Lennard v Heyday5 Pty Ltd

Catchwords: CIVIL PROCEDURE – application for leave under Civil Liability (Third Party Claims Against Insurers) Act 2017 and s 151D of the Workers Compensation Act 1987 to proceed against insurer – unopposed leave given – failure to comply with subpoena for production of documents – application to examine director – granted

Legislation Cited: Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW)
Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)
Workers Compensation Act 1987 (NSW)
Workplace Injury Management and Workers Compensation Act 1998 (NSW)

Cases Cited: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Gallo v Dawson (1990) 64 ALJR 458
Gower v State of New South Wales [2018] NSWCA 132
Itek Graphix Pty Limited v Elliott [2001] NSWCA 442
Salido v Nominal Defendant (1993) 32 NSWLR 524
Zaki v Better Buildings Constructions Pty Limited [2017] NSWSC 1522

Category: Procedural rulings

Parties: Jason Lennard (Plaintiff)
Heyday5 Pty Ltd (First Defendant)
Buildcorp Group Pty Ltd (Second Defendant)
Workers Compensation Nominal Insurer (Third Defendant)
Beirut Paving Pty Ltd t/as The Sydney Brick Paving Company Pty Ltd (Fourth Defendant)
City Stone Paving Pty Ltd (Fifth Defendant)

Representation: Counsel:
R O’Keefe SC and K Young (Plaintiff)
Solicitors:
RMB Lawyers (Plaintiff)
DWF Law (First Defendant)
Lander & Rogers (Second Defendant)
Bartier Perry Lawyers (Third Defendant)
Sparke Helmore Lawyers (Fourth Defendant)

File Number(s): 2024/72233

Publication restriction: Nil

JUDGMENT

1. Mr Lennard was seriously injured in February 2021 while working as a window fitter at a building at Martin Place Sydney when he was dismantling scaffolding, he claims, when he stepped backwards into a void created by a missing paver. He later underwent surgery and in November 2023 made a claim for lump sum compensation on the agent, EML, of the third defendant, the Workers Compensation Nominal Insurer, under s 66 of the Workers Compensation Act 1987 (NSW), after his whole person impairment had been assessed. He also gave notice of his intention to bring a claim for work injury damages against his employer Ausrise.

2. Mr Lennard brought these proceedings in February 2024 against Buildcorp, which had been refurbishing the building in which he fell and had contracted Ausrise to install windows, doors, skylights and louvres in the building. As well as against Heyday5, which had been contracted to provide electrical construction and engineering services there.

3. After further medico legal assessment, in February 2024, an agreement was reached in relation to Mr Lennard’s impairment claim, that he had suffered 34% whole person impairment. Mr Lennard then filed his s 66 claim.

4. In May 2024 Mr Lennard served particulars of his work injury damages claim required by s 282 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). In September, a s 78 notice denying liability was served on him, with the result that on 6 September he served his prefiling statement, that stopping time for the purpose of s 151D of the Workers Compensation Act*.* Three years from the date of his accident having expired on 27 February 2024.

5. It was in December 2024 that Mr Lennard filed an amended statement of claim which joined the third defendant, the Insurer, as well as the fourth and fifth defendants after a mediation in the Personal Injury Commission failed, the Insurer having declined to mediate. His injuries by then having been assessed to have reached maximum medical improvement.

6. This judgment explains why I indicated that I would make the orders sought as the result of Mr Lennard’s July and August 2025 motions, which the active parties did not oppose. Thereby he sought the leave he requires to pursue his claims against the Insurer, as well as orders that the second, fourth and fifth defendants comply with a subpoena for production he served on them in April 2025. The latter orders were amended with leave at the hearing, to require a director of the fifth defendant, City Stone Paving, which has not been active in the proceedings, to attend Court to be examined about its failure to comply with the subpoena and to pay costs Mr Lennard incurred as a result.

7. To establish his case Mr Lennard relied on the affidavit evidence of his solicitor Mr Sheppard, annexed to which were various reports and correspondence. This established the circumstances in which he commenced these proceedings out of time against the Insurer and thus required the leave he will be given. As well as the subpoena served on City Stone, to which it has not responded, albeit documents produced by other defendants reveal that it undertook certain work at the building site before Mr Lennard was injured.

Leave

8. I was satisfied that the leave Mr Lennard required under s 151D of the Workers Compensation Act*,* which limits the time that damages claims such as he pursues can be commenced, without leave of the Court, to three years after the date of the accident.

9. Time does not run for the purpose of s 151D until a prefiling statement is served: s 151DA(1)(b). In Mr Lennard’s case its service had the result that the last day to commence the proceedings against the Insurer was 27 February 2024. The delay in filing was thus some six months.

10. Leave to proceed against a company in voluntary liquidation is required: s 500(2) Corporations Act 2001 (Cth). But there appears to be no utility in its pursuit.

11. Ausrise having gone into voluntary liquidation in May 2024, with resulting liquidation in June. The liquidator having advised that it could not comply with any judgment ordering the payment of damages to Mr Lennard, estimated to be between $50,000 and $200,000, given its asset and liabilities.

12. The Insurer was established by s 154A of the Workers Compensation Act.

13. The Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) permitting Mr Lennard’s claim to be pursued against the Insurer, which stands in place of his former insured employer, if he is given leave: ss 4-6 considered in Zaki v Better Buildings Constructions Pty Limited [2017] NSWSC 1522.

14. The Insurer’s position is that it does not consent to nor oppose Mr Lennard’s application for leave and thus it has served no evidence on the motion. It does not deny that Ausrise’s insurance policy responded to Mr Lennard’s claim and its scheme agent, EML, has accepted liability for his workers compensation claim and continues to receive his statutory benefits.

15. In its proposed defence the Insurer also admits that it agreed to indemnify Ausrise for liability in respect of work injury damages claims under its insurance contract. It does not suggest that it will suffer any prejudice as the result of the grant of the leave Mr Lennard requires, understandably, given the relevantly limited delay in his pursuit of his claim against it and all that he has to date pursued.

16. There is no issue that the s 151D discretion must be exercised by having regard to what is fair and just, it not containing any specific criteria to be taken into account when the discretion is exercised: Itek Graphix Pty Limited v Elliott [2001] NSWCA 442 at [87] citing Salido v Nominal Defendant (1993) 32 NSWLR 524 at 530; G**allo v Dawson (1990) 64 ALJR 458; and Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. That requiring a consideration of delay and prejudice: Salido at 147.

17. The onus lying on an applicant to prove that the justice of the case requires the discretion to be exercised in his or her favour: Itek Graphics at [82]. Consideration having to be given to the four rationales for the enactment of limitation periods explained by McHugh J in Brisbane South Regional Health Authority at 552: Itek at [87]. They being:

“(a) As time goes by relevant evidence is likely to be lost;

(b) It is oppressive to a defendant to allow an action to be brought long after the circumstances that gave rise to it have passed;

(c) It is desirable for people in the community to be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Many in the community have a significant interest in knowing that they have no liabilities beyond a definite period;

(d) The public interest requires that disputes be settled as quickly as possible.”

18. In Gower v State of New South Wales [2018] NSWCA 132 at [4] the three propositions which have to be established by an applicant were identified. Although disagreeing about the result, their Honours did not disagree with that approach, namely, the applicant having to establish that:

“(a) there was a sufficient and acceptable explanation for the delay;

(b) there was a reasonably arguable claim of negligence against the defendant, and

(c) the conduct of the trial would not cause the defendant significant prejudice, so as to render the trial unfair.”

19. I was satisfied that Mr Lennard has met the onus which falls upon him to establish a just basis for the exercise of the Court’s s 151D discretion, approaching the evidence in the required way. There being no issue that he has an arguable case, given the extent of the injuries which he suffered as the result of his 2021 workplace accident. And his statement of claim pleading with some particularly the breach of the non-delegable duty of care which he seeks to pursue.

20. The explanation for the delay in bringing these proceedings against the Insurer lies in:

21. Mr Lennard having had to pursue treatment for the injuries he suffered, including to his cervical spine and shoulder, as well as having to reach maximum medical improvement, before his various claims were able to be pursued;

22. He having engaged his solicitors in September 2022 and with their assistance, pursuing his various claims;

23. The requirements of the W**orkers C**ompensation regime and when Mr Lennard’s injuries reached maximum medical improvement after his December 2022 spinal surgery, following EML’s agreement that it would be funded, so that his level of whole person impairment became capable of assessment by experts who were engaged;

24. It being established in November 2023 that his whole person impairment exceeded the 15% threshold for damages, after which he made a claim for lump sum compensation: s 66 Workers Compensation Act;

25. Expert reports served in 2024 resulting in Mr Lennard undertaking the further assessments EML arranged in March 2024, with the resulting agreement about his whole person impairment reached in May 2024: s 151H Workers Compensation Act;

26. Ausrise being placed into voluntary administration in May 2024, with the result that leave to proceed against it was then required and the Liquidator’s appointment in June;

27. The provision of particulars of his damages claim being provided in May, of which particulars were sought in June, and provided: s 282 Workplace Injury Management and Workers Compensation Act 1998 (NSW);

28. The Insurer’s service of s 78 notice denying liability in September;

29. The filing and service on the Insurer’s agent, EML, of his prefiling statement in September 2024 and the Insurer’s prefiling defence in October 2024; and

30. The Insurer’s December 2024 advice that it declined to mediate Mr Lennard’s claim resulting in the service of the amended statement of claim joining the Insurer in December 2024.

31. In the face of that history, I was satisfied that it was fair and just to grant Mr Lennard the leave which he required, that not being opposed by the Insurer, understandably in all of these circumstances. There is no suggestion that any evidence has been lost as a result. Or that the Insurer has been prejudiced in any way by the delay in commencing the proceedings against it, understandably, given all that it has been involved in to date.

Th proposed examination order

22. As I have explained, the evidence establishes that City Stone Paving did not comply with the subpoena served on it on 5 November, when it was served personally on Mr Rachid. Together with a letter which explained what it required and the potential consequences of not complying with it.

23. In the circumstances I was satisfied that it was just that its director Mr Rachid be required to attend for the examination sought, as r 33.13 of the Uniform Civil Procedure Rules 2005 (NSW) permits.

24. That City Stone Paving has chosen not to be active in the proceedings does not excuse its failure to comply with the Court’s subpoena. Even those unconnected with proceedings before the Court on whom subpoenas are served must comply with them, unless they have a reasonable excuse. City Stone Paving has not approached the Court to seek to establish that it has such an excuse and it has not been relieved of the obligation to comply.

25. This is a serious situation. A failure to do comply with a subpoena involving a contempt of the Court: r 33.12(1). Contempt by a corporation may be punished by the Court. So may an officer responsible.

26. I thus urge compliance with the subpoena and Mr Rachid’s communication with Mr Lennard’s solicitors, to resolve any issue which City Stone Paving may have with compliance and to arrange a suitable time for his examination, if it is pressed.

Costs

27. I am satisfied, in the circumstances, that it is just to order that costs of the motions be costs in the cause. Further, that Mr Rachid bear the costs Mr Lennard has incurred as the result of City Stone Paving’s failure to comply with the subpoena, unless he approaches the Court by 30 January 2026 to have some other costs order made.

Orders

28. I have amended the orders finally pressed to give effect to what I have said about the costs of the subpoena, as well as requiring the service of this judgment on Mr Rachid. For these reasons I order:

29. Pursuant to s 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017, leave is granted to the Plaintiff to bring proceedings against the Third Defendant named in the Amended Statement of Claim filed 13 December 2024, in lieu of Ausrise Aluminium Pty Ltd (in liq).

30. Pursuant to s 151D of the Workers Compensation Act 1987 leave is granted to the Plaintiff, nunc pro tunc, to bring these proceedings against the Third Defendant as specified in the Amended Statement of Claim filed 13 December 2024.

31. Costs of the notices of motion filed by the Plaintiff on 17 July 2025 and on 27 August 2025 are to be costs in the cause.

32. Mr Shakar Rachid, Director of the Fifth Defendant, is ordered to attend this Honourable Court on a date to be fixed in order to be examined with respect to his failure to comply with the subpoena to produce filed 30 April 2025, pursuant to rule 33.12 of the Uniform Civil Procedure Rules 2005.

33. The Plaintiff’s legal representative has leave to approach the Supreme Court of NSW registry and/or the registrar of the Common Law Division of the Court in order to obtain a date for the examination of Mr Shakar Rachid.

34. The Plaintiff’s legal representative is required to effect personal service on Mr Shakar Rachid with a copy of this judgment and these orders. The representative is also required to give him notice of the date appointed for his examination, not later than 28 days before the date appointed for his examination.

35. Pursuant to rule 42.27 of the Uniform Civil Procedure Rules 2005, unless Mr Shakar Rachid approaches the Court by 30 January 2026 to have some other costs order made, he is to pay the Plaintiff’s costs incurred by the failure to comply with the subpoena to produce filed 30 April 2025.

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