AMP General Insurance Ltd v Victorian WorkCover Authority & Ors [2006] VSCA 236

AMP General Insurance Ltd v Victorian WorkCover Authority & Ors [2006] VSCA 236 - VSCA 2006 case summary — Zoe

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1 On 25 October 1989, a worker suffered injuries from a fall at a domestic building site in East Malvern. The Victorian WorkCover Authority has paid the worker statutory compensation since he was injured. The Authority alleges that his injuries were caused by the negligence of Jara Constructions Pty Ltd ("the company"), which it says was the principal contractor at the site. AMP General Insurance Limited ("AMP") was the public liability insurer of the company.

2 The Authority wishes to enforce against the company its statutory right of indemnity under s.138 of the Accident Compensation Act 1985. The company was deregistered on 11 September 1998, so the Authority applied to the Court under s.601AH(2) of the Corporations Act 2001 for an order reinstating the company.

3 The application for reinstatement was not opposed by the Australian Securities and Investments Commission and on 5 July 2006, Master Efthim ordered that the company be reinstated. AMP, though not a party to the original application, filed a notice of appeal from the Master's decision. No issue was raised about the standing of AMP to appeal, but on 24 August 2006, the appeal was dismissed.

4 The matter came on in this Court on 5 October 2006, as an application for leave to appeal. Although it was the view of both parties that no leave was required, AMP nevertheless sought leave out of an abundance of caution. We deal with the question of leave later.

5 AMP also sought an order that the appeal not be taken to have been abandoned. The deemed abandonment occurred because of AMP's failure to file within the prescribed time the Note of Proposed Contents of Appeal Book: r.64.16(1). The Authority would not consent to the reinstatement of the appeal, because it maintained that the appeal was manifestly hopeless.

6 In the course of argument on these interlocutory issues, the Court proposed - and the parties agreed - that the appeal itself could be heard the following day (6 October). This course was followed and the hearing of the appeal took only half a day. The parties and their legal representatives are to be commended for their readiness to change course at short notice. The speedy disposition of the appeal in circumstances such as this has obvious advantages both for the parties and for the Court.

7 To enable that course to be followed, the President determined under s.11(1A) of the Supreme Court Act 1986 that the Court be constituted for this appeal by two Judges of Appeal.

Whether leave to appeal is required

8 It is a matter of concern that the question of whether an order is final or interlocutory - that being the criterion under s.17A(4) of the Supreme Court Act for determining whether leave to appeal is required - continues to be productive of such uncertainty. It is most unfortunate that a party in AMP's position feels compelled to make a precautionary application for leave to appeal, even though its own assessment is that leave is not required. As the long list of cases set out in Williams - Civil Procedure demonstrates, the distinction has proved to be notoriously difficult to apply over many years.

9 There must, of course, continue to be a class of orders - those traditionally characterised as "interlocutory" - which are only appellable by leave. Both the workload of the Court of Appeal, and the importance of minimising interlocutory appeals, require that this be so. But the continuation of the uncertainty, reflected in other applications before the Court in recent weeks, suggests that it may be time to explore a different approach to classification. The Civil Justice Review, presently being undertaken by the Victorian Law Reform Commission, provides an opportunity to consider the possibilities for reform.

10 Leave to appeal is required if the appeal is from "a judgment or order in an interlocutory application".[1] AMP contends - and the Authority does not dispute - that the order of the Judge below is a final order because it finally determines the rights of the parties in relation to the reinstatement proceeding. The reinstatement proceeding is a self-contained proceeding provided for by the Corporations Act, with its own originating process.

11 Were the reinstatement proceeding to be viewed in isolation, the order reinstating the company would have to be regarded as a final order. The question is whether its character changes in circumstances where the reinstatement proceeding is no more than a necessary preliminary to the prosecution of a principal proceeding. That is often - though not uniformly - the case with reinstatement applications.

12 In Dodoro v Knighting,[2] Callaway JA (with whom the other members of the Court agreed on this point) identified, as one of three kinds of interlocutory orders, an order which does not determine the rights of a party in a principal cause. His Honour said:

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27 In our view, the decision to order reinstatement is properly characterised as a discretionary decision of the kind described in Norbis v Norbis. The decision has all of the features there referred to. The decision depends on the application of a very general standard - what is "just". The standard is so general, indeed, that it might be thought to do no more than make explicit the duty implicitly imposed on every decision-maker - to consider and weigh, fairly and rationally, all the relevant considerations. What is "just" is a value judgment, and there is room for reasonable differences of opinion, no particular opinion being uniquely right.

28 Accordingly, it is not for this Court to decide for itself whether reinstatement is just. Rather, we must consider whether AMP has shown the discretion to have miscarried, in accordance with the well-established principles for appellate review of discretionary decisions.[21]

Did the discretion miscarry?

29 AMP's attack on the decision of the primary judge concentrated on the prejudice likely to be caused to AMP on account of the "extraordinary, unexplained delay" by the Authority in seeking to enforce its rights. The essential complaint is that the judge failed to give any, or any sufficient, consideration to this question of prejudice.

30 As already noted, the workplace accident occurred in October 1989. In 1995, the Authority commenced a proceeding against the company seeking an indemnity under s.138. The company filed a defence to that proceeding. On 1 November 1996, a new case management system commenced operation in the Supreme Court which provided, in part, that any proceeding commenced by writ filed before 1 November 1996 would stand dismissed on 1 July 1997 unless the proceeding had been set down for trial or had been admitted to one of a specified number of lists. On 1 July 1997, no such step having been taken, the Authority's proceeding against Jara stood dismissed.

31 The Authority did not move to reinstate the proceeding against the company. No further step appears to have been taken until March 2005, almost seven years later, when the Authority commenced a proceeding against AMP as defendant, seeking recovery directly from AMP under s.601AG of the Corporations Act 2001. When AMP's solicitors raised a number of legal objections to that proceeding, the Authority evidently decided that it should seek to have the company reinstated, so that proceedings could once again be brought directly against the company. Hence the reinstatement application.

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37 In our view, the attack on his Honour's exercise of discretion must fail. This is not a case where it can be said that the primary judge "failed to take into account a relevant consideration", in the sense in which that category of discretionary error is defined. The relevant consideration was the (risk of) prejudice to AMP flowing from the reinstatement of the company, namely, that as the company's insurer AMP would be in the position of having to litigate (through exercise of its right of subrogation) a proceeding about a workplace accident which occurred very many years ago.

38 As appears from the passages we have set out, his Honour recognised the relevance of the issue - indeed, he described it as the issue for decision. AMP's real complaint concerns his Honour's refusal to undertake the kind of assessment of the risk of prejudice which would take place on an application to dismiss the proceeding for want of prosecution or otherwise as an abuse of process.

39 One of AMP's subsidiary objections was that his Honour erred in treating abuse of process, rather than want of prosecution, as the appropriate "analogue". This was said to be significant because - so the argument went - the discretion to dismiss for want of prosecution was enlivened merely by showing that there is a risk that a fair trial may not be had, whereas abuse of process could only be demonstrated where the applicant can show that a fair trial is not possible.

40 This submission must be rejected on both grounds. First, as the decision of this Court in Bishopsgate Insurance Australia Limited v Deloitte Haskins & Sells[30] demonstrates, the inherent power to stay or dismiss for want of prosecution is but one aspect of "the incidental powers which all courts have to prevent abuses of process."[31] Exactly the same point was made by the High Court majority in Batistatos v Roads and Traffic Authority (NSW).[32] Secondly, and consequently, no different test is applicable. Whether the complaint advanced by the defendant relies on the general principles of abuse of process or the more specific category of want of prosecution, the criterion is the same. Is there a substantial risk that the defendant will be unable to obtain a fair trial in the circumstances of the case? For want of prosecution, the defendant will need to show that the plaintiff's delay was "inordinate and inexcusable".[33]

41 Obviously, the delay of 17 years between the accident and now raises very real questions about whether a fair trial will be possible. His Honour's conclusion was, however, that this substantial lapse of time did not make it clear beyond argument that a fair trial was impossible. He concluded that further investigation of that question would be required and that the appropriate forum for that investigation was in the proposed proceeding against the company.

42 In our view, that conclusion was well open to his Honour in the making of this discretionary decision. Indeed, we would respectfully express our agreement with it. (That is, if we had had to decide the matter for ourselves, we would have come to the same conclusion). His Honour's approach reflected that of Gillard J in Pilarinos v Australian Securities and Investments Commission.[34] In that case, a putative defendant appealed against the reinstatement of a company, arguing that it was not just to order reinstatement because the proposed proceeding was bound to fail, and hence reinstatement was futile. Gillard J said:

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