Outer House judge dismisses Maltese transport authority from bus crash reparation action

Simon Morrison, the pursuer, sought reparation from Middlesea Insurance Plc as it was the insurer of the operator of the tour bus, City Sightseeing Malta Ltd. The Authority for Transport in Malta pled that it was immune from the court’s jurisdiction in terms of section 14 of the State Immunity Act 1978.

The case was heard by Lord Richardson in the Outer House of the Court of Session. Wilson, advocate, appeared for the pursuer, Stewart QC for the defender and Dewar QC and Hawkes QC for the third party. No submissions on this matter were heard from the pursuer.

Sovereign authority

On 9 April 2018, a tour bus operated by the defender was involved in a crash at Zurrieq, Malta, which was said to have injured the pursuer. He accordingly raised an action against the defender as the insurer of the tour bus operator, which contended that it was not liable to make reparations to him. The defender has previously paid the third party for a licence to operate sightseeing buses along the route it was travelling on.

Expert witnesses led by the third party explained that Transport for Malta was responsible for carrying out safety inspections of the major roads in Malt, and that ultimate control was retained by the Maltese Minister of Transport. It was submitted for the third party that the exercise of these powers was an act of exercising sovereign authority on the part of the Maltese Government, from which it received an annual contribution in order to be able to carry out its functions.

It was submitted for the defender that the juridical character of the present proceedings was one of private law. The third party had been brought to court on the basis of an alleged breach of its duty to maintain the roadway, specifically a failure to properly maintain trees as the edges of the road on which the crash occurred, and this was not of sufficient importance to be properly characterised as the exercise of sovereign authority.

Counsel for the defender further submitted that the relationship between itself and the third party could be characterised as a commercial transaction. This proposition was disputed by the third party, which argued that as the granting of tour bus licences could not be done by any private person, the act was closer to a public law characterisation than a private one.

Vital to the state

In his decision, Lord Richardson said of the character of proceedings: “Having identified what connects the separate entity to the proceedings, one requires to consider the context of that act or omission in order to determine whether or not it falls within the sphere of governmental or sovereign activity. In other words, the focus of the exercise of characterisation is on the context of what it is alleged had been done (or not done) by the separate entity.”

Considering the acts of the third party in closer detail, he said: “In respect of the ‘Transport Malta’s Duty (as defined by the defender) namely the duty to ensure the constant safety, upkeep, maintenance and security of the principal roads in Malta, this falls within an area of activity – road transport for goods and people - which is important and probably vital to the economic and social well-being of the Maltese state. This area or context would seem to me to be plainly one of governmental activity. It is not a duty which is incumbent on a private citizen.”

He continued: “I also reject the defender’s argument that somehow the particular aspect of the alleged failure relied upon in the current proceedings – which apparently involved overhanging tree branches – was too insignificant for it to be characterised as the exercise of sovereign authority. I do not consider this to be relevant to the exercise of characterisation which requires to be carried out.”

Addressing whether the defender and third party were linked by a commercial transaction, Lord Richardson observed: “It seemed to me that this part of the defender’s case was only advanced in a somewhat half-hearted fashion during the proof. As noted above, by the point of submissions this part of the case was no longer deployed as a free-standing argument in terms of section 3 of the 1978 Act but, rather, as support for the defender’s argument that the third party was not exercising sovereign authority in terms of section 14(2) of the 1978 Act.”

He concluded: “These arrangements were carried out pursuant to the functions which had been transferred to the third party. This was not a transaction which a private entity could have entered into in place of the third party. It is notable in this regard that [Maltese law] expressly precludes the third party from contracting out its regulatory or licensing functions. Against this background, I do not consider the fact that the third party is, so far as is practicable, to meet its expenditures from its revenues renders these licensing arrangements commercial.”

Lord Richardson therefore sustained the third party’s plea of jurisdiction and dismissed the action quoad the third party.