THE SUPREME COURT
321/98 & 8/99
HAMILTON CJ
DENHAM J
KEANE J
MURPHY J
BARRONJ

BETWEEN:
PHILIP BOWES
PLAINTIFF/APPELLANT
and

THE MOTOR INSURERS BUREAU OF IRELAND
DEFENDANT/RESPONDENT

[Judgments by Murphy J. and Barron J. (Dissenting); Hamilton C.J., Denham J. and Keane J. agreed with Murphy J.]

Judgment of Mr Justice Francis D Murphy delivered the 30th Day of July 1999

These proceedings (and the related action of Hart and the Motor Insurers Bureau of Ireland) concern the interpretation of an agreement in writing dated the 21st day of December 1988 made between the Minister for the Environment and the Motor Insurers’ Bureau of Ireland (the 1988 Agreement), the facts concerning a tragic accident which occurred on the 25th November 1993 and the manner in which a claim by Phillip Bowes (the Plaintiff) arising out of that accident was processed.

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The history of the accident as provided by the Plaintiff may be stated shortly. On the 25th November 1993 he was driving a Rover estate car, the property of Wrigley Company Limited on a public highway near Lismullen, Navan, County Meath. There was one passenger in the car, namely, Mr Andrew Hart (the Plaintiff in the related action and hereinafter referred to as ‘the Passenger’). A motor cycle the property of and driven by Mr Darby J Kennedy (the Deceased) came around a bend and collided with the car driven by the Plaintiff. The Plaintiff and the Passenger were injured in the collision and the motor car was damaged. Tragically Mr Kennedy was fatally injured.

THE PROCESSING OF THE CLAIM

By letter dated the 22nd day of July 1994 Messrs Stuart Stein & Co., Solicitors on behalf of the Plaintiff and the Passenger, wrote to the Motor Insurer’ Bureau of Ireland (MIBI). In that letter the Solicitors identified their clients, the date of the accident; its location and then went on to say as follows:-

“Our above named clients suffered personal injuries as a result of being involved in a collision with an uninsured motor cyclist. 

We should be obliged if you would forward the usual questionnaire to us for completion.” 

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On the 3rd August 1994 the MIBI replied enclosing the questionnaire sought and seeking from the Solicitors any medical or garda reports together with details of the insurance held by the claimants.

On the 12th day of August 1994 the questionnaire was returned duly completed together with a garda report and witness statements. It appears from the completed questionnaire that the Deceased had an address at Neilstown, Bohermeen, Navan, County Meath but that the motor cycle that he was driving at the time of the accident had a UK registration, namely, VFJ 432X.

In their letter to the MIBI, returning the questionnaire the Solicitors sought the co-operation of the MIBI in  the following terms:-

“We await hearing from you with your nomination of handling office.”

In their letter of the 14th September 1994 to the MIBI the solicitors referred to the earlier correspondence and commented as follows:-

“Proceedings have been prepared and we are anxious to press ahead with service. Please let us have your nomination of handling office/solicitors to accept service.”

It appears that a meeting took place between representatives of the MIBI and the Solicitors on the 30th September 1994 at which the representative of the MIBI explained that there would be some delay in “appointing a handling office” because the motor cycle in question had 

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been registered in England. In any event letters were exchanged between the MIBI and the Solicitors on the 30th September 1994 in which the Solicitors sought a response to earlier inquiries and the MIBI explained their difficulties as aforesaid.

On the 15th November the Solicitors referred once more to their earlier letter and sought a response from the MIBI. On the 30th November 1994 MIBI wrote to the Solicitors in the following terms:-

“We refer to previous correspondence and wish to advise that we have now passed the papers in this case to Cornhill Insurance Plc, Russell Court, St Stephen ‘s Green, Dublin 2, for investigation and protection of the Bureau’s interests.”

On the 20th December Cornhill Insurance wrote to the Solicitors stating that the file had been passed to them and went on to say;-

“We are unable to comment on liability at this stage as our investigations are continuing. In the meantime we confirm we are arranging to have your client medically examined and we will forward appointment details to you in due course”.

The letter included other details in relation to the proposed examination and the final communication exhibited clarified further details in relation to the examination.

Proceedings were then instituted by the Plaintiff and the Passenger naming the MIBI as the sole Defendant. Those proceedings were commenced by plenary summons dated the 15th 

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February 1996. In the Statements of Claim, each dated the 21st of February 1996, the history of the accident as recorded above was set out in some detail together with the particulars of the injuries sustained by the Plaintiff and the negligence alleged against the Deceased. In relation to the involvement of the MIBI it was asserted as follows:-

“The Defendant is a Corporation with registered offices at 3 South Frederick Street, Dublin 2 and is sued in respect of public duty under agreement with the State effective the 1st day of January 1989 in respect of the negligence, breach of duty and breach of statutory duty of one Darby J Kennedy. deceased, formerly of Neilstown, Bohermeen, Navan. Co. Meath in and about the driving, care, maintenance and control of a motor cycle the property of and then driven by the said deceased, in the circumstances hereinafter described.”

In their defence the MIBI contended that:-

“the Plaintiff’s claim herein is misconceived, the Motor Insurers’ Bureau of Ireland having neither refused compensation to the Plaintiff nor having offered compensation which the claimant considers to be inadequate.”

Without prejudice to that contention the MIBI raised further defences which included the following:-

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 “2 ... any liability of the Motor Insurers’ Bureau of Ireland to the Plaintiff is subject to the condition that the Plaintiff has a valid and enforceable claim against the alleged wrong-doer, Darby Kennedy deceased.

3 The Defendant denies that it has any liability to the Plaintiff arising from the negligence or breach of duty, including statutory duty, of Darby Kennedy deceased as any claim against the said Darby Kennedy is statute barred by virtue of the provisions of Section 9(2) of the Civil Liability Act 1961, proceedings not having been instituted within two years of his death.”

After the proceedings had been set down for hearing an application was made on behalf of the Defendant for the determination of the issue as to whether the claim against the MIBI was maintainable given that any claim against the said Darby Kennedy was statute barred.

The affidavit sworn by Mr Stuart Stein in relation to that motion contains evidence material to these proceedings. In paragraph four of his affidavit Mr Stein explained why no proceedings had been instituted against the estate of the Deceased in the following terms:-

“I was aware from discussions with the Plaintiff that the deceased motor cyclist was a young man, and as it appeared he was uninsured I believed that it would be a waste of time and expense going about establishing whether or not any representation to his Estate had been raised or taking any steps of my own by which his Estate could be constituted to provide a defendant in proceedings.”

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Again in paragraph eleven of his affidavit Mr Stein said:-

“I had at all material times, acted in the belief firstly, that the notification to the Motor Insurers ‘Bureau of the facts of the Plaintiff’s claim and circumstances of the accident, which notification was made by registered post was in itself sufficient to prevent any cause of action becoming barred in law for any reason. The issue of proceedings against the deceased motor cyclist’s estate involved difficulties which appeared to unnecessary and impractical in the circumstances of the claim. As appears from the correspondence and memoranda to which I referred, I had forborn to issue [sic.] proceedings earlier than February 1996 because of the uncertainty in the matter of representation of the Motor Insurers Bureau’s interests, and I had no reason to believe that the Bureau’s request for delay or forbearance could prejudice the claim. I believe, and have always believed, that it is sufficient for the proper constitution of the Plaintiff’s claim and these proceedings, that the Motor Insurers Bureau be sued alone and that the limit for any such claim is as defined in the Motor Insurers Bureau’s agreement and not otherwise. If the claim is otherwise barred in law, or otherwise governed by statutory limit in law, then I believe the Defendants should now be estopped from any such argument on the grounds of time lost on account of its own delays.”

Mr Stein may have been correct in his belief that it would have been “a waste of time and expense” to establish whether or not any representation had been raised to the estate of the 

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deceased motor cyclist and that the issue of proceedings against that estate would have involved difficulties which were “unnecessary and impractical in the circumstances of the claim”. Indeed it may be that if that argument had been put to the MIBI they would have accepted it. Perhaps they would have agreed too that it was in their interest to treat the case as if the accident had been caused by a vehicle the owner or user of which had been unidentified or untraced. It is clear from the correspondence that the MIBI were never invited to adopt that course and did not do so.  Furthermore the fact that Mr Stein has explained that he believed and had always believed that it was sufficient for the proper constitution of the Plaintiffs claim in the proceedings that the MIBI be sued alone makes it clear that his actions or inactions were unaffected by the conduct of the MIBI or their agents. In these circumstances the right of the Plaintiff to maintain the existing proceedings depends exclusively on the rights conferred upon him by the 1988 Agreement.

THE INTERPRETATION OF THE 1988 AGREEMENT

The potential of a mechanically propelled vehicle to cause serious personal injury became apparent in the early part of this century. As the years went by it was recognised that many motorists would have insufficient assets with which to compensate the victims of their negligent driving. No doubt it was for that reason that the Road Traffic Act 1933 section 56 imposed a statutory obligation on motorists to insure themselves against their liability for personal injuries caused by the driving or control of mechanically propelled vehicles. Although machinery was set up to secure compliance with this statutory requirement it was not always effective. The Executive had to address the question of what was to happen where a motorist had failed to obtain or maintain valid and effective insurance cover. The solution adopted here (and in the United Kingdom) was to persuade the insurance industry to provide a fund to meet such cases. In this jurisdiction a company limited by 

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guarantee, the Motor Insurers’ Bureau of Ireland, was incorporated with the support of insurers dealing in motor vehicle insurance in Ireland. That company, the MIBI, entered into an agreement in writing dated the 30th November 1955 with the Minister for Local Government. The purpose and effect of that agreement is set out in the first operative clause thereof in the following terms:-

“If judgment in respect of any liability for injury to person which is required to be covered by an approved policy of insurance under Section 56 of the [Road Traffic Act 1933] is obtained against any person or persons in any court established under the Courts of Justice Act, 1924 (No. 10 of 1924) whether or not such person or persons be in fact covered by an approved policy of insurance and any such judgment is not satisfied in full within 28 days from the date upon which a person or persons in whose favour such judgment was given become entitled to enforce it then MIB of I will so far as such judgment relates to injury to person and subject to the provisions of these presents pay or cause to be paid to the person or persons in whose favour such judgment was given any sum payable or remaining payable thereunder in respect of the aforesaid liability including taxed costs (or such proportion thereof as is attributable only to injury to person) or satisfy or cause to be satisfied such judgment whatever may be the cause of the failure of the judgment debtor to satisfy the same.”

On the 12th day of March 1962 the MIBI entered into a further agreement with the Minister for Local Government. This agreement was necessitated by the enactment of the Road Traffic Act 1961. The purpose of the amending agreement was to confine the obligations of the MIBI to liability that would have been required to be covered by an approved policy under

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the Road Traffic Act 1933, notwithstanding the amended legislation. The 1962 agreement incorporated notes which are of some significance. Those notes record that the MIBI would “give sympathetic consideration to making some ex gratia payment” to victims of hit and run accidents which were a category of loss not covered by the 1955 Agreement. Aspects of the liability in respect of such ex gratia payments were considered in Bowes v. MIBI [1990] ILRM 59. By a further agreement dated the 30th December 1964 the liability of MIBI in respect of judgments was extended to any liability for injury to persons which was required to be covered by an approved policy of insurance under section 56 of the Road Traffic Act 1961.

The changes introduced by the 1988 Agreement were indeed revolutionary. First it extended the liability of the MIBI to meet judgments for “damage to property” in addition to injury to persons (see clause 4 (1). Secondly it extended the liability of MIBI to liability for the payment of compensation for personal injury or death (but not property) of any person caused by the negligent driving of a vehicle in a public place (after the 31st December 1988) where the owner or user of the vehicle remained unidentified or untraced (see clause 6). Thirdly, the Agreement expressly permitted proceedings to be brought by an injured party citing the MIBI either as co-defendant or sole defendant in the particular circumstances mentioned in clause 2 of the 1988 Agreement.

The surprising feature of the arrangements made between the Executive in this jurisdiction (and in the United Kingdom) and with the insurance industry was that it took the form of an agreement between the Minister concerned and the corporate body representing the industry. The uncompensated victims of motor accidents could not in law enforce the obligations undertaken by the insurance industry in those agreements as there was no privity between them and MIBI. This serious difficulty was overcome before 1988 by a simple and effective 

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device: the MIBI did not in this jurisdiction (or the Motor Insurance Bureau in the United Kingdom) take any point if and when they were sued by a judgment creditor seeking to recover on foot of a judgment for personal injuries obtained against a negligent driver (see Albert v. Motor Insurers Bureau [1972] AC 301).

Whatever their procedural shortcomings, the substance of the pre 1988 Agreements was clear: the MIBI had committed itself, subject to various exceptions and conditions precedent, to meeting the claims of certain judgment creditors. The explanation for this arrangement can be readily understood. The motor industry was not treating the uninsured motorist as if he were insured. There was no question of monies provided by the MIBI forming part of the assets of the judgment debtor. So, far from it, the judgment debtor would be liable to the MIBI either by way of subrogation or assignment for all monies paid by it to the judgment creditor. Moreover, the procedure ensured that the MIBI would be the payer of last resort. Any persons whose negligence contributed to the injuries could be made a defendant by the victim, either at his election or at the direction of the MIBI, and no matter how small a part the negligence of that defendant played in causing the accident, the fact that the judgment could be recovered against him for the entire amount relieved the MIBI of any liability whatever. The fact that the MIBI had express contractual power to settle claims of which they were given notice did not affect the concept that in respect of accidents occurring before the 31st December 1988 they were liable only in respect of judgments obtained in courts established under the Courts (Establishment and Constitutional) Act 1961.

The reason that victims of hit and run drivers could not avail of the earlier agreement was that judgment could not be obtained against them. To overcome that problem the 1988 Agreement simply provided that the liability of MIBI should extend to the payment of compensation for personal injury or death of persons where the owner or user of the vehicle remained 

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unidentified or untraced. This important change might have provided a suitable opportunity to rethink and recast the entire arrangement under which the victims of motor accidents might be compensated. That opportunity was not taken. Instead the basic agreement was retained and additions made to it which compounded, rather than clarified, existing ambiguities.

Whilst the arrangement continues in the form of an agreement between the Minister and the MIBI the 1988 version expressly confers upon “persons claiming compensation” certain rights to seek enforcement of the provisions of that agreement. The three procedures made available to persons claiming compensation are set out in clause 2 of the Agreement as follows:-

“1 making a claim to MIB of I for compensation which may be settled with or without admission of liability, or

2	citing as co-defendants MIB of I in any proceedings against the owner or user of the vehicle giving rise to the claim except where the owner and user of the vehicle remain unidentified or untraced, or

3	citing MIB of I as sole defendant where the claimant is seeking a court order for the performance of the Agreement by MIB of I provided that the claimant has first applied for compensation to MIB of I under Sub clause (1) of this Clause, and has either been refused compensation by MIB of I or has been offered compensation by MIB of I which the claimant considers to be inadequate.”

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Clause 2 aforesaid is unhappily expressed. On the face of it, it would appear to imply that any person seeking compensation from the MIBI, having made a claim against it, could then institute proceedings naming the MIBI as the sole defendant. That interpretation would make sub clause (2) of clause 2 irrelevant and unnecessary. Furthermore, such construction would ignore the fact that the liability of the MIBI (or the provisions of the Agreement enforceable against it by a claimant) arises in two distinct ways. First, the MIBI may be liable on foot of a judgment obtained against an uninsured or inadequately insured driver, or alternatively to pay compensation for the negligence of the driver or user of a vehicle (whether insured or not) who is unidentified or untraced. Whatever procedures are adopted those are the only circumstances in which provisions can be enforced by a claimant against the MIBI. Either the claimant seeks to be repaid a judgment debt - in which case he must issue proceedings against a driver - or else he seeks to be compensated for the negligent driving of an untraced and unidentified driver. In that case he may, subject to compliance with the various conditions precedent, institute proceedings against the MIBI as the sole defendant; but his essential proof to obtain compensation would be the negligence of an unidentified and untraced driver.  Clearly in the present case any such proceedings would fail as the driver of the vehicle involved has been identified. Accordingly, any claim against the MIBI to succeed must involve the identified driver (or his estate) and proceedings against him to judgment unless the MIBI negotiate an acceptable compromise of the Plaintiffs claim.

In my view in the present circumstances no claim by the Plaintiff can be sustained because judgment has not been obtained against the estate of the deceased, Darby Kennedy, and any proceedings now leading to such judgment are unfortunately barred by the lapse of time.

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Whilst the Appellant has relied heavily on the Directive of the European Union, known as the “Second Council Directive” (84/5/EEC of 30th December, 1983) I do not believe that this argument is well founded. In my view the 1988 Agreement for all its faults and interpreted in the manner which I have indicated gives full effect to the European Directive in the results to be achieved by that Directive.

I would dismiss the appeal in the above entitled proceedings and the same result would follow in the related proceedings by the Passenger against the Motor Insurers Bureau of Ireland.

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THE SUPREME COURT
321/98 & 8/99
Hamilton C.J. 
Denham J.
Keane J.
Murphy J.
Barron J.

Between:
ANDREW HART
Appellant
and

MOTOR INSURERS BUREAU OF IRELAND
Respondent
PHILIP BOWES
Appellant
and

THE MOTOR INSURERS BUREAU OF IRELAND
Respondent
JUDGMENT delivered on the 30th day of July 1999 by BARRON J.

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(2)

The basic facts of these actions are relatively simple. The plaintiffs were injured in a road traffic accident involving a car in which they were travelling with a motor cycle the driver of which was killed.

The accident occurred on the 25th November 1993. On the 22nd of July, 1994, the solicitors for the plaintiffs wrote by registered letter to the Motor Insurers’ Bureau of Ireland (the Bureau) as follows:

“Dear Sirs, Our clients: Philip Bowes and Andrew Hart

Accident 25th November 1993 at Lismullen, Navan, Co. Meath

Our above named clients suffered personal injuries as the result of being involved in a collision with an uninsured motor cyclist. We should be obliged if you would forward the usual Questionnaire to us for completion.

Yours faithfully”

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(3)

A reply dated 3rd August, 1994 was received from the Bureau which was as follows:-

“Dear Sirs, 
We thank you for your letter of 22nd July. So that we have all the details of this occurrence and to avoid unnecessary correspondence, perhaps you would be good enough to complete and return the attached Questionnaire, when the matter will have our further attention. When replying, the enclosure of any Medical or Garda reports would be helpful. Also, please let us have full details of claimant’s insurance, i.e. name of the insurers and policy number, where the claimant was driving a vehicle involved in the accident.
Yours faithfully”

The questionnaire was returned completed together with the garda report and attached statements. Efforts were made by the plaintiffs’ solicitors to trace to the motor cyclist insurance but were unsuccessful.

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(4)

Ultimately the Bureau nominated Cornhill Insurance plc to represent its interests. A medical examination of the plaintiffs was then arranged. All this had been done by mid-November 1994. 

It was not until the 15th February 1996 that plenary summonses were issued on behalf of the plaintiffs against the Bureau. The reason for the gap between November, 1994 and February, 1996 is not explained.  The plenary summons is endorsed in the form of an action for damages for negligence. In the statement of claim the defendant was sued in “respect of public duty under agreement with the State.”

By its defence the Bureau pleaded at paragraph 1:-

“The Defendant maintains that the Plaintiff’s claim herein is misconceived, the Motor Insurers Bureau of Ireland having neither refused compensation to the plaintiff nor having offered compensation which the claimant considers to be inadequate.”

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(5)

The rest of the defence was without prejudice to this plea and related to a denial of a successful cause of action against the deceased motor cyclist.

In addition at paragraph 3 the defendant pleaded:

“The Defendant denies that it has any liability to the Plaintiff arising from the negligence or breach of duty, including statutory duty, of Darby Kennedy deceased as any claim against the said Darby Kennedy is statute barred by virtue of the provisions of section 9(2) of the Civil Liability Act, 1961, proceedings not having been instituted within two years of his death.”

By reason of this plea an application was made to have a preliminary issue heard and by an order of Mr. Justice Johnson made the 3rd November, 1997, a preliminary issue was directed, being whether the claim against the Motor Insurers’ Bureau of Ireland arising from the negligence 

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(6)

and breach of duty of Darby Kennedy, deceased is maintainable giving that any claim against the said Darby Kennedy is statute barred by virtue of the provisions of s. 9(2) of the Civil Liability Act, 1961.

This issue came before Budd J. who held that the plaintiffs were not entitled to sue the Bureau as sole defendants. Accordingly, the actions were dismissed. It is against this order that the matter comes before this Court.

Two issues arise: (1) whether the Motor Insurers’ Bureau of Ireland (the Bureau) can be sued as sole defendant by a claimant who has suffered injury at the hands of an uninsured but identified driver rather than at those of an unidentified or untraced motorist, and (2) if it can, can it rely upon a special defence - here the Statute of Limitations - open to the identified driver or, in this case, his personal representatives, had they been sued.

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(7)

The determination of these issues depends upon the proper construction of the agreement dated 21st December, 1988 and made between the Minister for the Environment and the Bureau (the 1988 Agreement). This in turn depends upon the scheme which had previously existed and the reason for the making of the 1988 Agreement. The scheme which existed previously was pursuant to an agreement dated the 30th November, 1955 between the Minister for Local Government and the Bureau (the 1955 Agreement). Under that Agreement the Bureau was liable to satisfy all judgments against motorists whether insured or not remaining unsatisfied for a period of twenty-eight days. As a condition precedent to liability notice of intention to bring the proceedings had to be given to the Bureau and served by registered post.

The relevant provisions of the 1955 Agreement were as follows:

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(8)

“(1) If judgement in respect of any liability for injury to person which is required to be covered by an approved policy of insurance under section 56 of the Act is obtained against any person or persons in any court established under the Courts of Justice Act, 1924 (No. 10 of 1924) whether or not such person or persons be in fact covered by an approved policy of insurance and any such judgment is not satisfied in full within twenty-eight days from the date upon which the person or persons in whose favour such judgment was given become entitled to enforce it then MIB of I will so far as such judgment relates to injury to person and subject to the provisions of these presents pay or cause to be paid to the person or persons in whose favour such judgment was given any sum payable or remaining payable thereunder in respect of the aforesaid liability including taxed costs (or such proportion thereof as is attributable only to injury to person) or satisfy or cause to be satisfied such judgment 

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(9)

whatever may be the cause of the failure of the judgment debtor to satisfy the same.

(4)	The following shall be conditions precedent to MIB of I’s liability, videlicet:-

(a)	That notice of proceedings be given by registered post before commencement of such proceedings:

(i) To the insurer in any case in which there was in force at the time the accident occurred an approved policy of insurance purporting to cover the driving of the vehicle and the existence of which is known before the commencement of proceedings to the person bringing same

(ii) To MIB of I in any other case same.

(b)	That if so required by MIB of I and subject to full indemnity from MIB of I as to reasonable costs, the person bringing the proceedings (hereinafter called the Plaintiff) shall have taken or shall take all reasonable steps against any person against whom the Plaintiff might have a remedy in respect of or arising out of the injury or death of the Third Party. Any dispute as to the reasonableness of 

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(10)

a requirement of MIB of I that any particular steps should be taken to obtain judgment against any such person shall be referred to the Minister whose decision shall be final.

(c)	That the judgment or judgments (including such judgments as may be obtained under paragraph (b) of this Clause) be assigned to MIB of I or its nominee.

(d)	That the Plaintiff shall give credit to MIB of I for any amounts paid to him by or on behalf of
the defendant in respect of any liability for injury to person or property arising out of the event  which occasioned the claim against MIB of I.

(5) When notice of proceedings has been given under Clause 4 it shall be competent for MIB of I not later than fourteen days after the closing of the pleadings to offer to the Plaintiff in full satisfaction of the obligation of MIB of I such sum as they consider sufficient in respect of damages together with the equivalent of the taxed cost to date and if in that action the Plaintiff is awarded in respect of damages for injury to person apart from injury to property not more than the sum offered under this Clause (exclusive of the sum for such costs) then in satisfaction of this Agreement MIB of I shall not be required to 

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(11)

pay more than the total of such damages awarded and the sum offered in respect of costs and shall be entitled to set off any costs incurred by them after the date of the offer.”

The Act referred to in the body of the Agreement was the Road Traffic Act, 1933. Subsequently when the Road Traffic Act, 1961 was passed there were two further agreements, one in 1962 and one in 1964, which provided for the altered insurance obligations contained in the 1964 Act. However, the scheme of the Agreement was not altered in any way. The liability of the Bureau remained as a liability to satisfy all judgments remaining unsatisfied for twenty-eight days.

In using the word “liability” I intend to refer solely to the obligations undertaken by the Bureau in accordance with the terms of the several agreements. For example, where the Agreement refers to “conditions precedent to MIB of I’s liability” this does not impose any liability on the Bureau; it merely indicates the circumstances in which the obligations

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(12)

 undertaken by the Bureau pursuant to the terms of the Agreement can become enforceable.

One aspect of the scheme of the agreements between the Bureau and the Minister which lessened their effect was that unless there was someone to be made defendant, there was no remedy. In this way, claims against unidentified or untraced motorists were excluded from the provisions of the scheme. Damage to property was also excluded.

The amendment of the scheme by the 1988 Agreement was brought about to comply with the terms of a European Directive (“the 1983 Directive’) entitled “Second Council Directive 84/5/EEC of 3O December, 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles.” This Directive provided that any scheme involving the Bureau should

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(13)

include claims against unidentified or untraced motorists and claims for damage to property as well as claims against identified motorists. 

Article 5 of the Directive provided that Member States should amend their national provisions to comply with the Directive not later than 31st December, 1987 and that the provisions thus amended should be applied not later than 31st December, 1988. The State complied with this requirement both as to the amendments to our national provisions and as to the time at which they were to be applied by the 1988 Agreement.

These requirements could have been effected either by a supplemental agreement or by an entirely fresh agreement. In the event, it was not done by either method. The 1988 Agreement is an apparent combination of the two methods. The 1988 Agreement was made on the 21st December, 1988. It determines the earlier agreements but at the same time re-enacts their material provisions while at the same time 

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(14)

including new provisions. The difficulty in construing it arises from this re-enactment of the former provisions. This suggests that in regard to claims against persons who are identified there is to be no change, whereas as against persons who cannot be identified or traced new procedures are to be provided by new provisions.

The difficulty in this approach is that the 1983 Directive upon which the Agreement is based does not make any distinction between the circumstances in which claims may arise. More importantly there are internal indications in the new provisions themselves which cannot relate to persons who are unidentified or untraced.

Before seeking to construe the 1988 Agreement, it is appropriate to set out the relevant provisions of this Agreement and of the 1983 Directive respectively.

The new provisions of the 1988 Agreement are as follows:

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(15)

“2.	MIB of I hereby agrees that a person claiming compensation (hereinafter referred to as ‘the claimant’) may seek to enforce the provisions of this Agreement by -

(1) making a claim to MIB of I for compensation which may be settled with or without admission of liability, or

(2) citing as co-defendants MIB of I in any proceedings against the owner or user of the vehicle giving rise to the claim except where the owner and user of the vehicle remain unidentified or untraced, or

(3) citing MIB of I as sole defendant where the claimant is seeking a court order for the performance of the Agreement by MIB of I provided the claimant has first applied for compensation to MIB of I under Sub-clause (1) of this Clause and has either been refused compensation by MIB of I or has been offered compensation by MIB of I which the claimant considers to be inadequate.

3.	The following shall be conditions precedent to MIB of I’s liability:

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(16)

(1)	The claimant or the claimant’s legal representative shall have given notice in writing, by registered post, of intention to seek compensation:

(a)	in respect of personal injuries or death not later than three years from the date of the accident giving rise to the personal injuries or death;

(b)	in respect of damage to property not later than one year from the date of the accident giving rise to the damage to property.

(2)	The claimant shall furnish MIB of I with all material information reasonably required in relation to the processing of the compensation claim including information relating to the relevant accident, personal injuries or death, medical treatment, funeral expenses, damage to property, and legal professional or other costs reasonably incurred by or on behalf of the claimant.

(3)	The claimant shall furnish MIB of I with copies of all relevant documentation in relation to the

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(17)

accident and any subsequent legal proceedings relating thereto, including copies of all correspondence, statements and pleadings.

(4)	The claimant shall endeavour to establish if an approved policy of insurance covering the use, in a public place, of any vehicle involved in the accident exists by demanding or arranging for the claimant’s legal representative to demand, insurance particulars (including policy number if available) of the user or owner of the vehicle in accordance with the provisions of section 73 of the Act.

(5)	The claimant shall furnish MIB of I with details of any claim for which the claimant is aware made in respect of the damaged property arising from the accident under any policy of insurance or otherwise and any report made of which the claimant is aware or notification given to any person in respect of that damage or the use of the vehicle giving rise thereto, as MIB of I may reasonably require.

4. 	(3)	Where a person applies to the MIB of I for compensation and no judgment has been obtained or  is obtainable, MIB of I 

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(18)

shall, as soon as is reasonably practicable, give a decision on the application and shall give reasons for the decision.

(4)	Where MIB of I and the claimant agree an amount in respect of compensation, MIB of I shall pay such amount to the claimant within 28 days of such agreement being reached.

6.	In the case of an accident occurring on or after the 31st day of December, 1988, the liability of MIB of I shall extend to the payment of compensation for the personal injury or death of any person caused by the negligent driving of a vehicle in a public place, where the owner or user of the vehicle remains unidentified or untraced.”
 
Alongside these provisions the 1988 Agreement also includes mutatis mutandis the provisions of clause 4 of the 1955 Agreement - clause 7 of the 1964 Agreement - as sub-clauses 6, 7, 8 and 9 of clause 3. Likewise, it includes clause 1 of the 1955 Agreement - clause 2 of the 1964 Agreement -

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as clause 4(1) and clause 5 of the 1955 Agreement - clause 8 of the 1964 Agreement as clause 10.

Since the 1988 Agreement has been brought into being as a result of the 1983 Directive, before seeking to construe the 1988 Agreement it is appropriate to look to the terms of this Directive as an aid to construction of that Agreement. 

The relevant recital to this Directive provides so far as is material:

“Whereas it is necessary to make provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified; whereas it is important ... to provide that the victim of such an accident should be able to apply directly to that body as a first point of contact...”

The relevant provisions of the Directive appear in Article 1(4) and are as follows:

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“Each Member State shall set up or authorise a body with the task of providing compensation, ... for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied [i.e. an uninsured vehicle]... The victim may in any case apply directly to the body which, on the basis of information provided at its request by the victim, shall be obliged to give him a reasoned reply regarding the payment of any compensation.”

For sake of clarity I propose to refer to the obligation of the Bureau to meet claims against identified drivers as being the old cause of action, and claims in respect of the actions of unidentified or untraced motorists as the new cause of action.

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The internal indications in the new clauses that they apply to both owners and users who are identified as well as to those who cannot be identified or traced are to be found in clauses (3)(3), 3(4) and 4(3).

The reference in clause 3(3) to “subsequent legal proceedings” and the reference in clause 3(4) to “insurance particulars ... of the user or owner of the vehicle”, both new provisions, can only refer to identified drivers.

The kernel of the question, however, is the interpretation to be placed on clause 4(3). There is in my view no justification as a matter of construction for regarding this clause as applying only to the new cause of action, however much one might believe that the old cause of action had to be pursued to judgment before any liability was imposed upon the Bureau.

There are a number of reasons why it should be construed as applying to both causes of action. Article 1(4) of the 1983 Directive clearly gives the right to apply directly to the Bureau whether the vehicle is 

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unidentified or uninsured and imposes an obligation on the Bureau to give a reasoned reply. The recital upon which this provision is based shows an intention to provide that the victim of an accident - where the vehicle which caused it was uninsured or unidentified - should be able to apply directly to the Bureau as a first point of contact. No distinction is made in the recital between the new and the old cause of action. Since directives should be given a purposive construction, laws and in this case the 1988 Agreement, made in pursuance of them should be construed likewise. Clearly, clause 4(3) of the 1988 Agreement meets these several requirements of the 1983 Directive.

Secondly, clause 4(3) follows on from clause 4(1). If you have a judgment, you have one right; if you do not, you have a different right. So far that would give the right under clause 4(3) to those having the right under clause 4(1). This would be the position if the words “or is

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 obtainable” were omitted from clause 4(3). These words are included to show that the right given by clause 4(3) applies also to the new cause of action.

Clause 4(3) uses the word “applies” rather than “claims”, a further indication that it purports to meet the provisions of Article 1(4) of the 1983 Directive. That it is also a claim is made clear by the use of the word “claimant” in clause 4(4).

It follows in my view that the new provisions of the 1988 Agreement do not apply exclusively to the new cause of action. As appears from paragraph 1 of the defence filed on behalf of the defendant the defendant accepts this proposition in part. The paragraph follows the wording of clause 2(3) of the 1988 Agreement and for this reason appears to accept that the claim procedure applies in every case. In its written submissions the Bureau also contended inter alia that clause 2(3) does not apply to 

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claims where the owner or user of the vehicle is identified, which contradicts its basic defence. In oral argument, counsel for the defendant relied strongly on his submission that the correspondence did not constitute a claim for the purposes of the agreement. This is also a contradiction since if clause 2(3) does not apply to the present claims it is immaterial that no claim was made on behalf of the plaintiffs.

The implications arising from this construction of clause 4(3) are important in the interpretation of clause 2 and in particular clause 2(3) of the 1988 Agreement. First, a claimant, even where he can bring proceedings and obtain judgment is not obliged to do so. He can apply to the Bureau under clause 4(3). Secondly, it seems that if the claimant cannot reach agreement with the Bureau for the purposes of clause 4(4), such claimant must be deemed to have made a formal claim for the purposes of clause 2(1). Thirdly, there would seem to be no justification 

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for suggesting that a claimant under the old cause of action who fails to reach agreement with the Bureau under the provisions of clause 4(4) must go the long road of obtaining judgment before such claimant can obtain compensation from the Bureau.

Consequently, clause 2(1) is applicable to any claimant whether the user or owner of the vehicle is identified, unidentified or untraced, provided that an application has first been made under clause 4(3).

Passing to clauses 2(2) and 2(3), these clearly relate to different circumstances. There are two obvious differences:

(1)	The need to have made a claim under clause 2(1) applies only to clause 2(3).

(2)	The specific exclusion of a claim against an owner or user remaining unidentified or untraced contained in clause 2(2) is not matched by any specific exclusion in clause 2(3).

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Nor do the different words – “giving rise to the claim” in clause 2(2) and “seeking a court order for the performance of the Agreement” in clause 2(3) – help. They are really saying the same thing and are in any event governed by “may seek to enforce the provisions of this Agreement” at the beginning of the clause.

The whole manner of drafting the 1988 Agreement is so unusual that there can be no certainty as to what is intended by clause 2(2). Clearly, it only applies to claims where the owner or user of the vehicle is identified. Equally clearly, it is not intended to apply where a claim has not been made under clause 2(1). In these circumstances, it probably is intended to apply when notice of intention only has been given to the Bureau. Under the 1955 Agreement and the 1964 Agreement it was not unusual for the Bureau to be joined as co-defendant in proceedings. Clause 2(2) probably intends to eliminate the need for such an application. As such 

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proceedings would be brought following merely notice of intention to issue the same the claim for the purposes of clause 2(1) would not arise.

In my view, clause 2(3) is easier to construe. It is the final means of enforcing the Agreement against the Bureau. The first step is to apply for compensation under clause 4(3). The parties may then agree the amount: clause 4(4). If they do not, a claim can be made which may or may not be settled: clause 2(1). I am conscious that there seems to be no real difference between clause 4(4) and clause 2(1). If all this fails, then clause 2(3) applies. Since the entire of this procedure may be used by a claimant under the old cause of action, there can be no basis for construing clause 2(3) against such a claimant.

These provisions effectively made the Bureau the insurer of first resort in all cases to which the 1998 Agreement applied. This position of the Bureau as insurer of first resort has been made even more clear by 

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Council Directive 90/232/EEC of 14th May, 1990. In particular, this Directive provided that the compensation payable by the Bureau should not be conditional upon showing that the negligent driver was unable or refused to pay, nor delayed by the resolution of a dispute as to which Bureau or insurer should ultimately be liable.

The relevant recitals of this Directive were:

“Whereas, however, in the case of an accident caused by an uninsured vehicle, the victim is required in certain Member States to prove that the party liable is unable or refuses to pay compensation before he can claim on the body;

whereas this body is better placed than the victim to bring an action against the party liable; whereas, therefore, this body should be prevented from being able to require that the victim, if he is to be compensated, should establish that the party liable is unable or refuses to pay;

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Whereas, in the event of a dispute between the body referred to above and a civil liability insurer as to which of them should compensate the victim of an accident, Member States, to avoid any delay in the payment of compensation to the victim, should ensure that one of these parties is designated to be responsible in the first instance for paying compensation pending resolution of the dispute...

These recitals are mirrored in Articles 3 and 4. Article 3 so far as is relevant is:

“However, Member States may not allow the body to make the payment of compensation conditional on the victim’s establishing in any way that the person liable is unable or refuses to pay.”

Article 4 so far as is material is as follows:

“In the event of a dispute between the body ... and the civil liability insurers as to which must compensate the victim, the Member States shall take

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the appropriate measures so that one of these parties is designated to be responsible in the first instance for paying compensation to the victim without delay.”

In pursuance of these provisions the Bureau has given the following undertakings:

“Article 3. The MIB of I will not (with effect from 31st December 1992) require a claimant, as a condition of securing compensation from the Mobil I, to demonstrate inability to pay by the negligent user or owner of the vehicle giving rise to the claim. Where a judgment is secured, the claimant will be required to assign the judgment to the MIB of I and the MIB of I will then pursue execution of the judgment.

Article 4. The MIB of I will not, (with effect from 31st December 1992) delay payment of compensation due to a claimant solely because of a dispute as to liability for payment between the MIB of I, a motor insurer or a bureau in another EC Member State or 

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designated territory. The MIB of I will pay the compensation due and must subsequently seek recovery where appropriate from the motor insurer or bureau concerned.”

While it is immaterial, it is to be noted that the undertaking in relation to Article 3 omits reference to refusal to pay.

This later Directive and the undertakings given on foot of it do not affect the construction of the 1988 Agreement. They do nevertheless give an indication of the understanding by the Bureau of its obligations thereunder. The undertaking with reference to Article 3 is independent of the existence of any judgment. In those cases where there is a judgment, the claimant will be required to assign it to the Bureau. 

Once the Bureau can be sued as a sole defendant, even in the case of an identified wrongdoer, then the question of the joiner of such 

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wrongdoer must be a matter for the Bureau. It can insist under clause 3(7) upon such person being joined as a defendant.

The answer to the central issue in these proceedings, whether the Bureau can be sued as sole defendant when the owner or user responsible is identified should be in the affirmative. The 1988 Agreement provides for two sets of procedures relating to the old cause of action. Why it should do so is obscure. The first is similar to that under the 1955 Agreement save that when the claimant brings such proceedings there is an obligation imposed by clause 2(2) to join the Bureau as a co-defendant. It commences with notice of intention to commence proceedings pursuant to the provisions of clause 3(6). The second is the same as for the new cause of action.

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That procedure requires, first, notification of intention to claim compensation within the time limited: clause 3(1); a claim pursuant to clause 4(3) followed by a reasoned response by the Bureau. If this cannot be settled pursuant to the provisions of either clause 4(4) or clause 2(1), proceedings may issue citing the Bureau as sole defendant.

This view of the agreement is in accord with the explanatory booklet on the agreement issued by the Department of the Environment. It follows that provided that a proper notice of intention to claim is made within the time provided by clause 3(1), followed by a claim as has been made by the plaintiffs, then the proceedings by the latter against the Bureau as sole defendant cannot be defeated by the time running under the Statute of Limitations as against the personal representatives of the wrongdoer.

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In my view, the originating letter in which the Bureau was asked to forward its usual questionnaire for completion by the plaintiffs was compliance by the plaintiffs with clause 3(1) of the Agreement in that it gave notice of intention to claim compensation. When the questionnaire was completed and returned, this was the act of a claimant within the meaning of clause 4(3). The efforts on behalf of the plaintiff to obtain insurance particulars of the wrongdoer came within clause 3(4).

These steps on behalf of the plaintiffs clearly indicated an intention to exercise such rights as they had under the terms of the 1988 Agreement. They never said specifically, “we claim compensation from you”, nor do they indicate which clauses they were relying on. The existence of the questionnaire showed what information the Bureau required. The plaintiffs complied with this and sought also to discover insurance particulars. In my view, both sides knew the purpose of what was 

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happening. The one was making a claim, the other was purporting to deal with it. The defendant cannot now be heard to say no claim was ever made.

Ultimately, it is my view that it is the clear intention of the Directive, and consistent with a purposive construction of the Agreement, that in fact the Bureau should act as insurer of the wrongdoer. Further, it is clear from the 1983 Directive that there was no intention that claims against unidentified or untraced wrongdoers should be in any different category or be dealt with in any different way from claims against uninsured drivers.

The reality of the Agreement is that the Bureau in those cases where the Agreement applies may be substituted for the wrongdoer; and where that procedure is adopted notification of intention to seek compensation 

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against the Bureau pursuant to the provisions of clause 3(1) of the Agreement is substituted for the issue of the plenary summons or other originating document.

In the circumstances, the plaintiffs were entitled to avail of the provisions of the 1988 Agreement. One final consideration; the Bureau was under an obligation to give a reasoned reply to the plaintiffs as soon as was reasonably practicable. This it did not do. By failing to do so, it was in breach of its obligations under clause 4(3) of the Agreement. In such circumstances, it cannot at the same time complain that the plaintiffs are in breach of clause 2, which in any event in my view they are not.

Unfortunately, there is no explanation available as to what happened between November 1994 and February 1996. In September 1994, the’ Bureau was more concerned with discovering whether the motor cycle was properly registered in the United Kingdom so it could recover anything paid iii this jurisdiction by it from its corresponding body in that jurisdiction. That in itself is a breach of its undertaking in relation to Article 4 of the later Directive.

In the circumstances, I would hold that the claims against the Bureau are maintainable given that any claim against the said Darby Kennedy is statute barred by virtue of the provisions s.9(2) of the Civil Liability Act 1961, and would allow the appeal.