The claimant insurer insured a courtesy car owned by a garage under a policy which covered vehicles driven with the garage’s permission for both business use and social, domestic and pleasure use. The garage lent the car to a customer while it repaired his own car, which was insured by the defendant. While driving the courtesy car the customer was in a collision with another car the driver of which sustained severe injuries. At the time of the collision, the customer was on his way home from a work shift as a security guard at a hotel which was not his usual place of work, but where he had agreed to work briefly as a favour to his boss. He had planned to make a short diversion on his way to pick up a friend from the local coach station and give him a lift home. The claimant applied for a declaration that it and the defendant were equally liable to indemnify the customer in respect of his liability for the other driver’s injuries. It relied on dual insurance and other clauses in its own and the defendant’s insurance policy the combined effect of which was that the indemnification of any liability fell to be shared equally. The defendant resisted that application on the grounds that, at the time of the collision, the courtesy car was not being used for the “social, domestic and pleasure purposes” to which the defendant’s policy was limited and that, in any event, the courtesy car was not a “private motor vehicle” within the terms of that policy.
On the claimant’s application—
Held, application refused. (1) When determining whether a journey was “social, domestic and pleasure” or “business” use, a judgment had to be formed on the particular facts as to the overall or primary purpose of the journey in order to determine its essential character. Where the facts disclosed a primary purpose within the ambit of cover, the court ought not to be astute to seek after a secondary purpose which suggested that at the time of the accident the car was not being used for a purpose for which cover was given. The court would look primarily to the insured's purposes, since it had to construe the policy as between the insurer and insured, not as between the insurer and some other person. Since the essential character was judged at the time of the incident, it was necessary to ask whether the essential character or purpose of a journey had changed from its inception. Applying that approach, the essential and primary purpose of the customer’s journey was driving home from work, and the courtesy pick-up of a friend on the way, albeit a necessitating detour, did not alter the fundamental character of the trip. A social, domestic or pleasure purpose did not take over just because he had finished work, nor did the frequency or novelty of the assignments take the use out of the description and make it a social, domestic or pleasure use. Accordingly, the journey made by the customer was covered only by the claimant’s policy (paras 30, 31, 32–35).
(2) The “private motor car” referred to in the defendant’s policy was not a car which was operated or supplied in the course of or for the purposes of a business. The courtesy car could not be described as a private motor car within the meaning of the policy since it was a part of the garage’s business, being provided to customers as an inducement to them to leave their car with the garage for repair, and effectively amounted to a marketing tool in the form of a convenience offered to customers to encourage their patronage. Further, no distinction was to be made in the present insurance context between vehicles owned by public entities, on the one hand, and by private entities, individual and corporate, on the other, since, in that context, the concept of what was “private” related not only to ownership but to use. A privately owned motor car was not one owned for the purposes of business, or by a business. The meaning of the policy being clear, there was no scope for a contra proferentem construction. Accordingly, any liability of the claimant in respect of the collision was its to bear alone and it could not call upon the defendant to share it (paras 37–41).
Tim Horlock QC (instructed by Clyde & Co) for the claimant.
Howard Palmer QC (instructed by Horwich Farrelly) for the defendant.