CO/1307/2003 
Neutral Citation Number: [2003] EWHC 1080 Admin
IN THE HIGH COURT OF JUSTICE 
QUEEN'S BENCH DIVISION  
THE ADMINISTRATIVE COURT 
Royal Courts of Justice 
Strand
London WC2 

Thursday, 1st May 2003
 B E F O R E:

LORD JUSTICE SCOTT BAKER

MR JUSTICE PITCHFORD

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THE QUEEN ON THE APPLICATION OF NAOMI BELINDA SMITH 
(APPELLANT)

-v- 

DIRECTOR OF PUBLIC PROSECUTIONS 
(RESPONDENT) 
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Computer-Aided Transcript of the Stenograph Notes of 
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MR R MULLAN appeared on behalf of the APPELLANT
MR G ROBERTS appeared on behalf of the RESPONDENT 
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J U D G M E N T 
(As approved by the Court) 
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Crown copyright©
Thursday, 1st May 2003
 
1.	MR JUSTICE PITCHFORD:  This is an appeal by way of case stated from a decision of the Justices, sitting at Wrexham Maelor on 20th November 2002.  Upon her plea of guilty, the Justices convicted the appellant of an offence contrary to section 143(2) of the Road Traffic Act 1988 and Schedule 2 of the Road Traffic Offenders Act 1988 of using a motor vehicle when there was not in force in relation to its use a policy of insurance complying with Part 6 of the Road Traffic Act 1988.
2.	The appellant argued before the Justices special reasons why her licence should not be endorsed under section 44 of the Road Traffic Offenders Act 1988.  The Justices found special reasons had not be established and ordered her licence to be endorsed with six penalty points.  It is against this decision that the appeal is brought. 
3.	The Justices found the following facts, which I extract from their statement of case.
4.	Mrs Smith possessed a contract of insurance, valid for 12 months, upon condition that she made periodical payments of the premium by way of direct debit from her bank account.  Demands were made by her insurers, but there were insufficient funds in the account to meet the demand.
5.	On 18th September 2001, her insurers, as they were entitled under the agreement, cancelled the policy.  Thus, Mrs Smith drove her motorcar without insurance.  The case stated identifies incorrectly the date of 4th April 2002.  We are informed that the correct date for commission of the offence was 16th October 2001.  She drove it without insurance and failed to produce an insurance certificate at the time, or within seven days.  
6.	Mrs Smith received no notification from her insurers that the policy had been cancelled, since a letter sent recorded delivery on 18th September 2001 did not arrive.  
7.	The appellant argued that her lack of knowledge of the cancellation of the policy constituted special reasons why her licence should not be endorsed.  The Justices rejected the argument.  They found that, while her belief was honest, although mistaken, it was culpable.  Hers was a personal responsibility to ensure that her use of the vehicle was covered by a current policy of insurance.  She had failed to perform that responsibility because she failed to comply with the terms upon which the policy was issued.  
8.	The cause was her own fault in failing to ensure that sufficient funds were available to meet her insurers' demand for payment.  In that sense, she was in breach of her positive obligation and her responsibility was undiminished by the failure of the postal service.
9.	The Justices found specifically that the claimant had sufficient understanding in intellect and could manage her own affairs competently and that she knew the continuation of her insurance cover depended on regular, timely payments of the instalments.
10.	Counsel for the appellant, Mr Mullan, submits that the Justices misdirected themselves in law.  He suggests the Justices believed that, in order to find the appellant had discharged the burden of proof, they must be satisfied on the balance of possibilities not merely that the appellant was misled into believing that she was insured, but that she was actively misled, rather than simply in ignorance.  As support for this submission, Mr Mullan relies on paragraph 5 and paragraph 6 of the case stated, which read as follows: 
"5.  We were referred to the following cases:  
Whittall v Kirkby [1946] 2 All ER 552
Rennison v Knowler [1947] 1 All ER 302 
Labrum v Williamson [1947] 1 All ER 824 
Our Legal Adviser advised us on the general law as to special reasons with particular reference to the case of Whittall v Kirkby.  We were also advised that the defendant had to satisfy us on the balance of probability that special reasons existed.  Further advice was given in respect of the insurance special reasons cases of Rennison v Knowler and Labrum v Williamson.  We were advised that in Labrum, the defendant had been actively mislead into believing that insurance was in force, whilst in Rennison, the defendant had held an honest but mistaken belief that insurance existed.  The essence of the advice was that an honest but mistaken belief, as a matter of law, could not amount to a special reason unless it was based on reasonable grounds.  Conversely, being mislead into such a belief could amount to a special reason.  We were supplied with a copy of the Law Reports of Rennison v Labrum for our consideration.  
6.  We formed the opinion that the claimant had not satisfied us to the balance of probability that special reasons existed in this case because the claimant had not been actively misled by anyone.  The responsibility of obtaining and maintaining insurance cover rested on the individual concerned.  In this case we found that the claimant had obtained insurance, but had not maintained it.  It was abundantly clear that in a policy paid for by direct debit the cover only existed in so far as the payments were maintained.  In such circumstances, a person has a clear and obvious duty to ensure that payments are maintained for the continuance of the policy.  Here, the payments were not made and the policy lapsed as a result ..."
11.	We have been referred to and have considered each of the authorities.  In my view, the advice given to the Bench was entirely accurate.  In Labrum v Williamson, the defendants sought a general trade cover from the insurer.  He was issued with a cover note, which insured him for third party risks for all vehicles in connection with his trade, whether driven by himself or another.  However, the policy, when issued, restricted cover to a named driver.  That restriction was not drawn to the defendant's attention and he did not read it.  The insurer had agreed, by the terms of the cover note, either to issue a policy upon acceptance of the proposal or to decline the proposal.  It issued a policy, but in different terms from those proposed.  
12.	Unsurprisingly, the Recorder found that the insured was misled and the Divisional Court, Lord Goddard, Chief Justice presiding, held that to be a special reason why the defendant should not be disqualified.  Lord Goddard emphasised that it was the duty of an insured to make himself acquainted with the terms of his policy (see Rennison v Knowler), but each case turned on its own facts and the facts in Labrum v Williamson were exceptional.  The appellant had been misled by his own insurers as to the terms under which the certificate would be and had been issued.
13.	It is my view that in this case the justices, when using the words "the claimant had not been actively misled by anyone", were not suggesting, and could not be taken to have been suggesting, that in order to succeed, the appellant was required to prove an intention to mislead.  They were merely distinguishing between a defendant who unwittingly had been misled by the action or words of another and a defendant who had not.
14.	Here, Mrs Smith's insurers had done nothing to mislead.  The actions or words of her insurers had not misled her into believing she was insured when she was not.  The context in which the words are used by the Justices make this clear.  The Justices proceeded, correctly in my view, to find that responsibility for failing to maintain insurance cover was the appellant's.  Accordingly, if she was ignorant of the lapse of cover, that was not because she was misled, but because she failed to ensure she had paid her premiums.  
15.	It would, of course, have been a different matter if the facts were that an error had been made by Mrs Smith's bank, but that is not this case.  
16.	Mr Mullan contends in the alternative that Mrs Smith was misled in the Labrum v Williamson sense by the Royal Mail, which failed to deliver the notification of cancellation.  For myself, I do not consider this to be a sustainable proposition.  Mrs Smith was herself responsible for the cancellation because she failed to pay the premium.  Her own fault was entirely independent of any failure of delivery by the Mail.
17.	It was in my opinion open on these facts for the Justices to find that if Mrs Smith was labouring under a misapprehension, then the fault was her own.  Once that conclusion was reached, a finding that her mistaken belief was not reasonably held was in my view inevitable.  For those reasons, I would dismiss the appeal.
18.	LORD JUSTICE SCOTT BAKER:  I agree.  Accordingly, the appeal is dismissed and the two questions posed for the opinion of the court in paragraph 8 of the case are answered, I think in the first instance no, and, with regard to the second question, yes.