Sharp v Pereira; Sub Nom. Sharp v Pereir; Sharp v Motor Insurers’ Bureau [1999]

FACTS:-

On 25 June 1993 the Claimant was knocked down by a Volkswagen van driven by the first Defendant and suffered severe injuries. The first Defendant was uninsured. On 1^st May 1996 the master made an order by consent joining the Motor Insurers’ Bureau as second Defendant to the action, the purpose being to protect the Bureau’s position in the event of any claim being made against it by the Claimant pursuant to the Agreement of 1988. That is the agreement between the Secretary of State and the Motor Insurers’ Bureau.

On 9^th December 1996 (one year prior to Morland J.’s judgment) after hearing an issue on liability only, Curtis J. entered judgment for the Claimant against the first Defendant, subject to a reduction of one third in respect of the Claimant’s contributory negligence. That judgment disposed of the question of liability. It also made it clear, in the context of the case, that unless the first Defendant came in to resources, which was an extremely unlikely event, the Motor Insurers’ Bureau would be the body responsible for meeting this claim.

On 29^th October 1997, the Claimant issued a summons seeking an interim payment in order to finance a programme of rehabilitation. That programme was to enable the Claimant to make the progress which it must have been in his interests to take place as soon as possible. The summons was adjourned to the judge in chambers because the Motor Insurers’ Bureau wished a point of principle to be clarified as to the correct application of the RSC. 

If there was an issue as to the correct interpretation of the rules and it was correct for that matter to be resolved by the courts. In the final analysis the courts were the only institution which could give final rulings as to interpretation, not only of the Rules of Court but other legal documents.

The Claimant then sought an interim payment under RSC, Ord. 29, r.11(2)(a) . The judge refused the application on the ground that r.11(2)(a) only applied where there was an invalid insurance policy and liability would be met by an individual insurer under the Bureau’s internal regulations and not where there was no insurance policy and liability would be met by the Bureau itself.

Order 29, r.11 of the Rules of the Supreme Court [as amended by the Rules of the Supreme Court (Amendment) 1996 (S.I. 1996 No. 2892 (L.10)) and (S.I. 1996 No. 3219 (L.18)) provide:

“(1) If … in an action for damages, the court is satisfied– … (b) that the Claimant has obtained judgment against the respondent for damages to be assessed; … the court may, if it thinks fit and subject to paragraph (2), order the respondent to make an interim payment of such amount as it thinks just … (2) No order shall be made under paragraph (1), in an action for personal injuries if it appears to the court that the Defendant is not a person falling within one of the following categories, namely–(a) a person who is insured in respect of the Claimant's claim or whose liability will be met by an insurer under s.151 of the Road Traffic Act 1988 or an insurer concerned under the Motor Insurers' Bureau agreement …”

Clause 7 of the Motor Insurers' Bureau Uninsured Drivers Agreement 1988 provides:

“If a judgment is obtained against any judgment debtor and remains unsatisfied, [the Motor Insurers' Bureau] will after the expiry of seven days from the execution date itself satisfy the same.”

The Claimant appealed on the ground that the judge at First Instance erred in law by holding that RSC, Ord. 29, r.11(2)(a) permitted the award of an interim payment against an uninsured driver where any liability would fall to be paid by an individual insurer under the Motor Insurers’ Bureau’s Domestic Regulations, but not where it fell to be paid from the Bureau’s central fund.

HELD:-

The appeal was allowed.  It was held that the term “insurer concerned” in RSC, Ord.29, r.11(2)(a) was not a term of art which referred only to those situations where there was an insurance policy which could be avoided as against the insured for some reason, therefore pursuant to an internal arrangement between the Motor Insurers’ Bureau and its members, any claim would be met by the “insurer concerned”. 

It was held that there was no valid reason why an interim payment should be made in the situation and not in the other where there was no insurance and the Bureau was directly responsible for meeting a claim.  The Rule Committee in amending r.11(2)(a) in 1996 made its intent clear although the language used did not express it helpfully and in future the rule should be read as applying to both the situation where the liability would be met by the Bureau and where the liability would be met by an insurance company because that company was originally the insurer in relation to the driver concerned. 

Technically an order for an interim payment was more an order than a judgment, so far as the Motor Insurers’ Bureau Agreement of 1988 was concerned, such a payment was a “judgment” within clause 7 of the agreement, which, if not satisfied by a Defendant within seven days, the Bureau was obliged to meet and that an order would be made against the first Defendant for an interim judgment of £50,000. 

Lord Woolf considered the position if the Motor Insurers’ Bureau wished for a point to be clarified, Lord Woolf stated in his judgment “it would be perfectly appropriate for the Bureau to have made an ex gratia payment of, say, £45,000 pending the resolution of the matter, or even £25,000. But not to make any payment whatsoever is something that this court finds surprising.”

Lord Woolf found that it was apparent that the language used in amending the rule was not ideally designed to meet that purpose. It is not as clear as it should have been. The explanation for this may have been that the Rule Committee was not aware of the precise manner in which the Motor Insurers’ Bureau operated in relation to the members of the Bureau.

Lord Woolf allowed the appeal from the decision of Morland J and made an order for the payment of an interim nature under Ord.29, r. 11 in the sum of £50,000 to the Claimant against the first Defendant only. That judgment was an obligation against the first Defendant only but will be one which I would expect the Bureau will honour under the terms of the agreement to which I have referred.

Pill LJ and Millett LJ agreed that RSC, Ord.29, r.11(2)(a) should be given the effect as stated by Lord Woolf MR.  The appeal was allowed although leave to appeal was refused.

Related posts:

1. Mills v Toner and the Motor Insurers Bureau [1995]
2. Granada UK Rental and Retail v SPN Fareway and Motor Insurers Bureau [1995]
3. Mastin v Blanchard and Motor Insurers Bureau [1995]
4. McGoona v Motor Insurers Bureau [1969]
5. Evans v The Secretary Of State For The Environment, Transport And The Regions And The Motor Insurers Bureau [2001]