CA Re S (a minor) (Sir Thomas Bingham MR) 47 child. The reason why the law is particularly solicitous in protecting the interests of children is because they are liable to be vulnerable and impressionable, lacking the maturity to weigh the longer term against the shorter, lacking the insight to know how they will react and the imagination to know how others will react in certain situations, lacking the experience to measure the probable against the possible. Everything of course depends on the individual child in his actual situation. For purposes of the 1989 Act, a babe in arms and a sturdy teenager on the verge of © adulthood are both children, but their positions are quite different: for one the ° Q ® > second consideration will be dominant, for the other the first principle will come into its own. The process of growing up is, as Lord Scarman pointed out in Gillick’'s case [1985] 3 All ER 402 at 421, [1986] AC 112 at 186, a continuous one. The judge has to do his best, on the evidence before him, to assess the understanding of the individual child in the context of the proceedings in which he seeks to participate. In the present case the judge reached a very clear view that $ should continue to be represented by the Official Solicitor. That was not only a proper conclusion but in our judgment an inevitable one. Any other would have bordered on the perverse. ‘The case does indeed cry out for the application of an objective, experienced judgment such as the Official Solicitor and those whom he consults are peculiarly well fitted to supply. Had the judge, surprisingly, decided to grant S's request, he would undoubtedly have sought the continuing assistance of the Official Solicitor as an amicus, so the gain to $ might in any event have been small. As it is, the Official Solicitor is duty bound to bring S's views fully and fairly to the notice of the court, as both he and the consultant psychiatrist have conscientiously done. But the judge’s conclusion that this 11-year-old boy lacks sufficient understanding to participate as a party in these emotionally complex and highly fraught proceedings is impregnable. ‘We dismiss the appeal on both issues. Appeal dismissed. No order for costs. L1Zysman Esq Barrister. Morley and another v United Friendly Insurance plc COURT OF APPEAL, CIVIL DIVISION NEILL AND BELDAM LI} 14,29 JANUARY 1993 Insurance — Accident insurance — Exception clause ~ Exclusion of liability if it resulted from wilful exposure to needless peril — Deceased jumping onto bumper of stationary or barely moving car — Driver driving off in zig-zag fashion at 15 to 20 mph — Deceased thrown off car and sustaining fatal injuries - Whether deceased wilfully exposing himself to needless peril - Whether exclusion clause applying to exclude liability. ‘The deceased was insured with the defendant insurance company under a personal accident insurance policy which provided, inter alia, that no benefit was payable under the policy if death or injury resulted directly or indirectly from ‘wilful exposure to needless peril’. The deceased had got out of a car in which he was a48 All England Law Reports [1993] 3 All ER passenger in order to relieve himself. When he returned to the car the driver, in order to hurry him, slowly began to drive away. The deceased then jumped or stepped onto the rear bumper of the car, which was barely moving at the time. ‘The driver accelerated slightly and drove off in a zig-zag fashion at 15 to 20 mph causing the deceased to be thrown off and suffer injuries from which he later died. ‘The plaintiffs, who were the administrators of the deceased's estate, claimed under the insurance policy but the defendants, relying on the exclusion clause, refused to pay. p ‘The plaintifls brought an action against the defendants but the judge dismissed their claim on the ground that by stepping onto the moving car the deceased had wilfully and deliberately exposed himself to a substantial risk of injury within the exclusion clause. The plaintiffs appealed. Held — In determining whether the deceased had wilfully exposed himself to ¢ needless peril so that the exclusion clause in the policy applied to exclude payment under the policy, it was necessary for the defendants to show that the exposure to risk had been wilful and not merely negligent. That required (per Neill LJ) the court to consider the circumstances, including the likelihood of the insured injury being incurred if the risk was taken and the opportunity for reflection before the risk if taken or (per Beldam L)) that at the time of his actions the deceased was mindful of 4 a real risk of the kind of injury for which benefit was provided by the policy and that he either intended to run that risk or exposed himself to it not caring whether he sustained such injury or not. On the facts, the deceased had not ‘wilfully’ exposed himself to unnecesary peril but had merely engaged in a momentary act of stupidity and accordingly the plaintifis were entitled to recover under the ploicy. The appeal would therefore be allowed (see p 52 ¢gj to p 53 a, p 55 f to p 56 a, post) Dictum of Lord Loreburn LC in Johnson v Marshall Sons & Co Ltd [1906] AC 409 at 411 applied. Notes For policies insuring against accidental injury, see 25 Halsbury’s Laws (4th edn) paras f 594-600, and for cases on the subject, see 29 Digest (Reissue) 470-471, 484-488, 3982— 3985, 4102-4121. Cases referred to in judgments Beller (Marcel) Ltd v Hayden [1978] 3 All ER 111, [1978] 1 QB 694, [1978] 2 WLR 845. Candler v London and Lancashire Guarantee and Accident Co of Canada (1963) 40 DLR 9 (2d) 408, Ont HC. Forder v Great Western Rly Co [1905] 2 KB 532, DC. Glenlight Shipping Ltd v Excess Insurance Co Ltd 1982 SC 42 , Ct of Sess. Graham v Belfast and Northern Counties Rly Co [1901] 2 IR 13, Ir QBD. Johnson v Marshall Sons and Co Ltd [1906] AC 409, HL. A Lewis v Great Western Rly Co (1877) 3 QBD 195, CA. Rv Sheppard [1980] 3 All ER 899, [1981] AC 394, [1980] 3 WLR 960, HL. Case also cited Oei-v Foster and Eagle Star Insurance Co Ltd [1982] 2 Lloyd’s Rep 170. i Appeal The plaintiffs, William Morley and Eva Morley, the administrators of Philip William Morley deceased, appealed from the judgment of his Honour J D Walker sitting as a deputy circuit judge in the Kingston upon Hull County Court on 4 March 1991 dismissing their action against the defendants, United Friendly Insurance ple (theCA Morley v United Friendly Insurance plc (Neill LJ) 49 insurance company), for £3,000 alleged to be payable under an insurance policy @ dated 11 September 1978 insuring the deceased against personal injury and death. ‘The facts are set out in the judgment of Neill LJ. Berard Gateshill (instructed by Philip Hamer & Co, Hull) for the appellants. Frank Burton (instructed by Barlow Lyde é& Gilbert) for the insurance company. b Cur adv vult 29 January 1993. The following judgments were delivered. NEILL LJ. This is an appeal by Mr William Morley and Mrs Eva Morley from the order of his Honour J D Walker sitting as a deputy circuit judge on 4 March 1991 dismissing the appellants’ claim against United Friendly Insurance ple (the insurance company) for £3,000 alleged to be payable under an insurance policy. The claim was brought by the appellants’ as administrators of Philip William Morley deceased. The action was tried in the Kingston upon Hull County Court. No oral evidence was called by either side other than the formal evidence of Mr William Morley. By a contract of insurance dated 11 September 1978 the insurance company insured the deceased against the perils and contingencies set out in the policy of insurance. Clause 2 of the policy of insurance provided (so far as is material) as follows: ‘2 If the Insured shall within the United Kingdom sustain bodily injury caused by violent accidental external and visible means which injury shall solely and independently of any other cause result within seven days in his/her death or within twelve months in the loss of one or more of his/her limbs (amputated above the wrist or ankle) or the total and permanent loss of sight in one or both of his/her eyes or the break of fracture of his/her Humerus, Ulna, Radius, Femur, Tibia or Fibula or in his/her being totally and continuously f incapacitated from attending to employment or business of any kind and (in the case of a female) her household duties the Company will upon production of reasonable proof of such injury pay to the Insured or in the event of death to his/her legal personal representatives the appropriate accident benefit...’ By an indorsement to the policy dated 21 October 1985 the deceased increased the g_ amount payable on death to £3,000. The policy provided that it was subject to the conditions therein contained. Paragraph 1 of the conditions set out special exclusions and provided, inter alia, as follows: “... No accident benefit shall be payable if death injury or incapacity shall h result directly or indirectly from or be accelerated by any of the following causes ... (iii) Wilful exposure to needless peril (except in an attempt to save human life)...” ‘On 25 July 1986 the deceased was injured in an accident. On 31 July 1986 he died as a result of those injuries. It is first necessary to examine the circumstances in j_ Which those injuries were sustained. The deceased was the son of the appellants. On Friday, 25 July 1986 the deceased, who was then aged 24, went out for the evening with his fiancée, Miss Alison Norrie, and two other friends. At about 9.50 pm the deceased and the two friends were passengers in a Ford Escort car being driven by Miss Norrie along Station Road, in Hessle, North Humberside. They were on their way to a public house called the Ferry Boat Inn. The deceased had had about four to six pints of beer to drink earlier50 All England Law Reports [1993] 3 All ER in the evening and had agreed that Miss Norrie should drive the car. She had had very little to drink and was described by the judge as ‘totally sober’. In order to reach 4 the Ferry Boat Inn at Hessle Haven it was necessary to travel to the west from Station Road to Woodfield Lane, then cross the railway line by a road bridge and travel eastwards again along Redcliffe Road and Livingstone Road. For pedestrians, however, there was a shortcut from Station Road by an iron footbridge to Livingstone Road. As the car reached the bridge on the north side of the railway line», the deceased asked Miss Norrie to stop so that he could relieve himself. It was arranged that he would rejoin the party on the other side of the footbridge and in the meantime they would cross the railway by the road bridge in Woodfield Lane. Having relieved himself the deceased crossed the railway by means of the footbridge. By then the car was in Livingstone Road at the south end of the footbridge. As the deceased approached Miss Norrie started to move. According to. ¢ her statement to the police she started to move in order to make the deceased hurry up because they had to reach the Ferry Boat Inn by 10 pm. As she moved off, however, the deceased jumped or stepped onto the rear bumper of the car. It seems clear that Miss Norrie realised what had happened but instead of stopping the car she accelerated slightly and began to steer in a “zig-zag fashion’. The judge, basing himself on the evidence given at the coroner's inquest and on the statements made 7 to the police, gave this account in his judgment of what happened in Livingstone Road: “Arthur Barley [an independent witness] puts the speed of the car at “15/20 mph certainly no less” and Alison was steering the car in a zig-zag fashion along the empty road. Philip at this time, having stepped onto the rear bumper of the slowly moving car, was becoming more and more insecure and his shouted “Whoa” heard by Mr Barley is consistent with his alarm at what was happening and fear for his safety. What had started as innocent horseplay was rapidly tuming into a situation fraught with danger. Although the last thing the girl wanted to do was to hurt her boyftiend I am forced to the conclusion that in a moment of thoughtlessness, coupled with excitement and perhaps a little irritation—"the silly sod, what's he messing about at’—her driving was the factor that caused Philip's fall and ultimately his death. The bumper gave him a very insecure foothold and, although at the time he stepped onto it the car was, hardly moving, had he suffered an insured injury at that precise time it would have been hard to argue that he had not wilfully exposed himself to needless g peril. The situation, however, quickly changed when Alison started to drive as she did. ‘That was a risk which he had no cause to anticipate. The girl was, after all, a competent driver, sober, engaged to him and already sharing their home with him. She clearly loved him. I find that he had no means of knowing, and did not know, the extent of the risk to which he was to be so quickly subjected.” , A little later in his judgment the judge considered the effect of the relevant exclusion provision in the policy. He continued: “What has to be decided is whether he wilfully exposed himself to (any) needless peril. The word “any” does not appear in the policy but peril means substantial risk to life or limb. In the present situation therefore, although, as 1 have found, Philip did not appreciate and accept the risk of being killed, there was clearly some danger to limb in stepping onto the rounded surface of a moving car, with no handholds, in darkness. That was a “wilful” act, a deliberate act, it exposed him to a substantial risk of injury and it falls within the exclusion clause in the policy; it was without doubt “needless”.”CA Morley v United Friendly Insurance plc (Neill LJ) 51 It seems clear from these passages in the judgment that the judge reached the @ following conclusions: (a) that at the time the deceased stepped onto the rear bumper of the car it was hardly moving. It is also to be noted that according to the evidence the car was at all times in first gear; (b) that the rear bumper gave the deceased a very insecure foothold. We have seen a photograph of the rear of the car and this conclusion was clearly fully justified; (c) that at the time he stepped onto the rear bumper the deceased had no reason to anticipate that his fiancée would accelerate and then steer the car in a zig-zag manner. Accordingly at that time the deceased could not have foreseen the possibility that he might be killed; (d) that nevertheless, at the moment when he stepped onto the bumper there was some danger that the deceased would suffer an injury to one of his limbs; (e) that stepping onto the rear bumper was a deliberate and therefore a wilful act by the deceased which exposed him to a substantial risk of injury. ‘This risk was needless. In his careful argument in support of the appeal counsel for the appellants accepted that the judge was right to concentrate on the extent of the risk at the moment when the deceased stepped onto the bumper. He further accepted that on any issue of causation the appellants could not place reliance on the fact that Miss Norrie changed her mode of driving after the deceased stepped onto the bumper, d because the exclusion applied if death resulted either ‘directly or indirectly’ from any of the specified causes. It is therefore necessary to consider whether at the moment when he stepped onto the rear bumper the deceased wilfully exposed himself to an unnecessary peril within the meaning of the policy. It is common ground that the ‘peril’ referred to in the exclusion clause means a tisk of suffering one or more of the injuries which the policy of insurance was designed to cover. In the context of the present case the relevant peril was a risk of breaking or fracturing the ‘Humerus, Ulna, Radius, Femur, Tibia or Fibula’, ‘The case for the insurance company was put very succinctly. By stepping onto the rounded surface of the bumper of a moving car in the dark and when there were no handholds available the deceased exposed himself to the wholly unnecessary risk of f abroken bone. The exposure was wilful because the deceased either knew the risk and accepted it or, if he did not consider the risk, was reckless. ‘The risk of a broken or fractured bone was an obvious risk in the circumstances. In the course of the argument we were referred to several authorities, including ‘Marcel Beller Ltd v Hayden [1978] 3 All ER 111, [1978] 1 QB 694, Glenlight Shipping Lid -v Excess Insurance Co Ltd 1982 SC 42 and R v Sheppard [1980] 3 All ER 899, [1981] AC 394. These authorities, however, and other cases to which I have referred since the conclusion of the argument, merely demonstrate that the precise connotation of the word ‘wilful’ (which for the purposes of this appeal is the most important word in the exclusion clause) depends on the context. It is true that in the Glenlight case the Court of Session was concerned with an A exclusion clause in almost identical terms to the present clause in that it was there provided that the insurers should not be liable for any claim which was the consequence of the insured ‘wilfully exposing himself to needless peril (except in an attempt to save human life)’. The facts in the Glenlight case, however, were markedly different from those in the present case because the trial judge held that the deceased, who had driven over the end of a ramp of a ferry boat and toppled into the sea, was unaware of any risk. He did not know that there was a gap of sea between the end of the ramp and the pier. It was accepted that the deceased was probably under the mistaken impression that the ferry boat had arrived at the pier. How then is the phrase ‘wilful exposure to needless peril’ in this policy to be interpreted? It is clear, and indeed was accepted by counsel for the insurance company, that the words cannot be construed too strictly. Thus they cannot be o °52 All England Law Reports [1993] 3 All ER construed so as to remove insurance cover from an insured who engages in contact sports such as football. On the other hand, at the other end of the scale, the words 4 would seem more than apt to cover the circumstances considered in the Canadian case of Candler v London and Lancashire Guarantee and Accident Co of Canada (1963) 40 DLR (24) 408, where the deceased, in order to demonstrate to a friend that he had not lost his nerve balanced himself on the coping of a hotel patio thirteen floors above the street and fell to his death. ‘The trial judge held that the event was not an accident within the meaning of the policy, but it is clear that in addition it would certainly have involved ‘wilful exposure to needless peril’. In my judgment the ‘wilfulness’ has to be directed to the ‘exposure to peril’. It is not enough to show an intentional act which results in peril. There must be a conscious act of volition, which can include recklessness, directed to the running of the risk. Accordingly, in order to determine where in the spectrum a particular case ¢ falls it is necessary to have regard to all the circumstances including (a) the likelihood of the insured injury being incurred if the risk is taken and (b) the opportunity for reflection before the risk if taken. If one applies the first of these criteria one can draw a clear distinction between Formula 1 motor racing and hang gliding on the one hand and golf and football on the other hand. I regard the second criterion also as being of importance. In addition it is necessary to take account of the commercial purpose of the policy. It was intended to insure the deceased against the risk of suffering some serious injury. It is common ground that the cover includes injuries caused by the insured’s ‘own negligence. The insurance company say, however, that the actions of the deceased were not merely negligent but were foolhardy and reckless. e In this case unusually this court is in no worse position than the trial judge in making an evaluation of the facts. The judge saw no relevant witnesses. Though we must treat the judge’s decision with the utmost respect we are free in the circumstances to look at the matter afresh. No one has sought to disturb the judge's conclusion that at the moment when the ¢ deceased stepped onto the bumper ‘the car was hardly moving’. It seems to me therefore that at that moment there was a risk that the deceased might fall off and cut or bruise himself. He might well have sprained his wrist or twisted his ankle, But the risk at that stage of a fracture of a bone, though a real risk as opposed to a fanciful risk, was to my mind not very great. ‘This modest risk has then to be linked with the opportunity for, and presumed extent of, the appreciation of the risk. I g agree with the judge’s assessment of what happened as being ‘a foolish bit of horseplay which went dramatically wrong’. | respectfully differ from the judge, however, with his description of the horseplay as ‘reckless’ if in the context he equated recklessness with wilful exposure to peril On the meaning of the word ‘wilful’ in this clause I have derived assistance from the speech of Lord Loreburn LC in Johnson v Marshall Sons & Co Ltd [1906] AC 409 at 411, where he said that the words ‘wilful misconduct’ in the Workmen's Compensation Act 1897 imported that ‘the misconduct was deliberate’ and not ‘merely a thoughtless act on the spur of the moment’, The deceased’s action in this case was a momentary act of stupidity. The speed of the vehicle is to be judged by the fact that the judge referred to the deceased as ‘stepping onto the bumper’. The j peril was clearly ‘unnecessary’ and the contrary has not been argued. But having given anxious consideration to this case I have come to the clear conclusion that in the circumstances the deceased did not wilfully expose himself to unnecessary peril. The exclusion clause should be reserved to deal with cases where either the occurrence of an insured injury is more likely or where the appreciation of the peril can be more clearly demonstrated.CA Morley v United Friendly Insurance plc (Beldam LJ) 53 For these reasons I would allow the appeal. a BELDAM LJ. The appellants’ are the parents and administrators of Philip Morley, who died in a most unfortunate accident on the evening of Friday, 25 July 1986. The deceased was entitled to the benefit of a personal accident policy written by the respondents. It covered him against perils and contingencies which included: b “2 If the Insured shall within the United Kingdom sustain bodily injury caused by violent accidental external and visible means which injury shall solely and independently of any other cause result within seven days in his/her death or within twelve months in the loss of one or more of his/her limbs (amputated above the wrist or ankle) or the total and permanent loss of sight in one or both of his/her eyes or the break or fracture of his/her Humerus, Ulna, Radius, € Femur, Tibia or Fibular or in his/her being totally and continuously incapacitated from attending to employment or business of any kind ... ‘The amount payable on death was £3,000. The deceased died from a head injury when he fell from the back of a car driven by his fiancée, Miss Norrie, in Livingstone Road, Hessle, North Humberside. The © deceased and his fiancée, with two friends, had been for a drink to a public house and were proposing to go to a disco at the Ferry Boat Inn. On the way the deceased got out of the car to relieve himself, arranging to walk over a bridge and to meet the others in the car on the opposite side. Miss Norrie drove to the appointed place and when she saw the deceased approaching from behind for a joke started to move ¢ slowly forwards. Seeing this, he ran after the car and stepped onto the rear bumper as it slowly moved forward steadying himself with his hands on the roof. At the time he stepped onto the car it was hardly moving, but Miss Norrie, not realising the danger and carrying on the practical joke, started to accelerate until the car reached a speed of 10-15 mph and in the same spirit she did not drive in a straight course but steered from one side of the road to the other. At some time, but after the deceased had hung on for some seconds, he shouted ‘Whoa’ clearly becoming alarmed. Shortly after he fell off and most unfortunately he struck his head and suffered the injury which led to his death. As the judge said, what had started as innocent horseplay had rapidly turned into a situation fraught with danger. He said Miss Norrie’s driving, taking place in a moment of thoughtlessness coupled with excitement and perhaps a little irritation, was the factor which caused the deceased's 9 fall and ultimately his death. In due course the appellants put forward a claim for the death benefit payable under the policy. The respondent insurers relied upon an exclusion contained in the policy in these terms: os ‘No accident benefit shall be payable if death injury or incapacity shall result directly or indirectly from or be accelerated by ... (ii) wilful exposure to needless peril (except in an attempt to save human life)...” The question which the judge had to determine was whether, in the circumstances in which he held the accident to have occurred, the deceased had j wilfully exposed himself to needless peril. It was accepted by the respondents that in the context of this policy the peril referred to in the exclusion clause was a substantial risk of sustaining bodily injury of a kind which could give rise to a claim under the policy. The judge held that the deceased had wilfully exposed himself to such a risk and rejected the appellants’ claim; they now appeal to this court. To decide whether the respondents had discharged the burden of showing that the deceased had wilfully exposed himself to needless peril, it is necessary to have54 All England Law Reports [1993] 3 All ER regard to other findings of the learned judge. Of the change from innocent horseplay to a situation fraught with danger the judge said: “That was a risk which (the deceased] had no cause to anticipate. ‘The girl was, after all, a competent driver, sober, engaged to him and already sharing their home with him, She clearly loved him. I find that he had no means of knowing, and did not know, the extent of the risk to which he was to be so quickly subjected.’ He also said, as was obvious, that the bumper of the car gave him a very insecure foothold and that he had no proper handhold. He expressed his decision in the following terms: ‘In the present situation, therefore, although, as I have found, [the deceased] did not appreciate and accept the risk of being killed, there was clearly some danger to limb in stepping onto the rounded surface of a moving car with no handholds, in darkness. That was a “wilful” act, a deliberate act, it exposed him to a substantial risk of injury and it falls within the exclusion clause in the policy; it was without doubt “needless”.” In this passage I believe the judge fell into the error of concluding that because the actions of the deceased were deliberate, ie intentional, and because there was a substantial risk of injury, the deceased must have intentionally or wilfully exposed himself to that risk. ‘An exclusion clause in a policy of insurance has to be construed in a manner consistent with and not repugnant to the purpose of the policy. To construe the words ‘wilful exposure to needless peril’ so as to deprive the insured of benefit under the policy whenever it could be shown that his intentional acts had exposed him to a substantial risk would severely restrict the scope of the indemnity against accidental bodily injury. To avoid liability insurers must show that the exposure to needless peril was wilful, not merely that intentional acts done by the insured resulted in his being exposed to such peril. ‘The word ‘wilful’ used in similar contexts has been the subject of judicial interpretation for over 100 years. In conjunction with the word ‘misconduct” it was construed in contracts of carriage by rail where, for example, the company had excluded liability except for wilful misconduct of its servants. In Lewis v Great Western Rly Co (1877) 3 QBD 195 at 206 Bramwell LJ expressed the matter thus: “wilful misconduct” means misconduct to which the will is a party, something opposed to accident or negligence; the misconduct, not the conduct, must be wilful.” (Bramwell LJ's emphasis.) Brett LJ said (at 211): ‘Care must be taken to ascertain that it is not only misconduct but wilful misconduct, and I think that those two terms together import a knowledge of ‘wrong on the part of the person who is supposed to be guilty of the act of omission.” And Cotton LJ said (at 213): “Now, I do not think there can be any doubt at all that wilful misconduct is something entirely different from negligence, and far beyond it, whether the negligence be culpable, or gross, or howsoever denominated, There must be the doing of something which the person doing it knows will cause risk or injury, or the doing of an unusual thing with reference to the matter in hand, ° ©CA Morley v United Friendly Insurance plc (Beldam LJ) 55 either in spite of warning or without care, regardless whether it will or will not @ cause injury to the goods carried ..." So also in a similar case Forder v Great Western Rly Co [1905] 2 KB 532 at 535-536, Lord Alverstone CJ said of the phrase ‘wilful misconduct’: ‘Lam quite prepared to adopt, with one slight addition, the definition of wilful misconduct given by Johnson J. in Graham v. Belfast and Northem Counties Ry. Co. ({1901] 2 IR 13 at 19), where he says: “Wilful misconduct in such a special condition means misconduct to which the will is party as contradistinguished from accident, and is far beyond any negligence, even gross or culpable ¢ negligence, and involves that a person wilfully misconducts himself: who knows and appreciates that it is wrong conduct on his part in the existing circumstances to do, or to fail or omit to do (as the case may be), a particular thing ...”. The addition which I would suggest is, “or acts with reckless carelessness, not caring what the results of his carelessness may be”.” d ‘The words ‘serious and wilful misconduct’ were used in the proviso to s 1(1)(b) of the Workmen's Compensation Act 1925, where they denoted conduct which disentitled a workman to benefit for injury caused by accident at work. They were judicially construed in Johnson v Marshall Sons & Co Ltd [1906] AC 409 at 411 by Lord @ Loreburn LC, who said: ‘... the word “wilful”, I think, imports that the misconduct was deliberate, not merely a thoughtless act on the spur of the moment. f The interpretation of the word ‘wilful’ in one context may be no guide to its meaning in another; but I consider that there is sufficient similarity in the context in which the word is used in this accident policy for guidance to be obtained from the instances quoted to be persuasive. Thus the meaning to be given to ‘wilful exposure to needless peril’ in the clause excluding liability under the policy requires that the conduct relied on must go beyond negligent exposure to needless peril. It must be 9 shown that at the time of his actions the insured was mindful of areal risk of the kind of injury for which benefit was provided by the policy and that he either intended to run that risk or exposed himself to it not caring whether he sustained such injury or not. Unless the operation of the exclusion clause is confined in this way, it would in my view unwarrantably diminish the indemnity which it was the purpose of the policy to afford. So I would hold that, on the facts of this case, the respondent did not make good the contention that the deceased wilfully exposed himself to needless peril. Although the bumper bar did not give him a proper foothold and he had no handhold other than steadying himself with his hands on the roof of the car, it was not in my view a reasonable inference from such a thoughtless act on the spur of the moment that he appreciated that he was exposing himself to the.risk at least of fracture of one of the major bones of the body or that he embarked on that conduct not caring whether he sustained such injury or not. I would not characterise his impulsive response to a practical joke as wilful exposure to needless peril. In quality and degree his actions fell short of deliberate56 All England Law Reports [1993] 3 All ER risk taking or recklessness of injury of which he was mindful. Accordingly 1 would allow the appeal. . Appeal allowed. Dilys Tausz Barrister. b Inland Revenue Commissioners v Herd HOUSE OF LORDS c LORD MACKAY OF CLASHFERN LC, LORD KEITH OF KINKEL, LORD JAUNCEY OF ‘TULLICHETTLE, LORD BROWNE-WILKINSON AND LORD SLYNN OF HADLEY 15, 16 FEBRUARY, 17 JUNE 1993 Income tax — Emoluments from office or employment — Deduction of tax — Failure to deduct tax — Appointment by parent company of taxpayer as executive director of 4 subsidiary — Terms of appointment enabling taxpayer to acquire shares in subsidiary — Shares resold to parent company for consideration in excess of then market value — Whether consideration ‘emoluments’ - Whether parent company an ‘employer’ — Whether parent company liable to account for tax — Income and Corporation Taxes Act 1970, s 204 — Finance Act 1972, s 79 — Finance Act 1976, s 67 — Income Tax (Employments) Regulations 1973, reg 2. On 25 March 1980 the taxpayer was appointed executive director of a wholly-owned subsidiary of the parent company of a group of companies and on the same day the parent company sold to him 10,000 ordinary shares in the subsidiary for £1, being their then market value. The sale took place solely as the result of the taxpayer's f acceptance of his appointment as executive director of the subsidiary. On 4 May 1983 the taxpayer sold the shares back to the parent company for £380,000, their market value at that date being £211,300. The inspector of taxes raised an additional assessment to income tax on the taxpayer under Sch E on the amount received on the sale of the shares on the basis that £211,299 (the excess of the market value on. disposal over the market value on acquisition) was assessable under s 79° of the 9 Finance Act 1972 and £168,700 (the excess of the disposal consideration over the market value) was assessable under s 67° of the Finance Act 1976. On appeal the special commissioner reduced the assessment to nil on the ground that as the taxpayer himself had stipulated the terms on which he had acquired the shares he @ Section 79(1) provides: ‘Where a person, on or after 6th April 1972, acquires shares or an interest in shares in a body corporate in pursuance of a right conferred on him or opportunity offered to him as a director or employee of that or any other body corporate, and not in pursuance of an offer to the public, subsections (4) and (7) of this section shall apply [to make certain gains or benefits chargeable to income tax under Sch E] unless their application is excluded by subsections (2) and (3) of this section respectively.” J b Section 67(1) provides: ‘Subsections (2) to (6) of this section apply {to make chargeable to tax certain notional loans treated as being obtained by reason of employment] where after 6th April 1976—a) a person employed or about to be employed in director's or higher-paid employment ("the employee”), or a person connected with him, acquires shares in a company (whether the employing company or not); and (b) the shares are acquired at an under-value in pursuance of a right or opportunity available by reason of the employment.”