McCall v Poulton & Ors

The Court of Appeal dismissed the appellant's challenge to the county court judge's decision to refer questions to the European Court of Justice. Key legal questions were whether the Marleasing interpretative principle applies to a private contract entered into to discharge a Member State's obligations under Council Directive 84/5/EEC (Article 1.4), whether Article 1.4 is directly effective, and whether the Motor Insurers' Bureau (MIB) is an emanation of the State for the purposes of direct effect. The court concluded these issues were genuinely arguable in the applicant's favour and of general importance; accordingly it was necessary and appropriate to refer questions to the ECJ.

Material grounds for that decision included (i) the existence of a real tension between national authority decisions (notably White v White and Byrne) and later ECJ authority (notably Evans and Pfeiffer) on the reach of the Marleasing principle; (ii) conflicting judicial treatment in other member states on whether a body such as the MIB is an emanation of the State (for example Farrell and subsequent national decisions); and (iii) the fact that the resolution of those points would be dispositive not only of the present case but of numerous similar cases. The court therefore declined to disturb the judge's reference and ordered argument on the form of the reference.

Background and parties. The claimant, Mr McCall, a blameless victim of a road traffic accident caused by Mr Poulton, hired a replacement vehicle from Helphire on credit and obtained post-accident cover from Angel Assistance which covered legal costs and Helphire's hire charges if not recovered within the credit period. The Motor Insurers' Bureau (MIB) compensates victims of uninsured drivers pursuant to Article 1.4 of Council Directive 84/5/EEC and the Uninsured Drivers Agreement between the MIB and the UK Secretary of State. Angel paid the hire charges under the policy and was subrogated to any recovery.

Nature of the claim and relief sought. Mr McCall sued Mr Poulton for damages including hire charges. The MIB had compensated other losses but refused to pay the hire charges relying on clauses 6(1)(c) and 17(1) of the Uninsured Drivers Agreement which, in summary, excluded liability to persons other than victims and permitted deductions for compensation received from insurers or other sources. Helphire and Angel sought to be joined and applied for questions to be referred to the European Court of Justice concerning the construction and direct effect of the Directive and the status of the MIB; MIB resisted.

Issues framed.

• Whether the Marleasing principle (interpretation of national law in the light of a directive) applies to a private agreement entered into by a Member State to discharge its obligations under a directive, such as the Uninsured Drivers Agreement;
• Whether Article 1.4 of Council Directive 84/5/EEC is directly effective so as to give rise to a direct claim against the MIB;
• Whether the MIB is an emanation of the State for the purposes of direct effect.

Court's reasoning. The court considered the county court judge's reasoning and the parties' submissions. On the Marleasing point the Court of Appeal reviewed the House of Lords decision in White v White, which held that Marleasing does not apply to private agreements, but noted later ECJ authorities (notably Evans and Pfeiffer) which arguably extend or clarify the Marleasing principle when domestic measures, including agreements relied on to discharge a State's directive obligations, are in issue. On the emanation/direct effect point the court reviewed Foster and later ECJ and national decisions, observed conflicting treatments (including Byrne v MIB where the national judge found MIB was not an emanation and the Irish decisions in Farrell where the MIBI was found to be assimilable to the State), and concluded that the guidance was not so uniform as to render a reference pointless. Given the general importance of the questions, the possibility that ECJ guidance would be dispositive in multiple cases, and that the issues were genuinely arguable, the Court dismissed the appeal and confirmed that the questions should be referred to the ECJ.

Procedural posture. This was an appeal from a decision of His Honour Judge Mitchell in Canterbury County Court (4TN02981). The judge had granted permission to appeal and originally ordered the reference; the Court of Appeal reviewed that decision and dismissed the appeal but ordered further consideration of the form of the reference.

The appeal was dismissed. The Court of Appeal agreed with the county court judge that the questions of (i) whether the Marleasing principle applies to a private contract entered into to discharge a Member State's obligations under Council Directive 84/5/EEC, (ii) whether Article 1.4 of that Directive is directly effective, and (iii) whether the MIB is an emanation of the State, were genuinely arguable, of wider importance and likely to be dispositive in other proceedings; accordingly it was necessary to refer those questions to the European Court of Justice.

On appeal from Canterbury County Court (His Honour Judge Mitchell, 4TN02981). The county court had ordered a reference to the European Court of Justice; permission to appeal was granted and the Court of Appeal dismissed the appeal but ordered the matter of the form of the reference to be addressed.