Mr Ioan Daniel Nemeti and Others v Sabre Insurance Company Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Cotter QC,His Honour Judge Cotter Q.C. |
| Judgment Date | 23 November 2012 |
| Neutral Citation | [2012] EWHC 3355 (QB) |
| Docket Number | Case No: QB/2012/0387 |
| Court | Queen's Bench Division |
| Date | 23 November 2012 |
[2012] EWHC 3355 (QB)
His Honour Judge Cotter Q.C.
Sitting as a Judge of the High Court
Case No: QB/2012/0387
HQ10X04662
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
On Appeal from Master Eastman
Royal Courts of Justice
Strand, London, WC2A 2LL
Philip Mead (instructed by Levenes) for the Respondents
Howard Palmer Q.C. and Marie Louise Kinsler (instructed by Weightmans) for the Appellant
Hearing date: 19 November 2012
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is an appeal against the order of Master Eastman made on 4 th July 2012. Permission to appeal was granted by Mr Justice Cranston on 10 th October 2012. At the heart of the appeal is the issue of the scope of the Court's power to permit an amendment allowing the substitution of a party outside the relevant limitation period. Specifically, the Appellant, Sabre Insurance Company Limited ("Sabre") appeals from the order of the Master that the Claimants have permission to amend the Particulars of Claim to substitute the Estate of Ioan Bura ("the Estate") in place of Sabre.
History of proceedings
This claim arises out of a road traffic accident which occurred on 29 th December 2007 in Romania. The Claimants were passengers in a motor vehicle registration no AJ56WJM driven by Ioan Bura, who lost control of the car and hit the concrete base of a bridge. Tragically he died in the accident. The Claimants are Romanian nationals as was Ioan Bura. Sabre provided motor insurance to Mr Chirila Bura, the father of Ioan Bura, in respect of the motor vehicle. Ioan Bura was driving whilst uninsured at the time of the accident.
On 8 th December 2010 the Claimants issued a claim form issued against Sabre referring to the accident, that it resulted from the negligence of the driver (unnamed) and that as Sabre was the insurer of the vehicle there was a duty to indemnify their insured by virtue of section 3 of the European Communities (Rights against Insurers) Regulations 2002. Particulars of Claim relying on this direct right of action were served on 10 th February 2011. These set out the facts of the accident, that it was caused by the negligent driving of Mr Iona Daniel Bura, and at paragraph 4 that
"The Defendant was at all material times the insurer of the vehicle registration number AJ56WJM and consequently has a duty to indemnify their insured for negligent acts or omissions pursuant to section 3 of the European ( Right against Insurers) Regulations 2002, and is directly liable to the Claimants for the negligence of their insured."
On 27 th April 2011 a Defence was served denying that the Claim Form and/or Particulars of Claim disclosed reasonable grounds for the bringing of a claim. There was reference to an obvious problem with the claim as pleaded arising by virtue of the fact that the accident occurred in Romania whereas the Regulations only apply to an accident occurring within the United Kingdom. Further it was pleaded that the driver Ioan Bura, was not the insured party.
On 7 th June 2011 the Claimants made an application for permission to join the Estate of Ioan Bura as Second Defendant. By way of response on 13 th July 2011 the Defendant made an application to strike out the claim.
By a letter dated 28 th May 2012 from the Claimants' solicitors it was conceded that the Claimants had no right of action against Sabre, and it was stated that the Claimants intended to continue with their application to amend as an application to substitute the Estate of Ioan Bura as Defendant.
In due course the Claimants sent draft Amended Particulars of Claim to the Defendant. Save for the substitution of the Estate the only amendment was to delete paragraph 4 to which I have referred
On 29 th June 2012 there was a further application by Claimants for permission to substitute the Estate in place of Sabre.
It was common ground before the Master that the claim as originally formulated was indeed fatally flawed. Regulation 3 of the European Communities (Rights against Insurers) Regulations 2002 provides that an insurer "shall be directly liable" to an entitled party (i.e. any resident of a Member State) if certain conditions are fulfilled:
i) The entitled party has a cause of action arising out of an "accident", as defined. This condition was not fulfilled since 'accident' is defined by Regulation 2(1) as meaning an accident on a road or other public place in the United Kingdom, and the Claimants' accident occurred in Romania; and
ii) The entitled party has a cause of action against "an insured person in tort", defined by ss. 2(1) and 2(3) as a person insured under a policy of insurance. This condition was not fulfilled since the Claimants' cause of action was against Ioan Bura, who was not insured by Sabre. Further, the direct liability created upon the insurer toward the entitled party is a liability equivalent to "the extent that he [the insurer] is liable to the insured person". The extent of Sabre's liability under the policy of insurance is nil, since Ioan Bura was not authorised to drive under the policy and was not entitled to any indemnity under it.
The applications heard by Master Eastman on 4 th July 2012 were Sabre's application of 13 th July 2011 to strike out the claim and the Claimants' application to substitute the Estate of Ioan Bura in place of the original Defendant, Sabre, issued on 29 th June 2012, and to amend the content of the Particulars of Claim as set out in the draft served. The Claimants' original application dated 7 th June 2011 to amend by adding the Estate as Second Defendant, was effectively abandoned.
Master Eastman was assisted by what he referred to as "compendious and extremely helpful" skeleton arguments produced by both Counsel. By agreement he dealt with the application to substitute first.
He stated
"Miss Kinsler at the heart of her skeleton argument.. essentially reduces the issue to this. She says the original claim was brought pursuant to a statutory entitlement under the 2002 regulations. I would only have a discretion to allow the substitution if, pursuant to either [CPR] 19.5(3) or indeed, section 35(5) and (6), I was satisfied that, effectively, I would be carrying on the instant claim."
And
"Miss Kinsler says, well, the claim in this case was a claim arising out of statute and, therefore, to effectively instigate a claim for personal injury based in tort, which is what the substitution would do, is not the same as a claim for damages for personal injuries arising out of a road traffic accident, it is not the same claim. Therefore the point does not arise as they are totally different claims. That is her point. Mr Mead says, well, actually they are not because in fact the claim essentially is "the remedy sought" and the remedy is damages for a personal injury. I am satisfied that Mr Mead's interpretation of the circumstances in the one to be preferred. This is, essentially a claim for damages for personal injury."
And
"Reading Regulation 3 it is quite clear to me that whilst [regulation] 3(2) says you can go directly against the insurer, a proper interpretation of the whole of those regulations makes it clear that the underlying cause of action here is the liability of the insurer for their insured. That is what defines the liability of the insurer. Their insured is the person responsible for the cause of action. As Mr Mead says, the factors are the same, the measure of damages will all be the same, the liability follows in the same way, the parties will be the same and the insurer will be the same. In those circumstances I am quite satisfied that the claim in this case is a claim for damages for personal injuries, i.e. a cause of action against and insured person on tort arising out of an accident. Taking all those facts into account, the question which Ms Kinsler poses… is it the case that the direct claim brought by the Claimants cannot be maintained unless the estate of Mr Bura is substituted for Sabre? The answer is clearly yes. The court therefore has the power to order substitution pursuant to s 35(6) of the Limitation Act and CPR 19.5(3)(b)"
As a result of this reasoning Master Eastman ordered that:
"1. The Claimants' application to amend the Particulars of Claim to substitute the Estate of Ioan Daniel Bura for Sabre Insurance Company Limited dated 7 June 2011 be allowed"
2. The Amended Particulars of Claim be filed and served by 4pm on 13 July 2012."
There was no order was made with respect to Sabre's application to strike out, save that Sabre had to pay the costs of it.
Sabre appeals the order primarily on the basis that the Master was wrong in law in that he had no discretion to make the order that he did. As a secondary argument it is said that if the Master did have the power that was wrong in the exercise of his discretion. The master did not expressly set out that he had directed his mind to the exercise of discretion stating only that it was "the only proper and appropriate course". He did make reference in what he described as "ancillary comments" to any course other than substitution being unattractive and "be seen to do nothing more than promote satellite litigation"
Before I turn to the submissions before me it is necessary to set out the following matters that were not in dispute between the parties and also the relevant statutory provisions.
The following matters were...
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