Solicitors:
Mr Ivan Simic, Taylor & Scott (Plaintiff)
Mr Julian Beal, Firths Lawyers (First Defendant)
Mr Bruce Cussen, William Roberts Lawyers (SIRA)
File Number(s): 2020/00190745
[2]
Judgment
By Amended Notice of Motion filed 19 May 2021 the plaintiff seeks to file a Second Amended Statement of Claim, a draft of which is Annexure 'A' to the Notice of Motion. The motion is brought pursuant to rules 6.19, 6.24 and 6.32 of the Uniform Civil Procedure Rules 2005 (NSW), and the amendment sought is to join the State Insurance Regulatory Authority ('SIRA') as the Second Defendant.
[3]
BACKGROUND
The original Statement of Claim filed 18 November 2016 sought damages, interest and costs from Tenix Properties Pty Limited (previously known as Marr (Contracting) Pty Limited and E.A. Marr (Contracting) Pty Limited) ('Tenix') on the basis that during the course of Lawrence Sheldon's ('the deceased') employment as a mobile crane driver with Tenix, he was exposed to and inhaled asbestos dust and fibre and suffered injury to both lungs, asbestos related pleural disease and pleural plaques.
Unfortunately, the deceased passed away on 12 December 2016 and very little was done in the proceedings until the matter came before me on 29 September 2020 in my list as part of the Dust Diseases Tribunal Super Call Over. Since then, the executor has been substituted as plaintiff, a defence has been put on, and this Amended Notice of Motion filed.
The orders that the plaintiff seeks are that:
1. She have leave to join the SIRA as the second defendant in the proceedings; and
2. She have leave to rely on an Amended Statement of Claim, which is annexed to the Notice of Motion.
In support of the motion, the plaintiff's solicitor filed an affidavit on 4 May 2021 and the solicitor for the defendant filed an affidavit on 10 May 2021. I have been provided with written submissions on behalf of the plaintiff and SIRA. I note that Tenix consented to the orders in the Amended Motion being made and did not wish to address the Tribunal.
The proposed amendments to the Statement of Claim seek to limit the deceased's relevant period of employment with International Rigging (NSW) Pty Limited ('International Rigging') to a period for which insurance cover can be established. I note that SIRA does not accept that, by doing so, the plaintiff may establish that National Employers' Mutual General Insurance Association Limited ('NEM') would have been liable to indemnify, the now deregistered, International Rigging. It accepts there are questions of law and facts which will need to be determined at trial in order for that issue to be resolved.
The Insurers' Guarantee Fund ('IGF'), established under s 227 of the Workers Compensation Act 1987 (NSW) ('the Act'), finances the payment of workers compensation claims when a licenced insurer or an authorised self-insured employer becomes insolvent. NEM (deregistered) was one such insurer. SIRA is the manager of the IGF. SIRA is not an insurer.
International Rigging is deregistered. The IGF, in the interests of NEM, holds a record of International Rigging having a relevant policy with NEM for the period from 29 July 1983 to 30 September 1984.
SIRA accepts that in the circumstances the amendments to the Statement of Claim, to the extent to which they seek to limit the relevant period of employment of the deceased by International Rigging, ought, in ordinary circumstances be allowed. However, SIRA contends that because it ought not be added as a party before the deregistered employer is reinstated, those amendments are futile.
SIRA opposes the prayer in the motion that would join them as a defendant in the proceedings. Paragraph 4E of the proposed Amended Statement of Claim pleads as follows:
'The second defendant is by law and statute liable to discharge the obligations of International Rigging to pay the plaintiff damages for injuries arising out or[sic] in the course of his employment with International Rigging.'
To that end, the plaintiff relies upon s 236 of the Workers Compensation Act 1987 (NSW) in making the assertion found at paragraph 4E. Section 236 is in the following terms:
'236 Payments of workers compensation when insolvent insurer dissolved (cf former s 30Z)
(1) When an insolvent insurer has been dissolved, the payments of compensation under judgments or awards relating to policies of insurance issued by the insolvent insurer which would, but for the dissolution taking place, be payable by the insolvent insurer shall continue and be paid out of the Guarantee Fund by the Authority.
(2) When an insolvent insurer has been dissolved, a person who would have had, but for the dissolution of the insolvent insurer, an entitlement to payment of any amount arising from or relating to any policy of insurance issued by the insolvent insurer (being a policy in respect of which the insolvent insurer is the insurer) shall be entitled to payment of that amount out of the Guarantee Fund.
(3) A person referred to in subsection (2) may make a claim against the Authority, as manager of the Guarantee Fund, in respect of an entitlement to payment of an amount under that subsection.
(4) The Authority, as manager of the Guarantee Fund, is entitled to deal with and finalise a claim made under subsection (3) in relation to a policy of insurance issued by an insolvent insurer to the same extent as it would have been entitled to do so if the insolvent insurer had not been dissolved.'
The plaintiff asserts that as she only relies upon the period of employment during which the deceased was employed and exposed to dust in the course of such employment, that is until 30 September 1984.
The plaintiff further submits that to reinstate International Rigging to the Register, as suggested by SIRA as the appropriate course to be adopted, would be pointless and would occasion unnecessary costs in so doing. The plaintiff also refers to the ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW), which she asserts applies to the Tribunal to indicate that the resolution of the issues between the parties ought be dealt with on a just, quick and cheap basis. I have some sympathy for the plaintiff in that regard, as the course of restoring International Rigging to the Register will occasion a delay and significant costs.
As previously indicated, SIRA contends that it ought not be added as a party before International Rigging is reinstated to the Register, as if that did not occur, the plaintiff's action against SIRA must fail as a consequence of s 236 of the Act.
This provision was recently the subject of close examination by the New South Wales Court of Appeal in the matter of Richards Contracting Co Management Pty Limited [2021] NSWCA 34 ('Richards Contracting'). In that case, SIRA successfully argued that, in order for the plaintiff to establish the entitlement referred to in s 236(2) of the Act, he or she must first establish liability in the employer. The Court of Appeal held, at [49], that 'to establish an entitlement for the purpose of s 236(2) of the Act, it is first necessary to establish the liability of the insured employer. This is because that liability is a precondition to the liability of the insurer, and hence the entitlement to make a claim under s 236(2).'
The Court of Appeal concluded that the provisions of Division 7 of Part 7 of the Act do not permit a claim to be made against SIRA in the absence of a finding of liability against the employer. The Court posed for itself the question of whether the plaintiff was entitled to proceed directly against SIRA and, at [19], noted that it was convenient to deal with that issue at the outset, because if the plaintiff had been entitled to proceed directly against SIRA in proceedings to which the deregistered company was not a party, there would be no need for the company to be reinstated in order for the claim against SIRA to be maintained. On the basis of its finding that the provisions of Division 7 of Part 7 of the Act did not permit a claim to be made against SIRA in the absence of a finding of liability against the employer, the Court of Appeal went on to consider whether, in the circumstances of that case, reinstatement could be lawfully ordered.
In short, whilst SIRA may be a proper party to proceedings where an entitlement in the plaintiff to make a claim under s 236(2) of the Act is asserted, the clear finding by the Court of Appeal was that, in order for that entitlement to be established in the first place, it is necessary to reinstate, and establish a liability in, the employer.
I accept that by the present Amended Notice of Motion, the plaintiff seeks to do precisely what the Court of Appeal said in Richards Contracting it could not do - namely, to maintain proceedings only against SIRA, without seeking to establish liability in the (reinstated) employer.
During the course of argument on the Motion, it became apparent that Counsel for the plaintiff, whilst not resiling from his position of seeking the leave sought in the motion, that if such reinstatement was necessary on the basis of the reasoning and orders in Richards Contracting, there was nothing that decried that the reinstatement had to occur prior to the final determination of the ultimate issues at trial, and that in fact I could grant the orders sought in the motion, and the plaintiff would then seek to have International Rigging reinstated to the Register.
I then offered the plaintiff an adjournment of the motion to take those steps, but the plaintiff declined to do so.
On the Court of Appeal's decision in Richards Contracting, until International Rigging is reinstated to the Register and made a party to the proceedings, SIRA cannot be a proper party to the proceedings.
The Notice of Motion is therefore dismissed, and the plaintiff is to pay the costs of SIRA as agreed or assessed. I make no order as to the costs of Tenix, as no application for costs was made by Tenix, nor did they take any active role in the motion.
[4]
ORDERS
I make the following orders:
1. The Notice of Motion is dismissed.
2. The plaintiff is to pay the costs of SIRA as agreed or assessed.
3. No order as to the costs of Tenix.
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Decision last updated: 04 June 2021