Roads and Traffic Authority of New South Wales v Barrie Toepfer Earthmoving and Land Management Pty Ltd

Background

1. On 15 April 2003, Gregory Luck (the second defendant), was driving a prime mover that was towing a low loader on which was an excavator in a southerly direction over the Hexham bridge. The excavator arm struck the bridge causing extensive damage. Barrie Toepfer Earthmoving and Land Management Pty Ltd (the first defendant) was the owner of the prime mover and low loader.
2. The plaintiff commenced proceedings claiming that the first defendant and Mr Luck were jointly liable for the repairs to the bridge as a debt. The second defendant was not served with the statement of claim and the plaintiff did not pursue its claim against him.
3. There was an insurance policy in force at the time of the accident. By an amended cross-claim, the first defendant claimed that the insurers had wrongly denied that they were liable to indemnify the first defendant under the terms of the policy.
4. During the hearing, the plaintiff was represented by Mr Glissan QC and Mr Manion. The first defendant was not legally represented, however, Barrie Toepfer, a director of the company was granted leave to appear on its behalf. Mr Deakin QC and Mr Stockley represented the insurers.
5. With the agreement of the parties, the proceedings were conducted on the understanding that I would determine the issues of liability and damage caused to the bridge by the accident. Questions as to the quantum of damages are to be referred to a referee under r 20.14 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR').
6. The plaintiff had filed a notice of motion on 5 July 2012 seeking "an order granting leave pursuant to s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ('LRMPA') for the Plaintiff to proceed directly against the First, Second and Third Cross-Defendants in its claim for damages."
7. The hearing of the plaintiff's claim commenced on 23 July 2012. The s 6(4) application was discussed by both counsel before me prior to the plaintiff's opening and suggestions were made as to how the application might be resolved. The following exchange took place between myself and Mr Glissan (T6 46-50; T7 1-7, 23/07/12): "HIS HONOUR: The question of the application, it seems to me, will progress better if both you and Mr Deakin have the opportunity to discuss what has been said. GLISSAN: There is no question about that, your Honour. HIS HONOUR: What I would indicate is that Mr Deakin's approach is attractive and it may be that some conditions can be agreed upon and handed up by way of short minutes to the Court. GLISSAN: I am sure that can be done, your Honour. It is attractive to all of us."
8. On the third day of the hearing, Mr Deakin said (T76 39-47, 25/07/12): "DEAKIN: But, your Honour, could I also announce ‑ and I think I can speak for both my learned friend and I on this issue ‑ that we both have come to the view, and your Honour may be terribly disappointed to know this, but we have both come to the view that with Mr Toepfer here, we really don't need to trouble your Honour with section 6 any more because the issues that could have been litigated in a section 6 application are really indistinguishable from those that are raised in Mr Toepfer's cross‑claims and, therefore, it would only add unnecessary duplication to the proceedings to have the same issues formally being raised within the context of a section 6 application" (Italics added).
9. The s 6(4) application did not re-emerge until the fortieth day of the hearing. At the end of his oral closing address which had occupied three days, Mr Glissan said (T1651 10-29, 11/12/13): "Let me then go to the one remaining issue which was on foot which was deferred until the end of the case, should it arise and need to be determined. Your Honour made some preliminary observations about it in the proceedings; the issue of direct by the plaintiff against the insurer pursuant to section 6 of the Law Reform (Miscellaneous) Provisions Act. Your Honour indicated that the answer to that would depend on the determination of the view whether or not the policy responded and that that would then inform a decision one way or the other. The only reason that it remains a matter on foot that remains to be determined, is, your Honour, that against all probability, should either party be dissatisfied with the judgment that is ultimately delivered in the case, there may be an appeal and should that appeal be one involving the construction of the insurance policy, it may be necessary, Mr Toepfer not been represented, that the plaintiff either, as a respondent to an appeal or possibly even appellant, to have a standing to pursue the insurance company. So it is in that context that the section 6 needs to be determined. It needs to be determined in any event, but it is a matter pleaded and is on foot. Those are my submissions."
10. In respect of this submission, Mr Deakin said (T1732 10-16, 12/12/13): "My friend very belatedly raised s6 suggestion at the heel of the hunt. Your Honour, it's not appropriate for your Honour to be embarking upon when there is still a party before this Court. Any s6 analysis at all, and your Honour cannot, we would submit, be expected to determine s6 issues simply because my learned friend's client may want to appeal. So we would invite your Honour to ignore it. Thank you your Honour."
11. There was no reference to the s 6(4) application in either parties written submissions as to the hearing.

Argument

1. The plaintiff seeks orders under Rule 36.17 UCPR or alternatively Rules 36.15 or 36.16 in respect of the plaintiff's application to join the insurers as a defendant which was not determined during the hearing or as part of the judgment.
2. The plaintiff contended that the court proposed that orders in respect of the s 6 application should be made at the same time as the court's determination on liability, that is what the plaintiff ultimately agreed to and submitted should occur during its final submissions.
3. Whilst Mr Deakin made a statement earlier in the hearing (T76-77) which might suggest that the court was not required to determine the application, the plaintiff submitted that statement must be viewed in the context of the court's own suggestions about how the s 6 application would be dealt with.
4. There was no statement, the plaintiff contended, on its behalf to the effect that the plaintiff was abandoning the application or would not require the court to determine the application in accordance with the court's own suggestion as to how it be dealt with.
5. The plaintiff submitted "as the parties agreed that the application for leave to join the insurers would be determined at the same time as the substantive issue then the orders made on the application must necessarily follow the court's determination of the substantive issue" (PWS 13).
6. The best way of dealing with the application would be for the court to find there was an arguable case that the insurers would be liable to indemnify but ultimately conclude that they were not so liable. The plaintiff submitted that the court should have, as part of the final judgment granted leave to join the insurers, but then, entered a judgment in favour of the insurers, having regards to the court's findings.
7. The insurers argued that the plaintiff's motion filed on 12 November 2014 should be summarily dismissed as a verdict and judgment was entered in their favour, and the relief sought by the plaintiff is prohibited by the proviso to s 6(4) LRMPA. It was submitted that the inference the court should draw is that the plaintiff deliberately decided not to pursue the application at trial (probably to avoid any adverse costs orders against it) and having done so should not now be permitted to depart from that position. The agreement between the parties to that respect is accurately recorded on day three of the transcript (T76 40-45, 25/07/12).
8. The insurers contended that Rules 36.17, 36.15 or 36.16 UCPR did not have any application to the present case. Whatever Mr Glissan may have intended by the comments he made to the court at the close of his submissions, he did not seek to set aside or go behind the agreement recorded on day three. The court was reminded that issues at trial are not determined by matters raised in final addresses.
9. It was submitted that at its highest, the plaintiff's motion depended upon an acceptance by the court of the assertion that some correction of the judgment was warranted as a result of inadvertence of the court in failing to deal with s 6. It was submitted that no such inadvertence occurred because: "14.1 the court was never invited in clear terms to deal with the s 6 application; 14.2 the affidavit in support of the application was never formally tendered or read; and 14.3 the Cross-Defendants were never afforded a clear opportunity to address submissions in response to any attempt by the Plaintiff to invoke the terms of a 6" (IWS 14).
10. Another submission was that contrary to the plaintiff's contention, the final determination of any s 6 application was not "deferred." Whatever the plaintiff may have "intended" was not conveyed to the court or the parties beyond what was recorded in the transcript and it is too late now for the plaintiff to belatedly attempt to invoke its earlier application.
11. The insurers argued that they have suffered irreparable prejudice in that they have been deprived of the opportunity to adduce evidence and place submissions before the court in opposition to any s 6 order.
12. The insurers contended that there was no utility in making any orders under the notice of motion when the plaintiff accepts that no order can be made because of the court's clear findings on the insurance issue and the plaintiff's position was adequately protected by the appeal filed by the first defendant that squarely raised the insurance issue.

Decision

1. The plaintiff's motion of 12 November 2014 is founded upon an incorrect premise. There was no agreement between the parties that the application for leave to join the insurers would be determined at the same time as the substantive issues. Whilst I made some suggestions as to how the s 6(4) application might be dealt with, Mr Glissan and Mr Deakin were given the opportunity to discuss the matter: (see [11] above).
2. Mr Deakin's announcement on the third day of the hearing (see [12] above): "we both have come to the view, and your Honour may be terribly disappointed to know this, but we have both come to the view that with Mr Toepfer here, we really don't need to trouble your Honour with section 6 any more" was said in Mr Glissan's presence without objection. I accepted that Mr Deakin was accurately relating to the court the agreement between Senior Counsel, and the plaintiff had abandoned the s 6(4) application.
3. There was no attempt by the plaintiff to restore the application before the completion of the evidence in the trial. The re-emergence of the issue occurred at the end of Mr Glissan's closing address which was almost 17 months after the agreement with Mr Deakin. It appears that Mr Glissan may have forgotten what had occurred on 25 July 2012.
4. In any event, it was procedurally unfair to the insurers to seek to resurrect the s 6(4) application in this way. As is pointed out in the insurer's submissions, the affidavit in support of the application was never formally tendered or read, they had been deprived of the opportunity to adduce evidence and place submissions before the court in opposition to any s 6 orders. In Ashrafi Persian Trading Co Pty Ltd t/as Roslyn Gardens Motor Inn & Anor v Ashrafinia [2001] NSWCA 243; (2002) Aust Torts Reports 81-636 Heydon JA (with whom Mason P and Handley JA agreed) said at [43]: " ... when final addresses took place the evidence had closed, and it would have been difficult for the case of either party to be reopened in the light of anything said in final address ... it is usual, in examining the issues at a trial, to concentrate not on what was said in final address, but on what was said in the pleadings, in particulars, in opening addresses, and in the course of the reception of evidence."
5. In my view, it is procedurally unfair to the insurers to ask the court to consider the s 6(4) application by way of the present motion.
6. Part 36 r 36.17 UCPR does not apply as there was no "error arising from an accidental slip or omission" in the judgment as it was unnecessary to deal with the application that had been abandoned. Rule 36.15 UCPR has no relevance, as the judgment was not given "irregularly, illegally or against good faith". Moreover, the time limitation expressed in r 36.16(3A) UCPR expired on 12 September 2014.
7. Section 6(4) of the LRMPA is as follows: "(4) Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action and of the judgment given therein the parties shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured: Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken" (underlining added).
8. In the principal judgment, I found that the insurers were entitled to refuse indemnity to the first defendant: Roads and Traffic Authority of New South Wales v Barrie Toepfer Earthmoving and Land Management Pty Ltd (No 7) [2014] at [176]-[177].
9. The first defendant has appealed that part of the judgment, which relates to the insurers. The plaintiff's desire to pursue an appeal in respect of the court's findings on the insurance issue is protected by the first defendant's appeal.
10. I do not propose to accede to the plaintiff's request to deal with a s 6 application.
11. Accordingly, I make the following orders: 1. The plaintiff's notice of motion filed on 12 November 2014 is dismissed. 2. The plaintiff is to pay the cross-defendant's costs of the motion.

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: 11 February 2015