McMinn v McMinn & Anor

Under section 151(4) of the Road Traffic Act 1988, an insurer avoids liability for an injured passenger where the passenger knew, or had reason to believe, that the vehicle had been stolen or unlawfully taken. Actual belief is unnecessary. It is enough that the passenger possessed information which would have given a good reason for believing that fact had the passenger considered it. Deliberately shutting one’s eyes to the obvious may satisfy the test.

The exception is construed in the context of the statutory policy of compensating road-traffic victims, but the phrase “had reason to believe” is distinct from actual knowledge. An unauthorised use may amount to an unlawful taking where control of the vehicle is appropriated for personal purposes in repudiation of the owner’s rights.

The claimant, a seriously injured passenger, brought a personal-injury claim against the driver and the vehicle insurers. The driver was the claimant’s younger brother and had driven a van without the owner’s permission or the insurers’ policy permission.

The insurers repudiated liability. The court was asked to determine as a preliminary issue whether the driver’s liability was an “excluded liability” under section 151(4) of the Road Traffic Act 1988, because the claimant knew or had reason to believe that the van had been stolen or unlawfully taken.

1. The court declared that the driver’s liability for the claimant’s injuries was an excluded liability within section 151(4) of the Road Traffic Act 1988. The insurers were therefore not required to indemnify the driver in respect of any judgment obtained against him.
2. The burden was on the insurers to prove the statutory exception on the balance of probabilities. The word “knew” meant actual knowledge or knowledge treated by law as equivalent to actual knowledge. The alternative phrase “had reason to believe” did not require proof of actual belief. It was sufficient that the passenger had information which would have afforded good reasons for believing that the vehicle had been unlawfully taken, had the passenger applied his mind to the matter. Deliberately shutting one’s eyes to the obvious could satisfy the test.
3. The expressions “stolen or unlawfully taken” referred to the corresponding offences under the Theft Act 1968. Applying the approach in R v Phipps and McKnight v Davies, a person who had authority to use a vehicle could unlawfully take it by allowing an unauthorised person to drive it where that person knew or believed that the owner would not have consented. The relevant question was whether control had been appropriated for personal purposes in repudiation of the owner’s rights.
4. The authorised driver knew that the owner would not have permitted the brother, who was young and unlicensed, to drive the van. His intoxication did not negative that knowledge. The brother likewise took the van without the owner’s consent or lawful authority. The claimant knew the van belonged to the driver’s employer and, in the circumstances, had every reason to believe that the driver was not permitted to drive it. His liability was therefore excluded.
5. The parties were invited to agree costs. Failing agreement within 14 days, costs would be determined on written representations. Any application for permission to appeal was to be notified within seven days.