District Court of WA|2002-03-28

Sturk v Sgio Insurance Ltd [2002] WADC 58 (28 March 2002)

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

CITATION : STURK -v- SGIO INSURANCE LTD [2002] WADC 58

Statutes - Interpretation - Action against liability insurer

Workers' Compensation and Rehabilitation Act 1981, s 93E

Suncorp Metway Insurance Limited v Clonmel Pty Ltd [2000] QSC 135; [2001] 2 Qd R 94

Thomas v Arimco Mining Pty Ltd & Anor (2000) 24 SR (WA) 142

Bayswater Car Rental Pty Ltd v Hannell [1999] WASCA 34; (1999) 10 ANZ Insurance Cases 61-437

Moltoni Corporation Pty Ltd v QBE Insurance Ltd [2001] HCA 73; (2001) 76 ALJR 337

Newcombe v AME Properties Ltd & Anor (1995) 14 WAR 259

Vollstedt & Anor v Calibre Enterprises Pty Ltd & Anor [1999] VSC 128; (1999) 10 ANZ Insurance Cases 61-440

1 MARTINO DCJ: This is an appeal by the defendant against the decision of Deputy Registrar Harman delivered on 27 September 2001 dismissing the defendant's application to set aside the writ of summons. The hearing before me was therefore a fresh hearing of the defendant's application to set aside the writ of summons.

2 The plaintiff's writ of summons dated 15 May 2001 contains the following indorsement of claim:

"The Plaintiff claims damages against the Defendant, as insurer of Gromark Packaging Pty Ltd a deregistered company, pursuant to section 601AG of the Corporations Law for personal injuries sustained by the Plaintiff on 18 May 1995 in the course of the Plaintiff's employment with the (sic) Gromark Packaging Pty Ltd as a consequence of the negligence of the (sic) Gromark Packaging Pty Ltd, its servants or agents and the Plaintiff further claims interest and costs."

3 The grounds of the defendant's application are set out in its chamber summons filed on 9 August 2001 as follows:

"This application is brought on the grounds that the Plaintiff has no right or cause of action against the Defendant pursuant to section 601AG of the Corporations Law or otherwise and that the (sic), as a result, this action represents an abuse of process of this Honourable Court."

4 Section 601AG of the Corporations Law is in the following terms:

"A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(b) the insurance contract covered that liability immediately before deregistration."

5 The defendant did not dispute that at the date of the plaintiff's alleged accident there was in force a workers' compensation and employers' indemnity insurance policy issued by the defendant in favour of Gromark Packaging Pty Ltd. Under that policy the defendant agreed to indemnify Gromark "against legal liability to pay damages ... at Common Law for personal injury sustained by any person employed by [Gromark] under a contract of service or apprenticeship if such injury is an injury in respect of which such person is entitled to recover from [Gromark] both compensation under the [Workers' Compensation and Rehabilitation Act 1981] and (subject to s 92 of the Act) damages independently thereof and if [Gromark] would be entitled to indemnity hereunder in respect of any compensation so recovered".

6 It was common ground that the plaintiff had not obtained any judgment against Gromark nor had there been any agreement to compromise any claim the plaintiff may have had against Gromark. It was also common ground that the plaintiff had not obtained leave to commence an action against Gromark under the former s 93D of the Workers' Compensation and Rehabilitation Act 1981. It was also not in dispute that the plaintiff had not obtained an agreement or determination that his degree of disability was not less than 30 per cent or elected to retain the right to seek damages under s 93E(3) of the Workers' Compensation and Rehabilitation Act 1981.

7 Counsel for the defendant submitted that to satisfy the requirement that Gromark "had a liability" as required by s 601AG of the Corporations Law that liability must have been established either by a judgment against Gromark or some form of agreement must have been entered into by Gromark recognising that liability. Counsel referred to par 15.23 of the Explanatory Memorandum to the Company Law Reform Bill 1997 however that paragraph does not assist in the interpretation of the section. It is in substantially the same terms as s 601AG itself.

8 In Suncorp Metway Insurance Limited v Clonmel Pty Ltd [2000] QSC 135; [2001] 2 Qd R 94 Muir J struck out a third party notice issued by the defendant against the third party insurer. The defendant's claim was under s 61(c) of the Law Reform Act 1995 (Qld), the equivalent to s 7(1)(c) of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA). The claim was against the insurer of a deregistered company at the time of the application. Muir J said at page 97:

"In this case [the deregistered company] had no liability to the respondents immediately before deregistration. Their claim was one for contribution under s.61(c) of the Law Reform Act 1995. Under that section:

'any tortfeasor liable in respect of that damage [damage suffered by any person as a result of a tort] may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage ...'

Any liability of [the deregistered company] to the respondents arising under the Law Reform Act had not come into existence at the time of its deregistration: cf. Bitumen and Oil Refineries (Australia) Ltd v. Commissioner for Government Transport [1955] HCA 1; (1955) 92 C.L.R. 200 at 211 and Littlewood v. George Wimpey & Co. Ltd & British Overseas Airways Corporation [1953] 2 Q.B. 501 at 519.

For the above reasons, the respondents cannot succeed in obtaining the relief claimed in the proposed third party notice, at least in the way the action is presently constituted. I thus refuse leave to deliver the third party notice and order that it be struck out."

9 The claim made by the plaintiff is not a claim for contribution or indemnity but a claim that the defendant's insured was liable in damages to him. In Hutchinson v ASIC [2001] VSC 465; (2001) 40 ACSR 198 at 206-207 Mahony M held that s 601AG of the Corporations Law is available to enable a plaintiff to bring an action against the insurer of a deregistered company where the plaintiff's claim against the deregistered company is one for damages for personal injuries. Mahony M distinguished Suncorp Metway Insurance Limited v Clonmel Pty Ltd (supra), pointing out that a claimant for indemnity or contribution only has a cause of action when there is a judgment entered against that claimant. I respectfully agree with Mahony M's analysis of s 601AG of the Corporations Law and Suncorp Metway Insurance Limited v Clonmel Pty Ltd (supra).

10 The indorsement of claim alleges that the plaintiff has suffered personal injuries on 18 May 1995 in the course of his employment by Gromark as a consequence of the negligence of Gromark, its servants or agents. If these facts are made out at trial then the plaintiff had a cause of action against the defendant's insured before it was deregistered and the insured had a liability to the plaintiff. That liability was a liability in negligence for damages for personal injuries suffered by an employee. The defendant's policy covered that liability. It follows in my view that if the plaintiff established at trial the facts alleged in the indorsement of claim he is entitled to recover from the defendant the amount of damages for which Gromark was liable to the plaintiff.

11 Counsel for the third party did not contend that the fact that the plaintiff has not yet secured a determination under s 93E(3) of the Workers' Compensation and Rehabilitation Act 1981 precluded the plaintiff from bringing this action. He accepted that Thomas v Arimco Mining Pty Ltd & Anor (2000) 24 SR (WA) 142 was correctly decided. I agree with that submission. I was informed that the plaintiff has applied for a determination under s 93E(3)(a). It follows therefore that the application to strike out the third party notice should be dismissed.

Compensation and Rehabilitation Act 1981

Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947

Sturk v Sgio Insurance Ltd [2002] WADC 58

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Sturk v Sgio Insurance Ltd [2002] WADC 58 (28 March 2002)

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Legislation Cited (3)

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