Judge rejects car insurance company’s bid to avoid policy over motorist’s ‘misrepresentation’

The motorist had stated on his form that his address was at a house in Giffnock, when there was evidence to suggest that he also lived at a flat in Govanhill.

However, a judge in the Court of Session ruled that it could not be said that this was a “deliberate or reckless misrepresentation”.

Accident

Lady Paton heard that on 25 January 2016 at 375 Calder Street, Govanhill, Glasgow, a teenager named Hussain Hafeez took his older brother Hadar Hafeez’s car keys without his knowledge or permission, and drove his brother’s red Ford Fiesta.

He had an accident, crashing into three parked cars – a Mercedes, an Audi, and a Ferrari – before leaving the scene and returning on foot to Calder Street to get help.

His brother, the defender, took a taxi to the scene of the accident, where police officers and vehicle recovery personnel were present.

Mr Hafeez, 24, explained that the car belonged to him and that his younger brother had taken it without his authority.

Hussain was interviewed and charged, and ultimately pled guilty to four charges: taking and driving without consent, driving without insurance, careless driving, and leaving the scene of an accident.

Insurance policy

The defender had taken out an insurance policy for a Nissan Micra in March 2015 through GoSkippy.com, after searching a price comparison website.

When applying for the policy and when varying the policy after acquiring the Ford Fiesta in October 2015 the defender stated in the private car proposal form that his residence and the place where he kept the vehicle was in a garage at 6 Dinard Drive, Giffnock, Glasgow, not Calder Street, Govanhill, Glasgow.

However, when he obtained a fresh driving licence in May 2015 he put 375 Calder Street as his address and when he acquired the Ford Fiesta he put the same address in the vehicle registration document.

The court was told that the insurance premium based on the Giffnock address was £1,649.34, while the premium based on the Govanhill property would have been £2,899.08.

In terms of the third party, fire and theft policy the defender was the only person entitled to drive the car.

‘Deliberate misrepresentation’

After the accident the car-owners submitted claims, but the defender’s insurer, the pursuer Southern Rock Insurance, sought to avoid the policy on the ground that the defender had made a misrepresentation.

The pursuer – represented by counsel Timothy Young – raised an action seeking a declarator in terms of section 152(2) of the Road Traffic Act 1988 that it was entitled to avoid the whole policy of insurance.

The defender lodged defences, with counsel Paul Davies submitting inter alia that “no misrepresentation” had been made, and certainly not a “deliberate misrepresentation”.

Mr Hafeez claimed he moved into Dinard Drive in about 2012-13, when his uncle agreed to let him stay in a spare bedroom in his five-bedroom house, which had a double garage.

He explained that he acquired a lease of a flat at 387 and subsequently 375 Calder Street to allow his sister and brother to live there, as he was in a better position to satisfy a landlord about credit history.

In relation to where he was living throughout these years the defender said he was not living at Calder Street, although he would sometimes stay overnight, but he confirmed that he was living there from March 2016 onwards.

Onus of proof

In terms of sections 2 to 5 of the Consumer Insurance (Disclosure and Representations) Act 2012, the onus was upon the pursuer to prove that the defender either deliberately or recklessly misrepresented his address as 6 Dinard Drive, but the judge ruled that the onus of proof was not satisfied.

In a written opinion, Lady Paton said: “On the evidence, it would appear that the defender interrogated computer websites designed to allow the consumer to carry out a comparative search amongst various insurance companies to find suitable terms and a premium, enabling the consumer to proceed to purchase a particular insurance.

“In my opinion, the online method of purchasing insurance adopted in this particular case has both advantages and disadvantages. Obvious advantages include accessibility to the consumer and an ability to conclude a contract for insurance immediately, in any environment with access to a computer. However there may be disadvantages, especially in a case such as this.

“The questions in the pro forma online website might not be sufficiently flexible to accommodate non-standard or qualified information which the consumer would have given in, for example, a face-to-face interview, or in a written form which permitted some narrative or explanation from the consumer.

“In such circumstances, the contention that the defender deliberately’ or ‘recklessly’ misrepresented to the insurers that his address was ‘6 Dinard Drive, Giffnock’ could only be established, in my opinion, if it could be proved that, at the time of seeking the insurance, the defender could not, on any view, claim 6 Dinard Drive as his ‘address’.

“In any more nuanced situation (for example, living partly at 6 Dinard Drive and partly at Calder Street, with possibly more time spent at one address than the other), the precise wording of the questions put to the consumer would be essential to assist in demonstrating that there had been a deliberate or reckless misrepresentation made to the insurers, and to permit the court to reach a conclusion on that matter. The present case disclosed, in my opinion, such a nuanced situation.”

The judge held that, on balance of probabilities, the defender lived partly at 6 Dinard Drive and partly at 387 and later 375 Calder Street during the relevant period.

She added: “In these circumstances, the information that the defender’s ‘address’ was ‘6 Dinard Drive, Giffnock’ cannot, in my view, be categorised as a deliberate or reckless misrepresentation. I accept that the Calder Street address appeared on the defender’s business documentation, and that Calder Street appears to have been the address to which communications were sent: but if a person is living at two addresses, it may indeed be convenient to select one address as a post-box. The conclusion which I have reached is sufficient for the resolution of the case.”