Terence Galvin (plaintiff/ respondent) v John Dennehy and Kieran Dennehy (first and second defendants) and the MIBI (third defendant/appellant).
MIBI - Road traffic - Appeal - Time limit for giving notice to MIBI of intention to claim for property damage - Question as to whom notice must be given - Motor Insurers Bureau of Ireland agreement dated 21 December 1988, Clause 3(1).
The High Court (before Mr Justice Brian McCracken): judgment delivered 18 March 2005.
For a claim in relation to damage to property to succeed and the MIBI to be liable to pay on that claim, a claimant must give the notice in writing referred to in clause 3(1) of the MIBI Principal Agreement 1998 to the MIBI. Such notice of intention to claim compensation for damage to property must be in writing and given not later than one year from the date of the accident giving rise to the damage to property.
It is not sufficient to give such notice to any other insurer against whom there may possibly be a claim.
The High Court (Mr Justice McCracken) so held in allowing the appellants' appeal.
John Punch SC and Pádraig Quinn BL for the appellant; Daniel O'Keeffe SC and John Wilde Crosbie BL for the respondent.
Mr Justice McCracken began his judgment by outlining the facts giving rise to the appeal.
On December 8th, 1996, the plaintiff was driving his car on a road near Newmarket-on-Fergus, Co Clare. He was struck from behind by another vehicle, lost control of his car and ended up almost on top of a wall at the side of the road. The vehicle which struck him did not stop but, shortly afterwards, another vehicle owned by the first-named defendant was found in a lay-by with damage to the front of it consistent with having struck the plaintiff from behind. It was now accepted by the appellant that this was so.
The plaintiff initially believed that he had been struck by the first defendant's car and that it had been driven by the second defendant, who was the son of the first defendant. He duly submitted a claim to the first-named defendant's insurers on this basis.
The first-named defendant maintained from an early stage that this was not so and that the car had in fact been stolen. Nevertheless the claim was investigated by his insurers and the plaintiff's vehicle was duly inspected by an assessor on behalf of those insurers. On January 29th, 1997, the insurers wrote giving a without-prejudice valuation of the vehicle on the basis that it was a total loss.
On May 30th, 1997, the plaintiff's solicitors wrote to the insurers in the knowledge that the first-named defendant claimed the vehicle was stolen and sought to ascertain whether the insurers were indemnifying the first defendant and also whether they were accepting liability.
This was apparently followed by several telephone calls to the insurer's Galway office but it was not until May 18th, 1998, that the first defendant's insurers repudiated liability on the basis that a driver had not been identified.
Immediately following this repudiation, on May 21st, 1998, the plaintiff's solicitors wrote to the third defendants who were the appellants in this appeal by registered post giving notice that they intended to issue proceedings against the appellant.
On December 3rd, 1999, proceedings were issued in the Circuit Court against all three defendants.
For various reasons the matter proceeded with considerable delay, but ultimately was heard before Judge Terence O'Sullivan in the Circuit Court. The proceedings were dismissed as against the first and second-named defendants and there was a decree for €34,645 against the appellant.
This sum was made up of €30,000 in respect of general damages, €150 in special damages for medical treatment and for towing charges and €4,495 for damage to the plaintiff's vehicle.
Mr Justice McCracken said that at the hearing before him on March 3rd, 2005, in Ennis, he reduced the general damages to €20,000 and confirmed the figure of €150 but reserved judgment in relation to the damage to the vehicle. The sum of €4,495 was an agreed sum and is not in issue and the only issue before the court was the liability of the appellant under the terms of the Motor Insurers Bureau of Ireland agreement dated December 21st, 1988, (herein called "the agreement") to compensate in respect of such damage. The clause at issue in the agreement was clause 3(1) which reads as follows: -
"The following shall be conditions precedent to MIB of I's liability: that
(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."
The plaintiff conceded that neither he nor his legal representative gave notice in writing by registered post to the appellant of his intention to seek compensation in respect of the damage to the car within the one-year period referred to at clause 3(1). However, he pointed out that the first defendant's insurers had not repudiated until after the one-year period had expired.
He further pointed out that notice was given to the apparent insurers of the vehicle and they were one of the insurers who entered into the original agreement which led to the formation of the appellant and was what is referred to as "the Principal Agreement" in the agreement.
They argued that clause 3(1) did not specify to whom the requisite notice must be given. They also pointed to clause 3(6) which was a further condition precedent, and reads as follows: -
"Notice of proceedings shall be given by the claimant 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 use 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."
The plaintiff maintained that notice given to the original insurers would have been sufficient under this clause and say that it should be applied by analogy to the notice under clause 3(1). The plaintiff further sought relief on the case of White v White [ 2001]1 WLR 481 as authority that there should be a purposive construction given to the agreement. That case was concerned with the United Kingdom equivalent of the agreement, both of which derive from Council Directive 84/5/EEC.
Mr Justice McCracken said there was no doubt that that case was authority for the proposition that the agreement must be construed in such a way as to carry out and implement the provisions of the directive. However, the purpose of the directive was very general, and was simply to ensure, in the words of article 3(1) of the original council directive, namely 72/166/EEC, that: -
"Each member state shall, subject to article 4, take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance. The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of these measures."
Mr Justice McCracken said that accordingly, the specifics as to how each member state will ensure that there is insurance is a matter for each individual member state. Questions such as notification of claims or time limits are not dealt with at all in the directive. Mr Justice McCracken said he was satisfied that it was perfectly lawful under the terms of the directive for the agreement to specify time limits within which claims should be made and time limits within which notification of proceedings should be given.
Mr Justice McCracken said that in any event, he thought that there could be no ambiguity in the construction of the agreement. Certainly clause 3(1) does not specify to whom notice of intention to seek compensation should be given, but it does refer to the intention of "the claimant" to seek such compensation.
Clause 2 of the agreement refers to "the claimant" as a person claiming compensation and provides that such person may seek to enforce the 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"
Mr Justice McCracken said that while this apparently allows a claimant either to claim directly against the appellant and negotiate a settlement with it or issue proceedings citing the appellant as a co-defendant, nevertheless the preconditions in clause 3 seem to make it quite clear that there are two steps involved.
Under clause 3(1) there must be a notice of intention to seek compensation and under clause 3(6) there must be a notice of proceedings if proceedings are going to be issued. It is clear that compensation may be awarded by the appellant without any proceedings being issued, provided there has been the requisite notice of intention to seek compensation given.
Mr Justice McCracken said that it seemed to him that these two provisions coincide with clause 2(1) and (2), the provision of clause 3(1) coinciding with those of clause 2(1). Under clause 2(1) it is absolutely clear that the claim for compensation must be made to the appellant, and Mr Justice McCracken said he failed to see how it could be seriously argued that the notice of the similar claimed compensation provided for in clause 3(1) could be construed as having to be given to anybody other than the appellant.
Mr Justice McCracken said he accepted that the plaintiff in the present case was put in a very unfortunate position by the inaction of the first defendant's insurers in determining whether they would repudiate or not, but it was a fact in this case that the plaintiff was aware from a very early stage that the first defendant strongly contended that the car was not driven by him or his son, but had been stolen.
Under those circumstances it was clear that if that contention was correct, the only claim that could be made would be against the appellant, and it was always open to the plaintiff to make such a claim within the 12-month period, notwithstanding that there was also an alternative claim being made against the first defendant's insurer.
Accordingly, the only possible interpretation of clause 3(1) of the agreement was that in relation to damage to property, a claimant must give the notice in writing referred to therein to the appellant and it was not sufficient to give such notice to any other insurer against whom there may possibly be a claim. Accordingly, as such notice was not given in the present case, the appellant was not liable to the plaintiff in respect of the damage to the motor vehicle itself.
Solicitors: Michael Houlihan & Partners (Ennis) for the appellant; Niall McDonagh & Co (Ennis) for the respondent.
P.J.Breen, barrister