(COURT OF APPEAL)

BABIKER BABIKER KAZAM v. SUDAN INSURANCE CO. LTD.

AC-REV-394-1968

Principles

Insurance—Compulsory insurance—Road Traffic Ordinance, s. 49—Covers the use of the motor vehicle as well as the person using it

According to Road Traffic Ordinance, s. 4 compulsory insurance covers the use of the motor vehicle as well as the person using it.

Advocates:  Henry Riad & Karam Shafig for the applicant

M. A. Hassib for the respondent

Judgment

Mahdi Mohamed Ahmed J. October 18 1969 : —This is an application for revision against the decision of Province Judge, Khartoum, dated July 11, 1968 reversing the decree of District Judge, Khartoum, dated May 30, 1968, in respect of respondent.

The grounds for revision urged by applicant’s counsel are that:

1. The decision of the learned Province Judge as to the sale of the car by second defendant in the suit to first defendant is not supported by sufficient evidence.

2. The sale of a car is incomplete and the property in the car does not pass to the purchaser until the sale is registered under the Road Traffic Ordinance 1962, s. 12.

3. Even if the property passed, that will not prejudicially affect the interest of applicant as second defendant failed to surrender the certificate of insurance as required by the Road Traffic Ordinance 1962 ss.59 and 62

4. That it is not equitable in the circumstances of the present case to allow respondent to escape liability.

Advocate for respondent replied that the record contains sufficient evidence to warrant the court’s finding as to the sale, and that registration under the Road Traffic Ordinance, S. 12, S a mere formality; and that the Road Traffic Ordinance, ss. 59 and 62 are not relevant, and that the relations between the parties are regulated by contract and not based on any considerations of justice or equity.

It transpires from the above that the main points for the determination of this court are whether the car was sold and the property therein passed to first defendant; and if so, whether respondents were or were not thereby absolved from liability.

We need not dwell much upon the first point. In my opinion there was sufficient evidence to warrant the fact-finding of the learned Province Judge. The car was in possession and control of first defendant and both he and second defendant testified on oath that a sale was concluded between them. No evidence in rebuttal was adduced and there is nothing in the record which justifies the rejection of their testimony. Moreover, as the opening words of the Road Traffic Ordinance 1962, s. 12 signify, and as was held in the case of Abde Moneim Ahmed All. V. Masoud Awad Masoud (1967) S.L.J.R. the said section imposes a duty to give notice to the Licensing Authorities of the change of ownership and does not affect the ownership or title of the owner.

We will now proceed to consider the effect of the transfer of the insured’s interest in the car on the liability of respondent. It seems to me that applicant’s contention is based on the assumption that compulsory insurance covers the use of the vehicle and not the person using it. In other words such questions as who owns the car or who was driving at the time of the’ accident are immaterial and in fact wholly irrelevant for fixing the insurer- with liability. The only material question is whether there is or there is no policy of insurance which covers the use’ of the car. If there is the insurer is liable irrespective of who owns or who was driving.

The argument on the face of it is quite appealing and beneficial since the knocked-down pedestrian will be indemnified even if an unlicensed driver or a car thief was at the steering-wheel. However the question is: does it have any legal basis? To find out we need to examine the requirements of chapter V of the Road Traffic Ordinance which lays down the principles of compulsory insurance.

The Road Traffic Ordinance, s. 49 requires that:

“no person shall use or cause or permit any other person to use a motor vehicle on the road unless there is in force in relation to the user of the vehicle by that person or that other person as ‘the case may be such a policy of insurance.."

If we consider carefully the wording of the above text it becomes apparent that the section requires coverage not for the use alone but for the user as well. If the legislature intended otherwise. the addition of the phrase “by that person or that other person” would be superfluous.

Again the Road Traffic Ordinance, s. o defines the nature- -and specifications of the policy required to be in force by section 49 in the following terms:

“In order to comply with the requirements of the last preceding section the policy of insurance must be policy which: insures such a person, persons, or classes of persons as may- be specified in the

policy in respect of any liability which may be incurred by him or them in respect of the death of, or bodily injury to any person caused by, or arising out of the vehicle on a road."

The above section makes it quite clear that the law requires a policy which insures the use of the car in respect of certain persons and not the world at large. Thus we conclude that the contention that compulsory insurance covers the use, irrespective of the users, has no legal basis.

In the present case it is conceded that the policy in force covers the personal as well as the authorized or permitted use of second defendant in the suit. It is further conceded that the policy was not assigned to first defendant and therefore there was no contractual relationship between him and the respondent. Thus the liability of respondent to indemnify applicant depends on the liability of second defendant and second defendant is not liable to indemnify applicant unless he caused or permitted first defendant to drive the car.

The word "permit” implies the giving of leave or licence to use the car whereas the word “cause” implies ordering or directing the use of the car. In both cases the person causing or permitting the use of the car must have some control or dominion over the car, and if he in any manner—for instance by sale—parted with his dominion or control he is not in a position either to cause or permit the use of the car. Watkins v. O’Shaughnessy [1939] 1 All E.R. 385 and Goodbarne v. Buck[1940] 1 K.B. 771.

In the present case it has already been decided that second defendant sold and delivered the car to first defendant before the accident took place. By transferring his interest in the car second defendant lost dominion and control and therefore he cannot be said to have caused or permitted first defendant to drive the car. The latter was driving in his own right as the legal owner of the offending car and second defendant is not responsible for his felonious activities. Since respondent’s liability is dependent on the responsibility of second defendant, and since the latter is not under any duty to indemnify applicant, respondent therefore cannot be held answerable to applicant.

I therefore, think that this application should be dismissed with costs.

Ramadan All Mohamed J. October i8, 1969 : —l agree with every bit of the above judgment. The main question is whether there is a privity of contract between applicant and the insurance company. If applicant has any right of resort to the insurance company it must be through the second defendant. Insurance cases are no exceptions in this respect. Liabilities cannot be forced on people behind their backs.