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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> McCall v Poulton & Ors [2008] EWCA Civ 1263 (21 November 2008) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2008/1263.html Cite as: [2008] EWCA Civ 1263

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Canterbury County Court
His Honour Judge Mitchell
4TN02981

		and B2/2007/2320 Royal Courts of Justice Strand, London, WC2A 2LL
		21/11/2008

Lord Justice Waller :

1. By a judgment handed down on 22 August 2007 His Honour Judge Mitchell, sitting in the Canterbury County Court, explained why he thought it was necessary to refer certain questions to the European Court of Justice (the ECJ) and made an order referring the same. He however granted permission to appeal. Before him one objection taken to referring questions at this stage was that there were issues which needed resolution before any points on European law arose for decision. By the time the hearing before us opened things had moved on. We thus must in the new context not only consider the judge's reasoning but in reality consider afresh whether it is necessary to enable the court to give judgment in these proceedings to refer certain questions to the ECJ. The parties had helpfully agreed most of the contents of a schedule to what would be an order if it were ruled that it was necessary to refer questions to the ECJ and I can adopt much of what is set out therein.

Nature and history of the proceedings

2. Mr McCall was the blameless victim of a motor accident caused by Mr Poulton's negligent driving. His car, a taxi, was damaged. He needed a replacement, so he hired a car from Helphire (UK) Limited (Helphire) on credit. He was also provided with an insurance policy issued by Angel Assistance Limited (Angel). This did not insure him against motor accidents. It provided post-accident cover for (i) the legal costs of Mr McCall's resulting claim and (ii) Helphire's charges in the event they were not recovered from Mr Poulton within the credit period.
3. It transpired that Mr Poulton was uninsured, and he did not pay Mr McCall any compensation for the losses caused by the accident.
4. The position before the judge was different but before us the position was that Mr McCall had indisputably made a claim on his Angel policy and (as Mr Milligan announced on the first day of the appeal) Angel have paid the hire charges, thereby discharging Mr McCall's debt to Helpline.
5. Mr McCall brought proceedings against Mr Poulton claiming compensation for the losses he had suffered including compensation for the cost of the hire.
6. The Motor Insurers' Bureau (MIB) is the body authorised by the United Kingdom to award compensation in the case of an accident caused by an uninsured driver, pursuant to Article 1.4 of Council Directive 84/5/EEC of 30^th December 1983 (the Directive). So far as relevant, the authority of the MIB is set out in the agreement made between the MIB and the United Kingdom's Secretary of State for Transport (the Uninsured Drivers Agreement).
7. The MIB has compensated Mr McCall for his physical injury and other losses. However, it declines to pay compensation for the hire charges in reliance on either or both of two exclusions in the Uninsured Drivers Agreement.
8. The first is contained in clause 6(1)(c), which excludes the MIB's liability to meet claims made 'by, or for the benefit of, a person ("the beneficiary") other than the person suffering death, injury or damage which is made… pursuant to a right of subrogation or contractual or other right belonging to the beneficiary.'
9. The second is stated by clause 17(1): 'Where a claimant has received compensation from… (b) an insurer under an insurance agreement or arrangement, or (c) any other source… MIB may deduct… an amount equal to that compensation.'
10. It is common ground (a) that the claim for compensation in respect of hire charges is brought for the benefit of Angel, pursuant to a right of subrogation, and (b) that Mr McCall has received compensation under an insurance agreement, such that both clauses 6(1)(c) and 17(1) of the Uninsured Drivers Agreement are engaged.
11. His Honour Judge Mitchell decided that it was necessary to make a reference in order that the judgment of the ECJ might be dispositive not only of these proceedings but also other proceedings raising the same issues which are currently before the courts of England and Wales, and proceedings which might otherwise be commenced in the future.

Relevant rules of national law

12. English law entitles the blameless victims of motor accidents, at least where they need a replacement car, to recover compensation in respect of hire charges from the culprits.
13. In English law, Mr McCall may bring such a claim notwithstanding Angel's payment of the hire charges. However, Angel is subrogated to Mr McCall's rights and, in the event that compensation for the hire charges is recovered, Mr McCall will be required to account to Angel for the proceeds.
14. The MIB is a company limited by guarantee, whose members are those motor insurers authorised to carry on motor insurance business in the United Kingdom. The funding of the MIB is guaranteed by its members. One of the main purposes of the MIB is to provide compensation for the victims of motor accidents caused by uninsured or untraced drivers.
15. No motor vehicle may be used on a public road in Great Britain unless the user is covered by third party insurance (Road Traffic Act 1988 section 143). Motor insurance can only be provided by those authorised under Part 4 of and Schedule 6 to the Financial Services and Markets Act 2000 to carry on motor insurance business in the United Kingdom (Road Traffic Act sections 145(2) and 95(2)), and such an insurer must be a member of the MIB.
16. Subject to the issue of direct effect, the MIB's obligation to compensate Mr McCall arises from the Uninsured Drivers Agreement. The MIB's principal obligation under this agreement is to pay unsatisfied judgments against uninsured drivers, where these are in respect of 'relevant liabilities' (clause 5.1). Relevant liabilities are those for which a contract of insurance must be in force in order to comply with the Road Traffic Act 1988 as amended or replaced from time to time (clause 2.1 of the agreement and sections 17(2)(a) and 20(2) of the Interpretation Act 1978).

Relevant provisions of European Community law

17. Compensation in respect of uninsured accidents, and in particular the obligation for member states to establish a compensating body, is governed by the Directive.
18. Article 1.4 states:

"Each Member State shall set up and authorise a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied. That provision shall be without prejudice to the right of the Member States to regard compensation by that body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between that body and the person or persons responsible for the accident and other insurers or social security bodies required to compensate the victim in respect of the same accident."

…

Furthermore, each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by this body, without prejudice to any other practice which is more favourable to the victim.

Contentions of the parties

19. Helphire and Angel contend that, as a matter of Community law, the MIB cannot rely on either of the two exceptions which it has invoked. They put their case in the following ways.

a. They submit (and there is no issue on this) the Uninsured Drivers Agreement is a contract made for the purpose of discharging the United Kingdom's obligations under the Directive. They submit that the principle identified by the ECJ in Marleasing SA v La Comercial Internacional de Alimentación SA C-106/89 [1990] ECRI-4135 (Marleasing) under which laws enacted by member states to bring into effect obligations imposed by Community law must be interpreted and applied so as to give full effect to the Directive, should be applied to the Uninsured Drivers Agreement. They submit that on the proper construction of the Directive the effect of applying the Marleasing principle would be to put a blue pencil through the exclusions relied on by the MIB;

b. In any event, they submit Article 1.4 of the Directive is directly effective. They submit that the MIB is an emanation of the State, and therefore that Mr McCall has a direct claim against the MIB under the Directive.

20. The MIB's answers to the above submissions are:

a. The Uninsured Drivers Agreement is a private contract, to which the Marleasing principles do not apply.

b. Article 1.4 of the Directive is not directly effective.

c. In any event, Article 1.4 cannot be directly invoked against the MIB, as it is not an emanation of the State.

d. Article 1.4 should not be interpreted to require it to pay compensation where the ultimate recipient will not be the victim of the accident, but a commercial organisation such as Helphire or Angel.

Application for a reference to the European Court of Justice.

21. Helphire and Angel applied to be joined in the proceedings at that time being pursued in Mr McCall's name only. They applied at the same time for certain questions to be referred to the ECJ. MIB accepted that certain questions were properly matters to be considered by the ECJ e.g. the proper construction of the Directive and whether the Directive had direct effect. However before the judge they submitted first that it was premature to refer. The submission was that there were factual issues relating to the question whether Mr McCall had suffered a loss at all in the light of the arrangements between him and Helphire/Angel and thus whether those entities or either of them had a subrogated claim through Mr McCall. Second the MIB submitted that in any event there was no purpose in a reference because (1) it was clear that the Marleasing principle did not apply to private agreements and in particular to this MIB agreement that matter having been considered by the House of Lords in White v White [2001] 1 WLR 481 and determined conclusively in favour of MIB; and (2) it was for the national court to determine whether MIB was an emanation of the State on the basis of guidance from the ECJ; that guidance was clear and indeed the national court (Flaux J) had already decided by reference to that guidance in Byrne v MIB [2008] 2 WLR 234 that the MIB was not an emanation of the State. There was thus accordingly, submitted the MIB, no purpose in making a reference now or at all.
22. The judge was in favour of Helphire/Angel on the subrogation issue and then found (1) that the Marleasing point raised a "a very difficult issue"; that he was almost being asked to rule on Helphire/Angel's arguments as though permission to appeal was being sought i.e. was there a reasonable prospect of success or some compelling reason why the matter should go to the ECJ; and that since the answer to both those questions was "yes" because "on the points of interpretation there is a very real tension between the two jurisprudences" [by which he meant the ECJ and the national court] that the issue required resolution by the ECJ [see paragraph 52]. He then went on to find (2) that, since the Marleasing issue was being referred and since he thought Helphire/Angel's arguments had "reasonable prospects of success" and that "there are other compelling reasons why the matter should be referred to the ECJ" the issue of direct effect and whether MIB is an emanation of the State should be referred also.

Arguments before us

23. The submission of the MIB that any reference was premature, on the grounds that there were issues which needed to be decided on subrogation, was no longer made before the Court of Appeal because Angel had by the time of the hearing of the appeal paid Helphire the sum due in respect of the hire charges. Furthermore Mr O'Brien QC on behalf of the MIB maintained his concession that the construction of the Directive and the issue of direct effect were referable questions. He equally however maintained his arguments which had failed before the judge. He submitted (1) that there was a decision of the House of Lords in White v White authoritatively ruling that the Marleasing principle did not apply to private agreements such as that between the Secretary of State and the MIB, and that there were subsequent decisions of the ECJ which did not cast any doubt on that point. He further submitted (2) that it was for the national court to consider whether the MIB was an emanation of the State relying on guidance from the ECJ; that the guidance was clear and indeed applied authoritively in MIB's favour by Flaux J in Byrne v MIB. His argument was that either Flaux J was clearly right in which event a reference was unnecessary on that point, or if it was arguable that Flaux J might be wrong, since the guidance was clear the point needed to be argued out and decided by the national court and appealed in the normal way.
24. Mr Milligan QC's submissions on behalf of Helphire and Angel were as to the Marleasing point that there was subsequent ECJ authority and that arguably that authority had extended the Marleasing principle to cover agreements entered into in fulfilment of a member state's obligation under a directive. In relation to the issue whether MIB was an emanation of the State, his argument was first that the guidance was not clear, and that in any event it was ultimately a matter for European Law whether an entity was an emanation of the State and where one had conflicting decisions of member states as to whether an entity such as the MIB was an emanation of the State, it was necessary to refer that question to the ECJ. His reference to conflicting decisions was to the fact that in Farrell v Whitty and the MIBI [2008] IEHC 124 the High Court in Ireland has recently ruled that the MIBI is an emanation of the state, whereas Flaux J in Byrne has ruled that the MIB is not.
25. Mr Milligan and Mr O'Brien referred to the same authorities in support of their arguments and it is convenient to summarise their more detailed submissions when examining these authorities.

Marleasing issue

26. By article 249 of the EC Treaty it is provided that:-

"In order to carry out their task and in accordance with the provisions of this Treaty, the European Parliament acting jointly with the Council, the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations or deliver opinions.

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

A decision shall be binding in its entirety upon those to whom it is addressed.

Recommendations and opinions shall have no binding force."

27. In relation to enactments relied on as bringing into force directives or to the enactments already existing relied on as fulfilling a member state's obligation, paragraph 8 of the judgment of the ECJ in Marleasing states that:-

". . . . the Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts. It follows that, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189 of the Treaty."

28. If the Marleasing principle applies, the national court goes much further in interpreting the enactment than it could conceivably go by the ordinary rules of interpretation. As Mr O'Brien put it, the court can use a "cleaver" and simply strike out provisions that do not comply with the directive. The question is whether that principle is available when construing not an enactment or regulation but a contract albeit a contract entered into in fulfilment of obligations arising under a directive.
29. When Mighell v Reading, Evans v MIB and White v White were considered by the Court of Appeal (see [1999] Lloyds Law Reports 30), Schiemann LJ and Hobhouse LJ expressed views as to the applicability of the Marleasing principle to the MIB Uninsured Drivers Agreement in the following terms. Schiemann LJ at page 39 said this:-

"For my part I do not accept that the Marleasing principle has any application to the agreement. The Marleasing principle applies to the interpretation of national law and puts an obligation on the courts to interpret national law in the light of community law. It is not authority for the proposition that an agreement between a national government and another person must as a matter of community law be interpreted in such a manner that the state has fulfilled all its obligations under community law. Such a proposition seems to me wrong in principle when applied to agreements. The agreement cannot in my judgment be properly categorised as part of national law. The state was at liberty to fulfil its community obligations in any way it liked and the fact that it chose to do nothing because it thought that the existing agreement by chance achieved fulfilment of those obligations cannot provide a basis for concluding that the other party to the existing agreement should be bound to a particular interpretation resulting solely from the State's view of its effect."

30. Hobhouse LJ at page 42 said:-

"In my judgment the correct view to take of the role and status of the Bureau is that it is a private law contractor and no more and as such is not capable of being covered by any direct effect the Directive may have. It cannot be disputed that this was its status prior to the making of the second Directive. Independently of any intervention of Community law, the Bureau was brought into existence by the insurance companies which were its original members. It provided a vehicle through which those independent insurance companies could enter into private law agreements with the Secretary of State. Their motivation does not alter or affect the nature of the relationship. It was contractual and no more.

This is clearly demonstrated by the position regarding untraced drivers. The United Kingdom government did not consider that it need take any step in this connection as a result of the making of the second Directive. It already had in place what it regarded as an adequate and satisfactory contractual arrangement with the Bureau. The Bureau is not constitutionally an emanation of the state: it is a private law company. It is not functionally an emanation of the state: it acts on its own behalf in the commercial interest of its members not on behalf of the state or as a delegate of the state. It enters into commercial private law contracts with inter alia the Secretary of State. Similarly, when seeking to implement the second Directive in relation to uninsured drivers the Secretary of State chose to make use of the same private law mechanisms as before.

The only capacity in which the Bureau has acted is as a private law entity and the only obligations it has assumed have been private law contractual obligations. This cannot be said to be a situation where any public law relationship has come into existence. Therefore the argument of the plaintiffs/claimants fails on the character of the relationship. What the United Kingdom did by way of implementation of the second Directive did not bring into existence any entity or relationship which enabled the Directive to be enforced against anybody (save possibly in the Francovich sense against itself). It follows that in my judgment I would emphasise as the cardinal feature of the present cases the private law status of the Bureau and the private law relationship it had with the Secretary of State and the fact that it only undertook private law obligations. It therefore does not meet the criteria for being treated as an emanation of the state nor does it suffice to satisfy the third criterion of direct effect. Whether one approaches the question in the way adopted by Schiemann LJ or by myself, the result is in the present cases the same: the criteria are not satisfied."

31. When White v White reached the House of Lords, [2001] 1 WLR 481, Lord Nicholls shared the above views saying this at paragraphs 21-22:-

"21. Had the MIB agreement been embodied in legislation, whether primary or secondary, the English court would have been under an obligation to interpret its provisions, as far as possible, in a way which gives effect to the Directive - see Marleasing SA v La Comerical Internacional de Alimentación SA (Case C-106/89) [1990] ECR I-4135. As Lord Oliver of Aylmerton observed in Litster v Forth Dry Dock and Engineering Co Ltd [1990] 1 AC 546, 559, a purposive construction will be applied to legislation even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use.

22. The present case does not involve legislation. Despite the contrary argument submitted to your Lordships, I do not see how the Marleasing principle, as such, can apply to the interpretation of the MIB agreement. Article 5 of the EC Treaty (OJ 1992 C224, p6) obliges member states to take all appropriate measures to ensure fulfilment of their obligations arising out of the Treaty."

32. With this view Lords Hope and Mackay clearly agreed. There is some dispute as to whether Lord Cooke also agreed but from the first paragraph of his speech it seems to me it was his intention to do so. In any event the point which Mr O'Brien makes and which Mr Milligan does not actually quarrel with is that Lord Nicholls expresses the view of a majority in the House of Lords. Thus only if it can be said that there has been some development at the ECJ indicating that that court might take the view that the Marleasing principle should apply to an agreement similar to the MIB Uninsured Drivers' agreement would it be right to refer the question whether Lord Nicholls view is the correct one.
33. What Mr Milligan relies on, as was relied on before the judge, are statements of the ECJ in judgments in Evans v MIB [2003] ECR I-4447 and more importantly in Pfeiffer v Deutches Rotes Kreuz [2004] ECR I-8835. In Evans a number of questions had been referred to the court in his claim against the United Kingdom for Francovich damages claiming that the United Kingdom had failed to implement the Directive in certain respects. In the judgment the court said this:-

"34. The fact that the source of the obligation of the body in question lies in an agreement concluded between it and a public authority is immaterial, provided that that agreement is interpreted and applied as obliging that body to provide victims with the compensation guaranteed to them by the Second Directive and as enabling victims to address themselves directly to the body responsible for providing such compensation.

35. As to whether it is sufficient, for the purposes of transposing the Second Directive, to rely on an existing body, it must be borne in mind that, whilst legislative action on the part of each Member State is not necessarily required in order to implement a directive, it is essential for national law to guarantee that the national authorities will effectively apply the directive in full, that the legal position under national law should be sufficiently precise and clear and that individuals are made fully aware of all their rights and, where appropriate, may rely on them before the national courts (Case C-365/93 Commission v Greece [1995] ECR I-499, paragraph 9, and Case C-144/99 Commission v Netherlands [2001] ECR I-3541, paragraph 17).

36. As the Court has already made clear, the last-mentioned condition is of particular importance where the directive in question is intended to accord rights to nationals of other Member States (Commission v Greece, cited above, paragraph 9, and Commission v Netherlands, cited above, paragraph 18). That is the position in relation to the Second Directive, which is intended in particular, according to the fifth recital in its preamble, to guarantee victims adequate protection, irrespective of the Member State in which the accident occurred.

37. In those circumstances, it must be held that a body may be regarded as authorised by a Member State within the meaning of Article 1(4) of the Second Directive where its obligation to provide compensation to victims of damage or injury caused by unidentified or insufficiently insured vehicles derives from an agreement concluded between that body and a public authority of the Member State, provided that the agreement is interpreted and applied as obliging the body to provide victims with the compensation guaranteed to them by the Second Directive and provided that victims may apply directly to that body."

34. Mr Milligan's interpretation of the words which I have placed in italics is that the court was ruling that the Marleasing principle is to be applied to the MIB Uninsured Drivers Agreement. This is a submission which the judge accepted. The alternative as submitted by Mr O'Brien is that all the court was saying was that provided the agreement was construed so as to comply, there would be no breach of the United Kingdom's obligations under the Treaty. I do not think it is clear which the court was saying, but it is certainly arguable that it was taking the view that the courts have an obligation to construe an agreement entered into or relied on for the very purpose of fulfilling an obligation under the Directive in accordance with the Marleasing principle.
35. The more important authority is Pfeiffer. In that case certain individuals were seeking to challenge the period of time they were required to work as imposed by a collective or works agreement and were seeking to enforce directly Article 6 of Directive 93/104/EC which sought to establish maximum weekly working times. German legislation was relied on as fulfilling Germany's obligation to incorporate the Directive as part of German law, which contained a provision (Paragraph 3) which restricted working hours to 8 hours a day. But it also contained a provision (Paragraph 7(1)(1)) which allowed a derogation from Paragraph 3 in the case of collective or works agreements dealing with certain circumstances.
36. The court held that Article 6 of the Directive was directly enforceable but then continued as follows:-

"106. As a consequence, Article 6(2) of Directive 93/104 fulfils all the conditions necessary for it to produce direct effect.

107. It still remains to determine the legal consequences which a national court must derive from that interpretation in circumstances such as those in the main proceedings, which involve individuals.

108. In that regard, the Court has consistently held that a directive cannot of itself impose obligations on an individual and cannot therefore be relied upon as such against an individual (see, inter alia, Case 152/84 Marshall [1986] ECR 723, paragraph 48; Case C-91/92 Faccini Dori [1994] ECR I-3325, paragraph 20; and Case C-201/02 Wells [2004] ECR I-0000, paragraph 56).

109. It follows that even a clear, precise and unconditional provision of a directive seeking to confer rights or impose obligations on individuals cannot of itself apply in proceedings exclusively between private parties.

110. However, it is apparent from case-law which has also been settled since the judgment of 10 April 1984 in Case 14/83 Von Colson and Kamann [1984] ECR 1891, paragraph 26, that the Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 10 EC to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts (see, inter alia, Case C-106/89 Marleasing [1990] ECR I-4135, paragraph 8; Faccini Dori, paragraph 26; Case C-126/96 Inter-Environnement Wallonie [1997] ECR I-7411, paragraph 40; and Case C-131/97 Carbonari and Others [1999] ECR I-1103, paragraph 48).

111. It is the responsibility of the national courts in particular to provide the legal protection which individuals derive from the rules of Community law and to ensure that those rules are fully effective.

112. That is a fortiori the case when the national court is seised of a dispute concerning the application of domestic provisions which, as here, have been specifically enacted for the purpose of transposing a directive intended to confer rights on individuals. The national court must, in the light of the third paragraph of Article 249 EC, presume that the Member State, following its exercise of the discretion afforded it under that provision, had the intention of fulfilling entirely the obligations arising from the directive concerned (see Case C-334/92 Wagner Miret [1993] ECR I-6911, paragraph 20).

113. Thus, when it applies domestic law, and in particular legislative provisions specifically adopted for the purpose of implementing the requirements of a directive, the national court is bound to interpret national law, so far as possible, in the light of the wording and the purpose of the directive concerned in order to achieve the result sought by the directive and consequently comply with the third paragraph of Article 249 EC (see to that effect, inter alia, the judgments cited above in Von Colson and Kamann, paragraph 26; Marleasing, paragraph 8, and Faccini Dori, paragraph 26; see also Case C-63/97 BMW [1999] ECR I-905, paragraph 22; Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores [2000] ECR I-4941, paragraph 30; and Case C-408/01 Adidas-Salomon and Adidas Benelux [2003] ECR I-0000, paragraph 21)."

37. Thus far the court has gone no further than state that the Marleasing principle applies in particular to "legislative provisions".
38. But the court then continued:-

"114. The requirement for national law to be interpreted in conformity with Community law is inherent in the system of the Treaty, since it permits the national court, for the matters within its jurisdiction, to ensure the full effectiveness of Community law when it determines the dispute before it (see, to that effect, Case C-160/01 Mau [2003] ECR I-4791, paragraph 34).

115.Although the principle that national law must be interpreted in conformity with Community law concerns chiefly domestic provisions enacted in order to implement the directive in question, it does not entail an interpretation merely of those provisions but requires the national court to consider national law as a whole in order to assess to what extent it may be applied so as not to produce a result contrary to that sought by the directive (see, to that effect, Carbonari, paragraphs 49 and 50).

116. In that context, if the application of interpretative methods recognised by national law enables, in certain circumstances, a provision of domestic law to be construed in such a way as to avoid conflict with another rule of domestic law or the scope of that provision to be restricted to that end by applying it only in so far as it is compatible with the rule concerned, the national court is bound to use those methods in order to achieve the result sought by the directive.

117. In such circumstances, the national court, when hearing cases which, like the present proceedings, fall within the scope of Directive 93/104 and derive from facts postdating expiry of the period for implementing the directive, must, when applying the provisions of national law specifically intended to implement the directive, interpret those provisions so far as possible in such a way that they are applied in conformity with the objectives of the directive (see, to that effect, the judgment in Case C-456/98 Centrosteel [2000] ECR I-6007, paragraphs 16 and 17).

118. In this instance, the principle of interpretation in conformity with Community law thus requires the referring court to do whatever lies within its jurisdiction, having regard to the whole body of rules of national law, to ensure that Directive 93/104 is fully effective, in order to prevent the maximum weekly working time laid down in Article 6(2) of the directive from being exceeded (see, to that effect, Marleasing, paragraphs 7 and 13).

119. Accordingly, it must be concluded that, when hearing a case between individuals, a national court is required, when applying the provisions of domestic law adopted for the purpose of transposing obligations laid down by a directive, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive. In the main proceedings, the national court must thus do whatever lies within its jurisdiction to ensure that the maximum period of weekly working time, which is set at 48 hours by Article 6(2) of Directive 93/104, is not exceeded."

39. Mr O'Brien argues that in Pfeiffer all the court was actually saying was that in accordance with the Marleasing principle, a blue pencil should be struck through Paragraph 7 of the German legislation, which would take away the right to derogate and which would thus strike down the agreement in so far as it failed to comply with Article 3. It is arguable that is all it was deciding but it is also true that if that is all it was deciding it would have been possible to stop at paragraph 113, and put the matter quite shortly. It is thus as it seems to me very arguable particularly in the context of an agreement which is entered into between a member state and another entity and which is relied as fulfilling the member state's obligations under the treaty, that the ECJ would say that the Marleasing principle should apply.
40. In Byrne Flaux J took the view that Evans in the ECJ and the parts of the judgment quoted at paragraph 3 above had not altered the position as stated in White v White. But Flaux J did not refer in his judgment to Pfeiffer or apparently consider its possible effect (although we were told by Mr O'Brien that he was referred to the relevant passages in oral submissions). In my view therefore the judge was right to conclude this was a difficult issue and he was entitled to conclude that it was necessary to refer the same to the ECJ.

Emanation of the state

41. In the judgment of the ECJ in Foster v British Gas [1990] ECR I-3313 appear the following important passages:-

"15. It follows that the Court of Justice has jurisdiction in proceedings for a preliminary ruling to determine the categories of persons against whom the provisions of a directive may be relied on. It is for the national courts, on the other hand, to decide whether a party to proceedings before them falls within one of the categories so defined.

. . .

18. On the basis of those considerations, the Court has held in a series of cases that unconditional and sufficiently precise provisions of a directive could be relied on against organizations or bodies which were subject to the authority or control of the State or had special powers beyond those which result from the normal rules applicable to relations between individuals.

19. The Court has accordingly held that provisions of a directive could be relied on against tax authorities (the judgments in Case 8/81 Becker, cited above, and in Case C-221/88 ECSC v Acciaierie e Ferriere Busseni (in liquidation) [1990] ECR I-495), local or regional authorieies (judgment in Case 103/888 Fratelli Costanzo v Comune di Milano [1989] ECR 1839), constitutionally independent authorities responsible for the maintenance of public order and safety (judgment in Case 222/84 Johnston v Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651), and public authorities providing public health services (judgment in Case 152/84 Marshall, cited above)."

42. The Court of Appeal has had to consider the question as to whether the criteria in Foster constituted an exhaustive statement. In NUT v St Mary's Church of England Junior School [1997] 3 CMLR 630 Scheimann LJ quoted Mustill LJ in Rolls Royce v Doughty [1992] ICR 538 where he said:-

"1. Is the applicant correct in contending that the sole test or at any rate the sole test material for present purposes, of whether the entity in question falls within the doctrine of BECKER . . and MARSHALL . . . is whether it is under the control of the state?

2. If this contention is not correct, to what extent does the answer furnished by the Court of Justice in paragraph [22] of its judgment in FOSTER constitute an exhaustive statement of the criteria for determining the status of the entity; and if it is not exhaustive, what test should be applied to the present case?"

43. Schiemann LJ then continued:

"23. He held that the answer to the first question was in the negative. For present purposes it is his approach to the second question which is of interest. He said this at page 552:-

On behalf of the employer Mr Pannick was disposed to accept, rightly in my view, that this test was not intended to provide the answer to every category of case. The words 'is included among' in paragraph [20] make this clear enough. Nevertheless, at least in a case of the same general type as FOSTER the court's formulation must always be the starting point and will usually be the finishing point. If all the factors identified by the court are present it is likely to require something very unusual to produce the result that an entity is not to be identified with the state. Conversely, although the absence of a factor will not necessarily be fatal, it will need the addition of something else not contemplated by the formula, before the principle in MARSHALL'S case . . . has a prospect of being brought into play."

44. Mr O'Brien places great reliance on the views of Hobhouse LJ in Mighell where he concluded obiter that the MIB was not an emanation of the State. Flaux J also so concluded in Byrne.
45. But in the ECJ views have been expressed which cast some doubt as to whether those views represent the position under European law. In Farrell v Whitty Case C-356/05 in the ECJ the Advocate General said this in relation to the MIBI (the Irish equivalent of the MIB):-

"72. In conclusion, it seems to me that the MIBI may, as a body authorised for the purposes of Article 1(4) of the Second Directive responsible for the function entrusted to those bodies by that directive, be put on the same footing as the State, with the result that Article 1 of the Third Directive may be directly relied upon by individuals before the national courts."

46. Although the court in its judgment did not adopt the simplistic position of the Advocate General they left the position of the MIBI open in these words:-

"39      The question remains whether that provision may be relied on against a body such as the MIBI.

40      A directive cannot be relied on against individuals, whereas it may be relied on as against a State, regardless of the capacity in which the latter is acting, that is to say, whether as employer or as public authority. The entities against which the provisions of a directive that are capable of having direct effect may be relied upon include a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the State, for providing a public service under the control of the State and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals (Case C-188/89 Foster and Others [1990] ECR I-3313, paragraph 20; Case C-343/98 Collino and Chiappero [2000] ECR I-6659, paragraph 23; and Case C-157/02 Rieser Internationale Transporte [2004] ECR I-1477, paragraph 24).

41      Since the national court has not provided sufficient information regarding the MIBI for it to be possible to determine whether the latter can be assimilated to such a body, it is for the national court to ascertain, taking account, on the basis of the above considerations, of the status of the MIBI and its relationship with the Irish State, whether the directive may be relied upon against it."

47. The important point is that when the case returned to Ireland the High Court in a judgment of Birmingham J, cited in [24] above, ruled that the MIBI was an emanation of the state. Farrell in the ECJ was not referred to by Flaux J in his judgment. It only became available on the internet a few days before the hearing and was not referred to in any written submissions although it was according to Mr O'Brien cited to him orally. More importantly Birmingham J only ruled as he did in January 2008. It is difficult to think that a body such as the MIB or its equivalent should be an emanation of the state in one member country and not in another. This furthermore gives cause for concern as to whether the guidance is so clear that it needs no further input from the ECJ.
48. In giving guidance it is often of assistance to have a concrete example on which to opine so as to clarify what the guidance means. Thus although I accept that in strict theory it may be for this court to decide whether the MIB is an emanation of the state, it would certainly be of assistance to have the view of the ECJ on the appropriate guidance and as to whether it would be their view that the MIB is an emanation of the state
49. I accordingly in agreement with the judge would find the ECJ's view as to the appropriate guidance of great assistance.
50. Finally, standing back – was the judge right to refer at this stage? It seems to me that he cannot be criticised for doing so. Some of the language he used relating to permission to appeal may not be apposite and some criticisms can no doubt be made of some of his reasoning. Mr O'Brien has set out in great detail in his skeleton areas where he says the judge has misunderstood the position. I have to say that I am not conscious of serious deficiencies but in any event do not find it fruitful to consider the points made because the position before us is somewhat different and it is right that we should ourselves consider whether it is necessary to refer the questions in order to give judgment.
51. It seems clear that the answer to these issues holds the key to the liability of the MIB. The issue of the MIB's liability is present in many cases other than this particular one. The construction of the Directive and the question of whether Marleasing applies to the MIB Agreements and indeed the question whether the MIB is an emanation of the State are important issues of some general importance. Provided it is genuinely arguable that the European Court will answer them in Helphire/Angel's favour, the sooner the ECJ opines on them the better.
52. I would accordingly dismiss the appeal. Some further consideration however needs to be given as to the form of order and the terms of the reference and argument should now be addressed to that.

Lord Justice Carnwath

53. I agree.

Lord Justice Wilson

54. I also agree.