Bluescope Steel Limited v Allianz Australia Insurance Limited

Supreme Court of NSW|2012-09-25|Before: Stevenson J, Barrett JA

EX TEMPORE Judgment 1I have two applications before me. The plaintiff, Bluescope Steel Limited, seeks leave to discontinue these proceedings pursuant to Uniform Civil Procedure Rules 2005 ("UCPR") r 12.1. 2Bluescope also seeks an order that despite the fact it is discontinuing these proceedings, the defendant, Allianz Australia Insurance Limited, pay the costs of the proceedings. 3Allianz opposes leave for discontinuance being granted. In turn, it seeks an extension of the time within which it can file a cross-claim in the proceedings.

Decision 4For the reasons that follow, I grant Bluescope leave to discontinue the proceedings. In those circumstances, I do not think it appropriate that Allianz be given an extension of time to bring a cross-claim. 5I do not think it appropriate to make any order as to costs.

Background 6On 5 July 2006 Mr Youden Jackson commenced proceedings against Bluescope and BHP Billiton Limited in the Dust Diseases Tribunal, invocating that Tribunal's exclusive jurisdiction under s 11(1) of the Dust Diseases Tribunal Act 1989. 7At that time Mr Jackson was gravely ill. He gave evidence at a bedside hearing a week later, on 12 July 2006. 8Mr Jackson died five days later, on 17 July 2006. 9Mr Jackson's proceedings were continued by his legal personal representative. 10On or about 21 August 2007 the proceedings between Mr Jackson and Bluescope were settled. On 21 August 2007, by consent, judgment was entered in favour of Mr Jackson against Bluescope in the sum of $225,000. Bluescope paid that sum on 2 October 2007. 11About eighteen months later, on 19 February 2009, settlement was reached between Bluescope and Mr Jackson's estate in relation to costs, and an agreed amount was paid on 28 February 2009. 12On 16 July 2009 Bluescope commenced separate proceedings in the Dust Diseases Tribunal seeking indemnity from Allianz under a statutory policy issued by Allianz's predecessor, Manufacturers Mutual Insurance Co Limited, to Bluescope's predecessor, John Lysaght Limited. Those proceedings were continued for some time, after which, it seems, Bluescope realised the proceedings were "flawed and futile". Those words come from the judgment of Barrett JA in Allianz Australia Insurance Ltd v Bluescope Steel Ltd [2012] NSWCA 240 at [69]. That decision was handed down on 8 August 2012. I shall refer to it further in these reasons. 13Bluescope then filed, in the proceedings originally brought by Mr Jackson, a Notice of Motion seeking an order extending the time within which it could bring a cross-claim against Allianz. By reason of UCPR Part 9, the cross-claim should have been brought within the time limited for the filing of Bluescope's defence; that is, within 28 days of service of Mr Jackson's claim (UCPR r 14.3). The application was thus years out of time. 14As emerges from what I have said earlier, Mr Jackson's claim against Bluescope in the proceedings had long been settled. 15On 25 March 2011, Kearns J made an order, as sought by Bluescope, extending the time within which it could bring that cross-claim. 16On this occasion his Honour said: - "There are matters that support the matter being heard in the Tribunal. One is that the parties have conducted this litigation from the filing of the statement of claim in June 2009 to September 2010 as if it were to be conducted in the Tribunal. As indicated earlier, this has involved several interlocutory processes and the filing of pleadings and affidavits. Another matter is one of the issues will concern the reasonableness of the conduct of Bluescope and its legal advisers in the conduct of the Jackson proceedings which were brought on urgently. The practices and procedures of the Tribunal in 2006 are likely to bear on this and, it seems to me, the Tribunal with its experience is likely to be better placed in taking these matters into account, to the extent they need to be, in assessing the evidence and the reasonableness of the conduct of those concerned." 17On 22 August 2011 Allianz filed a Notice of Appeal to the Court of Appeal in respect of Kearns J's decision. 18The Court of Appeal heard the matter on 7 May 2012. As I understand it, the principal issue argued was whether the Dust Diseases Tribunal, and Kearns J in particular, had jurisdiction to extend the time for Bluescope to bring a cross-claim notwithstanding the fact that the primary claim by Mr Jackson against Bluescope had been finalised by settlement. The Court of Appeal reserved its decision. 19On 11 July 2012 Bluescope commenced these proceedings in the Supreme Court. At that time the Court of Appeal's decision remained reserved and, presumably, neither of the parties knew when judgment would be delivered. 20In these proceedings Bluescope seeks, in substance, the same relief as it seeks in its cross-claim in the Dust Diseases Tribunal. 21It brought these proceedings: - (a)against the possibility that Allianz's appeal to the Court of Appeal might be successful and that the Court of Appeal might conclude that Kearns J had no jurisdiction to extend the time of the filing of Bluescope's cross-claim; (b)because of an apprehension that the limitation period during which it could commence proceedings against Allianz in this Court would expire on 14 July 2012 (six years after the date on which Bluescope first sought indemnity from Allianz); and (c)because it had, unsuccessfully, sought from Allianz an undertaking not to take any limitation point. 22On 8 August 2012 the Court of Appeal in Bluescope Steel Ltd v Allianz Australia Ltd unanimously dismissed the appeal. Beazley JA delivered a judgment with which Macfarlan JA agreed. Barrett JA delivered a separate judgment. Each member of the Court found that Kearns J did have jurisdiction. 23Barrett JA put the matter succinctly at [86]: - "As a matter of power, the Tribunal may make such an order [that is extending time to file a cross-claim] after the 28 days have elapsed and regardless of what has happened in the meantime to the principal case advanced through the statement of claim. The progress and fate of that principal case (and, if it has been disposed of, the passage of time since its conclusion) will, however, necessarily be taken into account by the Tribunal in deciding whether to exercise the power to extend time thus available to be exercised by it as a matter of discretion". 24And at [88]: - "A particular point should be made in conclusion. The availability of a cross-claim in circumstances of the present kind depends wholly on the exercise by the Tribunal of its discretion to extend time. In exercising that discretion, the Tribunal must have regard to its own role as a specialist court and, where the subject matter of the cross-claim is not within its own exclusive jurisdiction, to the existence of relevant jurisdiction in another court or other courts. The Tribunal will be alive to the question whether the matter sought to be agitated before it is in truth one suitable for its attention rather than that of another competent court." 25On 31 August 2012 Kearns J set the cross-claim down for hearing before his Honour for three days commencing 10 December 2012. 26Now that the appeal has been dismissed, Bluescope has no need to prosecute these proceedings, as the proceedings in the Dust Diseases Tribunal will continue. Accordingly it seeks leave to discontinue the proceedings in the Supreme Court.

Matters which are common ground 27There is no dispute about the following matters: - (1)although the cross-claim before the Dust Diseases Tribunal is not a matter arising in its exclusive jurisdiction, the Dust Diseases Tribunal has jurisdiction to hear the cross-claim by reason of s 11(4) of the Dust Diseases Tribunal Act. That is because the cross-claim is an "ancillary or related" matter to a matter within jurisdiction: see Beazley JA in Allianz Australia Insurance Ltd v Bluescope Steel Ltd at [56-57] and Barrett JA at [78]. (2)this Court has no power to transfer the Dust Diseases Tribunal proceedings to this Court. Part 9 (s 139 to s 153) of the Civil Procedure Act 2005 does not apply to the Dust Diseases Tribunal. Section 8 of the Jurisdiction of Courts (Cross-vesting) Act 1987 only gives this Court power to cross-vest a matter from the Dust Diseases Tribunal to this Court with a view to transferring those proceedings to another court. 28Further, there is no application before the Court to stay the proceedings before the Dust Diseases Tribunal. There is no power of the Court, as such, to stay proceedings in that Tribunal. If steps were to be taken to restrain proceedings in that Tribunal, they would have to be under s 69 of the Supreme Court Act 1970, whether in the nature of an order of writ of prohibition or otherwise.

Should the Court grant the plaintiff leave to discontinue? 29Allianz accepts that the usual approach under UCPR r 12.2 is to grant leave to a plaintiff who wishes to discontinue proceedings. 30The relevant principles were summarised in a decision of Graham J in Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at page 879, cited with approval by Sweeney J in SCI Operations Pty Ltd v Trade Practice Commission (1984) 53 ALR 283 at page 311 as follows: - "The principles to be culled from these cases are, in my judgment, that the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved." (See also cases gathered at Ritchie's Uniform Civil Procedure NSW, [12.1.50]) 31Two themes emerge. 32First, a plaintiff should not normally be compelled to litigate against its will. Here, Bluescope wishes to discontinue the proceedings. In that sense refusing leave would compel it to prosecute this litigation against its will. It is true, as Allianz submits, that the issues Bluescope agitates in these proceedings are the same as those in the Dust Diseases Tribunal. Refusing leave would not compel Bluescope to pursue a cause of action against its will. Nonetheless, were I to refuse to grant leave, Bluescope would remain involved in proceedings that it wishes now to eschew. 33Second, the Court should be careful not to deprive a defendant "some advantage which he has already gained in the litigation". 34In that regard Allianz submits that it (and indeed Bluescope) has achieved a significant advantage as a result of Bluescope commencing proceedings in this Court, in that it (and Bluescope) has an unfettered right of appeal, as opposed to the limited right of appeal available under s 32 of the Dust Diseases Tribunal Act (which is only "in point of law"). 35Allianz submits that this advantage may be of particular value in this case. This is because of an issue that has arisen in the proceedings (both here and in the Dust Diseases Tribunal) concerning an alleged conflict of interest on the part of Bluescope's solicitors when acting both for Bluescope and BHP at the bedside hearing on 12 July 2006. 36Allianz alleges that Bluescope, by not notifying it of that hearing, and allowing one counsel to represent both it and BHP, acted in breach of its duty of good faith to Allianz. 37I express no view about the merits of those contentions. 38Allianz submits, however, that there is a sensible possibility that contested issues of fact will arise in the exploration of that issue which, if decided adversely to Allianz (and indeed Bluescope), would not be amenable to appeal unless able to be characterised as being "in point of law" (for example, under the principles in House v R [1936] HCA 40; (1936) 55 CLR 499). 39Allianz also submits that it (and Bluescope) would have, if the dispute remained in this Court, the advantage of having the matter heard in the specialised list by a judge who, it might be supposed, had more experience in dealing with the insurance issues that will arise. 40A date has already been fixed in the Dust Diseases Tribunal for hearing; 10 December 2012. It is unlikely a date can be allocated in this Court before 2013. 41On the other hand, Bluescope submits that the limited appeal rights under s 32 is an inherent ingredient of the litigation before the Dust Diseases Tribunal and that it is beside the point to compare those limited rights to those available in this Court. 42Bluescope referred to the remarks of Santow JA in Julia Farr Services Inc v Hayes [2003] NSWCA 142, particularly at [14]. 43I have not found his Honour's observations in that case of great assistance to the particular circumstance before me. Unlike this case, the case Santow JA was considering involved matters lying within the exclusive jurisdiction of the Dust Diseases Tribunal. Further, that case did not involve a situation where, as here, the party that had initiated proceedings in the Dust Diseases Tribunal also initiated mirror proceedings in this Court. The question of "deprivation of advantage" did not arise in the Julia Farr decision. 44Bluescope also submits that: - (a)the legislature has given the Dust Diseases Tribunal jurisdiction to hear the controversy currently before it; (b)the Dust Diseases Tribunal has commenced to exercise that jurisdiction; (c)the proceedings are modest in quantum; (d)the original claim by Mr Jackson against Bluescope engaged the Tribunal's exclusive jurisdiction; and (e)the Tribunal has particular knowledge of the factual context in which Mr Jackson's claim arose. In that regard I refer to the comments of Kearns J, which I have set out above at [16]. 45The "advantage" for which Allianz contends has only arisen because of Bluescope's decision to commence these proceedings, notwithstanding that the proceedings in the Dust Diseases Tribunal are still pending. That decision was made in the face of Allianz's refusal to offer an undertaking not to rely on the Limitation Act 1969. Had Allianz given that undertaking, the opportunity or "advantage" to which it points would not have arisen. Thus, to that extent, the advantage that it complains will be lost has only arisen because of its own conduct. Whether that conduct was reasonable or not is a matter I address below.

Practical consequence of granting or refusing leave to discontinue 46If leave to discontinue is granted, Bluescope's claim in these proceedings will come to an end. It must follow, in my opinion, that I would refuse leave to Allianz to file a cross-claim. There would be no utility in doing so. 47In that event, Allianz has foreshadowed that it would commence, immediately, fresh proceedings in this Court seeking relief to the same effect as that in the proposed cross-claim. 48Bluescope has foreshadowed that, if that occurred, it would seek a stay of those proceedings on the grounds of abuse of process and it would rely upon principles of the kind set out in Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 per Gleeson CJ, Gummow, Hayne and Crennan JJ at [9]. 49On the other hand, if leave to discontinue is not granted Allianz would seek to have these proceedings prosecuted. The proceedings in the Dust Diseases Tribunal will remain pending, set to be heard on 10 December 2012. 50Allianz has stated that, in that event it will approach Kearns J and ask his Honour to refrain from proceeding on 10 December 2012. 51It seems likely that his Honour would wish to proceed with the matter, unless restrained from doing so. 52I say this because on 31 August 2012, when setting the 10 December 2012 date, Kearns J said that the date was "far enough away for you to get relief to prevent my hearing". 53If leave to discontinue were not granted, and this proceeding continued, and Kearns J refused to defer consideration of the matter, Allianz has foreshadowed making an application under s 69 of the Supreme Court Act for relief in the nature of a writ of prohibition to restrain Kearns J from hearing the case pending the decision in this case. 54However, it is hard to see how a remedy by writ of prohibition could lie unless it could be established that the Dust Diseases Tribunal does not have jurisdiction to hear the matter. 55In Aronson, Dyer and Groves, Judicial Review of Administrative Action, 4th ed (2009), it was said at page 804: - "...unlike certiorari, prohibition lies only for actual threatened excess of power. Almost no-one has suggested that prohibition also lies for patent non-jurisdictional error of law, and there is substantial authority against the idea". 56The authors cite, amongst other authorities, Sydney Water Corp Ltd v Industrial Relations Commission of NSW [2004] NSWCA 436; (2004) 61 NSWLR 661 at 675 [62]: - "Nevertheless, the Court should not make an order in the nature of prohibition unless satisfied of a threatened jurisdictional error". (citation omitted, emphasis in original) 57As set out above, the Court of Appeal in Allianz Australia Insurance Ltd v Bluescope Steel Ltd proceeded on the basis that the Dust Diseases Tribunal does have jurisdiction. 58Allianz has foreshadowed that it may also seek to test a refusal by Kearns J to cease hearing the matter by application for leave to appeal to the Court of Appeal under s 32 of the Dust Diseases Tribunal Act "on a point of law". However, if, as seems clear, the Dust Diseases Tribunal does have jurisdiction, it is hard to see what error of law will arise. 59There thus looms the most unattractive prospect that if leave to discontinue these proceedings is not granted, two sets of proceedings, in this Court and in the Dust Diseases Tribunal, will proceed in parallel and that both the Dust Diseases Tribunal and this Court will be asked to decide the same issue between the same parties. To merely state that proposition is to reveal its unacceptability. 60I am not able to say how likely that prospect is. That depends on whether Allianz could get relief in the nature of prohibition, or leave to appeal, as it foreshadows. I am satisfied there is, at the very least, real doubt it could get such relief and thus a sensible prospect of a "two decisions" scenario. 61Whatever decision I make, more litigation is likely. In those circumstances it is hard to make any decision about this matter that will promote the "just, quick and cheap resolution of the real issues in the dispute": s 56 of the Civil Procedure Act. 62Thus, there are a number of competing matters I must take into account. 63I think there is weight in Allianz's submission that to allow leave to discontinue would deprive Allianz of an advantage, perhaps a significant advantage, it has as a result of Bluescope's decision to commence these proceedings. However, as I have said, that advantage has only arisen because of Allianz's decision not to proffer the undertaking sought. 64In any event, my opinion is that the force of Allianz's submission is outweighed by the prospect that refusal to grant leave to discontinue may result in both the Dust Diseases Tribunal and this Court deciding the same issue between the same parties. That prospect must be avoided at all costs. 65Accordingly, I propose to grant Bluescope leave to discontinue.

Costs 66In Re Minister for Immigration and Ethnic Affairs (Cth) v Lai Qin [1997] HCA 6; (1997) 186 CLR 622, McHugh J said at 625, in a well known passage: - "If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continue to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the Court will make no order as to the costs of the proceedings. This approach has been adopted in a large number of cases." 67Bluescope submits that Allianz has behaved unreasonably by not giving the undertaking sought. 68I do not accept this submission. Allianz certainly made a hard-nosed decision. But this is litigation between experienced parties that Bluescope has itself described as "habitual litigants in the Dust Diseases Tribunal". 69Further, I am not in a position to make an assessment of whether, in the context of the delays that have occurred in the litigation before the Dust Diseases Tribunal, it was "unreasonable" for Allianz to refuse to give the undertaking.

Orders 70I make the following orders: - (1)Pursuant to Uniform Civil Procedure Rule 12.1 I grant the plaintiff leave to discontinue these proceedings. (2)I dismiss the defendant's Notice of Motion of 15 September 2012. (3)I make no order as to the costs of the applications before me today or of these proceedings. 71Since pronouncing those orders, Mr Parker, who appears for Bluescope, has tendered a letter from his instructing solicitors to Allianz's solicitors dated 6 September 2012. I am not persuaded that anything in that letter warrants me making an order for costs than that I have pronounced.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 October 2012

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