McCall v Poulton & Ors

On an appeal against an order referring questions to the ECJ, the appellate court must consider afresh whether a reference is necessary in the circumstances existing at the appeal. A reference is appropriate where the EU-law issues are genuinely arguable, materially affect liability and have wider importance. The court need not decide the merits in advance.

It was appropriate to refer whether the Council Directive 84/5/EEC required the Marleasing interpretive principle to apply to a contractual uninsured-drivers agreement, despite White v White [2001] 1 WLR 481, because later ECJ authority made the issue arguable. Guidance was also required on whether the MIB was an emanation of the state under Foster v British Gas [1990] ECR I-3313.

A negligent collision damaged the claimant’s taxi. He hired a replacement vehicle from Helphire on credit and received post-accident cover from Angel for legal costs and unrecovered hire charges. The driver was uninsured. The Motor Insurers’ Bureau paid for physical injury and other losses but relied on clauses 6(1)(c) and 17(1) of the Uninsured Drivers Agreement to exclude hire charges, which were claimed for Angel’s benefit by subrogation.

On 22 August 2007, His Honour Judge Mitchell referred questions to the ECJ concerning the construction of the Directive, the Marleasing principle, direct effect and whether the MIB was an emanation of the state. The MIB appealed. By the appeal, Angel had paid the hire charges, removing the factual objection based on subrogation. The issue was whether a reference remained necessary to decide the proceedings.

The appeal was dismissed. The Court of Appeal had to assess afresh, in the circumstances existing before it, whether a reference was necessary to enable judgment to be given. Angel’s payment of the hire charges meant that the earlier objection concerning subrogation was no longer live.

1. The question whether the Marleasing principle extends beyond legislation to a private contract entered into to fulfil obligations under a directive was genuinely arguable. White v White [2001] 1 WLR 481 supported the view that the principle did not apply to the MIB agreement. However, the later ECJ decisions in Evans v MIB [2003] ECR I-4447 and Pfeiffer v Deutches Rotes Kreuz [2004] ECR I-8835 arguably indicated a wider approach. The fact that Byrne v MIB [2008] 2 WLR 234 had not considered Pfeiffer reinforced the need for guidance.
2. The ECJ’s guidance in Foster v British Gas [1990] ECR I-3313 identified the relevant categories of bodies against which a directive may have direct effect. The national court ordinarily decides whether the particular body falls within those categories. The formulation was a starting point, but its application was not sufficiently clear in this context.
3. The different conclusions concerning the MIB and the Irish equivalent MIBI, including the decision in Farrell v Whitty and the MIBI [2008] IEHC 124, demonstrated that further ECJ guidance would be valuable. The questions concerned the MIB’s liability in numerous cases and were of general importance. It was therefore appropriate to refer them. The precise terms of the reference and order were left for further argument.

• Court of Appeal (Civil Division): dismissed the MIB’s appeal against the order for a reference and held that the questions should be referred, with the precise form of the order to be settled. [2008] EWCA Civ 1313
• Canterbury County Court: on 22 August 2007, His Honour Judge Mitchell referred questions to the ECJ and granted permission to appeal.