Motor Insurers Bureau of Ireland -v- Hanley, [2006] IEHC 405 (2006)

Docket Number:2004 528 S
Party Name:Motor Insurers Bureau of Ireland, Hanley
Judge:Peart J.
 
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THE HIGH COURT Record Number: 2004 No. 528 SBetween:Motor Insurers Bureau of IrelandPlaintiffAndJohn HanleyDefendantJudgment of Mr Justice Michael Peart delivered on the 18th day of December 2006:Introduction:These proceedings arise out of a motor accident which occurred on the 27th June 1996. On that occasion the defendant was driving a vehicle when uninsured, and a third party sustained personal injuries and other losses. On the 15th July 1997, the third party issued proceedings in the High Court against the defendant, John Hanley and the Motor Insurers' Bureau of Ireland ("the Bureau"), seeking damages for those injuries and losses. A firm of solicitors came on record on behalf of both defendants on the 17th July 1998. The Bureau in due course settled those proceedings and paid over to the third party a sum of 127,170.07 pursuant to its obligations under the MIBI Agreement. The Bureau submits that this was not a voluntary payment, but was made pursuant to its legal obligations.On the 15th September 1997 the defendant, John Hanley, signed a Mandate Form which states as follows:"(A) I consent to the Motor Insurers' Bureau of Ireland taking over and conducting in my name the defence of any claim or action for damages for personal injury made against me arising out of an accident which occurred on the day of 19 (sic)(B) The Motor Insurers' Bureau of Ireland will be entitled to make such admissions on my behalf as appear to it to be necessary in the conduct of the proceedings and I undertake to give them all possible assistance and information in the handling of the claim and conduct of proceedings.(C) In the event of my having a claim for contribution against any person or party I authorise the Motor Insurers' Bureau of Ireland to prosecute such claim in my name for its benefit.(D) [DELETED -- see below](E) I understand that the Motor Insurers Bureau of Ireland will where necessary and at its own expense instruct solicitors to act on my behalf."This Mandate Form has been signed by the defendant, but before signing same he deleted paragraph (D) which reads:"I hereby accept liability for all sums paid by Motor Insurers Bureau of Ireland in respect of any settlements effected by it or on foot of any award of judgment made arising from the said accident."The Bureau nevertheless instituted summary summons proceedings on the 30th April 2004 which contains a Special Indorsement of Claim which states:1. The plaintiff indemnifies uninsured drivers pursuant to an agreement dated the 21st December 1988 and made between the Minister of the Environment of the one part and the Motor Insurers Bureau of Ireland of the other part. The plaintiff has offices at 39, Molesworth Street, Dublin 2.2. Pursuant to the said agreement ands as a consequence of the defendant executing a mandate the plaintiff agreed in the case of an accident occurring on or about the 27th June 1996 to be liable for the payment of compensation to Peter O'Riordan the victim of this road traffic accident involving the defendant who was an uninsured driver.3. The plaintiff's claim is for 127,170.07 being money due and owing by the defendant to the plaintiff under and by virtue of the abovementioned mandate agreement whereby the defendant in consideration of the plaintiff paying over to Royal & Sun Alliance Insurance PLC the said sum of 98,921.62 on or about the 15th May 2003 and the said sum of 28,248.45 on or about the 25th September 2003, he authorised the plaintiff to deal with the defence of the above named Peter O'Riordan's claim against him. In breach of agreement the defendant refuses to repay the said monies.4. Further or in the alternative on or about the 15th May 2003 the plaintiff paid out 98,921.62 and on or about the 25th September 2003 the plaintiff paid out 28,248.45 for the benefit of and on behalf of the defendant and at his request, implied or otherwise.ParticularsThe plaintiff had indemnified the defendant in an action arising out of a road traffic accident in which the defendant was uninsured, in the sum of 127,170.07. This indemnification was granted not only in consideration of an express mandate signed by the defendant dated the 15th September 1997 but in addition as a consequence of the plaintiff's obligations under the said agreement dated the 21st December 1988.5. In the premises, the defendant became and is liable to repay the said sum to the plaintiff by reason of an implied or express subrogation or otherwise under the principles of recoupment/restitution.Following the service of these proceedings on the defendant on the 22nd July 2004, an appearance was entered by the defendant's solicitors. Thereafter, as required by Order 37 of the Rules of the Superior Courts, 1986 ("RSC") the plaintiff issued and served a Notice of Motion dated 1st June 2005 seeking liberty to enter final judgment for the amount of 127,170.07, together with interest and costs. That motion came before the Master of the High Court first of all on the return date the 4th October 2005. It seems to have been adjourned until at least the 17th November 2005 since there is a letter dated 14th November 2005 from the defendant's solicitors to the plaintiff's solicitors in which they state:"Further to recent correspondence herein please note we will not be contesting your application on Thursday 17th November 2005. We will not be in attendance."Nevertheless, according to the affidavit grounding the present motion, it appears that the Master of the High Court took the view that the claim was not one which could be the subject of a summary summons, and directed that the matter be listed before the President of the High court. On the 30th January 2006 the learned President directed that the present motion be issued and that the defendant be put on notice thereof. The present motion was issued by the plaintiff on the 15th February 2006 and seeks the following reliefs:"1. A declaration that the plaintiff is entitled to pursue its action herein as against the defendant by way of Order 2 of the Rules of the Superior Courts, 1986.2. Directions as to the joinder of the Minister for Transport as a notice party.3. Such further and other order or directions as this Honourable Court seems just.4. Costs."It is the first of these reliefs which really needs to be addressed in this judgment.The Court has been informed by Brian O'Moore SC for the plaintiff that it has been agreed between the plaintiff and the defendant that whatever the result of this present application, the Bureau will be discharging the defendant's costs of this application, since it is a matter which the Bureau is anxious to have clarified by the Courts. Henry Hickey SC has appeared on the defendant's behalf.An averment in the affidavit of John Casey sworn for the purpose of grounding the present motion states:"In addition this affidavit sets out the fact that Mr Hanley signed a mandate but on legal advice of Holmes O'Malley Sexton deleted the part that would make Mr Hanley contractually liable to the MIBI for the payment out of monies to Mr O'Riordan. I say and believe and I am advised that notwithstanding this deletion the plaintiff herein is still liable to pay out the monies on behalf of Mr Hanley and this duty is as set out in the relevant European Directives having direct effect in this jurisdictionÂ…"In the affidavit which grounded the Notice of Motion before the Master of the High Court, Brenda Kearns on the plaintiff's behalf averred at paragraph 6 of her affidavit as follows:"6. I say that as can be seen from the mandate form, Mr Hanley deleted Paragraph D which I have been advised by Counsel means that the plaintiff is not entitled to claim Judgment from any contractual obligation owed by the defendant herein to the plaintiff arising out of paragraph D which had been deleted as aforesaid. Judgment is therefore sought for the liquidated sum claimed on an action for recoupment instead as claimed in paragraph 5 of the Special Endorsement of Claim."I refer to these passages since Mr Hickey places reliance upon them when he submits that it is clear that the claim made herein is not a claim under a "contract, express or implied" and therefore outside the scope of the type of claims which are permitted to be commenced by way of summary summons under Order 2 RSC. The remainder of the affidavits do not need to be set out in detail. I will if necessary refer to other passages as required, but in general they set out some factual background relating to the claim being made, the settlement of the claim of Mr O'Riordan, and the basis on which the plaintiff feels that the defendant is liable to recoup to the plaintiff the sum claimed, and its belief that the settlement achieved in respect of the claim of Mr O'Riordan was a good settlement from the Bureau's point of view given the potential for the claim to achieve a higher amount of damages, including social damages if it went to trial. It is submitted by the plaintiff that it is without doubt that the Mandate Form by which the defendant authorised the Bureau to take over and defend the claim being made against him included an authority to settle the claim ahead of any trial if it was considered advantageous.Submissions:The defendant submits that although the sum claimed by the plaintiff is a liquidated sum, it is not claimed or due on foot of any contract, express or implied, since paragraph (D) has been deleted, and that in so far as it remains a claim for recoupment of a sum paid out to the injured third party, it is a claim outside Order 2 RSC and ought to be commenced by way of Plenary Summons. In his written submissions, Mr Hickey has submitted that in summary summons proceedings, the Court can on affidavit evidence alone grant judgment on the basis of affidavit evidence alone provided that it is satisfied that there is no bona fide defence to the claim, and that the defendant is denied the opportunity to put the plaintiff on full proof of each and every aspect of...

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