MERCANTILE MUTUAL INSURANCE (AUST) LTD v MOULDING and

Court of Appeal (NSW)|1997-06-05|Before: Priestley JA, Powell JA, Sackville AJ, Mr J

MERCANTILE MUTUAL INSURANCE (AUST) LTD v MOULDING and ANOR (No 3)

PRIESTLEY and POWELL JJA and CLARKE AJA 5 June 1997, 22 July 1997

Statutes - Interpretation - Particular words and phrases - "determined by a court before that commencement". Statutes - Interpretation - Retrospective operation - Amending Act - Amendment not to apply retrospectively unless "liability was the subject of... proceedings that have been determined by a court before" commencement of amendment. Words and Phrases - "determined by a court..."

Powell JA In pursuance of the leave in that behalf reserved to the Claimant/Appellant ("the Appellant') in April 1996 at the time when this Court delivered the second of its Judgments in this appeal, the Appellant has moved the Court for leave further to amend its Amended Notice of Appeal so as to raise an additional ground of appeal in the following terms, or to the like effect:

"6. Since the Court of Appeal has increased the Judgment of Sackville AJ and has applied the provisions of s79(3) MAA as it was at the date of the appeal, the Appellant/Defendant is entitled as against the Second Respondent to rely upon the provisions of the Workers Compensation Legislation Amendment Act 1995 and recover contribution from the Second Respondent under the doctrine of double insurance."

and for leave to advance submissions in support of that additional ground of appeal.

Although the Opponent/Second Respondent ("the Second Respondent') opposed the grant to the Appellant of leave further to amend its Amended Notice of Appeal in the way recorded above, Mr J J Steele QC who appeared with Mr P R Arden on the hearing of the application for the Second Respondent did not raise any objection to the Court dealing with the two aspects of the application together, and the application accordingly proceeded on that basis.

The facts which gave rise to the proceedings with which the Court was concerned to deal in its earlier Judgments and the circumstances which led the Court to reserved to the Claimant/Appellant the leave to which I have earlier referred, may be shortly stated.

On 24 September 1990, the First Respondent to the appeal ("Ms Moulding") was employed by one William Frederick Shanley (who was not joined as a party/Respondent to the appeal) as a "jillaroo" at his property known as "Homeleigh" at Bunyan, in New South Wales. At or shortly after 11.30 a.m. on that day, Ms Moulding was shot, while in the course of her employment duties, by a bullet which was accidentally discharged from Browning.22 calibre rifle owned by Mr Shanley, that accident occurring while Ms Moulding, at the direction or request of Mr Shanley, was attempting to put a lamb into the front

cabin of the utility in which Mr Shanley and Ms Moulding had driven to one of the paddocks on the property. The injuries to Ms Moulding were such that she was rendered permanently paraplegic.

At the time when Ms Moulding suffered her injuries, Mr Shanley was the holder of a Third Party policy issued in respect of his utility. That policy was in the terms of Schedule 1 to the Motor Accidents Act 1988, the operative provision being:

"The insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle... against liability in respect of the death of or injury to a person caused by the fault of the owner or driver of the vehicle in the use or operation of the vehicle... (whether or not on a public street)."

Mr Shanley was at that time also the holder of an Employers Insurance Policy issued pursuant to the provisions of s155 of the Workers Compensation Act 1987, the form of which Policy was specified in Form 7 to the Workers Compensation (General) Regulation 1987. At the time of the accident the form of the Policy, as specified in From 7, was so far as is relevant, in the following terms:

"... IF... the Employer becomes liable to pay compensation under the Act to... any person who is... a worker of the Employer... or becomes liable to pay any other amount in respect of the Employer's liability independently of the Act... for any injury to any such person (not including liability for damages in respect of a motor accident as defined in the Motor Accidents Act 1988...) THEN, and in every such case, the insurer will indemnify the Employer against all such sums for which the... Employer shall be so liable..."

Although the documents which appear to have been filed in the Common Law Division in the proceedings to which I now refer appear to reflect a degree of confusion on the part of the various parties, the first of the Judgments which Sackville AJ was to deliver suggests that what I set out below is a reasonably accurate record of the events which occurred following the accident.

In November 1991, Ms Moulding commenced proceedings, CLD 16144 of 1991, against Mr Shanley seeking to recover damages for negligence. In those proceedings, Mr Shanley, who was represented by the solicitors for the Second Respondent, which was his workers compensation insurer, raised a Cross-Claim seeking to recover against the Appellant, which was his third party insurer, indemnity pursuant to the Third Party policy.

In October 1992, there was filed a second Statement of Claim, CLD 15109 of 1992, in which Statement of Claim Ms Moulding sought to recover, again against Mr Shanley, damages for his alleged negligence, that second Statement of Claim being in substantially identical terms to the first. In the second proceedings, Mr Shanley, on this occasion, represented by the solicitors for the Appellant raised a Cross-Claim against the Second Respondent, seeking to recover against it indemnity pursuant to the provisions of the workers compensation policy.

The two proceedings were heard together by Sackville AJ (as he then was) in July and August 1994. As his Honour recorded at the commencement of the first of his Judgments, there was no serious dispute but that Mr Shanley had been negligent, the two major issues in dispute being, first, whether, assuming that Mr Shanley had been negligent, the liability should be borne by his workers compensation or third party insurer, or, perhaps, by both; and, second, the assessment of damages having regard to the fact that the legislative provisions governing assessment varied according to whether the injuries were caused by the fault of the owner or driver of a motor vehicle or were attributable to the fault of the employer.

WARRCANTILE MUTUAL INSURANCE (AUST) LTD v MOULDING and ANOR (No 3) (Powel JA)

In the event, Sackville AJ found a verdict for Ms Moulding against Mr Shanley in the sum of $2,394,894.00, which sum he held the Appellant liable to pay to Ms Moulding and, as well, found a verdict for the Second Respondent against Mr Shanley.

In its Amended Notice of Appeal, the Appellant relied upon the following grounds:

"1. That his Honour erred in law and in fact in finding that the fault of the Defendant which caused injury to the Plaintiff was fault of the Defendant in the use or operation of a vehicle, within the meaning of the Motor Accidents Act, 1988 and of the policy issued pursuant thereto.

Accordingly, his Honour should have held that Mercantile Mutual was not liable to indemnify the Defendant as against his liability to the Plaintiff for the injury.

If contrary to the above, Mercantile was so liable, his Honour should have held that by operation of the Workers Compensation Act, 1987, the policy issued by NZI to the Defendant was for the full amount of the Defendant's liability in respect of all workers employed by him without qualification, notwithstanding the terms of the Workers Compensation (General) Regulation 1987.

That his Honour should then have held that, insofar as the said regulation purported to limit the ambit of cover required by the said Act, the regulation was ultra vires.

Accordingly, his Honour should have held that Mercantile (if liable to indemnify the Defendant) was entitled to recover contribution from NZI under the doctrine of double insurance."

Alternatively, a declaration that, as between Mercantile and NZI, they are liable to contribute to a verdict in favour of the Plaintiff in such proportions as the Court shall determine."

Ms Moulding cross-appealed from the Judgment which had been entered in her favour by Sackville AJ upon a number of grounds including:

"1. His Honour erred when found (sic) that the Plaintiffs claim was caused by the fault of the Defendant as owner or driver in the use of a motor vehicle.

His Honour erred when he found that the Plaintiffs entitlement to damages was limited by the provisions of the Motor Accidents Act 1988."

and sought to have the damages which had been awarded to her by Sackville AJ reassessed by this Court.

Since they raised similar questions concerning the construction of the statutory policy of insurance in Schedule 1 of the Motor Accidents Act 1988 and, in particular, whether, in each case, the injuries which had been sustained by the relevant plaintiff had been caused by the fault of the owner or driver "in the use or operation of the vehicle" the subject of the relevant policy, the appeal was listed for hearing on the same day as the appeal in NRMA Insurance Ltd v NSW Grain Corporation, NSW Grain Corporation v Jamieson.

Before proceeding to record the submissions which were advanced on the hearing of the appeal, it is convenient - since they bear upon the manner in which those submissions were advanced on the hearing of the appeal - to record two matters which had occurred after the delivery by Sackville AJ of his Judgment and before the appeal came on for hearing:

on 23 December 1994 this Court delivered Judgment in Marmo Terazzo Products Pty Ltd v FAI Workers Compensation (NSW) Ltd & Anor; Marmo

Terazzo Products Pty Ltd v Trad & Ors, which Judgment held (inter alia) that the amendment to the form of insurance policy prescribed by the Workers Compensation (General) Regulation 1987 by the deletion from the indemnifying provision of the words "liability for damages in respect of a motor accident as defined in the Motor Accidents Act 1988 or', which amendment commenced on 1 October 1991, did not operate retrospectively but operated only prospectively so as to alter the nature of indemnity provided by an insurer under a policy issued by it in that, as of 1 October 1991, the coverage having regard to Pt5 of the Workers Compensation Act extended also to claims pursuant to the Motor Accidents Act;

on 1 September 1995, the Workers Compensation Legislation Amendment Bill 1995 was assented to, the amendments effected by that Bill, when assented to, including the addition of a further subcl(3), to cl19 in Pt15 of Schedule 6 to the principal Act, which clause, when originally inserted into the Schedule by the Workers Compensation (Benefits) Amendment Act 1991 had been numbered as cl18. Prior to the amendment effected in 1995, cll19 had read:

"19(1) A policy of insurance obtained by an employer under s.155 of this Act is taken to have covered the employer's liability for damages in respect of the death of or an injury to a worker of the employer where:

(a) that liability arose during the period that began with I February 1990 and ended with 30 September 1991 and was attributable to a motor accident within the meaning of the Motor Accidents Act 1988; and

(b) the liability of the owner of the motor vehicle involved in the accident was not covered by a third party policy issued under that Act; and (c) no damages were recoverable from the Nominal Defendant under that Act in respect of the death or injury.

(2) Sub-cl(1) has effect irrespective of any regulation under this Act that was in force during the period referred to in that sub-clause."

(The significance of the two dates referred to in cll9(1)(a) are that the 1 February 1990 was the date of commencement of the relevant provisions of the Workers Compensation (Benefits) Amendment Act 1989 - which retrospectively restored to workers modified common law rights to damages - while 30 September 1991 was the day immediately prior to the coming into force of the regulation amending the statutory form of policy under the Workers Compensation Act 1987 which removed from the indemnifying provision of the statutory policy the exclusionary words "liability for damages in respect of a motor accident as defined in the Motor Accidents Act 1988 or".)

Sub-cl3_ which was inserted into cll19 by the Workers Compensation Legislation Amendment Act 1995 was in the following terms: -

"(3) On and from the commencement of this sub-clause, the provisions of subcl(1)(b) and (c) do not have effect in relation to a liability referred to in subcl(1) unless the liability was the subject of legal proceedings that have been determined by a court before that commencement."

When the appeal and cross-appeal came on for hearing on 15 November 1995, the Court heard, first, argument on the question whether Sackville AJ had erred when he held that

Ms Moulding's injuries had been "caused by the fault of the owner or driver of the vehicle in the use or operation of the vehicle". Following the conclusion of the argument on that question, in respect of which question the Court reserved its judgment, the Court then heard argument on the cross-appeal which had been

WARRCANTILE MUTUAL INSURANCE (AUST) LTD v MOULDING and ANOR (No 3) (Powel JA)

filed on behalf of Ms Moulding seeking an increase in the amount of the award which had been made in her favour by Sackville AJ.

In the Written Submissions which had been filed on behalf of the Appellant in reply to the Written Submissions which had been filed on behalf of Ms Moulding, the following appeared:

"24. The Appellant/Defendant accepts that if this honourable Court does decide to reassess the award of damages made by his Honour or any part of it, the Court would be applying the law as of the present time rather than the law as at the date of trial. The Appellant/Employer points out that the application of the present law may well have implications in relation to the issue of liability, and, in this regard, the Appellant/Employer attaches copies of the relevant parts of the Workers Compensation Legislation Amendment Bill 1995 which was assented to on | September 1995."

Although I no longer have available to me the Transcript of the submissions advanced by Mr C R R Hoeben SC at the time, the note which appears in my Note Book, and which I made at the time, suggests - as also does the matter in the Judgment of Clarke JA to which I will later refer - that Mr Hoeben informed the Court that, although the issue of double insurance had been argued at the trial and had been raised specifically in Grounds 3, 4, and 5 of the Amended Notice of Appeal, that issue had not been prosecuted in the Appellant's appeal because the Judgment of this Court in Marmo Terazzo Products Pty Ltd v FAI Workers Compensation (NSW) Ltd & Anor; Marmo Terazzo Products Pty Ltd v Trad & Ors! supported the view which had been taken by Sackville AJ on that question, but that, if the Court were to increase the award which had been made by Sackville AJ in favour of Ms Moulding, the Appellant would wish to submit that, in that event, the proceedings were not to be regarded as having been "determined by a court" for the purposes of cl19(3) and, thus, that the position was to be regarded as one in which there was double insurance so that the Appellant was to be entitled to contribution from the Second Respondent. My note also indicates that Mr P. Deakin QC, who then appeared, with Mr P R Arden for the Second Respondent, submitted that the Appellant should not be allowed to raise the question of the effect of the amendments to cl19, following which Mr Hoeben sought leave further to amend the Amended Notice of Appeal.

On 8 December 1995 this Court delivered its Judgment in NRMA Insurance Ltd v New South Wales Grain Corporation; New South Wales Grain Corporation v Jamieson and its Judgment on the question of inability in the present case, in each case holding that the injuries which had been sustained by each plaintiff had been "caused by the fault of the owner or driver of the vehicle in the use or operation of the vehicle".

On 18 April 1996, this Court delivered its Judgment on the cross-appeal which had been raised by the Plaintiff, the principal Judgment being delivered by Clarke JA. As a result of that Judgment the cross-appeal was allowed, the award which had been made by Sackville AJ being increased by an amount of approximately $60,000.00.

At the end of Clarke JA's Judgment, his Honour recorded:

""At the heel of the hunt Mr Hoeben raised an issue which, in his submission, fell literally within the words of ground (5) of his client's Notice of Appeal. He acknowledged that the issue had not been raised at the trial and said that it could only arise in the appeal if the court decided to reassess the damages. It is

unnecessary to do more at this stage than say that the ground which Mr Hoeben seeks to raise arises from the amendment in September 1995 of the Workers Compensation Act 1987 because the Court indicated during the hearing that it would defer further consideration of this point (including whether it would allow it to be argued) until it had decided whether or not it would reassess the damages. For this reason it is not appropriate that the Court makes formal orders upon the publication of the Judgment. Nor is it appropriate that the Court deal with the issue of costs at this stage because Dr Morrison indicated that he may wish to be heard on that matter. In the circumstances I would propose that the Court publish its reasons and stand the matter over to a specific date for the making of final orders or for the consideration of the further progress of the appeals."

Formal Orders substantially disposing of the appeal and cross-appeal were made about | week later, at which time leave was reserved to the Appellant, if it were so advised, to seek to have the question referred to by Clarke JA in his Judgment dealt with by the Court. It was in pursuance of the leave so reserved that the matter was listed before the Court on 5 June 1997 at which time Mr Hoeben appeared, as he had at the trial and on the hearing of the appeal and cross-appeal for the Appellant while as I have earlier noted, on this occasion, Mr Steele appeared with Mr Arden for the Second Respondent.

Although Mr Hoeben submitted that the question of double insurance had been in issue before Sackville AJ and was the subject of the Appellant's Amended Notice of Appeal, in the Written Submissions which were filed on behalf of the Appellant, the following appears:

"10. If this Court is of the view that the Appellant's grounds of appeal should be amended, leave is sought to add an additional ground of appeal as follows:

"6. Since the Court of Appeal has increased the Judgment of Sackville AJ and has applied the provisions of s79(3) MAA as it was at the date of the appeal, the Appellant/Defendant is entitled as against the Second Respondent to reply upon the provisions of the Workers Compensation Legislation Amendment Act 1995 and recover contribution from the Second Respondent under the doctrine of double insurance.""

Although, in the Written Submissions which were filed on behalf of the Second Respondent, it was not conceded that the question sought to be determined by the Appellant fell within the terms of the Amended Notice of Appeal and it was submitted that leave further to amend the Amended Notice of Appeal should not be granted, in the end, the Court decided that the time available could be more efficiently used if all questions which were raised by the application were dealt with together.

The submissions which the Appellant sought to advance were neatly encapsulated in the following paragraphs of the Written Submissions which were filed on its behalf:

"14. It is necessary for the Second Respondent to establish that the words 'have been determined by a court' mean any determination regardless of its ultimate fate, ie whether the determination stands or is overturned. It most cases, no issue would arise because an appeal would not take place. It is submitted that in the case of an appellate determination which changes the original decision, it cannot be held that 'the legal proceedings have been determined by a court before that commencement.'

WARRCANTILE MUTUAL INSURANCE (AUST) LTD v MOULDING and ANOR (No 3) (Clarké AJA)

It is implicit in the use of the word 'determined ' that the decision of the court should be a final decision. In this case, such a final decision only occurred when the Judgment of Sackville AJ was adjusted by this Court in its Judgment of 18 April 1996.

If that argument is accepted, cl19(3) would apply as would the principles of double insurance obliging the Second Respondent to meet half the Judgment awarded in favour of the First Respondent against the Appellant/Defendant.

(Although the Second Respondent did not accept any liability to contribute toward that Judgment, Mr Steele accepted that, if the Appellant's submissions were accepted, the Second Respondent would be liable to contribute one-half of the Judgment which had been entered in favour of the Plaintiff against the Appellant.)

The question for the Court is, thus, whether the word "determined" where appearing in cl19(3), is to be construed - as the Appellant would have it - as meaning "finally determined", or - as the Second Respondent would have it - "determined at first instance", or whether it is to be given some other, and, if so, what, meaning?

There is no magic in the word "determined", which word will take its meaning from the context in which it appears. Thus, one may find in the authorities cases in which, in the particular context, the word "determined" has been held to mean "determined in a court of first instance" (see, for example, Harrison v Wythemoor Colliery Co?) and cases in which it has been given the meaning of "finally decided" (Re War Damage Act 1943: Re 56 Denton Road, Twickenham, Middlesex?) as well as cases in which the word has been held to be synonymous with "decided" (Attorney-General v Hughes+; Muir v Inland Revenue Commissioners).

As will be apparent from its terms, the object sought to be attained by the introduction of sub-cl3 into cl19 was retrospectively to extend the cover provided for by the statutory policy so as to include not merely accidents not on public streets involving uninsured motor vehicles but all accidents, whether or not involving an uninsured motor vehicle and whether or not occurring on public streets, so long as the liability of the employer had not been determined by a court before the commencement of the amendments. Since the function of the proviso to sub-cl3 was, as it seems to me, to provide a simple test to distinguish between those cases in which cover was to be regarded as being extended from those cases in which cover was not to be regarded as being extended, it seems to me that that function is more readily fulfilled if one ascribes to the exclusionary provision in sub-cl3 the meaning "the question of liability has been the subject of a judgment in a court of first instance".

In the light of this conclusion, it is not necessary to determine whether or not it was necessary for the Appellant to obtain leave further to amend its Notice of Appeal so as to raise the question.

I would propose that the application be dismissed with costs.

Counsel for Claimant: C R R Hoeben SC Solicitors for Claimant: Connery & Partners Counsel for Opponent: J J Steele QC and P R Arden

Solicitors for Opponent: Lyons Barnett Kennedy (Tamworth)

At a glance

Court

Decision date

Before

Source

Judgment (73 paragraphs)

Parties