YAU SHUN PO v. THE ORIENTAL INSURANCE CO LTD

Insurance Law

Criminal Law

Motor Vehicles (Third Party Risks) Ordinance, Cap. 272 - Compulsory third party insurance against death or bodily injury - Provisional licence holder driving in breach of conditions of licence - whether cover continued to apply.

                A motorcyclist holding a provisional licence to drive took out a compulsory third party insurance policy with the defendant insurance company under the Motor Vehicles (Third Party Risks) Ordinance, Cap. 272 in respect of death or bodily injury caused by his motorcycles An exception to the policy purported to exclude liability whilst the motorcycle was being driven by any person other than a "Driver". "Driver" was defined as:

"Any of the following : -

                The plaintiff was a pedestrian injured by the motorcycle whilst driven by the motorcyclist on a road at a time when the motorcyclist was in breach of the conditions of his provisional licence about not driving without L-plates and within specified hours.

                Although the plaintiff obtained judgment against the motorcyclist for damages in respect of personal injuries, the defendant insurance company refused to satisfy that judgment, contending the motorcyclist was not a "Driver" covered by the policy at the time of the accident because he was driving in breach of the conditions of his provisional licence. Held, the breach of the  conditions of the provisional licence notwithstanding, the motorcyclist remained a "Driver" at the time of the accident with the result that the defendant insurance company was liable under the policy as cover continued to apply. There was accordingly a declaration that the defendant insurance company was liable to satisfy the jugment obtained by the plaintiff against the motor-cyclist. (R. v. LEE Shui-ting (1965) H.K.L.R. 1140; CHAN King-law v. R., Criminal Appeal No. 698 of 1971 - unreported; and LAW Dor v. National Insurance Co. Ltd. (1977) H.K.L. R. 119 not followed)

M.P. No. 710 of 1985

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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____________

BETWEEN

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JUDGMENT

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1. Mr. Yau Shun Po ("the plaintiff") was crossing Chatham Road on foot at about half past one on the morning of the 26th August 1977 when he was knocked down by a motorcycle ridden by Mr. Yeung Lun("the motorcyclist"). At the time of the accident, the plaintiff was aged 27 and was employed as a construction worker. As the result of the accident, the plaintiff received injuries which put him in hospital for 82 days and kept him off work for 9 months. A fracture of one of the plaintiff's legs left it three eighths of an inch shorter than the other.

2. The motorcyclist was convicted of dangerous driving as the result of this accident. He had driven through a red light at the time the plaintiff had been crossing the road. The plaintiff took the motorcyclist to court, claiming damages for negligence. The court awarded the plaintiff $60,021 damages against the motorcyclist, together with costs, which amounted to $8,284 when taked, and in addition there was an award of interest. That was on the 20th November 1979. Since then, the motorcyclist has paid the plaintiff the insignificant sum of $4,200 towards the satisfaction of that judgment. The last time the plaintiff received anything was March 1981. If the plaintiff has to rely on the motorcyclist for payment, it has become clear that this is going to be an empty judgment, except for the $4,200 already paid.

3. The motorcyclist had owned the motorcycle he was riding at the time of the accident. Unless he had held a policy of insurance under the Motor Vehicles Insurance (Third Party) Risks) Ordinance, Cap. 272, the motorcyclist would not have been able to get the registration and vehicle licence necessary for putting his machine on the road. As Goddard L.J. remarked as long ago as 1942 in Zurich General Accident and Liability Insurance Co. Ltd. v. Morrison ⁽¹⁾ it is ''only because they held a policy that careless drivers were enabled to drive and put other persons in peril". The motorcyclist had insured his motorcycle against compulsory Third Party Risks with The Oriental Fire & General Insurance Co. Ltd., which is the defendant in the present proceedings ("the defendant insurance company").

4. The motorcyclist only held a provisional licence. That licence was issued under the conditions set out in the Second Schedule to the Road Traffic (Driving Licences) Regulations. (See Regulation 10(3)). The conditions in that Second Schedule, applying to motorcycles, are the following : -

 

"3.    No person other than such a driving instructor or licence holder shall be carried as a passenger.

 

6.    When a learner driver has satisfied the Commissioner that he is able to comply with the requirements specified in condition 2, the letter "L" and the Chinese character "學",  referred to in condition 5, shall appear in green.

 

8.    The learner driver may drive only over such roads and at such times as are specified in the provisional licence issued to him."

5. The times when the motorcyclist was permitted to drive were specified in his provisional licence as follows : -

6. By Regulation 10(4) of the Road Traffic (Driving Licences) Regulations it is provided that "A person to whom a provisional licence is granted shall not drive a motor vehicle except in accordance with the conditions under which such provisional licence has been granted ....."

7. From the outline of the facts which I have given, it can immediately be seen that at the time of the accident the motorcyclist was in breach of the condition of his provisional licence about not driving after 11 p.m.. That was not the only condition he broke. He was also driving without L-plates.

8. Because the mtorcyclist was in breach of the conditions of his provisional licence by riding outside permitted hours and without L-plates, the defendant insurance company contends it was not on risk at the time of this accident.

9. It is common ground that for the purpose of the present proceedings everything hinges on whether, at the time of the accident, the motorcyclist came within the definition of "Driver" in the policy issued by the defendant insurance company.

10. "Driver" was defined as:

                "Any of the following : -

 

Provided that the person driving is permitted in accordance with the licensing or other laws or regulations to drive the Motor Cycle or has been so permitted and is not disqualified by order of a Court of Law or by reason of any enactment or regulation in that behalf from driving such Motor Cycle."

11. That definition ties in with a "General Exception" in the policy that the defendant insurance company was not liable in respect of any accident, loss, damage and/or liability caused, sustained or incurred whilst the motorcycle was being driven by any person other than a "Driver".

12. It goes without saying that the motorcyclist was "the Insured".

13. According to the defendant insurance company, the motorcyclist at the time of the accident was not "..... permitted in accordance with the licensing or other laws or regulations to drive the motorcycle or has been so permitted.....''

14. This definition of "Driver" in compulsory third party insurance policies has engaged the attention of the courts in Hong Kong on previous occasions.

15. As long ago as 1962, Mr. O'Connor (then a magistrate, but later to become Mr. Justice O'Connor) held in R. v. Blue ⁽²⁾ that being in breach of the conditions of a provisional licence did not mean that the motorist was not a "Driver" and hence did not mean that he was without insurance. The case before Mr. O'Connor had been one involving a charge of driving in breach of the conditions of a provisional licence and a charge of driving without third party insurance. He convicted on the first charge but acquitted on the second. To arrive at this result, Mr. O'Connor, in effect, said that the words "in accordance with ....." did not govern the manner of driving but governed the issuing of the licence. The practical consequences of his decision were that the motorist was saved from a conviction on the serious charge of using an uninsured vehicle, whilst any innocent third party who had the misfortune to be injured as the result of negligent driving of the vehicle would have an insurance company to look to for the satisfaction of any judgment he got for damages.

16. Mr. O'Connor's decision fell to be considered by Hogan C.J. in R. v. Lee Shiu Ting⁽³⁾, another appeal from a magistrate (this time Mr. Cons who was later to become Mr. Justice Cons, J.A.). Of Mr. O'Connor's decision in R. v. Blue ⁽²⁾, Hogan C.J. made the following observation, which I find mystifying : "However unsatisfactory his conclusion might appear to be in practice .....".

17. One is tempted to call to mind the famous passage from Art Buchwald, the American humourist, in an address to new law graduates, cited by Lord Justice Kerr in an article in 1981 New L.J. 995, 996 :-

 

''It is an honourable calling that you have chosen. Some of you will soon be defending poor helpless insurance companies who are constantly being sued by greedy, vicious widows and orphans trying to collect on their policies. Others will work tirelessly to protect frightened, beleaguered oil companies from being attacked by depraved consumer groups. A few of you will devote your lives to suing doctors, while many of you will choose to sue the patients .....".

18. Homer evidently nodded on this occasion, for there is nothing even remotely unsatisfactory about Mr. O'Connor's decision. I would have thought it clearly represents main stream legal thinking. At the criminal level, it resolves doubt, if there is any, in favour of the subject, and at the civil level, it promotes the law's general policy of seeking to protect the interests of innocent third parties injured in motor vehicle accidents. How the criminal law leans in favour of the subject is so well known that I need say nothing further, for fear of labouring the obvious. In case the civil position is not so well known, I will cite some authority in support of it.

19. Of the legislation on which Hong Kong's Motor Vehicles Insurance (Third Party Risks) Ordinance is modelled, Goddard J. (as he then was) remarked that it "..... was aimed at the protection of the public by providing that there should be a body of insurers behind every driver of a car" ⁽⁴⁾. On a matter involving motor vehicle compulsory personal injuries insurance, Humphreys J. had the following to say ⁽⁵⁾ : -

"I have been asked by Mr. Terrell to give a benevolent construction to the matters of law in this case in the interests of innocent third parties. I agree that the court ought to do so ..... ".

More recently, there have been the observations of Lord Denning M.R. ⁽⁶⁾:-

"A motor vehicle is a powerful engine of death and destruction. It is capable of doing much damage to persons and to property unless it is driven with due care and attention. As the number of cars increase and as their speeds get faster and faster, so the danger grows. More and more people are killed. More and more are injured. More and more property is damaged. The sufferers ought not to be left without redress. So Parliament and judges have done their best to see that they are compensated for their loss.".

That the judges in Hong Kong could be justified in adopting a different approach from the judges in England on such a matter is, to my mind, inconceivable, particularly bearing in mind that "authorized insurers" in Hong Kong do not have to belong to any Motor Insurance Bureau like their U.K. counterparts (Compare s.2 and s.6 of the Motor Vehicles Insurance (Third Party Risks) Ordinance, Cap. 272 with s.145 of the U.K.'s Road Traffic Act 1972).  The reality of the position in Hong Kong has been that where insurance companies have been able to avoid satisfying judgments in favour of innocent third parties injured in traffic accidents, those third parties have simply been left to whistle for their money.

20. In relation to Mr. O'Connor's interpretation that the words "in accordance with ....." did not govern the manner of driving but governed the issuing of the licence, Hogan C.J. said "Indeed, grammatically this could be so''. ^(3a)

21. As part of his reasoning, Mr. O'Connor had resorted to a reductio ad absurdum. Mr. O'Connor had pointed out that unless the proviso in the definition of "Driver" was interpreted in the manner he suggested, the result would be that whenever the holder of an ordinary driving licence contravened some traffic regulation such as, say, driving on the wrong side of the road, speeding, or perpetrating a similar infringement, he would cease to be covered by his insurance policy. This result would ensue because the proviso referred to "or other laws or regulations" as well as those relating to licensing.  If the driving had also to be in accordance with those "other laws or regulations", it is difficult to see how there would ever be scope for any claim under the policy. Almost inevitably, when a third party has sustained personal injuries as the result of a motorist's negligence, that motorist will have failed to have driven in accordance with "other laws or regulations". For a start, the motorist will presumably be guilty of careless driving. Such a result would clearly be repugnant to the whole object and purpose of a third party motor vehicle policy.

22. Instead of dealing with Mr. O'Connor's point about the significance of the words "or other laws or regulations", Hogan C.J. went off at a tangent. Whereas Mr. O'Connor had only mentioned the case of the holder of an ordinary driving licence for the purposes of illustration, Hogan C.J. concentrated on the position of the holders of full driving licences as if this were central to Mr. O'Connor's argument. Hogan C.J. embarked upon a learned explanation of the differences between provisional and full licences What he said on this topic cannot be faulted, but, in my respectful submission, it is wholly beside the point.

23. Mr. O'Connor's argument need never have made any reference whatsoever to the holders of full driving licences. The point he was making applied with equal force to the position of the holder of a provisional licence. What Mr. O'Connor was saying, in effect, was that the proviso to the definition of "Driver" was not concerned with the manner of driving, regardless of whether the person doing the driving held a full licence or a provisional licence, and his reason for arriving at that conclusion was that the words "other laws or regulations" could not be ignored in the definition.

24. Hogan C.J. does, however, simply ignore the existence of those words "other laws or regulations". After explaining the difference between a provisional and a full licence, he simply declared that Mr. O'Connor had been wrong. He gives no enlightenment on whether the holder of a provisional licence must drive in accordance with the "other laws" relating e.g. to careless driving or speeding, if he is to come within the protection of the policy.

25. Perhaps, as Mr. Bunting for the defendant insurance company now claims, the words "or other laws or regulations" should be construed eiusdem generis with the word licensing", so that the meaning becomes "or other laws or regulations similar to licensing laws or regulations". That is one, possible interpretation, but I see no compelling reason to adopt that particular meaning. The eiusdem generis rule can only be of limited assistance where there is only one preceding item. (See, for example Quzai v. Quzai⁽⁷⁾)

26. The rival interpretations that can be advanced on the issue of whether "Driver" includes someone such as the motorcyclist in the case before me who drove in breach of the conditions of a provisional licence reveals that this definition is ambiguous. Hogan C.J. recognised that. After conceding that Mr. O'Connor's interpretation was grammatically valid, Hogan C.J. proceeded to adopt an alternative interpretation.

27. This leads into a consideration of what I regard as the most questionable feature of the decision in R. v. Lee Shiu Ting ⁽³⁾. It is a fundamental rule for the interpretation of insurance policies that they are construed contra proferentem. How this rule is adopted generally in relation to insurance policies is explained in Colinvaux's Law of Insurance (5th edition) at p. 37 : -

                "Contra proferentem rule

        Quite apart from contradictory clauses in policies, ambiguities are common in them and it is often very uncertain what the parties to them mean. In such cases the rule is that the policy, being drafted in language chosen by the insurers, must be taken most strongly against them. It is construed contra proferentes, against those who offer it. In a doubtful case the turn of the scale ought to be given against the speaker, because he has not clearly and fully expressed himself. Nothing is easier than for the insurers to express themselves in plain terms. The assured cannot put his own meaning upon a policy, but, where it is ambiguous, it is to be construed in the sense in which he might reasonably have understood it. If the insurers wish to escape liability under given circumstances, they must use words admitting of no possible doubt.

        But a clause is only to be construed contra proferentes in cases of real ambiguity. One must not use the rule to create an ambiguity, one must find the ambiguity first. Even where a clause by itself, is ambiguous if, by looking at the whole policy, its meaning becomes clear, there is no room for the application of the doctrine. So also where if one meaning is given to a clause, the rest of the policy becomes clear, the policy should be construed accordingly.".

28. If that is the general approach towards the interpretation of insurance policies, then surely how much more so should the courts adopt a contra proferentem approach in the case of compulsory motor vehicle insurance where there are the interests of innocent third parties to be protected.

29. That the contra proferentem approach is alive and well in Hong Kong was made clear by Mr. Justice Li (as he then was) in Luk Bik Yu v. Fong Wing Fook, Alfred and The Far East Insurance Co. Ltd. (Third Party)⁽⁸⁾ where he said ..... and I hold that where there is an ambiguity, the insurance company being the person who drafted the document and who issued the policy must have the interpretation of the document construed against the insurance company".

30. The fatal flaw in the Lee Shiu Ting ⁽³⁾ judgment, in my opinion, is that, for no satisfactory reason, it has resolved an ambiguity in an insurance policy in favour of the insurance company.

31. Exactly the same point as in Lee Shiu Ting ⁽³⁾ arose before Rigby C.J. in Chan King Lam and The Queen ⁽⁹⁾.  With great reluctance, Rigby C.J. felt himself impelled to follow "what seems to me to be the entirely logical reasoning of Hogan C.J. in the Lee Shiu Ting case".  What Rigby C.J. meant by "entirely logical reasoning" raises a very large question. It is not giving away any trade secrets to say that, contrary to popular myth, very few judicial decisions owe anything to logic, but, instead, rely solely on rhetoric and reasoning by analogy. Most legal decisions (this one included) are rationalised policy decisions. This thesis is explored in many jurisprudential works including, for example E.H. Levi's Introduction to Legal Reasoning, or Professor MacCormick's Legal Reasoning and Legal Theory.

32. If a logician were given the problem which confronted Hogan, C.J. in the Lee Shiu Ting ⁽³⁾ case, it is inconceivable that he could come up with the same answer in the same way, because the problem is simply outside the realm where logic can assist. The fact of the matter is that Hogan, C.J.'s decision had nothing to do with logic. Presumably, Rigby, C.J. meant that he found Hogan, C.J.'s reasoning persuasive.

33. A perusal of Rigby, C.J.'s judgment goes some way towards explaining how it was that he failed to detect the fallacy in Hogan, C.J.'s reasoning, so that Rigby, C.J. finished up having to follow a decision which led to a result which Rigby, C.J. himself described as "unnecessary and unreasonable". Rigby, C.J. interpreted the definition of "Driver" as if it only contained the words "permitted in accordance with the licensing ..... laws or regulations". Rigby, C.J. omitted the crucial words "or other laws or regulations" which, if interpreted in the way Mr. O'Connor had suggested years earlier, would have led to a result which did not have to outrage Rigby, C.J.'s sense of justice.

34. It should be mentioned, too, that Hogan, C.J. shrank from the consequences of his own decision. This is what he had to say ⁽³⁾ :

 

"The appeal is dismissed but this is another of these cases where a criminal court is asked to construe and determine a civil liability without having before it all the parties primarily concerned. It is not a very satisfactory situation and not a very satisfactory way of doing justice. One can well appreciate that there are cases where it is very appropriate or even essential for the police to bring a charge of driving without insurance cover. But where the real gravamen of the offence is a breach of the conditions of the driving licence and a suitable punishment is provided for that, I cannot help wondering whether, particularly when the matter turns on the difficult question of the proper construction to be placed on a none too clearly drawn clause in an insurance policy, it is really necessary or desirable to bring, in addition the much more serious charge of driving without a policy, with its mandatory penalty.".

35. The question of civil liability did at last present itself to the courts in Hong Kong. The name of the case was Law Dor v. National Insurance Co. Ltd. ⁽¹⁰⁾. Cons, J. (as he then was) was the Judge. The claimant in that case had sustained personal injuries as the result of the negligent driving of a provisional licence holder who was contravening the conditions of his licence at the time of the accident. Exactly the same point arose about the definition of the "Driver" in the third party insurance policy. No attempt was made to distinguish either R. v. Lee Shin Ting ⁽³⁾ or Chan King Lam v. R⁽⁹⁾. It was merely suggested to the learned Judge that a different principle might apply in civil cases from criminal cases, but no reason was advanced as to why that should be so. He simply followed the two Hong Kong cases that I have just mentioned and gave judgment for the insurance company.

36. It has been urged upon me that in the interests of certainty, I should follow the first instance decisions of Lee Shin Ting ⁽³⁾, Chan King Lam ⁽⁹⁾ and Law Dor ⁽¹⁰⁾, unless I think they are clearly wrong. The law, in my opinion, took a wrong turn when Hogan, C.J. in Lee Shiu Ting ⁽³⁾ failed to apply the contra proferentem rule to deal with the ambiguity which had previously been explained for him by Mr. O'Connor in R. v. Blue ⁽²⁾. In the words of Lord Denning, M.R. "There is no certainty more to be deplored than the certainty of injustice" ⁽¹¹⁾. Certainty, in any event, appears to be of only limited importance in Hong Kong (See the observations of Fuad, J.A. in Costain International Ltd. v. A-G ⁽¹²⁾. I like to think that the following passage from Bennion's Statutory Interpretation (at page 53) extends to the Hong Kong Judiciary : -

"The Judiciary are inclined to believe, with Trollope, that -

 

'It is true that one must put up with wrong, with a great deal of wrong. But no one need put up with wrong that he can remedy'.".

37. In my humble view, the departure I am making from the previous line of Hong Kong authority leads to a more sensible and satisfactory result which will be more in keeping with the ordinary citizen's understanding of the law. To most people, there is surely a vast different between driving without any licence at all, and driving in breach of the conditions of a licence. (On this, see R. v. Powell ⁽¹³⁾.) Whilst the previous line of Hong Kong decisions has, in effect obliterated that distinction for all practical purposes, my decision seeks to restore it. The object of the proviso to the definition of "Driver", in my view, is to prevent an insurance company from being on risk when the machine is driven by someone who is unlicensed in the sense of never having been issued with a licence at all for the class of vehicle in question, but it does not seek to exclude the driver who holds a licence yet, nonetheless, breaches its conditions. It would, I think, be regarded as rather odd to prosecute someone for driving without a licence when he was merely driving in breach of the conditions of a licence. The corollary of the Hong Kong decisions I am refusing to follow was that such a prosecution would have been possible, but such anomalies are avoided by the interpretation I have adopted.

38. Mr. Bokhary, Q.C. for the plaintiff has succeeded with me in his frontal attack on the Hong Kong line of cases beginning, with Lee Shiu Ting ⁽³⁾. He also raised three fresh arguments, apparently not touched upon in the line of cases beginning with Lee Shiu Ting ⁽³⁾,  so that if he succeeded on those arguments, Lee Shiu Ting could be side-stepped as having beer, decided per incuriam. None of those alternative arguments of Mr. Bokhary succeeded with me, however. I will now deal briefly with each of those arguments in turn.

39. Firstly, there was the argument that the proviso to the definition of "Driver" did not apply to the motorcyclist who was then "The Insured", under limb (a) of the definition, but only to (b) : "Any person who is driving on the Insured's order or with his/her/their permission" I do not think that is correct. The impression I get is that the natural way to read the words is to make the proviso apply to each of the limbs of the definition. Mr. Bunting, as part of his submission, pointed out that "The Insured" might be a corporation. I did not, however, see that as in any way significant for the purpose of deciding whether the proviso extended to both limbs of the definition. If  "The Insured"  happened to be a corporation, there simply would be no possibility of "The Insured" driving. In such circumstances, limb (b) would then inevitably have to come into operation.

40. The second point made by Mr. Bokhary turned on the significance of the words "or has been so permitted" in the definition of "Driver". I do not think that those words advanced the plaintiff's cause.  If the defendant insurance company were, contrary to the view I have adopted, correct in its contention that the holder of a provisional licence trans-gressing one of its condition is not then someone whose "driving is permitted in accordance with the licensing for other laws or regulations to drive" then, likewise, such a person has not then been "so permitted". It is the presence of the word "so" which is fatal to this argument of the plaintiff.

41. Thirdly, the plaintiff contends that he is entitled to rely on the provisions of section 12(1) of the Motor-vehicle's insurance (Third Party Risks) Ordinance Cap. 272. That subsection reads as follows : -

"12.     (1) Where a certificate of insurance has been issued under section 6(3) in favour of the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any of the following matters -

 

	(a)	the age or physical or mental condition of persons driving the vehicle; or
	(b)	the condition of the vehicle; or
	(c)	the number of persons that the vehicle carries; or
	(d)	the weight or physical characteristics of the goods that the vehicle carries; or
	(e)	the times at which or the areas within which the vehicle is used; or
	(f)	the horsepower or value of the vehicle; or
	(g)	the carrying on the vehicle of any particular apparatus; or
	(h)	the carrying on the vehicle of any particular means of identification other than any means of identification required to be carried by or under this Ordinance or by or under the Road Traffic Ordinance.

For the sake of completness, I also set out section 6 of the same ordinance :-

 

"6.    (1) In order to comply with the requirements of this Ordinance, a policy of insurance must be a policy which -

(a)	is issued by an authorized insurer; and
(b)	insures such 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 use of the motor vehicle on a road:     Provided that such a policy shall not be required to cover -
	(i)    liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment : or
	(ii)	[Deleted 22.   of  1976, s. 3. Effective from 1 June 1977]
	(iii)	any contractual liability.

        (2) Notwithstanding anything in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of those persons or classes of persons.

 

        (3) A policy shall be of no effect for the purposes of this Ordinance unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate (in this Ordinance referred to as a certificate of insurance) in the prescribed form and containing such particulars of any conditions subject to which the policy is issued and of any other matters as may be prescribed, and different forms and different particulars may be prescribed in relation to different cases or circumstances.".

 

42. It is common ground that (i) the defendant insurance company is an "authorized insurer", (ii) there has been a certificate of insurance issued under section 6(3) and (iii) the present case is concerned with "such liabilities as are required to be covered by a policy under section 6(1)(b)".

43. If the defendant insurance company is correct in saying that, by transgressing the conditions of his provisional driving licence about not driving without L-plates and/or not driving outside the permitted times the motorcyclist took himself out of the definition of "Driver" in the policy, the plaintiff contends that, nonetheless, the defendant insurance company will still be liable to satisfy the plaintiff's judgment against the motorcyclist because of the provisions of section 12(1) of the Motor Vehicles Insurance (Third Party Risks) Ordinance.

44. There is no doubt in my mind that if the policy were drawn in such a way as not to provide cover when the motorcycle was driven in breach of the condition about permitted times in a provisional licence, the defendant insurance company would not escape liability because clearly it would be seeking to impose a restriction by reference to"..... (e) the times at which or the areas within which the vehicle is used ..... " Had it been that the only transgression of the provisional licence had been to drive outside of permitted hours, the defendant insurance company would certainly have been defeated by section 12(1) of Cap. 272.  I cannot, however, agree with the submission on behalf of the plaintiff that the drawing of the policy in such a way as to seek to avoid liability on the basis of a breach of condition about fixing L-plates to the vehicle would be a restriction by reference to either "..... (b) the condition of the vehicle ....." or " ..... (h) the carrying on the vehicle of any particular means of identification other than any means of identification required to be carried by or under this Ordinance or by or under the Road Traffic Ordinance ....." To my mind, it would be an unnatural use of language to describe L-plates as having anything to do with the condition of a vehicle, and I am satisfied that L-plates are a means of identification required to be carried under the Road Traffic Ordinance.

45. Another argument was mounted on behalf of the defendant insurance company as to why section 12(1) of Cap. 272 had no application to the circumstances of the present case. This argument relied on the circumstance that there were no words in the policy stating explicitly, in terms, that "this policy shall not apply if the motorcycle is driven by a provisional licence holder outside permitted times or without L-plates affixed" or similar words to that effect. True, there are no such explicit words, but the interplay of the definition of "Driver" in the policy together with the provisions of the Road Traffic (Driving Licences) Regulations in force at the time of the accident have the effect of bringing the conditions of provisional licences into the policy by reference.

46. Incidentally, section 12(1)(e) provides another reason why R. v. Lee Shiu Ting ⁽³⁾ was wrongly decided. It is difficult to imagine that a standard provision in an insurance policy, such as the definition of "Driver" in the present case, would be drawn in such a way as to attract the operation of section 12(1)(e) of Cap. 272. Section 12(1) of Cap. 272 has been in force since the year 1952. I would not expect insurance companies to behave so irresponsibly by the year 1977 as to have a provision in their policies which had to be struck down when it was exposed as coming into conflict with section 12(1) of Cap. 272.

47. Thus, although the plaintiff wins on its main argument about the interpretation of "Driver", it does not also succeed on the three subsidiary points with which I have just dealt.

48. It might well be, however, that there was another basis on which the plaintiff could have succeeded. It could be argued that the proviso in the definition of "Driver" amounted to a condition precedent, with the result that the defendant insurance company would have remained liable to the plaintiff under the policy because of the operation of section 10(1) of the Motor Vehicles Insurance (Third Party Risks) Ordinance, despite any breach of the conditions of a provisional licence.

49. I set out the provisions of section 10(1) :

 

"10. (1) If, after a certificate of insurance has been issued under section 6(3) in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under section 6(1)(b) (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment any sum payable in respect of interest on that sum by virtue of any law relating to interest on judgments.".

50. That subsection is identical to section 148(1) of the Road Traffic Act 1972 in the United Kingdom. How that provision operates is explained by Colinvaux's Law of Insurance (5th edition) at page 447. This is a topic which need not, however, be explored further for present purposes, as it will not affect the outcome of the present case in practice.

51. In view of the foregoing, I hold that the plaintiff is entitled to the declaration sought against the defendant insurance company, namely that the defendant insurance company is liable to satisfy the judgment in favour of the plaintiff for the sum of $60,021 plus costs of $8,284, together with the interest. I am given to understand that there is no dispute as to the calculation of the interest.

(1)    (1942) 72 LL. L. Rep 167, CA 174

(2)    Causeway Bay Magistracy Case No. 27503/62 - unreported

(3)    1965 H.K.L.R. 1140

(3a)    1965 H.K.L.R. 1140, 1142

(3b)    1965 H.K.L.R, 1140, 1143

(4)     Tattersall v. Drysdale 1935 2KB 174, 181

(5)    General Accident Fire & Life Insurance Corporation Ltd. v. Shuttleworth (1938) LL. L. Rep. 301, 306

(6)    Launchbury v. Morgans 1971 2QB 245, 254

(7)    (1979) 3 All E.R. 897

(8)    1978 H.K.L.R. 215, 221

(9)    Criminal Appeal No. 698 of 1971 - unreported

(10)    (1977) H.K.L.R. 119

(11)  (See 1982 H.K.L.J. 114)

(12)  (1983) H.K.L.R. 228, 240

(13)    6 N.R.L.R. 15