B3/2002/0604 
Neutral Citation Number: [2003] EWCA Civ 18
IN THE SUPREME COURT OF JUDICATURE 
IN THE COURT OF APPEAL (CIVIL DIVISION) 
ON APPEAL FROM GUILDFORD COUNTY COURT
(HIS HONOUR JUDGE BISHOP)
Royal Courts of Justice 
Strand 
London, WC2 

Tuesday, 14th January 2003
 B E F O R E:

LORD JUSTICE PETER GIBSON 
LORD JUSTICE KEENE 
MR JUSTICE JACOB
 
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AKERS AND OTHERS
Claimants/Respondents
-v-
 
MOTOR INSURERS' BUREAU AND ANOTHER 
Defendants/Appellants 
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(Computer-Aided Transcript of the Palantype Notes of
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
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MR D PEARCE-HIGGINS QC (instructed by Weightmans, India Buildings, Water Street, Liverpool, L2 0GA) appeared on behalf of the Appellants
MR LEVISSEUR (instructed by Messrs Websters, Cameo House, Bear Street, London WC2) appeared on behalf of the Respondents
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J U D G M E N T 
(As Approved by the Court)
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Crown Copyright©
Tuesday, 14th_ January 2003
J U D G M E N T 

1.	LORD JUSTICE PETER GIBSON:  I will ask Keene LJ to give the first judgment.
2.	LORD JUSTICE KEENE:  This is an appeal by the Motor Insurers' Bureau ("MIB"), one of the two defendants in the court below, from the decision of His Honour Judge Bishop at Guildford County Court on 8th March 2002.  The claimants were relatives of a young man, Graham Akers, who was killed in a traffic accident on the A228 in Kent on 14th June 1997. Graham Akers was sixteen and three-quarters years old at the time and he was one of a number of passengers in a Toyota car being driven by Roy Thorne, who was the other defendant.  Roy Thorne drove at high speed, lost control of the vehicle and hit an embankment, causing the car to turn over and end up in a field.  He was subsequently convicted of causing death by dangerous driving.  He was 19 at the time.  The car was one which he was in the course of buying from a friend, but neither it nor he were insured.  Consequently, the MIB was joined as the second defendant in the civil proceedings.  Mr Thorne did not actively defend the proceedings, but the MIB did, both generally and in respect of their own liability.  Mr Thorne appeared in person at the trial.  
3.	There was no dispute as to his negligence, but there were issues raised as to contributory negligence by the deceased, as to which the judge ultimately held that there had been contributory negligence, both in not wearing a seat-belt and in accepting a lift from somebody whom he knew had been drinking and had taken cannabis.  This appeal is not concerned with those findings of contributory negligence.
4.	The issue on this appeal arises because the MIB took the point that, whatever the liability of Mr Thorne, the MIB was not liable under the terms of its Agreement with the relevant Secretary of State, that being the Agreement dated 21st December 1988.  As is well known, under that Agreement the MIB accepts an obligation to satisfy a judgment obtained in respect of a liability which is the subject of a compulsory insurance obligation under the Road Traffic Acts when such judgment remains unsatisfied.  Typically the MIB's obligation arises where the driver primarily liable is uninsured or cannot be traced. 
5.	However, the MIB's obligation is subject to certain exceptions.  One of those is to be found in clause 6(1)(e) of the 1988 Agreement.  The relevant part of clause 6(1), insofar as material for the present appeal, reads as follows: 
"6(1) The MIB shall not incur any liability under clause 2 of this Agreement in a case where: 
	  ...
 (e)   at the time of the use which gave 	rise to the liability the person suffering death or bodily injury ... was allowing himself to be carried in or upon the vehicle and either before the commencement of his journey in the vehicle or after such commencement if he could reasonably be expected to have alighted from the vehicle he- 
			 (i) 		 ...
	 (ii)				 knew or 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 Road Traffic Act 1972." 
6.	The effect of that provision is that the MIB's obligation does not apply where the person killed or injured "knew or ought to have known" that the vehicle was uninsured.  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, [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.
7.	In the present case, the relevant evidence came from two other young men, who had been passengers in the car, and from the driver, Roy Thorne.  Mr Thorne and one of the passengers, Mr Aaron Goldfinch, gave oral evidence at the trial.  The other passenger, Michael Cameron, had made a written witness statement which was admitted under the provisions of the Civil Evidence Act.  The judge reviewed the evidence in an ex tempore judgment and concluded that, although there was "a great deal of evidence" pointing in the direction of Mr Akers having known that Mr Thorne was not insured, he could not be satisfied on the balance of probabilities that Mr Akers did know.  He therefore found that the MIB was liable.
8.	The judge did not in his judgment deal with whether Mr Akers ought to have known about the lack of insurance; and leading counsel for the MIB raised this with him immediately the judgment had been concluded without, one is bound to say, getting any very clear response.  When the application for permission to appeal to this court came before Hale LJ, she invited the judge to provide additional reasons for his decision in accordance with the procedure recommended in English v Emery Reimbold & Strick Limited.  He has helpfully done so in writing, emphasising that he had doubt as to whether Mr Akers had heard any statement that Mr Thorne was not insured.  The judge has also stated that he had not been satisfied that Mr Akers, a sixteen year-old without driving experience, had been put on inquiry as to the question of insurance.
9.	The judge's conclusions have come under criticism from Mr Pearce-Higgins QC for the MIB.  He submits that the judge did not make any clear findings of fact in his judgment, he points out that none of the evidence seems to have been rejected by the judge as having been dishonestly given and he emphasises that this court has the witness statements of the relevant witnesses together with transcripts of the oral evidence given by the two witnesses who gave such evidence.  Consequently, it is contended that this court is in as good a position as the judge to arrive at a conclusion on the crucial issue.  
10.	Mr Pearce-Higgins submits that the evidence indicates that these young men were all in a group when a discussion about the lack of insurance took place.  There is, he says, no evidence pointing towards Mr Akers not having heard such statements being made.  The evidence shows either that Mr Akers heard these comments that there was no insurance, or, at the very least, that he heard the question of insurance being discussed in circumstances which put him on inquiry within the sense meant by the decision in White v White.  He was, it is said, clearly reckless not to have made any such further inquiries if that was the case.
11.	On behalf of the respondents, the relatives of the deceased, Mr Levisseur contends that there was nothing wrong with how the judge formulated the legal test which he had to apply.  It is emphasised that the judge must have been clear about the issues and that this was a case where the evidence did not consume a great deal of time.  It is conceded by Mr Levisseur that the judge did probably accept, so far as one can tell, that someone had made a statement that the car was not insured.  But he argues that these young men were larking about, and the judge was therefore entitled to conclude, on the balance of probabilities, that Mr Akers did not hear what was being said about the lack of insurance.
12.	The background to this issue is that Graham Akers and Michael Cameron had arrived in the Margate area in a car driven by another young man who had then been arrested by the police.  The result of that was that Mr Akers and Mr Cameron were, in effect, stranded there and wanted a lift back to South-east London.  There was evidence that Mr Cameron pressed Mr Thorne, who had the Toyota, to give them a lift and that Mr Thorne was initially reluctant to agree.  In his witness statement, taken as his evidence-in-chief, Mr Thorne stated that: 
"We were all standing in a close group and Michael [that is Cameron] asked about the car.  I informed him in the presence of Graham [that is Akers] that I did not have a licence and that the car was not insured.  
When I first refused to drive them, both Graham and Michael asked again, and I then felt obliged to do so as Aaron had offered the money."
13.	In his oral evidence to the court, according to the judgment, Mr Thorne said that he thought that Mr Akers would have heard that that was the case, but he could not be sure.  The transcript of his evidence records him as saying that he could not be clear that Mr Akers heard.
14.	Aaron Goldfinch had made two witness statements.  In the first, which he told the court he preferred, he said this at paragraph 13: 
"I told Michael [Cameron] and Graham [Akers] that Roy was not insured to drive the car when we all first met up, and then again before we left to travel to London. Roy also said that he was not insured, but they were quite happy for the lift home." 
Earlier in the same statement he had said that he knew that Roy Thorne was not insured.  
15.	In his second statement Mr Goldfinch stated: 
"We were all having a laugh together in the vehicle.  I remember chatting about cars and the fact that Roy did not own the vehicle.  As I said earlier I am sure that the vehicle wasn't insured.  I assumed from the fact that they knew Roy didn't own the car that the others would also assume that the vehicle was not insured.  I do not however remember Roy specifically saying that he was not insured." 
The judge seems to have regarded Mr Goldfinch's comment in his second statement that he had assumed that the others would assume that the car was not insured as in some way contradicting his first witness statement.
16.	According to the judge, in his oral evidence Mr Goldfinch said that there was a discussion about the insurance, which he described as a "slight discussion".  We have the benefit of a transcript of Mr Goldfinch's evidence, and what he said at this particular stage when being cross-examined by Mr Thorne was this:
"... there was a discussion about the insurance and everyone was aware that something was wrong with the insurance."
Then, a few question later, the judge intervened and said this: 
"Just on that point, let us pick it up.  You talked about him not being insured, did you?  
A. Yes.
Q. You are quite clear about that?  
A. There was slight discussion about insurance."
Then leading counsel for the MIB intervened, saying: 
"I have made a note: `Everyone was aware there was a problem with insurance'.  
A.  Yes, this is what I mean.  It was discussed and people had their own thoughts and ideas on the insurance situation.  But nothing was said yes or no." 
17.	Michael Cameron in his witness statement said that he remembered someone, possibly Aaron Goldfinch, saying that Thorne had never taxed and insured the car.  The judge rightly pointed out in his judgment that Mr Cameron in his statement did not say that Graham Akers had heard what was said.  That is true, but his evidence does tend to confirm that Mr Goldfinch himself had at least said that, as Mr Goldfinch himself had said in his first witness statement.
18.	I have set out these crucial passages from the evidence at some length because the judge did not make express findings of fact as to who said what and in what circumstances.  However, he did have before him two important pieces of evidence on this topic.  The first was that of Roy Thorne that in the presence of Graham Akers he said that he did not have a licence and that the car was not insured.  As the judge emphasised, Mr Thorne accepted at trial that he could not be sure, or perhaps clear, that the deceased heard that.  Mr Thorne's oral evidence was that he though that he would have done.  Secondly, there is the evidence of Mr Goldfinch, which was to the effect that there was a discussion about Mr Thorne not being insured.  As I have already indicated, Mr Cameron's witness statement lends some support to there having been an occasion when Mr Goldfinch said something along those lines.
19.	What evidence was there to the contrary?  It is difficult to discern any.  The judge commented in his judgment that he was concerned that there was no evidence "at the top end of what might be required to the effect that face to face, man to man, Mr Akers was told that Mr Thorne was not covered by insurance".  Yet there was evidence, as I have indicated, that Mr Thorne and Mr Goldfinch talked about Mr Thorne not being insured, and, indeed, Mr Levisseur in the course of his submissions today has accepted that the judge probably did accept that someone had made a statement that the car was not insured.  The judge also seemed to have accepted that these young men, while talking, were in a tight little group: see page 14 D of his judgment.  
20.	In his further reasons supplied to this court he refers to having "doubt" as to whether Mr Akers heard such a statement.  I am bound to say, that is a somewhat unusual way of formulating a conclusion in a civil case.  There does not seem to have been any evidence pointing to Mr Akers not having heard, while there was the evidence of Mr Goldfinch that everyone was aware that something was wrong with the insurance.
21.	One is, of course, very reluctant to interfere with a judge's conclusion reached after having heard oral evidence at a trial, but we do have the benefit of the transcripts of the oral evidence, as well as the witness statements.  On the basis of the evidence recorded, it seems to me that the judge here must have been applying too stringent a standard of proof on this issue.  It appears to have been accepted by him that at least Mr Thorne, and perhaps Mr Goldfinch, made such a statement about insurance in this tight little group and such evidence as there was pointed to Mr Akers hearing that.  He was in the group when the statement was made, he was anxious to know if Mr Thorne would drive them home and it would seem likely that he was concentrating, therefore, on what was being said.  Mr Thorne, according to the judgment, thought that Mr Akers would have heard what was said.  No-one suggested to the contrary.  
22.	In all these circumstances, it is difficult to see how it could properly be concluded that, on the balance of probabilities, Mr Akers did not hear that being said.  If so, it would follow that Mr Akers knew that there was no insurance but, nonetheless, decided to accept the lift.  Putting it at its lowest, one is forced to conclude that Mr Akers must have been aware that there was a problem about insurance, and in those circumstances he ought have known, in the sense established in White v White, that there was no insurance.  At the very least, he was deliberately avoiding specifically inquiring further about that topic.  
23.	For my part, I conclude that this is one of those perhaps sad cases that comes within the exception in clause 6(1)(e) of the agreement and I therefore would allow this appeal.
24.	MR JUSTICE JACOB:  I agree.
25.	LORD JUSTICE PETER GIBSON:  When the question for the trial judge is whether a passenger knew or ought to have known, in the narrowly extended sense recognised by Lord Nicholls in paragraph 16 of his speech in White v White, that the driver was uninsured, it is important that the judge should set out the findings of fact which enabled him to reach the conclusion which he did on that question.  Unhappily in the present case, whilst the evidence given orally to the judge and appearing in the witness statements is recorded by the judge, he failed to make findings as to that evidence.  He referred to the difficulties in reaching a conclusion, such as that Mr Akers, the passenger, was not there to give evidence, but it is the duty of a judge to make findings nonetheless.
26.	For the reasons which Keene LJ has given, I too have reached the conclusion that the judge must have applied too stringent a test and that, on the evidence which the judge received and did not reject, the further conclusion must be that Mr Akers had the relevant knowledge.
27.	I also would allow this appeal.
Order: Appeal allowed with costs.  The court makes a declaration that:
(1) the MIB is not obliged to satisfy the judgment against the first defendant, Mr Thorne;
(2) so far as there are any adverse costs orders below, the MIB are not obliged to pay any costs of the claimant in respect of the hearing below.
(Order does not form part of Approved Judgment)