Gurtner v Circuit and Another

Court of Appeal

14 December 1967

[1964 G. No. 1503]

[1968] 2 Q.B. 587
Lord Denning M.R., Diplock and Salmon L.JJ.

1967 Nov. 21, 22; Dec. 14

Road Traffic—Third party insurance—Motor Insurers' Bureau—Joinder as party to

proceedings—Action by third party against assured motor cyclist—Motor cyclist's
whereabouts and name of insurers unknown—Application by bureau to be added as
defendants—Bureau's agreement with Minister to satisfy unsatisfied judgment debts—
Whether jurisdiction to add bureau as defendants—Road Traffic Act, 1960 (8 & 9 Eliz. 2,
c. 16), s. 207 (3)—R.S.C.(Rev. 1965) (S.I. 1965, No. 1776), Ord. 15, r. 6.

Practice—Parties—Joinder—Interest in matters in dispute—Agreement with Minister to

satisfy unsatisfied judgments obtained by third parties—Third party's action against
assured motor cyclist—Motor cyclist's whereabouts and name of insurers unknown—
Application by bureau to be added as defendants—Whether bureau "a person ... whose
presence ... necessary to ensure ... all matters in dispute effectually and completely
adjudicated upon"—Road Traffic Act, 1960, s. 207 (3)—R.S.C. (Rev. 1965) Ord. 15, r.6.

In June, 1961, the plaintiff pedestrian was injured by a motorcycle driven by the
defendant. The defendant gave his name and address and produced his certificate of
insurance to the police but the police records did not include the name of the defendant's
insurers. In June, 1964, the plaintiff issued a writ claiming damages for personal injuries
caused by the defendant's negligent driving but the writ was never served on the
defendant as he had emigrated to Canada in 1962 and could not be traced. The writ was
renewed on three occasions and the third order renewed the writ until September, 1967.
In November, 1965, the plaintiff's solicitors informed the Motor Insurers' Bureau of the
plaintiff's claim and asked their help in tracing the defendant's insurers. The bureau asked
an insurance company to act on their behalf but the insurance company was also
unsuccessful in tracing the defendant or his insurers. In June, 1967, the plaintiff
successfully applied for an order for substituted service of the writ on the defendant at the
offices of the insurance company. The bureau then applied to be added as defendants to
the plaintiff's action, under R.S.C. Ord. 15, r. 6 (2) (b),1 as they might be liable under the
terms of their *588 agreement with the Minister of Transport dated July 17, 1946, to
satisfy any damages awarded to the plaintiff; they also desired to counterclaim for a
declaration that as the plaintiff had not complied with clause 5 (1) (A) of their agreement
with the Minister, which required that a plaintiff should give notice of his action against
an uninsured motorist within 21 days after the commencement of his proceedings, they
were relieved from their liability to satisfy any damages awarded to the plaintiff against
the defendant. They also applied to have the orders renewing the writ, the order for
substituted service and the service of the writ set aside. Master Ritchie ordered that they
should be added as defendants to the action on their undertaking to satisfy any damages
awarded to the plaintiff in respect of the defendant's negligence but without prejudice to
their being able to raise any defence on the question of their liability and he set aside the
orders renewing the writ, the order for substituted service and the service of the writ. The
plaintiff successfully appealed to the judge who set aside the master's orders. The bureau
appealed:-

Held:

(1) that, where the determination of an action between two parties would directly affect a
third person's legal rights or his pecuniary interest, the courts had a discretion, under
R.S.C. Ord. 15, r. 6 (2), to order the third person to be added as a party to the action on
such terms as the court considered desirable so that all matters in dispute could be
"effectually and completely determined and adjudicated upon"; that, as the bureau had an
obligation to the Minister of Transport to satisfy all unpaid damages awarded to a
plaintiff in an action against an insured motorist, which obligation the Minister could
enforce by an action for specific performance, the bureau had a legal and pecuniary
interest in ensuring that all proper defences were raised in the plaintiff's action.
Accordingly, justice required that the bureau be added as defendants to the plaintiff's
action and the court would exercise its discretion, under R.S.C. Ord. 15, r. 6 (2), and add
the bureau as defendants to the action on their undertaking to pay all damages awarded to
the plaintiff.

Beswick v. Beswick [1968] A.C. 58 ; [1967] 3 W.L.R. 932; [1967] 2 All E.R. 1197, H.L.
(E.), followed.

Byrne v. Brown (1889) 22 Q.B.D. 657; 5 T.L.R. 255, C.A., considered.

Dicta in Amon v. Raphael Tuck & Sons Ltd. [1956] 1 Q.B. 357; [1956] 2 W.L.R. 372;
[1956] 1 All E.R. 273, and Fire Auto and Marine Insurance Ltd. v. Greene [1964] 2 Q.B.
687; [1964] 3 W.L.R. 319; [1964] 2 All E.R. 761, criticised.

(2) That since there was strong prima facie evidence that the defendant was insured, the
bureau should not be allowed to counterclaim in the action for a declaration that they
were relieved from liability to satisfy any damages awarded to the plaintiff because of his
failure to comply with the condition precedent in clause 5 (1) (A) of their agreement with
the Minister of Transport.
(3) That the orders renewing the writ should not be set aside as in the circumstances they
had been properly made and the *589 plaintiff was entitled to continue his action (post,
pp. 597D-E, 604F - 605C).

(4) That the order for substituted service of the writ on the defendant at the address of the
insurance company, who were not the defendant's insurers, was improperly made but, in
all the circumstances of the case, to set aside the order for substituted service and the
service of the writ would achieve no useful purpose and for the plaintiff to have to apply
to the court for a further order for substituted service would add unnecessarily to the costs
of the action (post, pp. 596G - 597C, 605D-G).

Per Diplock L.J. In a case such as this, which must be rare, where there is strong prima
facie evidence that the defendant is insured but it is not possible to ascertain the identity
of his insurers an order for substituted service of the writ could properly be made by
serving it on the defendant at the address of the bureau (post, p. 605D-E).

APPEAL from Chapman J.

On June 29, 1961, the plaintiff, Frederick Gurtner, whilst crossing a road, was knocked
down and injured by a motor cycle driven by the defendant, John Christopher Circuit.
The defendant gave his name and address to a police officer and the address was 45
Alpine Avenue, Tolworth, Surrey. He subsequently showed to a police officer his
certificate of insurance issued by Lloyd's Motor Policies and that the officer noted the
certificate number but not the name of the syndicate. On June 26, 1964, the plaintiff's
solicitors issued a writ claiming damages for personal injuries caused to the plaintiff by
the defendant's negligent driving on June 29, 1961. The solicitors attempted to serve the
writ on June 24, 1965, and then learnt that the defendant had emigrated to Canada in
1962. On June 25, 1965, the writ was renewed until June 25, 1966.

The plaintiff instructed new solicitors and, in November, 1965, his solicitors wrote to the
Motor Insurers' Bureau informing them of the plaintiff's claim and seeking their help to
trace the defendant's insurers. The bureau asked the Royal Insurance Co. Ltd. to act for
them but neither the plaintiff nor the insurance company were able to trace the name of
the insurers or the whereabouts of the defendant. On June 23, 1966, the writ was renewed
until June 24, 1967, and, on June 15, 1967, it was renewed until September 14, 1967.

The plaintiff, acting in person, applied for an order of substituted service of the writ and
on June 22, 1967, Master Ritchie ordered that there should be substituted service of the
writ on the *590 defendant "at c/o The Royal Insurance Co. Ltd., 24/28 Lombard Street,
London, E.C.3."

The bureau applied by summons to be added as defendants to the plaintiff's action and to
have set aside the orders renewing the writ, the order for substituted service and the
service of the writ. The summons came before Master Ritchie, who, on July 14, 1967,
ordered that the bureau should be added as defendants to the action on their undertaking
to satisfy any damages awarded to the plaintiff in respect of the defendant's negligence
but without prejudice to their being able to raise any defence on the question of their
liability to satisfy any judgment debt. The summons was then adjourned until July 28,
1967, when the master ordered that the orders extending the validity of the writ, the order
for substituted service of the writ and the service of the writ be set aside.

On October 11, 1967, the plaintiff successfully appealed to Chapman J. who set aside the
orders made by Master Ritchie on July 14 and 28, 1967. The bureau appealed against the
judge's decision that the bureau should not be added as defendants, their ground of appeal
being that the order ought to be made under R.S.C., Ord. 15, r. 6 (2) (b), because the
obligation under their agreement with the Minister of Transport dated July 17, 1946,
imposed upon the bureau such duties, and gave the bureau such an interest in the
plaintiff's action, that the bureau was a necessary party to the action. Further grounds of
appeal were that there was no sufficient explanation or justification for the delay that had
occurred in issuing or serving the writ and that the service of the writ upon the Royal
Insurance Co. Ltd. ought to be set aside since there was no evidence to justify an order
for substituted service and the insurance company could neither inform the defendant of
the writ nor act on his behalf.

Ralph Gibson for the Motor Insurers' Bureau. The standard motor insurance policy has a
provision whereby the insurers have the right to continue legal proceedings on behalf of
their insured. The courts have recognised this right although an insurance company may
not proceed in its own name: see Windsor v. Chalcraft2 and Murfin v. Ashbridge and
Martin. 3 The bureau desires to continue this action as if they were the defendant's
insurance company. Their agreement with the Minister of Transport dated July 17, 1946,
is an agreement under which they have a moral but not a *591 legal obligation to
compensate a person injured in a motor accident. Unless the bureau are added as
defendants they have no locus standi and, in this case, judgment will be given by default
and the bureau can raise no question as to whether and to what extent the defendant is
liable to the plaintiff for negligent driving nor can they question the quantum of damages.
The bureau would also wish to raise the question whether the plaintiff is entitled to
expect the bureau to pay the damages awarded to him as he did not give the required
notice, under clause 5 (1) (A) of the agreement, to the bureau within 21 days from the
commencement of his action. The plaintiff must give that notice if the defendant was not
insured but, if he was insured, the bureau have no obligation to compensate the plaintiff
and all that the plaintiff can expect from the bureau is an ex gratia payment. This position
is not altered merely because the defendant cannot be traced.

The bureau's basic obligation under the agreement is to pay all unsatisfied judgments
within seven days against motorists who should have been covered by third party
insurance. If the bureau had a legal obligation to such plaintiffs then it would be
sufficient for them ta be added as defendants. Although their obligation to a plaintiff is
not a legal one, they could be forced to meet that moral obligation by an action for
specific performance by the Minister of Transport: see Beswick v. Beswick.4

The court may at any stage of proceedings join a person whose presence before the court
is necessary to ensure that all matters in dispute are effectively and completely
determined: see R.S.C. (Rev. 1965), Ord. 15, r. 6 (2). In Fire Auto and Marine Insurance
Ltd. v. Greene,5 John Stephenson J. adopted a narrower construction to the predecessor of
this rule than did Devlin J. in Amon v. Raphael Tuck & Sons Ltd. 6 The old rule's
wording was wider than the present one but under the new rule, adopting the construction
of Devlin J. in Amon's case, 7 the bureau can be added as defendants in these
proceedings. Lord Esher M.R. in Byrne v. Brown 8 gave a still wider construction to the
predecessor of that rule: see also Moser v. Marsden 9 and Dollfus Mieg et Compagnie S.
A. v. Bank of England, 10 where there was an analogous position to the present case. *592

The renewal of the writ should be set aside as the burden is on the plaintiff to show that
there is good reason why he has not served it on the defendant. The plaintiff has not given
reasons for his failure and he has further delayed the matter by his slowness in applying
for substituted service. The substituted service on the Royal Insurance Co. Ltd. should
also be set aside for that company has no interest in this action. If the order renewing the
writ is not to be set aside then a form of substituted service on the defendant will have to
be considered but, whatever the court decides, the bureau would appreciate an indication
that, in circumstances similar to the present case, it is not desirable that substituted
service should be effected by service of the writ on the nearest insurance company.

The plaintiff in person. The Motor Insurers' Bureau should neither be made a party to my
action nor be permitted to attempt to minimise or defeat my claim against the defendant
for the bureau was constituted to safeguard people like me who have been injured in a
motor accident by drivers who are not covered by insurance and, therefore, cannot pay
the damages awarded by the court. In this case I have only to satisfy the court that I am
not the guilty party to be awarded damages and the facts show that my claim has merit
and that I am not the guilty party.

Cur. adv. vult.

December 14, 1967. LORD DENNING M.R.

read the following judgment: On June 29, 1961, the plaintiff was walking across Robin
Hood Way on the Kingston By-pass. He was run down by a motor-cycle and severely
injured. His skull was fractured and he lost his memory. A police officer came up after
the accident and took down particulars. The motor-cyclist, the defendant, gave his name
and address as John Christopher Circuit of 45 Alpine Avenue, Tolworth, Surrey. His
machine was a 350 cc. "Royal Enfield" Bullet, VPG 816. The police officer took also the
names and addresses of three witnesses and noted down the statements made by them.
Within five days the defendant gave to the police the details of his insurance. It was
Certificate No. 381512 issued by Lloyd's Motor Policies. But the police did not take
down the name of the syndicate which had issued the certificate.

Some time later the injured plaintiff instructed solicitors, Beer & Co., to act for him.
They got particulars from the police, but they do not appear to have communicated with
the defendant at *593 all. They seem to have waited till the three years' period of
limitation had nearly expired. Then on June 26, 1964, they issued a writ against the
defendant, John Christopher Circuit, of 45 Alpine Avenue, Tolworth, which was the
address given in the police report. It was indorsed with a claim for "damages for personal
injuries caused to him by the defendant's negligent driving on June 29, 1961."

It does not appear that Beer & Co. at that time made any attempt to serve the writ. If they
had tried to serve it in 1964 and called at the address in Tolworth, they would have
discovered that the defendant's family left that address in 1962. The defendant went to
Canada and married out there. Efforts have been made to trace him but without success.

The writ was only valid for the first 12 months from June 26, 1964, to June 26, 1965. But
Beer & Co. did not try to effect service of the writ till the 12 months had nearly expired.
Then on June 24, 1965, a process server called at 45 Alpine Avenue, Tolworth, and got
no answer. The people next door said that the defendant had gone to Canada about three
years ago. Thereupon on June 25, 1965, Beer & Co. applied for the renewal of the writ ex
parte. It was renewed for a second 12 months until June 25, 1966.

Soon afterwards the plaintiff instructed other solicitors, Nye & Donne. They obtained a
legal aid certificate, and not being able to find the defendant, they wrote on November 8,
1965, to the Motor Insurers' Bureau: because that bureau does in some circumstances pay
the damages awarded to injured persons. The plaintiff's solicitors gave the bureau the
particulars taken by the police of the insurance of the defendant (Certificate No. 381512
issued by Lloyd's Motor Policies) and asked the bureau if they could trace the insurers
involved. The bureau asked the Royal Insurance Co. to investigate the matter, but without
success. No one has been able to trace the insurers or the defendant. These investigations
took some time. So much so that the second 12 months was near to expiring on June 25,
1966. To safeguard the position, Nye & Donne on June 23, 1966, applied for the writ to
be renewed. It was renewed for a third 12 months until June 24, 1967. But during the
third 12 months the plaintiff's legal aid certificate was discharged, and he acted
thenceforward in person. The third 12 months was near to expiring when on June 15,
1967, he applied for it to be renewed. It was renewed for three months until September
14, 1967.

Now comes an important step. On June 22, 1967, the plaintiff *594 applied for
substituted service by serving the writ on the Royal Insurance Co. Ltd. He made in
support this affidavit:

"(1) Affidavit in support of an application for substituted service. (2) I, Frederick

Gurtner, medical research scientist of 157 Marine Parade, Brighton, Sussex, make oath
and say as follows: (3) As already mentioned in my application for renewal of the
aforesaid writ, [the defendant] went to Canada Still in 1961, and in spite of repeated
endeavours, his present whereabouts cannot be ascertained. (4) With letter of December
12, 1965, Messrs. Nye & Donne, Brighton, who dealt with this matter, informed me that
the Motor Insurers' Bureau have passed the matter to the Royal Insurance Co. who would
negotiate on their behalf. (5) I ask, therefore, for leave to serve this writ to the Royal
Insurance Co. so that the latter may deal with the matter on behalf of the Motor Insurers'
Bureau."
On reading that affidavit, Master Ritchie on June 22, 1967, ordered that service could be
effected by sending the writ by ordinary pre-paid post addressed to John Christopher
Circuit, c/o Royal Insurance Co. Ltd., 24/28 Lombard Street, E.C.3. In pursuance of that
order, the plaintiff sent the writ in a letter to the defendant at that address. It, of course,
never reached him. The Royal Insurance Co. Ltd. did not know his whereabouts any
more than anyone else. They had no authority to enter an appearance on his behalf. Nor
did the Motor Insurers' Bureau. No one had any authority to enter an appearance on his
behalf. It looked as if judgment would go against the defendant by default unless
something was done.

You may ask: why should anyone worry if judgment did go against the defendant by
default? The answer is that the Motor Insurers' Bureau had every reason to worry. They
had entered into an agreement with the Minister of Transport by which they promised to
pay any judgment against a motorist if it was not satisfied by his insurers within seven
days. Faced with this obligation, the bureau were desirous of coming into the
proceedings. They wanted to investigate the plaintiff's claim. They had the statements of
one or two witnesses who said that the plaintiff was himself to blame because he ran
across the road. So contributory negligence might arise. The bureau also wanted to
inquire into the amount of damages in case he claimed too much. He is said to have asked
for £20,000 or £30,000. They also wanted to inquire into the order for substituted service
so as to see if it was rightly made; and also to investigate the renewals of the writ.

In order to be able to take these points, the Motor Insurers' *595 Bureau on July 3, 1967,
applied to be added as defendants to the action. Master Ritchie granted the application
upon their giving an undertaking to satisfy any damages awarded to the plaintiff. But
Chapman J. reversed that decision. He thought that on the authorities the Motor Insurers'
Bureau could not be added as defendants.

The relevant rule is the new R.S.C., Ord. 15, r. 6 (2) (b), which says that the court may
order any person to be added as a party

"whose presence before the court is necessary to ensure that all matters in dispute in the
cause or matter may be effectually and completely determined and adjudicated upon."

That rule is in substantially the same terms as the old R.S.C., Ord. 16, r. 11, and nothing
turns on the difference in wording. There were many cases decided on it. But I need not
analyse them today. That was done by Devlin J. in Amon v. Raphael Tuck & Sons Ltd.11
He thought that the rule should be given a narrower construction, and his views were
followed by John Stephenson J. in Fire Auto and Marine Insurance Ltd. v. Greene. 12 I am
afraid that I do not agree with them. I prefer to give a wide interpretation to the rule, as
Lord Esher M.R. did in Byrne v. Brown. 13 It seems to me that when two parties are in
dispute in an action at law, and the determination of that dispute will directly affect a
third person in his legal rights or in his pocket, in that he will be bound to foot the bill,
then the court in its discretion may allow him to be added as a party on such terms as it
thinks fit. By so doing, the court achieves the object of the rule. It enables all matters in
dispute to "be effectually and completely determined and adjudicated upon" between all
those directly concerned in the outcome.

I would apply this proposition to the present case. If the Motor Insurers' Bureau are not
allowed to come in as defendants what will happen? The order for substituted service will
go unchallenged. The service on the defendant Circuit will be good, even though he
knows nothing of the proceedings. He will not enter an appearance. The plaintiff will sign
judgment in default of appearance. The judgment will be for damages to be assessed. The
master will assess the damages with no one to oppose. The judgment will be completed
for the ascertained sum. The defendant *596 will not pay it. Then the plaintiff will be
able to come down on the Motor Insurers' Bureau and call upon them to pay because they
have made a solemn agreement that they will pay. They made an agreement with the
Minister of Transport on June 17, 1946. by clause 1 of which they agreed that if a
judgment for an injured person against a motorist is not satisfied in full within seven
days, the Motor Insurers' Bureau will pay the amount of the judgment to the injured
person. The agreement is well known. It is set out in full in a note to Hardy v. Motor
Insurers' Bureau.14 It is true that the injured person was not a party to that agreement
between the bureau and the Minister of Transport and he cannot sue in his own name for
the benefit of it. But the Minister of Transport can sue for specific performance of it. He
can compel the bureau to honour its agreement by paying the injured person, see Beswick
v. Beswick. 15 If the Minister of Transport obtains an order for specific performance the
injured person can enforce it for his own benefit, see by Lord Pearce in Beswick v.
Beswick. 16 If the Minister of Transport should hesitate to sue, I think it may be open to
the plaintiff to make him a defendant: and thus compel performance.

It is thus apparent that the Motor Insurers' Bureau are vitally concerned in the outcome of
the action. They are directly affected, not only in their legal rights, but also in their
pocket. They ought to be allowed to come in as defendants. It would be most unjust if
they were bound to stand idly by watching the plaintiff get judgment against the
defendant without saying a word when they are the people who have to foot the bill. I
think that Fire Auto & Marine Insurance Ltd. v. Greene17 was wrongly decided and
should be overruled.

In my opinion we should make an order allowing the Motor Insurers' Bureau to be added
as defendants. They are prepared to undertake to pay any damages that may be awarded.
This undertaking should be embodied in the order. On being added, they should be
entitled to defend the action and to exercise all the rights of the defendant Circuit therein.

Once they are added as defendants they would be in a position to urge that the order for
substituted service was not properly made and should be set aside. It seems to me not to
have been *597 properly made. The affidavit in support was insufficient to warrant the
order, for the simple reason that it did not show that the writ was likely to reach the
defendant, nor to come to his knowledge. All that it showed was that if the writ was sent
to the Royal Insurance Co. Ltd., it would reach the Motor Insurers' Bureau. But the Motor
Insurers' Bureau were not defendants at that time. So that would not suffice. It would be
different if the defendant was insured with the Royal Insurance Co. Ltd., but that was not
suggested.

In my opinion, therefore, the order for substituted service made on June 22, 1967, could
be set aside if it would serve any useful purpose. If there were any possibility of tracing
the defendant in Canada, substituted service should be ordered by advertisement and so
forth. But that seems to be a useless procedure here. The practical course is to allow the
order for substituted service to stand without incurring any further costs: and to allow the
service to stand.

Next, the Motor Insurers' Bureau wish to set aside the renewals of the writ made on June
25, 1965 (for a second 12 months); on June 23, 1966 (for a third 12 months) and on June
15, 1967 (for a further three months). I do not think those renewals should be set aside.
The defendant was away in Canada and could not be traced so as to be served. That is a
good reason for renewing a writ. Lord Goddard said in Battersby v. Anglo-American Oil
Co. Ltd.18:

"The best reason, of course, would be that the defendant has been avoiding service, or
that his address is unknown, and there may well be others."

Finally, the Motor Insurers' Bureau wish to lodge a counterclaim. They wish to say that,
if the defendant is liable, they are exempt. They say that the condition in clause 5 (1) (A)
of that agreement with the Minister of Transport was not fulfilled in that the defendant
was an uninsured person: and they were not given notice of the proceedings against him
within 24 days, as required by that condition. I do not think there is anything in this point.
The defendant showed his certificate of insurance to the police. He was plainly an insured
person, even though his insurers cannot now be found. So the condition in clause 5 (1)
(A) does not apply. The bureau should not be allowed to put in this counterclaim.

I would therefore allow this appeal. The Motor Insurers' *598 Bureau should be added as
defendants and be entitled to defend the action and to exercise all the rights of the
defendant therein. The Motor Insurers' Bureau undertake to pay to the plaintiff any
damages that may be awarded against the defendant.

DIPLOCK L.J.

This appeal illustrates once again the legal anomalies which result from the method
adopted by the Minister of Transport in 1946 to fill a gap in the protection of third parties
injured by negligent driving of motor vehicles provided by the Road Traffic Acts of 1930
and 1934.

Under those Acts although insurance against third party risks was made compulsory and
insurers made directly liable to satisfy judgments against their assured, an injured person,
although he had recovered judgment against a negligent defendant, could whistle for his
money if (a) the defendant was not insured at the time of the accident or (b) his policy of
insurance was avoided in the circumstances specified in section 10 (3) of the Act of 1934
for non-disclosure or misrepresentation or (c) his insurer too was insolvent. To fill this
gap the insurers transacting compulsory motor vehicle insurance business in Great
Britain, acting in agreement with the Minister of Transport, formed a company, the Motor
Insurers' Bureau, to assume liability to satisfy judgments of these three kinds. But instead
of amending the legislation so as to impose upon the Motor Insurers' Bureau a statutory
liability to the unsatisfied judgment creditor as had been done by the Road Traffic Act,
1934, in respect of the liability of insurers to satisfy judgments against defendants
covered by a valid policy of insurance, the matter was dealt with by an agreement of June
17, 1946, between the Minister of Transport and the Motor Insurers' Bureau.

To this contract, for that is all that it is in law, no unsatisfied judgment creditor is a party.
Although clearly intended by both parties to be for the benefit of such creditors, the
Minister did not enter into it otherwise than as a principal. He was not purporting to act as
agent so as to make it capable in law of ratification by those whom it was intended to
benefit. Many of them were not born at the time when it was made. The only person
entitled to enforce the contract is the Minister. I do not doubt that upon the principle
accepted by the House of Lords in Beswick v. Beswick,19 the Minister could enforce it by
obtaining a judgment for specific *599 performance which, once obtained, could be
enforced against the bureau by the unsatisfied judgment creditor in whose favour the
order for specific performance was made. But the Minister is the only party entitled to
bring an action to enforce the contract. It confers no right of action against the Motor
Insurers' Bureau upon any unsatisfied judgment creditor.

Nevertheless the courts have upon a number of occasions entertained actions by

unsatisfied judgment creditors brought against the bureau to enforce on their own behalf
undertakings given by the bureau to the Minister under the contract. In these actions, in
which the Minister was not joined as a party, the bureau has not taken the point that a
plaintiff was not privy to the contract on which he has sued. The court, for its part, has
turned a blind eye to this. Unless the point is specifically raised. the court is entitled to
proceed upon the assumption that the bureau has, before action is brought, contracted for
good consideration with the plaintiff to perform the obligations specified in its contract
with the Minister or has by its conduct raised an estoppel which would bar it from relying
upon absence of privity of contract. But this Nelsonian solution cannot be adopted where
a party to the litigation does raise the point that there is no privity of contract or where, as
in the present case, one party is a litigant in person who does not understand the point but
in whose interest it is to take it if it be a valid one.

Under clause 1 of its contract with the Minister and subject only to the conditions
precedent in clause 5, the bureau gives an unqualified undertaking to pay to the judgment
creditor all sums remaining unpaid after seven days under a judgment against any person
in respect of any liability for negligent driving of a motor vehicle. The existence and the
amount of the bureau's liability, of which the Minister can obtain an order for specific
performance for the benefit of the unsatisfied judgment creditor, thus depends upon the
result of an action to which the bureau is not a necessary party. Although there may be a
good defence to that action, judgment in it may be obtained by default either collusively -
which is not the case in the present appeal - or because the defendant is unaware of the
action or through impecuniosity or for some other reason is not concerned to resist it; and
the damages may be assessed upon such evidence as the plaintiff chooses to tender
without being subjected to cross-examination. Clearly the bureau have a lively interest, at
any rate commercial, in seeing that all proper defences in that action as respects liability
*600 are raised and that all relevant material which tends to reduce the quantum of
damages recoverable is adduced to the court.

We have been informed that in an attempt to mitigate the injustice to the bureau of
allowing assessment of damages upon judgments by default to proceed without critical
scrutiny, it has been the practice of the Queen's Bench masters, with the acquiescence of
plaintiffs, to allow the bureau to be represented at the hearing of the assessment to cross-
examine the plaintiff's witnesses and to adduce other evidence. But, save with the consent
of the plaintiff, this sensible practice cannot be followed unless the bureau is entitled to
be joined as a party to the action, and even where the plaintiff does consent, it is desirable
that this formality should be observed - if only to give the bureau a right to appeal or to
resist an appeal by the plaintiff.

In the present action brought by the plaintiff against the defendant, in which the plaintiff
is now in a position to obtain, but has not yet recovered, judgment by default, the bureau
seek to be added as parties in order that they may take steps which would be available to
the defendant to set aside the renewal of the writ and the order for substituted service of
the writ upon him, and, if the action is not dismissed upon either of these grounds, to
dispute the plaintiff's liability upon the merits, to raise the defence of contributory
negligence, and to dispute the quantum of the damages claimed. In addition to these
steps, which would be available to the defendant the bureau wish to raise a point which
does not concern that defendant in any way, to wit, that the defendant was an "uninsured
person" and that, since notice of the bringing of the proceedings against him was not
given to the bureau within the time limited by clause 5 (1) (A) of its contract with the
Minister, the bureau is under no liability to satisfy any judgment recovered against the
defendant in the action.

If the court has any discretion to grant the bureau's application to be added as a party so
that it may take the steps which would be available to the defendant if he wished to
contest his liability, justice clearly requires that the court should do so. Chapman J. felt
that he should follow the decision of John Stephenson J. in Fire Auto & Marine Insurance
Ltd. v. Greene,20 and held that there was no such discretion.

The court's powers to order a party to be joined in an existing action are governed by
R.S.C., Ord. 15, r. 6, of which the relevant provisions are: *601

"(2) At any stage of the proceedings in any cause or matter the court may on such terms
as it thinks just and either of its own motion or on application ... (b) order any person who
ought to have been joined as a party or whose presence before the court is necessary to
ensure that all matters in dispute in the cause or matter may be effectually and completely
determined and adjudicated upon be added as a party."
The bureau is plainly not "a person who ought to have been joined as a party." The action
is perfectly well constituted without it. The question is whether, within the meaning of
the rule, the bureau is "a person ... whose presence before the court is necessary to ensure
that all matters in dispute in the cause or matter may be effectually and completely
determined and adjudicated upon."

The Fire Auto & Marine case21 was an action by an insurance company for a declaration,
under section 207 (3) of the Road Traffic Act, 1960, which replaces section 10 (3) of the
Act of 1934, that the policy of insurance of the defendant, who was being sued for
damages in a running-down action brought by another person, was void. If such a
declaration were obtained, the bureau would become liable under their contract with the
Minister to satisfy any judgment obtained in the running-down action against the
plaintiff. The bureau clearly had a commercial interest in resisting the declaration, but
this is not enough. John Stephenson J. accepted the analysis of the rule and the many
previous decisions under it contained in the exhaustive judgment of Devlin J. in Amon v.
Raphael Tuck & Sons Ltd., 22 and John Stephenson J. 23 took the view that the court had
no jurisdiction to add a party against the will of the plaintiff unless the person seeking to
be added was 24:

"at least ... able to show that some legal right enforceable by him against one of the
parties to the action or some legal duty enforceable against him by one of the parties to
the action will be affected by the result of the action."

Devlin J. in Amon's case, 25 after analysing the previous decisions which he thought
disclosed conflicting "wider" and "narrower" constructions of the rule, whose actual
wording has varied from time to time but without affecting its substance, finally came
down in favour of an even narrower construction than John Stephenson J. Devlin J. said
26
: *602

"The only reason which makes it necessary to make a person a party to an action is so
that he should be bound by the result of the action, and the question to be settled therefore
must be a question in the action which cannot be effectually and completely settled unless
he is a party."

Tested by either of these criteria, the bureau does not qualify for joinder as a party to the
present action. Applying the test of Devlin J., it will be bound by the judgment in the
sense that under its contract with the Minister, it can be compelled by him to satisfy it.
Whether the bureau is a party to the action or not, it is not necessary to make it a party so
that it may be bound. Applying the test of John Stephenson J., the legal duty owed by the
bureau to the Minister is not enforceable by either party to the action brought by the
plaintiff against the defendant.

I do not think that either test should be treated as comprehensive. Both illustrate the
undesirability of propounding general propositions wider than are strictly necessary for
the determination of the particular case. The legal position of the Motor Insurers' Bureau,
which Devlin J. did not have in mind in Amon's case,27 is unique. It will be bound by the
judgment in this plaintiff's action against the defendant, in that it will be under a legal
obligation to satisfy it. But its legal obligation to satisfy the judgment will not be owed
directly to this plaintiff. It will not be enforceable by him. But it will be enforceable by
the Minister by an order for specific performance in favour of the plaintiff and if the
Minister seeks and obtains such an order, the order will be enforceable by the plaintiff
himself. See Beswick v. Beswick, 28 which was decided after the decision of John
Stephenson J. in the Fire Auto & Marine case. 29 The bureau's legal obligation differs
from the statutory obligation of an ordinary insurer under section 207 of the Road Traffic
Act, 1960, owed to a judgment creditor in a running-down action to satisfy the judgment
obtained against the assured, in that the insurer's legal obligation is directly enforceable
by the plaintiff in the running-down action, whereas the bureau's legal obligation is not
enforceable by the plaintiff himself but is enforceable for his benefit by the Minister, who
is not a party to the action.

Clearly the rules of natural justice require that a person who is to be bound by a judgment
in an action brought against another party and directly liable to the plaintiff upon the
judgment should *603 be entitled to be heard in the proceedings in which the judgment is
sought to be obtained. A matter in dispute is not, in my view, effectually and completely
"adjudicated upon" unless the rules of natural justice are observed and all those who will
be liable to satisfy the judgment are given an opportunity to be heard. In the case of an
ordinary insurer, this does not arise in practice, since the standard terms of a third-party
liability policy give to the insurer a contractual right to conduct the defence of the
running-down action in the name of the assured. But as I read his judgment in the Fire
Auto & Marine case,30 John Stephenson J. would have allowed an ordinary insurer to be
added as a party to a running-down action if the policy of insurance did not contain such
a term. and this, I think, would be right.

I do not think the rules of natural justice depend upon a technicality as to the procedure
by which the liability of a person who is bound to satisfy the judgment obtained by the
plaintiff in the running-down action is enforceable. So long as it is legally enforceable
against that person either directly by the plaintiff or indirectly by the Minister for the
plaintiff's benefit under such a contract as exists in the present case, the court has
jurisdiction to add that person as a party and ought normally to exercise its discretion by
granting his application to be added. I think, therefore, that the bureau is entitled to be
added as a party to the present action and to this extent, at any rate, this appeal should be
allowed.

Having drawn attention to the undesirability of propounding general propositions, I desire

to emphasise that my judgment in the present case is based upon the special position of
the bureau under its contract with the Minister. What reasons influenced the Government
to adopt this oblique and extra-statutory way of imposing liability upon the bureau,
despite the legal complications this involves, I do not know. But the courts must accept it
as it is and try, so far as they are permitted by the rules, to make it work with justice to
the bureau as well as to the persons for whose benefit the Minister made the contract.
Nothing that I have said is intended necessarily to have any wider application than to this
unique legal situation resulting from the Minister's contract with the bureau. I prefer to
decide other cases on their own different facts when they arise.

The order of the master of July 14, 1967, ordering that the *604 bureau be added as
defendants, which was set aside by Chapman J., was made upon an undertaking of the
bureau to satisfy any damages awarded to the plaintiff in respect of the defendant's
negligence, but without prejudice to their being able to raise in the action any defence on
the question of their liability so to do. The undertaking to the court seems to me to be
appropriate in the circumstances. The bureau's contract with the Minister is terminable
upon notice. But in the present case where the defendant has not appeared and is not
likely ever to do so, it would, I think, be convenient to incorporate in the order adding the
bureau as second defendants to the action, an express statement that they shall be entitled
to defend the action and to exercise all the rights of the first defendant Circuit therein.

But the bureau also desire to raise in the plaintiff's action a counterclaim for a declaration
that, even though judgment be recovered by the plaintiff against the defendant, Circuit,
they are relieved from liability to satisfy it because he was an uninsured person, and the
notice, which under clause 5 (1) of their contract with the Minister is a condition
precedent to their liability, was not served. Mr. Gibson for the bureau has frankly
conceded that the issue to be raised by the proposed counterclaim is one of construction
of that contract. I do not think that it would be right to allow him to raise it without
joining the Minister as defendant to the counterclaim. There may possibly be cases where
it would be proper to allow the bureau to raise a counterclaim for a declaration that the
conditions precedent in clause 5 (1) of the contract have not been fulfilled but, if Mr.
Gibson will forgive my saying so, I think that on the facts of the present case there is so
little merit in the argument he wishes to advance in the proposed counterclaim that it
would not be right to increase the costs of the action by permitting its ambit to be
extended by the inclusion of the counterclaim.

The bureau also applied to the master for an order setting aside the renewals of the writ,
the order for substituted service and the service of the writ pursuant thereto. The master
made such orders on July 28, 1967. These orders were not considered on their merits by
Chapman J., since as a result of his reversal of the earlier order adding the bureau as a
party in the action, the bureau had in his view no locus standi to apply for them.

It is this part of the appeal which has occasioned me most anxiety. The writ was first
renewed on June 25, 1965, upon an ex parte application by the plaintiff's then solicitors,
supported *605 by an affidavit which did not disclose sufficient information to justify the
renewal of the writ in accordance with the practice laid down in recent decisions of the
court. But we now know that the defendant had disappeared and there may have been
some good explanation for the apparent delay in the attempt to find him. The bureau were
informed on November 8, 1965, of the date of the accident and of the fact that a writ had
been issued. Had they applied promptly then to be added as defendants and to set aside
the renewal of the writ, such explanation might have been available to the plaintiff. But
the bureau in fact delayed until July, 1967, by which time the plaintiff had changed his
solicitors, the legal executive of the former solicitors concerned had left their
employment and the opportunity of ascertaining whether there was any adequate
explanation has been lost. In these special circumstances I do not think that it would be
right to accede at this date to the bureau's application to set aside the orders for the
renewal of the writ.

The order for substituted service obtained on the plaintiff's own affidavit, for he was then
acting in person, was obviously wrong. There was no possible reason for serving the
defendant at the address of the Royal Insurance Co. Ltd. But in a case like this, which
must be rare, where there is strong prima facie evidence that the defendant is insured but
it is not possible to ascertain the identity of his insurers, an order for substituted service
might properly be made upon the defendant at the address of the Motor Insurers' Bureau.
Such an order, of course, should not be made except on evidence that all reasonable
efforts have been made by the plaintiff to trace the defendant and effect personal service.
But it is now common ground that the defendant has left this country and there is no real
prospect of tracing him. In these circumstances it would only add unnecessarily to the
costs to set aside the service in order that a further application may be made by the
plaintiff for substituted service on the defendant at the address of the bureau. Mr. Gibson
has not really pressed us to do so in the present appeal. His main anxiety is lest the
impression should be gained that plaintiffs need no longer search diligently for
defendants before applying for an order for substituted service on them at the address of
the bureau. I hope I have said enough to make it clear that this is not so.

I would, therefore, allow the appeal against the judge's order to the extent of adding the
Motor Insurers' Bureau as defendants to the action upon the terms which I have already
indicated.

*606

SALMON L.J.

I agree with both judgments which have been delivered. I would only add that in my view
no person would be entitled to sue the bureau on its contract with the Minister other than
the Minister himself. He may obtain an order for specific performance in favour of the
persons for whose benefit the contract was made (Beswick v. Beswick).31 I do not think,
however, that any such person, not being a party to that contract, can sue upon it.

I agree, for the reasons stated by my Lords, that in the circumstances of this case the
bureau is entitled to be added as defendants to the action.

Representation

Solicitors:L. Bingham & Co.

Appeal allowed in part. The Motor Insurers' Bureau to be added as defendants to the
action on their undertaking to satisfy any damages awarded to the plaintiff against the
defendant, Circuit. Order for substituted service of the writ and the service of the writ to
stand. (H. J. )

1. R.S.C. (Rev. 1965), Ord. 15, r. 6 (2): "At any stage of the proceedings in any cause or
matter the court may on such terms as it thinks just and either of its own motion or on
application ... (b) order any person who ought to have been joined as a party or whose
presence before the court is necessary to ensure that all matters in dispute in the cause or
matter may be effectually and completely determined and adjudicated upon be added as a
party. ..."

2. [1939] 1 K.B. 279; 54 T.L.R. 834; [1938] 2 All E.R. 751, C.A.

3. [1941] 1 All E.R. 231, C.A.

4. [1968] A.C. 58; [1967] 3 W.L.R. 932; [1967] 2 All E.R. 1197, H.L.(E.).

5. [1964] 2 Q.B. 687; [1964] 3 W.L.R. 319; [1964] 2 All E.R. 761.

6. [1956] 1 Q.B. 357; [1956] 2 W.L.R. 372; [1956] 1 All E.R. 273.

7. [1956] 1 Q.B. 357; [1956] 2 W.L.R. 372; [1956] 1 All E.R. 273.

8. (1889) 22 Q.B.D. 657; 5 T.L.R. 255, C.A.

9. [1892] 1 Ch. 487, C.A.

10. [1951] Ch. 33; 66 T.L.R. (Pt. 2) 559; [1950] 2 All E.R. 605.

11. [1956] 1 Q.B. 357; [1956] 2 W.L.R. 372; [1956] 1 All E.R. 273.

12. [1964] 2 Q.B. 687; [1964] 3 W.L.R. 319; [1964] 2 All E.R. 761.

13. (1889) 22 Q.B.D, 657; 5 T.L.R. 255, C.A.

14. [1964] 2 Q.B. 745, 770; [1964] 3 W.L.R. 433 ; [1964] 2 All E.R. 742, C.A.

15. [1968] A.C. 58; [1967] 3 W.L.R. 932; [1967] 2 All E.R. 1197, H.L.(E.).

16. [1968] A.C. 58, 91.

17. [1964] 2 Q.B. 687.

18. [1945] K.B. 23, 32; 61 T.L.R. 13; [1944] 2 All E.R. 387, C.A.
19. [1968] A.C. 58.

20. [1964] 2 Q.B. 687.

21. [1964] 2 Q.B. 687.

22. [1956] 1 Q.B. 357.

23. [1964] 2 Q.B. 687, 697.

24. [1964] 2 Q.B. 687, 697.

25. [1956] 1 Q.B. 357.

26. Ibid. 380.

27. [1956] 1 Q.B. 357.

28. [1968] A.C. 58.

29. [1964] 2 Q.B. 687.

30. [1964] 2 Q.B. 687.

31. [1968] A.C. 58.

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