust to allow the finding that Gary Rees ought to have known that the vehicle was not insured to stand. The appeal of the Second Claimant must therefore be allowed.
  9. In the circumstances, that part of the order recording that the court had determined as a preliminary issue that each Claimant ought to have known that the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part IV of the Act will be set aside. That issue will be remitted to the county court and that matter will need to be re-heard. The determination made in respect of four other preliminary issues has not been the subject of any appeal and those four determinations therefore stand.
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