Sharp v Pereira

In a personal injury claim involving an uninsured driver, an interim payment may be ordered against the driver where the Motor Insurers’ Bureau will meet the liability under the Uninsured Drivers Agreement. The amended Order 29 rule 11(2)(a) must be construed purposively rather than technically. It covers both liability met from the Bureau’s central funds and liability met by a member insurer under internal arrangements. An interim payment order is a judgment for the purposes of clause 7 of the Agreement. If the judgment debtor does not satisfy it within seven days of the execution date, the Bureau’s obligation to pay may arise. The court retains discretion to refuse an order where the Bureau can properly establish that it has no obligation.

Robert Sharp suffered severe injuries when he was struck by a van driven by Michael Pereira, who was uninsured. Judgment was entered against Pereira on liability, subject to a one-third reduction for contributory negligence. The Motor Insurers’ Bureau was joined to protect its position under the Uninsured Drivers Agreement.

Sharp sought an interim payment to fund rehabilitation. Morland J accepted the Bureau’s construction of the amended interim-payment rule and declined to order payment. The appeal concerned whether the court had jurisdiction to order an interim payment against the uninsured driver where the liability would ultimately be met by the Bureau rather than an individual insurer.

Appeal allowed. The Court of Appeal unanimously held that the amended Order 29 rule 11(2)(a) permitted an interim payment order against the first defendant. The order was made against Pereira alone, with the expectation that the Bureau would honour it under the Agreement.

1. Lord Woolf MR held that the amended wording was not to be construed technically. The expression insurer concerned was not a term of art confined to cases where a member insurer, rather than the Bureau itself, would meet the claim. The purpose of the amendment was to remove the difficulty identified in Powney v Coxage (The Times 8 March 1988). There was no rational basis for distinguishing between liability met from the Bureau’s central funds and liability met by a member insurer under internal arrangements. Lord Justice Pill agreed with these reasons.
2. Lord Justice Millett agreed with the effect of the construction, although by a different route. He regarded the Bureau’s direct obligation to pay as an a fortiori case and treated the omission of an express reference to the Bureau as an obvious casus omissus capable of being supplied.
3. Lord Woolf held that an interim payment order was a judgment within clause 7 of the Uninsured Drivers Agreement. If the judgment debtor failed to satisfy the order within seven days of the execution date, the Bureau’s obligation to satisfy it arose, although the Bureau was not itself a party to the judgment.
4. The court retained discretion to consider the Bureau’s legitimate interests. If the Bureau could properly show that it had no obligation under the Agreement, for example because it had not been notified of the claim, an interim payment would ordinarily serve no useful purpose.

An interim payment of £50,000 was ordered against the first defendant, payable into the Court of Protection within 21 days. The appeal was allowed with costs here and below.

1. Court of Appeal (Civil Division): allowed the appeal, ordered the first defendant to make an interim payment of £50,000, and awarded costs. [1998] EWCA Civ 1085.
2. Queen’s Bench Division: Morland J adopted the Motor Insurers’ Bureau’s construction of the amended interim-payment rule and declined to order the requested payment.