When Indemnities Are Not Paid
Page 41
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IN the June 11 issue of The Commercial Motor, I drew the attention of readers to the principle of an employer claiming an indemnity—or reimbursement —from his own employee when the latter has been
negligent when about his master's business. Another attempt to invoke the principles of indemnity was .recently made in an interesting County Court case, and as the facts upon which the litigation arose are likely to be of fairly frequent occurrence it is certainly worth noting both the judgment and the arguments advanced during the proceedings.
The owner of a car sent it to his regular garage with a complaint about the stiffness of the steering. It was his regular garage in so far as he had used it for over four years and—this fact might have been important— he had received and paid some 72 bills, on each one of which was printed the words "customers' cars garaged and driven at owner's risk." In addition there was displayed a notice at the entrance to the garage containing the terms upon which customers' cars were accepted and garaged, which included in substance the same reservation.
In Collision
The mechanic who repaired the car decided that before handing it back to the owner it should be road tested to make sure that the steering was satisfactory, and while he was himself driving it in furtherance of this decision he was in collision with another vehicle through his own negligence. There followed an action for damages against the garage brought by the owner-driver of the second car, which issue was never, however, fought out as it was compromised by the garage paying the plaintiff a sum of about £70 and costs by way of settlement. Having reached this settlement, the defendants sought to recover from their customer the full amount of their liability by way of an indemnity.
Criminal Offence?
It was contended for the garage that there should be implied in the contract for repair between them and their customer a term in respect of such an indemnity for any liability for any claim arising out of the driving of the car by one of their employees. The grounds upon which this apparently startling proposition was based were twofold. First, because it was said that the :ustomer would have been liable to the injured third 'arty in any event himself, although he was not present, )n the ground that it was his vehicle being driven on us behalf, and secondly because, owing to the requirenents of section 35 of the Road Traffic Act, 1930, he vould be committing a criminal offence if his car were !riven with his consent by an employee of the garage vithout a third-party insurance policy being in force o cover such driving.
The first argument was based on the 1952 case of )rmrod v. Crosville Motor Services, Ltd., where the rwner of a car had arranged with a friend for the latter 3 drive the car to the South of France and there hand back to him. There had been an accident en route wing to the friend's negligence and the owner found to is surprise that he was vicariously liable, since although le friend was not " employed " by him in the sense in .hich one employs a servant—for whose negligence a taster is, of course, liable—yet he was driving the car at
the owner's express request and the Court considered that sufficient.
Here, 'however, the judge held that the primary purpose of the road test was to satisfy the garage themselves that the repair had been properly carried out and that although it must be implied in the contract that the owner had given his permission for such a trial run, that was not the same as saying that it was made for his purpose or benefit. In addition to that, the general rule is that one is not liable for the actions of an "independent contractor "—as opposed to one's servant—and clearly the garage was in that category.
Driver or Owner?
As regards the argument based on the owner's obligations under section 35 of the Road Traffic Act, the judge considered that it was quite impossible to infer from the provisions of that section as to compulsory thirdparty insurance, a duty on the part of the owner to indemnify someone else driving his car. The statutory requirement was that the driver of the car should he insured—not at all the same thing as requiring the owner to be insured against the negligence of a person whom he has permitted to drive his car. That contention therefore also failed.
It was finally argued on behalf of the garage that there must be taken to have been an express—not merely an implied—term of the contract between them and their customer that the latter would bear any loss arising from the use of his car while in their possession and for this they relied on the words "customers' cars garaged and driven at owner's risk" which it was quite clear had many times been brought to the notice of the customer, both on the billheads and in the entrance to the garage itself.
"At owner's risk," it was argued, was wide enough to cover damage done by the customer's car as well as to it. Here, however, the judge invoked the well-known legal principle that where one party to a contract is seeking to exempt himself from a liability that would otherwise be his, and to shift it elsewhere, by relying upon such an exemption clause as this one, then only the clearest and most unambiguous words in the clause supporting such a contention were adequate for the purpose.
Specific Language It would certainly surprise anyone who left any article —whether it was a motor vehicle, a radio set or anything else—for repair, to be told that "at owner's risk covered not only damage to the article deposited but injury to someone arising during the time it was under repair. Clearly, therefore, to rely upon such an alleged exception to liability it would be necessary for a garage to show that a customer had expressly intended to contract on those lines and in order to show this only "clear and unambiguous" language would suffice. It is obvious that if language of such a kind were used, no customer of any garage in his right mind would agree to the imposition of such a term!
The case, however, contains several useful lessons, not the least of which is that, generally speaking, the concepts of legal right and common sense go hand in hand, and also that this is another example of how strictly the law will construe a provision in a contract of such a nature against the party putting it forward.