In my opinion section 8 of the Motor Vehicles (Third Party Insurance) Act, 1958, has no application in the present case; it only renders void and of no effect a condition in a policy providing that no liability shall arise under the policy or that any liability so arising shall cease in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy
It is abundantly clear, therefore, that the first condition of the obligation of the insurers is that there is a judgment recovered by the person who seeks protection under section 10 (1) of the aforesaid Act. The second condition is that the judgment must be in respect of a liability which is required to be covered by compulsory insurance. In other words, the only person who can maintain a right of action against the insurers is a person falling within the limited class of third parties whose bodily injury or death is required to be covered by a motor policy. The third condition is that the liability is in fact covered by the terms of the policy or would be covered by the policy but for the fact that the insurers are entitled to avoid or cancel, or have avoided or cancelled the policy.
The mere fact that the fare was not paid by the respondent cannot, in my view, change the character of the contract. It remained throughout a contract to convey the respondent in the insured’s motor-car as “a passenger for reward.”
The Act is one to make provision for the protection of third parties against risks arising out of the use of motor vehicles and for purposes incidental thereto. It is of prime importance, therefore, that the motor vehicles must be used within the scope of the policy. The policy referred to in this case did not cover use whilst carrying a passenger for reward. In those circumstances there was no policy of insurance in force in respect of third party risks.
