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This is probably the most important case law appertaining to Hire or Reward that has ever been adjudged by our judiciary.
Anyone wishing to make use of the concept of hire or reward in the course of their everyday life should be aware of the judgment in this case.
If I could have found a reference to the full listing of this case on the internet I would have posted the link. Unfortunately I could not find any such reference so under the circumstances those wishing to take advantage of the information in this judgement will have to read the contents on TDO. The reason why it was not previously made available is because of its length. I suggest you print this judgment and read it when you have time.
In the past, I have mentioned this case many times and stated its importance in respect of hire or reward, I hope those reading it will understand why.
Regards
JD
[HOUSE OF LORDS]
ALBERT APPELLANT AND MOTOR INSURERS' BUREAU RESPONDENTS
1971 May 10, 11, 12; July 7
Lord Donovan, Viscount Dilhorne, Lord Pearson, Lord Diplock and Lord Cross of Chelsea
Road Traffic - Third party insurance - "Hire or reward" - Driver carrying fellow workers to and from work - Regular and understood arrangement that driver rewarded in money or kind - Driver liable for death of passenger - Judgment against driver unsatisfied - Whether required to insure against liability to passengers - Whether passenger being carried in "vehicle in which passengers are carried for hire or reward" - Road Traffic Act 1960 (8 & 9 Eliz. 2, c. 16), s. 203 (4) Road Traffic - Third party insurance - Motor Insurers' Bureau - Agreement with Minister - Action on agreement by third party - Whether permissible
Q, a dock worker, regularly carried fellow dock workers to and from work in his car when they were working in the same dock as himself. It was a regular and understood arrangement that they should pay him something in cash or kind. An accident occurred in which the plaintiff's husband, a fellow dock worker who was a passenger in the car in pursuance of the arrangement, was killed.
The plaintiff brought an action against Q under the Fatal Accidents Acts 1846-1908 and the Law Reform (Miscellaneous Provisions) Act 1934 and was awarded damages and costs. Q failed to satisfy the judgment and the plaintiff brought the present action against the Motor Insurers' Bureau claiming the full amount of the damages and costs by virtue of their agreement with the Minister of Transport.
The question was whether Q had been bound to insure against passenger liability on the basis that his car had been "a vehicle in which passengers are carried for hire or reward" within the proviso to section 203 (4) of the Road Traffic Act 1960.
Willis J. held that he had not been, on
1 Motor Insurers' Bureau (Compensation of Victims of Uninsured Drivers) Agreement (1946); for text see note to Hardy v. Motor Insurers' Bureau [1964] 2 Q.B. 745, 770 et seq.
2 Road Traffic Act 1960, s. 201: "(1) Subject to the provisions of this Part of this Act, it shall not be lawful for a person to use, . a motor vehicle on a road unless there is in force in relation to the user of the vehicle by that person . such a policy of insurance or such a security in respect of third-party risks as complies with the requirements of this Part of this Act. ."
S. 203: "(1) In order to comply with the requirements of this Part of this Act, a policy of insurance must satisfy the following conditions . (3) Subject to the following subsection, the policy - (a) must insure such person, . as may be specified in the policy in respect of any liability which may be incurred by him . in respect of the death of or bodily injury to any person caused by, or arising out of, the use of the vehicle on a road; . (4) The policy shall not, by virtue of paragraph (a) of the last foregoing subsection, be required to cover - (a) liability in respect of the death of, or bodily injury to, persons being carried in or upon, or entering or getting on to or alighting from, the vehicle at the time of the occurrence of the event out of which the claims arise; . Provided that paragraph (a) of this subsection shall not have effect in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment."
The ground that "hire or reward" connoted a reward payable under a legally binding contract and that no contractual relationship had been intended to result from the arrangement between Q and his fellow dock workers. The Court of Appeal affirmed his decision.
On appeal by the plaintiff:-
Held, allowing the appeal, that (per Lord Donovan, Lord Pearson and Lord Diplock) "a vehicle in which passengers are carried for hire or reward" meant a vehicle used for the systematic carrying of passengers for reward, not necessarily on a contractual basis, going beyond the bounds of mere social kindness and amounting to a business activity; and that, on the facts as found by Willis J., Q's vehicle had been so used (post, pp. 319C-D, G - 320B, 333B-G, 334F).
Coward v. Motor Insurers Bureau [1963] 1 Q.B. 259, C.A. and Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494, C.A. considered.
Per Viscount Dilhorne. The use of a vehicle even on one isolated occasion for the purpose of carrying passengers for hire or reward makes it "a vehicle in which passengers are carried for hire or reward." Whether a passenger is carried for hire or reward is a question of fact the answer to which does not depend on whether there is a legally binding contract (post, pp. 322G, 325A-B).
Per Lord Cross of Chelsea. A vehicle may be one in which "passengers are carried for hire or reward" although it is not normally or habitually so used. There must be an agreement sufficiently certain in its terms to constitute a legally enforceable contract, in the absence, at least, of a term, express or implied, that neither party shall be able to sue on it (post, pp. 338G-H, 340E-F).
Observations on the right of a third party to sue on the agreement between the bureau and the Minister of Transport (post, pp. 312C-F, 320E-G, 329E, G, 334B).
Decision of the Court of Appeal [1970] R.T.R. 315; [1970] 1 Lloyd's Rep. 506 reversed.
The following cases are referred to in their Lordships' opinions:
Bonham v. Zurich General Accident & Liability Insurance Co. Ltd. [1944] 2 All E.R. 573; [1945] K.B. 292; [1945] 1 All E.R. 427, C.A. Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494; [1969] 3 W.L.R. 231; [1969] 3 All E.R. 572, C.A. Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259; [1962] 2 W.L.R. 663; [1962] 1 All E.R. 531, C.A. East Midland Traffic Area Traffic Commissioners v. Tyler [1938] 3 All E.R. 39, D.C. Gurtner v. Circuit [1968] 2 Q.B. 587; [1968] 2 W.L.R. 668; [1968] 1 All E.R. 328, C.A. Hardy v. Motor Insurers' Bureau [1964] 2 Q.B. 745; [1964] 3 W.L.R. 433; [1964] 2 All E.R. 742, C.A. Motor Insurers' Bureau v. Meanen, 1970 S.L.T. 341; 1971 S.L.T. 264; [1971] 2 All E.R. 1372 (Note), H.L.(Sc.).* Newell v. Cross [1936] 2 K.B. 632; [1936] 2 All E.R. 203, D.C.
* Reporter's note. The Lord Ordinary (Lord Kissen), 1970 S.L.T. 341 held that the Motor Insurer's Bureau, on facts similar to those in the present case, was liable and his decision was upheld by the First Division of the Court of Session, 1971 S.L.T. 264. The House of Lords in dismissing the Motor Insurers' Bureau's appeal [1971] 2 All E.R. 1372 (Note) followed their decision in the present case.
Wyatt v. Guildhall Insurance Co. Ltd. [1937] 1 K.B. 653; [1937] 1 All E.R. 792.
The following additional cases were cited in argument:
Aitken v. Hamilton, 1964 S.L.T. 125; 1964 S.C.(J.) 28. Cocks v. Mayner (1893) 70 L.T. 403. Izzard v. Universal Insurance Co. Ltd. [1937] A.C. 773; [1937] 3 All E.R. 79, H.L.(E.). McGoona v. Motor Insurers' Bureau [1969] 2 Lloyd's Rep. 34. Vandyke v. Fender [1970] 2 Q.B. 292; [1970] 2 W.L.R. 929; [1970] 2 All E.R. 335, C.A.
APPEAL from the Court of Appeal.
This was an appeal by the plaintiff, Mrs. Sheila Lilian Albert (suing on her own behalf and as administratrix of the estate of Joseph Albert deceased), by leave of the Court of Appeal from their decision on April 27, 1970, by which they dismissed her appeal from the order of Willis J. on June 20, 1969 [1969] 2 Lloyd's Rep. 243, dismissing her action against the defendants, the Motor Insurers' Bureau.
The plaintiff's claim against the bureau was for the full amount of a judgment and order for costs obtained by her in an action against James Quirk for damages under the Fatal Accidents Acts 1846-1908 and the Law Reform (Miscellaneous Provisions) Act 1934.
The facts are set out in the opinion of Lord Donovan.
Ralph Gibson Q.C. and Anthony Nicholson for the plaintiff. The agreement by the bureau with the Minister is for the benefit of persons injured. If the Minister were made a party to the action it would be an enforceable agreement. If neither party requires the Minister's presence the agreement can be treated as an enforceable agreement without joinder of the Minister: McGoona v. Motor Insurers' Bureau [1969] 2 Lloyd's Rep. 34.
The first question here is as to the true construction of the proviso to section 203 (4) of the Road Traffic Act 1960: (a) What is the meaning of "for hire or reward"? (b) Does this require habitual user as such? The words of the proviso should be given their simple and literal meaning, and the glosses of requiring a legally enforceable contract of carriage (Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259) and of requiring habitual user with enforceable contract (Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494) should both be rejected.
The second question is whether, if a legally enforceable contract is required, that relationship was proved between Albert and Quirk. There will be no reference to the evidence on this question but only to the primary findings of fact made by Willis J.
The third question is whether, if habitual user is required, such user was proved.
Coward was a decision on the Road Traffic Act 1930 as amended in 1931, 1934 and 1937. The decision was founded upon a comparison of the words "for hire or reward" as used in the compulsory insurance provisions in Part II, section 36 (1), with those words as they appeared in the public service vehicle provisions of the Act, and the court concluded with particular emphasis upon the definition of "public service vehicle" in section 121 (1), that the words must mean the same in both sets of provisions, namely, "hire or reward under legally enforceable contract."
The Act of 1960 consolidated substantial amendments made by the Road Traffic Act 1956. Those amendments were made only to part of the provisions considered in Coward, namely, the public service vehicle provisions. In particular, new definitions of the classes of public service vehicles were enacted, and the definition of "public service vehicle" contained in section 121 (1) of the Act of 1930 and referred to in Coward was repealed. The validity of the decision in Coward, however, must be tested by reference to the original provisions in the Act of 1930 since Parliament does not appear to have intended any alteration to the compulsory insurance provisions of the Act of 1930, either by the 1956 amendments or by the minor change in wording introduced by the Act of 1960. The Act of 1960 was made pursuant to the Consolidation of Enactments (Procedure) Act 1949 by which procedure no alterations in the law should be made "of such importance that they ought . to be separately enacted by Parliament" (section 1 (5)).
It is, therefore, necessary to establish the extent of the compulsory insurance provisions in the Act of 1930 by reference to the meaning intended by Parliament to be attached to the words "for hire or reward"; to see whether any meaning had been fixed for that phrase in earlier legislation and, by reference to the practical structure and working of the Act of 1930, to determine whether it was necessary to attach to the words "hire or reward" the limited meaning attached to them in the decisions of the Court of Appeal in Coward and Connell. As between the gloss requiring a legal contract of carriage and the second gloss requiring habitual user it is the second which should be preferred if either has to be attached. The plaintiff's primary submission is that the words should be given their natural meaning without any gloss.
The relevant authorities are Izzard v. Universal Insurance Co. Ltd. [1937] A.C. 773; Wyatt v. Guildhall Insurance Co. Ltd. [1937] 1 K.B. 653; Bonham v. Zurich General Accident & Liability Insurance Co. Ltd. [1945] K.B. 292; Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259; Aitken v. Hamilton, 1964 S.L.T. 125; Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494; Vandyke v. Fender 1970 2 Q.B. 292; and Motor Insurers' Bureau v. Meanen, 1970 S.L.T. 341; 1971 S.L.T. 264.
As to the construction of the compulsory insurance provisions of the Acts of 1930 and 1960 see the long title of the Act of 1930. The amendments of 1931 and 1934 were not of significance on this point. The words should be given their ordinary and literal meaning: see Maxwell on Interpretation of Statutes, 12th ed. (1969), p. 28.
In section 36 (1) (b) (ii) of the Act of 1930 and in the proviso to section 203 (4) of the Act of 1960 the phrase "in the case of a vehicle in which passengers are carried for hire or reward" defines the circumstances in which the insurance of liability to passengers is compulsory; it relates to the time of the offence or of the event which gives rise to a claim. It is not a phrase defining a class or type of vehicle. Thus, in section 203 (4) of the Act of 1960 "persons being carried in . the vehicle at the time of the occurrence" defines the persons to whom liability need not be, or must be, insured, and the circumstances in which that liability must be insured are "in the case of a vehicle in which passengers are carried for hire or reward," i.e., at the time of the occurrence. For example, a man who, as his business, owns and operates a taxi may use it for private purposes without hire or reward at the weekend, and on such an occasion, despite the type and normal user of the vehicle, it would not be "[a] case of a vehicle in which passengers are carried for hire or reward."
The persons to whom under section 35 of the Act of 1930 and section 203 of the Act of 1960 liability need not, in general, be covered by insurance are passengers, but in certain circumstances that liability must be covered, namely, "in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment." If there be such a "case," then liability to all passengers in the vehicle must be covered by insurance, and nothing requires inquiry as to whether any particular passenger has an enforceable contract or other arrangement of or for carriage or is carried by reason of a contract of employment. Further, in such a "case" insurance cover is as necessary and desirable on the first occasion of such carriage as upon any subsequent, or "habitual," occasion.
The proposition appearing in the judgment of the Court of Appeal in Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259, 274, supported by reference to Bullen and Leake's Precedents of Pleading, 3rd. ed. (1868), that by 1868 no distinction was drawn between the two expressions "for hire" and "for reward" is inaccurate and not a correct approach to legal usage of the terms in 1930. The first approach should be that each word is to be given its meaning, and there is no reason to treat either word as surplusage: see the definitions of "hire" and "reward" in the Shorter Oxford English Dictionary, 1933 ed., pp. 135, 1730. Whereas "hire" may connote a legally enforceable relationship, "reward" covers circumstances both where a legally enforceable relationship exists and where it does not.
As to the meaning to be given to "for reward" in section 36 of the Act of 1930 and section 203 of the Act of 1960, there is a difference between "carriage for reward" and "reward for carriage." It is accepted that it must be shown that the carriage was "for reward." The phrase is to be construed according to its ordinary meaning without the importation of further or special requirements, and such ordinary meaning includes any case in which at the time of the occurrence of the event out of which the claim arises the vehicle is one in which a passenger is then carried "for reward," that is to say, there is a sufficient connection between the carriage of the passenger and any reward that is paid, promised or expected for the court to say that the carriage was "for reward."
It is relevant to consider what words Parliament would have used if it had intended to enact the requirement of either "legally enforceable contract of hire or reward" or "habitual user" as such; express words to such effect would have been used. If the obligation to insure liability to passengers was to be, in cases of "for hire or reward," coterminous with carriage in public service vehicles or with use of vehicles for commercial or business purposes it is inconceivable that Parliament would not have said so. Reference to all earlier legislation in which the phrase "hire or reward" has been found in provisions regulating transport does not reveal any settled meaning which could justify the importation of the requirement of legally enforceable contract or habitual user.
If cases of "carriage for hire or reward" were intended to be limited to cases of "carriage under contract for hire or reward" it is strange that Parliament did not say so in view of the fact that the next following phrase is "carried . by reason of or in pursuance of a contract of employment": see also the provisions of section 97 of the Act of 1930 where there was reference to "contract for the conveyance of a passenger in a public service vehicle."
If, by concluding that a vehicle may be used "for hire or reward" without enforceable legal contract, the vehicle becomes a "public service vehicle" within the definition of that phrase in the Act of 1930, yet the consequences (see sections 67, 72, 77, 84 and 97) were not such as to require or justify any modification of the plain meaning of the phrase "for hire or reward" where it appears in section 36 of the Act of 1930, now section 203 of the Act of 1960.
In 1930 Parliament had not seen the need accurately to define the borderline between the vehicle commercially used and the private vehicle used on occasions to carry passengers for hire or reward for the purposes of public service vehicle regulation on the one hand and compulsory insurance of and liability to passengers on the other. Anomalies and difficulties would not be removed or avoided by superimposing the requirement of "legally enforceable contract" on the phrase "for hire or reward." Effect should be given to the plain meaning and intention of Parliament so far as concerns the extent of the obligation to insure liability to passengers, and that extent of obligation should not be cut down because of supposed difficulties with reference to the public service vehicle regulation provisions of the Act of 1930.
Izzard v. Universal Insurance Co. Ltd. [1937] A.C. 773 was primarily a decision on the insurance policy in that case and was concerned with the phrase "contract of employment." The decision emphasises the need to apply the plain meaning of the words in the compulsory insurance provisions of the Act of 1930 and the relevance to the construction of the Act of decisions upon the meaning of phrases in policies designed to follow it. No reference was made either to enforceable contract or to habitual user.
In Bonham v. Zurich General Accident & Liability Insurance Co. Ltd. [1945] K.B. 292 the majority of the Court of Appeal held that the words "for hire or reward" in a policy of insurance, which words were intended to follow the language of the Act, did not require a legally enforceable contract; that decision was correct.
In Wyatt v. Guildhall Insurance Co. Ltd. [1937] 1 K.B. 653, a decision of Branson J., the court was concerned with the Act of 1930 and an isolated occasion when an insured carried two passengers for a money payment, and it was held that the exception "in the case of a vehicle in which passengers are carried for hire or reward" affected only vehicles in which passengers were so carried "normally and habitually"; the case is the origin of this gloss.
It was subsequently noted as establishing the need for "habitual user" in publications including Shawcross on Motor Insurance, 2nd ed. (1949), pp. 202-203, 208, where the proposition was regarded as settled law. It was said in Connell v. Motor Insurers' Bureau [1969] [1972] A.C. 301 Page 307 2 Q.B. 494, per Lord Denning M.R. at p. 503, that when Parliament passed the Act of 1956 and made no reference to the compulsory insurance provisions it must be taken to have approved the comment made, obiter, by Branson J. in Wyatt as to the need for "habitual user," but Bonham's case [1945] K.B. 292 had also been duly noted in publications as negativing any requirement of "legally enforceable contract" at least in policies designed to follow the language of the Act, and Parliament also made no reference to that point in the 1956 amendments.
The test or requirement of "legally enforceable contract," as established by Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259, is inept and inconvenient: a person who takes a passenger in his car for hire or reward frequently would not know or care whether he was entering into a legally enforceable contract or some less formal arrangement. The test is uncertain and undesirable. "For hire or reward" in section 36 of the Act of 1930 covers the case where there is no legally enforceable contract so long as the carriage is shown to be "for reward."
This meaning applied equally to the words "for hire or reward" in the sections dealing with public service vehicle regulation, e.g., sections 61 and 121. The difficulties arising from including within the public service vehicle provisions cases of the private car used for such hire or reward without legally enforceable contract were not significantly different from the difficulties which arose in any event as appears from the many cases decided on the sections regulating public service vehicles. Parliament appears not to have had in clear contemplation the mixed user of vehicles, i.e., the private car used informally as a taxi or hired car or the car shared for reward, but any difficulties, real or supposed, arising under the public service vehicle regulations by including within "hire or reward" cases of reward without legally enforceable contract should not deflect the House from applying, in relation to the compulsory insurance provisions of the Act of 1960, the plain meaning of the words used. If the words in the sections regulating public service vehicles are held to connote "legally enforceable contract," then in the compulsory insurance provisions a different meaning should be applied.
Since Parliament intended liability to some passengers, but not to passengers generally, to be covered, and since those to whom liability is to be covered by insurance include passengers in the vehicle "in the case of a vehicle in which passengers are carried for hire or reward," it is relevant, in determining the intention of Parliament as expressed by the words used, to consider the reasons and purposes of these provisions and the facts relevant to them, namely, the alleviation of the distress of the individual claimant, on the argument that he who pays is entitled to expect insurance cover (see per Lord Kissen in Motor Insurers' Bureau v. Meanen, 1970 S.L.T. 341, 345); the benefit to the community at large in passing the burden of the loss from the community to the insurers and thence to the class of person doing this class of damage; the burden of the cost of insurance to the motorist; and the fact that a criminal offence may be involved.
In including within the benefit of compulsory insurance passengers in a vehicle in a case of carriage for hire or reward Parliament had in mind nothing more complicated than that when there is carriage for reward there will be more passengers and more occasions of carriage of such
passengers, i.e., the extent and frequency of exposure to risk; such a concept is not necessarily limited either to legally enforceable contract or to habitual user.
Further, as to the criminal offence point, the essential requirement is certainty: if the words "carriage for hire or reward" were given their ordinary meaning a man using a vehicle might more readily and accurately answer suitable questions in a proposal form for insurance and thereby pay for and obtain the cover which he needed than if the extent of his required cover should turn upon the view of a court as to the legal enforceability of any informal arrangement which he might thereafter make or as to the degree of normality or habitualness in or of any similiar arrangement.
Importing the notion of legally enforceable contract gives rise to unnecessary problems relating to capacity to contract, and to the problem of evasion by express stipulation that no legal contract shall arise: see Cocks v. Mayner (1893) 70 L.T. 403.
If a legally enforceable contract of carriage for reward is required in law then it was in fact proved in the present case: see the findings of primary fact of Willis J. [1969] 2 Lloyd's Rep. 243, 249-250; the House is entitled to substitute its own conclusion upon those primary findings.
If habitual user is required, then, on those primary findings, such user was proved.
The appellant has a claim for interest: see the Administration of Justice Act 1969, section 22. Interest should be given from an appropriate date. January 1, 1968, should be taken.
H. Tudor Evans Q.C. and Timothy Preston for the bureau. Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494 was rightly decided. As to whether a contractually binding relationship is a prerequisite of insurance cover within the proviso to section 203, it is a valid rule of construction that one may look at preceding and succeeding sections in which similar language is used to obtain guidance, and, indeed, to assess the whole scheme of the Act. The Parts of the Act in which the material words are found are Parts III and IV, relating respectively to public service vehicles and the carriage of goods by road.
The bureau's first submission is that in Part III of the Act the words "hire or reward" plainly and invariably import contract or the conception of contract. A contract for the use of a public service vehicle may sometimes be expressed, is very often implied and, in the case, for example, of a taxi, may be a mixture of both. The conclusion that contract runs throughout the whole of Part III is to be deduced from sections 117, 118 and 151. With reference to section 117, see the definition of "fares" in section 257 (1). That clearly relates to a state of affairs which is contractual: the right to be carried and the duty to carry.
The ordinary commonsense meaning of "fare" involves the right to be carried. Each subsection of section 118 of the Act involves the conception of contract. In section 118 (3) (a), the word "payment" is used; in section 118 (3) (b) the word "fare" and the words "in consideration of" plainly import contract, and section 118 (3) (c) refers by implication to the right to be carried. The language of sections 117 and 118 is the language of contract.
Section 118 (3) (a) is the main contract. It has to be considered in connection with the succeeding sub-clauses. If this is not the meaning then passengers in public service vehicles would find themselves in an extraordinary position. They would be making a payment for presence on someone else's property which conferred no rights on them at all. That section 118 (3) is dealing with a contractual relationship becomes clear from section 151.
No case has been cited in which it has been said that the public service vehicles sections of the Act do not create, by the payment of a fare, a contract between the passenger and the carrier. Therefore, the words "for hire or reward" in sections 117 and 118 are words which denote contract. The same conception of contract is found in the licensing provisions of the Act: sections 164 and 166.
It is valid to take into account, with regard to section 203 (4) (a), the meaning of the same words in other Parts of the Act, and where they are used in the connotation of contract then at any rate prima facie the same meaning is to be given to them as in other Parts of the Act. In fact, the proviso to section 203 (4) is really a saving clause dealing with public service vehicles because without it passengers in public service vehicles would not be required to be insured by law, subject only to section 151 which renders void an agreement by which a passenger agrees not to be covered.
The question is raised whether section 61 (2) of the Road Traffic Act 1930 can be considered as a substantive section and looked at in isolation as a guide to the meaning of section 36. The Interpretation Act 1889 offers no guide to its interpretation (see section 8. Section 61 (2) of the Act of 1930 is a section for the better definition of parts of section 61 (1). It does not give guidance with regard to section 36 because the primary rule of statutory construction is that the Act as a whole must be looked at. In any event, if there is a subsection which is further definitive of a preceding subsection one must look at in its own context before looking at other Parts of the Act.
If it had been intended that section 61 (2) should be separated from its context clearer language would have been used and the subsection would be found in some other Part of the Act or in some other way or as an independent section. It does not, admittedly, say "for the purposes of this section," but it contains an expression only found in section 61 (1) (a) and (b). Alternatively, if it does apply generally, its language is plainly the language of contract.
The bureau's primary submission is that one has to look at the phrase "for hire or reward" used throughout the Act to determine its meaning in a particular place. If that is done in relation to this legislation then wherever one finds the words "carried for hire or reward" one finds the language of contract, and throughout sections 61, 67 and 131 of the Act of 1930 and in Parts III and IV of the Act of 1960 the intention of the legislature was to postulate that there should be a contractual relationship between the passenger and the carrier (or someone) - that is, a legally enforceable contract. For the payment of something known as a "fare" the passenger obtains the right to be carried and the carrier is under a duty to carry; with regard to any licensed public service vehicle the carrier does not have the right to refuse to carry a passenger offering himself for carriage.
The provision in section 151 forbidding contracting out does not by itself imply a contract. There is no requirement in section 203 (4) (a) of the Act of 1960 for carriers to insure. So, if it is asked how the passenger is insured, the answer is found only in the proviso, which is in the language of Part III. True, there is no reference to separate fares, but public service vehicles are not limited to separate fares. Thus, the proviso is plainly designed to provide cover for passengers who fall into Part III and who, but for the proviso, would be uninsured. Nowhere in Parts III or IV of the Act of 1960 is there any language which would draw any distinction between "hire" and "reward," nor has any case been cited in which any such distinction has been drawn.
"Hire" is apt to cover a vehicle where, whether it is hired with or without the services of a driver, the passenger has the right to control the means of getting to his destination. "Reward" imports the wider connotation of the use of a vehicle without any control over the driver and where it shall go - e.g., it is not valid to use the expression "hire" in relation to a bus but clearly the passenger is carried for reward.
Emphasis is to be put on the word "for." This means "in return for" or "in consideration of." That was the approach of Atkinson J. in Bonham v. Zurich General Accident & Liability Insurance Co. Ltd. [1944] 2 All E.R. 573, 576-578. His decision was overruled but that passage found favour with MacKinnon L.J. [1945] K.B. 292, 296-297.
With regard to Meamen, 1970 S.L.T. 341; 1971 S.L.T. 264, if the value to the driver is to be considered this would produce a very vague situation. One would have to decide what might or might not amount to a reward in certain circumstances.
The words of the proviso to section 203 (4) clearly import a business, contractual, relationship, even if they are broader than being just confined to public service vehicles and merely include them. Section 203 (4) (a) is directed to the moment in question - the time of the occurrence and the people being carried in the vehicle at the time of the occurrence. In the proviso different language is used in relation to the vehicle - the type of vehicle. It is designed to describe the character of the vehicle. One must contrast the proviso with the subsection of which it forms part, and there is a striking change of language. It implies habitual user.
With regard to section 118 (3) (b), a public service vehicle would be a stage or express carriage even if carrying only one passenger in the course of business.
The last question is whether, on the facts of this case, there was a contract. The relationship between the men existed only when they were working in the same dock; cf. per Upjohn L.J. in Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259, 271: this makes it unlikely that they intended to enter into a legal relationship. It is clear that payment was not a condition of carriage. One has to go no further than this to determine the answer to the question whether there was a contractual relationship here. To establish a contract there has to be an intention to create a legal relationship This contract would be void for uncertainty and void because there was no intention to create a legal relationship.
With regard to the position of the Motor Insurers' Bureau, it was incorporated under the Companies Act 1929 for the purposes of entering
into an agreement with the Minister of Transport to provide payments in certain circumstances: (i) where the tortfeasor was not insured; (ii) where there had been an effective repudiation of insurance, or (iii) where the insurance company had gone into liquidation. Collaterally with that agreement (the agreement of 1946), the bureau was duly incorporated and entered into an agreement known as a "domestic agreement" with the insurance companies whereby it was agreed that the bureau would nominate insurers who would deal with claims made.
The position of the bureau in law has been considered in three cases. It was pointed out by Lord Denning M.R. in Hardy v. Motor Insurers' Bureau [1964] 2 Q.B. 745, 757 that no point had ever been taken on behalf of the bureau that a plaintiff, not being a party to the agreement with the Minister, had no rights under the agreement and therefore could not sue upon it. The position of the bureau was further considered in Gurtner v. Circuit [1968] 2 Q.B. 587, per Diplock L.J. at p. 598. In McGoona v. Motor Insurers' Bureau [1969] 2 Lloyd's Rep. 34 Lawton J. held that a plaintiff could apply for a decree of specific performance of the agreement. There has been a further agreement in 1969 extending the agreement of 1946 to cover injuries caused by the negligence of an untraced driver. Hitherto, the practice has been for the bureau to make an "ex grouchy" payment in such cases.
As to interest, in the event of an appeal succeeding, the bureau makes no submission. Gibson Q.C. in reply. As to the bureau's submission to the effect that the language in the whole scheme of the Acts of 1930 and 1960 is consistent with and agreeable to the concept of legally enforceable contract in cases of carriage for hire or reward, it has never been the plaintiff's submission that it was or is not.
The plaintiff's submission is that nothing in these Acts shows that in the regulation of public service vehicles it was the intention of Parliament to limit the phrase "for hire or reward," even in sections 117 and 118 of the Act of 1960, to hire or reward under legally enforceable contracts.
The bureau has submitted, with reference to sections 151 and 203 of the Act of 1960, that it was really the intention of Parliament to limit compulsory insurance for passengers to passengers in public service vehicles.
There are a number of phrases which Parliament might have used instead of "hire or reward." It did, for example, in section 19 of the Act of 1930, limit the time for which drivers might remain continuously on duty by reference to "public service vehicles." If the limit of Parliament's intention was to restrict compulsory insurance of liability to passengers to cases of passengers in public service vehicles then it would have said so expressly. Further, under the original definition of "public service vehicles" in section 121 of the Act of 1930 many vehicles were excluded from that definition which were plainly used "for hire or reward" under legally enforceable contracts.
Their Lordships took time for consideration.
July 7. LORD DONOVAN. My Lords, the appellant is the widow of Joseph Albert and the administratrix of his estate. Her husband was killed as the result of a motor car accident on March 22, 1965, while he was being driven as a passenger in the car by a Mr. Quirk. On December 15, 1967, the appellant obtained judgment against Mr. Quirk for £9,200 under the Fatal Accidents Acts, for £501 15s. under the Law Reform Act and for some £300 as costs. Nothing has been paid. Mr. Quirk could not pay and the insurance company which should have indemnified him - the Fire, Auto and Marine Insurance Co. Ltd. - has failed.
In consequence the present action against the Motor Insurers' Bureau was begun in 1969 to recover the aforesaid sums from the bureau. The appellant relied upon an agreement entered into on June 17, 1946, between the bureau and the then Minister of Transport whereby the bureau undertook to satisfy a judgment "in respect of any liability which is required to be covered by a policy of insurance or a security" in terms of the Road Traffic Acts, and which is not otherwise satisfied.
The question immediately suggests itself as to how the appellant as a third party can claim the benefit of this agreement. The point was looked at in Hardy v. Motor Insurers' Bureau [1964] 2 Q.B. 745, where, at p. 757, Lord Denning M.R. remarks that the agreement is on the face of it a contract between two parties for the benefit of a third, and that no point was taken by the bureau that the agreement was not enforceable by the third person.
Diplock L.J. also considered the matter in Gurtner v. Circuit [1968] 2 Q.B. 587, 599, saying that on a number of occasions the court had turned a blind eye to the position, and that unless the point were specifically raised the court was "entitled to proceed upon the assumption that the bureau has, before action is brought, contracted for good consideration with the plaintiff to perform the obligations specified in its contract with the Minister or has by its conduct raised an estoppel which would bar it from relying upon absence of privity of contract."
In the present case the bureau has likewise raised no point concerning the right of the appellant to sue under the same contract, and in the circumstances I say no more upon the matter.
The bureau resists the present claim on the ground that the liability which gave rise to the claim for damages was not a liability required to be covered by a policy of insurance or a security in terms of the Road Traffic Acts: it was therefore outside the terms of the above agreement of 1946. The appellant contends the opposite. The issue depends upon whether the proviso to section 203 (4) of the Road Traffic Act 1960 applies to the facts of this case.
The effect of that provision is, inter alia, to make compulsory the insurance of passengers against risk of injury if travelling in "a vehicle in which passengers are carried for hire or reward." If Mr. Albert, when he was killed, was travelling in such a vehicle, the bureau agrees that it must pay. If he were not, it is common ground that the bureau is not liable. Willis J. and the Court of Appeal decided the issue adversely to the appellant who now appeals to this House by leave of the Court of Appeal.
Quirk was a dock worker together with the late Mr. Albert at the Royal Group of Docks and occasionally at Tilbury, and he (Quirk) had been in the habit of giving lifts to and from work to some of his fellow workers, including Mr. Albert. The material facts in this connection are conveniently summarised by Willis J. in his judgment as follows [1969] 2 Lloyd's Rep. 243, 249-250:
"The facts as I find them were:
(a) For about eight years prior to the accident Quirk regularly carried other dock workers in his car whenever they were working in the same dock as himself, that is to say, in the Royal group of docks, including the King George V Dock, and farther afield, at Tilbury.
(b) It was a regular and understood arrangement between Quirk and such dock workers as I have referred to in (a) above, that they should pay Quirk sums varying between 5s. and 10s. and that (1) in relation to journeys to and possibly from the London docks the sums varied from 7s. 6d. to 5s. per head per week, paid usually on the weekly pay days, and (2) in relation to the Tilbury journeys, up to 7s. 6d. per head per return journey.
(c) If fellow dock workers did avail themselves of any opportunity to travel to or from work in Quirk's car they expected to pay and he expected to receive some financial payment.
Nevertheless (d) the reward was sometimes in kind, such as a pint of beer or a packet of cigarettes; and (e) free transport was sometimes given by Quirk when a passenger found it difficult to pay, and in such a case Quirk did not try to exact payment as a condition of carrying them again.
(f) Carriage in Quirk's car was not limited to his close friends, such as his brother, who always travelled free, or Mr. Albert, but was available, if there were room, to fellow dock workers going to the same dock where Quirk happened to be working and who lived in his locality, and to members of the same gang when, as was always known the preceding night, they were detailed to prepare a ship at Tilbury.
(g) So far as journeys to Tilbury were concerned, the employers paid 10s. or so journey money for a journey by bus and train. The object of the arrangement was that among the dock workers to whom I have referred, dock workers, including Quirk, who proposed to use their motor cars for such journeys were prepared to carry other members of their shift not for any fixed tariff but for some arbitrary figure which would leave the passenger something out of his journey money and give the driver something towards his expenses.
(h) There is no reliable evidence that Quirk advertised his services, solicited custom or quoted any tariff, but the wellunderstood arrangement was that any dock worker who wanted a lift to the dock where Quirk was going could get in touch with him and try to arrange with him. If he travelled, both parties expected that some money payment would be made, but this was, as it were, a dockland convention which could in given circumstances be satisfied in kind by the passenger or even in kindness by Quirk.
(i) I think that the evidence on the whole strongly suggests that Quirk had over the years operated what might loosely be called an unofficial taxi service, partly to help his friends and partly to finance his motoring expenses. (j) Quirk's car, which by Mr. Preston's proper concession, if I may say so, must include its predecessor, was at the material time being used as it had been regularly used during Quirk's journeys to and from work over the years, namely for carrying passengers for a monetary reward which Quirk expected to receive and the passengers expected to pay; and finally, (k) notwithstanding the finding in (j) above, neither Quirk nor any of his passengers intended any contractual relationship to result from the offering and acceptance of a lift in Quirk's car."
On these facts the learned judge, basing himself on the decision of the Court of Appeal in Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259, dismissed the claim. The ratio of that decision was that "hire or reward" in the present context connoted a monetary reward legally recoverable under a contract express or implied. Willis J. held that no such contract existed here. The Court of Appeal (Davies and Winn L.JJ. and Sir Frederick Sellers) dismissed an appeal to them by the present appellant, taking a similar view to that of Willis J. and referring also to the decision in Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494. I shall have to refer in more detail later to these and other authorities.
The compulsory insurance of third parties against injury by motor vehicles was first introduced in the Road Traffic Act 1930. This Act was amended by the Road Traffic Act 1956, and a consolidating measure was enacted in 1960, being the Road Traffic Act of that year. The term which falls to be considered in this case, namely, "a vehicle in which passengers are carried for hire or reward," has remained unchanged, however, since its first appearance in the Act of 1930 (although it was there expressed as an exception instead of a proviso) and it is common ground between the parties that in interpreting the term regard may properly be had to the language of the Act of 1930 and to contemporary circumstances.
The Road Traffic Act 1930 ("the Act of 1930") by section 35 (1) made it unlawful for any person to use a motor vehicle on a road unless there were in force in relation to that user a policy of insurance against third party risks which complied with the requirements of the Act. Section 35 (2) imposed criminal sanctions for any contravention of section 35.
Section 36 proceeded to specify the requirements of the Act in respect of policies. The person or persons specified in the policy had to be insured against liability which might be incurred by him or them in respect of the death or of bodily injury to any person caused by or arising out of the use of the vehicle on a road.
Proviso (ii) to section 36 (1) (b) enacted that such compulsory insurance was not required in respect of persons "being carried in or upon or entering or getting on to or alighting from the vehicle at the time of the occurrence of the event out of which the claims arise." In other words, risk to passengers did not have to be covered. But this freedom to leave passengers uninsured was cut down by the opening words of the proviso: "except in the case of a vehicle in which passengers are carried for hire or reward ." In this case, therefore, compulsory insurance of such persons was necessary.
If one goes straightaway to the corresponding provisions in the Road Traffic Act 1960 ("the Act of 1960") which are in point in the present appeal
it will be found that similar third-party insurance is made compulsory by section 201 (1). Subsection (2) imposes criminal sanctions for disobedience.
Section 203 (4) (a) enacts that the policy need not cover passengers, who once more are defined as "persons being carried in or upon, or entering or getting on to or alighting from, the vehicle at the time of the occurrence of the event out of which the claims arise." The freedom not to insure passengers is now, however, cut down by a separate proviso to section 203 (4) reading, so far as is presently relevant:
"Provided that paragraph (a) of this subsection shall not have effect in the case of a vehicle in which passengers are carried for hire or reward ."
It is nobody's case that this change in the way of expressing the situation is material.
The crucial question for present purposes is whether Quirk's car in which Mr. Albert was riding was "a vehicle in which passengers are carried for hire or reward" and this expression has been the subject of conflicting judicial decisions. At one extreme is the interpretation which would impose liability to insure a passenger who was carried as an act of kindness on an isolated occasion, if the passenger voluntarily undertook at the outset of the journey to pay for the cost or part of the cost of the petrol. At the other is the interpretation which would require the carriage to be for "hire or reward" representing a contractually binding obligation.
Certain of the judicial decisions reviewed in the course of the argument deal with questions arising out of the wording of the policy of insurance. Thus in Wyatt v. Guildhall Insurance Co. Ltd. [1937] 1 K.B. 653 the risks insured were exclusive of risks arising out of the use for "hiring." The insured person on an isolated occasion carried two passengers from Manchester to London for a money payment. Branson J. held that this was a "hiring" and so outside the scope of the policy. Strictly speaking, therefore, he did not need to examine the Act of 1930 but he did so since it had been relied upon in argument. His view was that in the exception to the proviso to section 36 (1) (b) "hire or reward" were synonymous terms, and that section 36 (1) (b) (ii) was dealing with vehicles normally and habitually used for the carrying of passengers for hire or reward. It did not cover an isolated occasion when a man took some reward for the conveyance of a passenger in his car:
"Two constructions may be possible, but as this is a penal statute one leans against the construction which would turn the user of the car into a criminal user" (p. 662).
Bonham v. Zurich General Accident & Liability Insurance Co. Ltd. [1945] K.B. 292 was also decided upon the language of a policy of insurance. The proposal form said that passengers would not be carried for hire or reward. The assured, however, habitually carried three passengers to work and back for the equivalent return railway fare. There was no contract to do this and the money was voluntarily offered and accepted. He had done this for a long time. In the Court of Appeal du Parcq and Uthwatt L.JJ. thought this was, on account of the regularity of the course of conduct and the time it had been going on, a carriage of passengers for reward, and that the insurance company was therefore free from liability.
MacKinnon L.J. thought the opposite on the ground that "hire or reward" connoted a hire or reward in respect of which there was a legally enforceable claim, and there was none there.
By contrast Coward v. Motor Insurers' Bureau [1963] 1 Q.B. 259 was a decision on the Act of 1930. (The case was decided in 1961 but not reported in the Law Reports until 1963.) Here a passenger was regularly carried for 18 months to and from work on the pillion seat of a motor cycle driven by Cole. There was no contract, but Coward paid a weekly sum to Cole for his transport. The Court of Appeal held that the expression "passengers are carried for hire or reward" in section 36 (1) (b) (ii) of the Act of 1930 means carrying passengers for a monetary reward legally recoverable by the carrier under a contract express or implied. There was no such contract here. Therefore Cole was not bound to insure his passenger and the Motor Insurers' Bureau were therefore under no liability.
In Connell v. Motor Insurers' Bureau [1969] 2 Q.B. 494 an arrangement whereby the owner of a private motor car carried a passenger on three occasions for a stipulated reward was held to be a contract. Nevertheless it was decided by a Court of Appeal differently constituted that passenger insurance was not required because the proviso to section 203 (4) of the Act of 1960 applied only to a vehicle in which passengers were normally or habitually carried for hire or reward, and this private motor car was not such a vehicle. Lord Denning M.R. in the course of his judgment said, at pp. 503-504:
"I must confess that I am not altogether satisfied about the ground given for the decision in Coward's case [1963] 1 Q.B. 259. It is often a very nice question whether there is a legally binding contract when a driver gives a man a lift. I should have thought that, in the ordinary way, when a man agrees to carry a man for payment, there is a contract, albeit informal, no matter whether the payment is by way of contribution to the petrol or a reward for the lift. I would agree therefore with the judge that there was a binding contract here. But in any case, contract or no, it is a fine point: and it would be a pity if these cases turned on it. I do not think they do turn on it. I would prefer to put the decision in Coward's case on the ground that the motor-cycle was not 'a vehicle in which passengers are carried for hire or reward.' It was a private motorcycle giving a man a lift. So Cole was not bound to insure against injury to passengers . I propose to decide the present case on this simple ground: the car driven by Mr. English was not a vehicle in which passengers were normally or habitually carried for hire or reward."
East Midland Traffic Area Traffic Commissioners v. Tyler [1938] 3 All E.R. 39 was a decision of a Divisional Court of the King's Bench Division upon a case stated by magistrates. They had dismissed an information against Tyler which alleged that in contravention of the Act of 1930 he had used a public service vehicle on a road without the necessary licences. Tyler had in fact used his private Morris Minor car to give three friends a lift to and from their common place of work. By agreement they shared in the cost of the oil and the petrol at the rate of 5s. a week each. The Divisional Court held that these were "separate fares" and accordingly under section 61 (2) of the Act of 1930 the vehicle was to be "deemed to be a vehicle carrying passengers for hire or reward at separate fares" and so required the licences which had not in fact been obtained. The case is not on all fours with the present one on its facts, and the true construction of the exception in section 36 (1) (b) (ii) of the Act of 1930 was not in issue.
Finally, I come to Motor Insurers' Bureau v. Meanen [1971] 2 All E.R. 1372 (Note) in which the appeal of the bureau was heard by your Lordships immediately following the present appeal. It is another case of a workman giving fellow workmen a lift to and from work in his van over a long period in return for their sharing the cost, in this case the cost of the petrol. The arrangement was informal, without any binding obligation, but the Court of Session, 1971 S.L.T. 264 held that the vehicle was, in the circumstances, one in which passengers were carried for reward, so that the bureau was liable to pay the unsatisfied judgment for damages which Meanen obtained.
In the light of the difference of judicial opinion thus revealed one can understand the observation of Edmund Davies L.J. when giving leave to appeal in the instant case that the matter "needs clearing up."
The way in which statutory liability to insure some passengers has been imposed is not without interest and may be of some significance. It would have been very understandable if the legislature had singled out those engaged in the passenger-carrying business and imposed such a liability upon them by some separate and independent provision. They are, after all, engaged in the business for profit; the passenger usually has no knowledge about the state of the vehicle in which he embarks, or the reliability of the driver. In those circumstances it is reasonable to require the operators of such vehicles to insure the passengers, the more so as the premiums will be reflected in the fares.
Neither the Act of 1930 nor the Act of 1960 proceeds, however, in this direct way. The relevant part of each begins by compelling all users of motor vehicles to insure against liability to third parties in respect of death or bodily injury caused by or arising out of the use of a motor vehicle on the road. If each Act had stopped there it would have been compulsory to insure all passengers. But the next thing that each Act does is to provide that passengers need not be insured. It then enacts the opposite if the vehicle is one in which passengers are carried for hire or reward.
The reasoning behind this legislative structure would seem to be this: passengers, like the driver himself, can properly be left to look after themselves. After all, if the passenger elects to go by private transport he will usually know the driver, often have some idea as to the condition of the vehicle and if he thinks that either presents a risk he need not run it. There is, therefore, no justification for imposing the additional burden on all private car owners to insure all potential passengers. But where public transport is concerned the position is different. The passenger must almost invariably take the vehicle and the driver as he finds them, and the same
is true of the private hire vehicle if it is chauffeur-driven: in these cases it is eminently reasonable that the operator of such vehicles should insure passengers, and this obligation is now expressed by the proviso.
Coming to the problem of its construction in order to determine whether Mr. Quirk's vehicle was within its scope, I am myself clear at least on this: that the words "a vehicle in which passengers are carried for hire or reward" now appearing in the proviso to section 203 (4) of the Act of 1960 cannot be construed as meaning any vehicle in which passengers were in fact being carried for hire or reward at the time of the occurrence of an event giving rise to a claim. Such a construction would lead to the absurd result that an omnibus leaving the depot in the morning would not be a vehicle in which passengers were carried for reward until it picked up its first passenger, and would lose the characteristic thus acquired each time it was running empty. If Parliament had intended this result, it need only have said, as has been pointed out elsewhere, that the necessary insurance must be provided when passengers are being carried for reward.
The relevant words are an adjectival clause governing "a vehicle," and I construe them as pointing to the function or one of the functions which the vehicle is used to accomplish. And by this I mean not some fleeting use of the vehicle to carry a passenger on some isolated occasion even though it may be arranged at the outset that he shall contribute something towards the expense but, on the contrary, some settled plan to carry passengers for reward which has been put into operation with a regularity and frequency (actual or intended) which justifies the conclusion that this is one of the vehicle's normal functions.
There is no difficulty in identifying a motor omnibus or a taxicab as such a vehicle. On the foregoing construction of the proviso one scarcely need do more than look at it. There is likewise no difficulty in identifying a private motor car as such a vehicle if one is told, for example: "this is one of a fleet of private cars used for hiring out." The difficulty comes in cases like the present where a man uses his own private motor car to carry passengers and gets a quid pro quo from them for doing it.
The factor which is common to the omnibus, the taxicab and the private car which is an asset of the car-hire company is that they are all put on the road to carry passengers as a matter of business, and if this is borne in mind no difficulty arises with regard to the private driver giving a lift as a social kindness, even if some recompense is arranged at the outset. Such a driver has moreover (on this differentiation) no problem as to whether when he takes out his annual policy in advance he must insure possible passengers. Nor will the car dodge in and out of the proviso when the driver embarks and disembarks such a passenger. But is the driver who does what Mr. Quirk did in the present case also to be treated as a person giving lifts predominantly as a social kindness or is he, on the contrary, to be put in the same category as the omnibus, the taxi or the hired-out car?
They, as I have said, carry passengers as part of a business, and it may sound a little grandiose to describe Quirk's passenger-carrying activities as a business. But when it is recalled that for eight years he regularly carried passengers to and from work for a reward in cash or in kind which he expected to receive and they expected to pay, is there in the last analysis anything different in what he did from what a taxi-driver would do, except
the informality of the arrangement, the size of the reward and the fact that Quirk did it part-time? He systematically rendered service for reward, and if those rewards had been substantial enabling him to make a significant profit I do not think many people (certainly not the Inland Revenue) would shrink from asserting that it was akin to a business profit.
In my opinion, in view of the regularity of the arrangement and the finding of the judge that a reward was expected from the passengers, I think the smallness of the gain matters not. Nor, in my opinion, does the absence of a legally binding contract. I may say, in passing, that in view of the finding of the trial judge that neither Quirk nor his passengers intended any contractual relationship to result I would not myself be prepared to hold that a contract was here concluded.
The test which I favour, namely: has there been a systematic carrying of passengers for reward which goes beyond the bounds of mere social kindness? - which I may call for short the "business test" - is in line I think with the reasoning of the judges of the First Division in Meamen, 1971 S.L.T. 264 (who all attach importance to the features of duration and regularity) and with Lord Denning M.R.'s view in Connell [1969] 2 Q.B. 494, 503-504 that the existence of a binding contract is too narrow a test. Of course, if the "business test" is applied one will normally find a contract. But not necessarily so.
I recognise that on this construction there may be some instances, like the present, where careful examination of the facts will be reared before concluding whether or not the line which separates social kindness from planned operation for reward has been crossed. I do not think this presents any great difficulty. The courts have had to resolve for over a century questions whether a taxpayer has engaged in purely private nonbusiness activities or whether he has engaged in business.
The difficulty lies not in recognising a business when one sees it but in devising a formula for recognition. And whatever construction of the proviso is adopted, each case will still have to be decided on its own facts, and if the existence or not of a legally binding contract were to be the test the true answer could be just as difficult to find.
The construction which I favour conforms, I think, to the meaning which "hire or reward" bears in the public service vehicles part of the Act of 1930 and the Act of 1960. There the definition of public service vehicles clearly imports the notion of business. I confess I have not identified the case where "passengers are being carried for hire or reward otherwise than in the course of a business of carrying passengers," as to which see section 118 (3) (d) of the Act of 1960. I feel it must be some exceptional case which is here in mind, and, if so, the words quoted ought not to control the present problem of construction.
To summarise -
* 1. I think the words "hire or reward" must be read disjunctively.
* 2. I agree that the carriage must be for reward. A reward given for carriage is not the same thing.
* 3. In the present case there has been regular and systematic carriage of passengers by Quirk for about eight years. Quirk expected to be paid either in cash or in kind, and the passengers he carried expected to make such payment. That there was no legally binding contract I regard as immaterial. Even without any such contract, Quirk was, on the facts found by the trial judge, carrying on part-time the business of carrying passengers for reward with the consequence that the vehicle he was using was within the scope of the proviso.
I would accordingly allow the appe
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