Vandepitte v Preferred Accident Insurance Corp. of New York: PC 1933

The plaintiff was injured in a motor accident. He failed in a direct claim against the insurers of the negligent defendant driver. The insurance was effected by the father (Mr Berry) of the negligent driver and provided that an indemnity would be available to an authorised driver.
Held: The Board rejected the claim as there was no evidence that the father had contracted on behalf of anybody but himself nor that he intended to create a beneficial interest for his daughter. The policy expressly provided that it should benefit a third party (the daughter) and, in effect, a person injured by her negligent driving. However, if a trust is created and if the trust refuses to enforce an obligation, the beneficiary may sue for enforcement, joining the trustee as a defendant
Lord Wright: ‘No doubt at common law no one can sue on a contract except those who are contracting parties . . the rule is stated by Lord Haldane in Dunlop Pneumatic Tyre Co. v. Selfridge and Co.: ‘My Lords, in the law of England certain principles are fundamental. One is that only a person who is a party to a contract can sue on it. Our law knows nothing of a jus quaesitum tertio arising by way of contract. Such a right may be conferred by way of property, as, for example, under a trust, but it cannot be conferred on a stranger to a contract as a right to enforce the contract in personam.’ In that case, as in Tweddle v Atkinson, only questions of direct contractual rights in law were in issue, but Lord Haldane states the equitable principle which qualifies the legal rule, and which has received effect in many cases, as, for instance, Robertson v. Wait; Affreteurs Reunis Societe Anonyme v. Leopold Walford (London), Ld.; Lloyd’s v. Harper – namely, that a party to a contract can constitute himself a trustee for a third party of a right under the contract and thus confer such rights enforceable in equity on the third party. The trustee then can take steps to enforce performance to the beneficiary by the other contracting party as in the case of other equitable rights. The action should be in the name of the trustee; if, however, he refuses to sue, the beneficiary can sue, joining the trustee as a defendant. But, though the general rule is clear, the present question is whether R.E. Berry can be held in this case to have constituted such a trust. But here again the intention to constitute the trust must be affirmatively proved: the intention cannot necessarily be inferred from the mere general words of the policy.’
References: [1933] AC 70
Judges: Lord Wright
This case is cited by:

  • Cited – Barbados Trust Company Ltd v Bank of Zambia and Another CA 27-Feb-2007
    The creditor had assigned the debt, but without first giving the debtor defendant the necessary notice. A challenge was made to the ability of the assignee to bring the action, saying that the deed of trust appointed to circumvent the reluctance of . .
    (, [2007] EWCA Civ 148, [2007] 1 Lloyd’s Rep 495)
  • Cited – Don King Productions Inc v Warren and Others ChD 13-Apr-1998
    Where partnership terms required benefit of all contracts to be assigned to the partnership, this included unassignable personal contracts which were to be held in trust for partnership, unless stated otherwise.
    Lightman J said: ‘The existence . .
    (Times 13-Apr-98, Gazette 13-May-98, [2000] Ch 291, [1998] 2 All ER 608)
  • Cited – Roberts v Gill and Co and Another CA 15-Jul-2008
    The claimant sought damages in negligence against solicitors who had advised the executors in an estate of which he was a beneficiary. He now sought to amend his claim to make a claim in his personal and in derivative capacities. Sums had been paid . .
    (, [2008] EWCA Civ 803, Times 18-Aug-08, [2009] 1 WLR 531, [2008] WTLR 1429, [2009] PNLR 2, [2009] CP Rep 3)
  • Cited – Roberts v Gill and Co Solicitors and Others SC 19-May-2010
    The claimant beneficiary in the estate sought damages against solicitors who had acted for the claimant’s brother, the administrator, saying they had allowed him to take control of the assets in the estate. The will provided that property was to be . .
    ([2010] WLR (D) 130, , , [2010] UKSC 22, , , , [2010] PNLR 30, [2010] WTLR 1223, [2010] 2 WLR 1227, [2011] AC 240)

These lists may be incomplete.
Last Update: 27 November 2020; Ref: scu.249314