Wieck v Wayoutback Desert Safaris Pty Ltd

Supreme Court of NSW|2023-02-21|Before: Payne JA, Mr J

JUDGMENT

This judgment addresses an application by Mrs Doris Wieck, the plaintiff in proceedings 2021/360862 (the plaintiff) to join an insurer as a party to her claim for breach of contract, breach of statuary guarantee and unconscionable conduct. The plaintiff seeks leave to join Allianz Australia Insurance Limited (Allianz) under s 5(1) of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (Third Party Claims Act). The two existing defendants, Wayoutback Desert Safaris Pty Ltd (the first defendant) and Wayoutback Australian Safaris Pty Ltd (the second defendant) had notice of the application and the hearing date and chose not to appear.
On 21 February 2023, after hearing from the plaintiff and Allianz, I made the following orders: 1. Pursuant to s 5(1) of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), leave to the Plaintiff to commence and continue her proceedings against the insurer of the First and Second Defendants, being Allianz Australia Insurance Limited ACN 000 122 850. 2. Pursuant to r 19.1 of the Uniform Civil Procedure Rules 2005 (NSW), leave to the Plaintiff to amend her statement of claim to join the insurer of the First and Second Defendants, being Allianz Australia Insurance Limited ACN 000 122 850, as an additional Defendant to the proceedings. 3. Leave to file and serve the Amended Statement of Claim in the form of Exhibit B in these proceedings.
These are my reasons for making those orders.

Background Facts

The plaintiff is a 59-year-old German citizen and resident of Germany. In 2019, the plaintiff and her husband planned a three-week holiday to Australia. For the purposes of that planned holiday, the plaintiff and her husband retained the services of Boomerang Reisen GmbH (Boomerang), a German travel agent, which offered a travel package of flights to and from Australia, and transport, accommodation and travel experiences in Australia. The total price for this package was €15,906.00. The plaintiff and her husband agreed to the terms of the travel package by executing a written "Binding Travel Registration" with Boomerang.
One of several services included in the travel contract was a three day "Goanna Dreaming Tour" of the remote Northern Territory operated by the two defendants. The first defendant owned a tour bus which was used to transport participants in the tour.
The plaintiff pleads that Boomerang was either the plaintiff's agent or the defendants' agent. She claims Boomerang: (a) acted as agent for Wayoutback Desert and/or Australian Safaris in their dealings with Mr and Mrs Wieck, including for the purposes of s 139B(2) of the Competition and Consumer Act 2010 (Cth) (CCA); or, in the alternative, (b) acted as agent for Mr and Mrs Wieck in their dealings with Wayoutback Desert and/or Australian Safaris.
The plaintiff pleads that, through Boomerang's agency, the travel contract was made between her and the two defendants. She pleads the contract as follows: 7. On or about 26 April 2019, or in the alternative 7 May 2019, or in the alternative 13 May 2019 or in the alternative 20 September 2019, Mr and Mrs Wieck entered into a contract pursuant to which, in consideration for the payment of €15,906.00, Wayoutback Desert and/or Australian Safaris agreed to provide travel services to Mr and Mrs Wieck during their holiday to Australia (the Travel Contract).
The terms of the contract are pleaded thus: 9. It was an implied term of the Travel Contract that: a. The Services provided, comprising the Tour, would be rendered with due care and skill by Wayoutback Desert and/or Australian Safaris (the Due Care Term); b. The bus used for the Tour would be equipped with functioning seatbelts (the Seatbelt Term). … 17. In the premises, Wayoutback Desert and/or Australian Safaris: a. breached the Due Care Term; and b. breached the Seatbelt Term. … 20. As a result of the breaches of the Travel Contract, Mrs Wieck has suffered loss and damage, as particularised below.
Clause 16 of the contract with Boomerang was entitled "Choice of applicable law". It provided: The contractual relationship between the customer and the tour operator shall be governed exclusively by German law. This also applies to the entire legal relationship. Insofar as German law is not applied to the liability of the tour operator with regard to the cause of action of the customer against the tour operator abroad, German law shall apply exclusively with regard to the legal consequences, in particular with regard to the type, scope and amount of claims of the customer.
On 7 November 2019, the plaintiff began the Goanna Dreaming Tour. The tour group was led by a Mr Shannon Wise, who also drove the tour bus. The plaintiff pleads that Mr Wise was the tour's "facilitator" on behalf of both defendants.
On 9 November, Mr Wise began to drive the tour bus back to Alice Springs. During this journey, the plaintiff pleads she was unable to use her seatbelt, which was not operating. On a flat stretch of highway, the bus collided with a stationary vehicle, which had been parked in the middle of the road.
The plaintiff suffered extensive injuries, including injury to her spine, which has left her with severely reduced mobility and unable to work. She requires domestic care.

The Allianz Policy

The first and second defendants held an insurance policy with Allianz for public and products liability insurance. The first and second defendants are both listed in the policy schedule as the insured. The period of insurance was 4 May 2019 to 4 May 2020.
Clause 1.1 of the policy document defines "Cover" as "Personal Injury … happening during the Period of Insurance as a result of an Occurrence within the Policy Territory in connection with Your Business or Your Products…".
Clause 2.14 of the policy document defines "Occurrence' as 'An event including continuous or repeated exposure to substantially the same general conditions which results in Personal Injury …, neither expected nor intended from Your standpoint".
Clause 2.15.1 relevantly defines "Personal Injury" to be "bodily injury, death, illness, disability, Loss of Consortium, shock, fright, mental anguish or mental injury".
Clause 3.19 of the policy document contains a limited exclusion for "Vehicles" which relevantly provides: This Policy does not provide indemnity in respect of claims directly or indirectly arising from: … 3.19 Vehicles The use of a Vehicle owned by You or in Your physical or legal control: 3.19.1 which is required under any legislation to be registered…
There is likely to be a lively issue at trial about whether, by clause 3.19, the defendants' liability arising from the bus accident is excluded from cover.

Procedural history

On 20 December 2021, the plaintiff filed a Statement of Claim, along with a Statement of Particulars - Personal Injury Proceedings against the first and second defendants. That Statement of Claim alleges breach of contract, breach of statutory guarantee under s 60 of sch 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), and unconscionable conduct at general law and under s 21 of the Australian Consumer Law on the part of the first and second defendants.
On 15 February 2022, the first and second defendants, then represented by Wotton + Kearney Lawyers, each filed an Appearance. On 6 May 2022, Wotton + Kearney Lawyers filed a Notice of Intention of Ceasing to Act in relation to both the first and second defendants. On 11 May 2022, the first defendant filed a Notice of Change of Solicitor stating that it was now represented by Mr Mark Faraday of Henry William Lawyers. A Notice of Ceasing to Act was filed by Wotton + Kearney Lawyers on 31 May 2022 in relation to the second defendant. The second defendant has not been legally represented since that date. On 20 February 2023, Mr Faraday filed a Notice of Intention to File Notice of Ceasing to Act in relation to the first defendant. No other solicitor has come on to the record for the first defendant.
On 16 February 2022, the second defendant was placed into voluntary administration. On 13 April 2022, the administrators executed a Deed of Company Arrangement (the DOCA). Clause 16.1 of the DOCA had the effect that all creditors' claims on the second defendant would be extinguished upon termination of the DOCA. Clause 16.1 by its terms does not apply to claims which were subject to an insurance policy. Clause 14(b) also purportedly excludes from the general release any claim covered by insurance. The plaintiff submits that her claims fall within the terms of the Allianz Policy and therefore are not extinguished by termination of the DOCA. This will likely be an issue at the trial.
On 5 May 2022, the plaintiff filed a Notice of Motion naming the first and second defendants, along with Dual Australia Pty Ltd, as respondents. On 2 June 2022, consent orders were filed, the effect of which was to discontinue the Notice of Motion against the third respondent, Dual Australia Pty Ltd. Leave was granted for the plaintiff to discontinue against Dual Australia Pty Ltd on 9 September 2022.
On 12 August 2022, the plaintiff filed the Amended Notice of Motion, naming the first and second defendants, Dual Australia Pty Ltd and Allianz as respondents. She sought the following orders: 1. [not pressed at the hearing]. (1A) [not pressed at the hearing]. 1. Pursuant to s 5(1) of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), leave to the Plaintiff to commence and continue her proceedings against the insurer of the Second Defendant, being the Fourth Respondent to this Notice of Motion. 2. Pursuant to r 19.1 of the Uniform Civil Procedure Rules 2005 (NSW), leave to the Plaintiff to amend her statement of claim to join the insurer of the Second Defendant, being the Fourth Respondent to this Notice of Motion, as an additional Defendant to the proceedings. (4A) Leave to file and serve an Amended Statement of Claim. 1. Costs. 2. Any further or other Order as this Honourable Court thinks fit.
The DOCA was terminated on 22 December 2022. On 19 January 2023, the second defendant exited administration.
On 17 February 2023, the plaintiff served a proposed Amended Statement of Claim which she would file if granted leave to do so. The proposed Amended Statement of claim became Exhibit B before me.
On 20 February 2023, the plaintiff sought leave to file a Further Amended Notice of Motion in which all references to "the insurer of the Second Defendant" were amended to read "the insurer of the First and Second Defendants". I granted this leave to rely upon the Further Amended Notice of Motion at the hearing.

Evidence

The plaintiff's solicitor, Ms Fiona Henderson, swore two affidavits, one on 4 May 2022 along with a bundle of exhibits labelled FH-1. The exhibits comprised the travel contract and various company search documents relating to the second defendant and its administration.
Ms Henderson swore a second affidavit on 12 August 2022, along with a bundle of exhibits labelled FH-2. The exhibits included copies of the Allianz policy schedule and policy document, as well as a copy of the DOCA.
Allianz relied on three affidavits. The first was sworn by Mr Brian George Moroney on 11 November 2022, which annexed copies of the Allianz policy schedule and policy document. The second was sworn by Mr Moroney on 10 February 2023, which annexed various company search documents relating to the second defendant. The third was affirmed by Ms Stephanie Ga-Yang Lee on 20 February 2023, the day before the hearing. It annexed part of the German Civil Code. At the hearing, I granted leave for Allianz to rely on this late served affidavit.

Legal test to be applied

Section 5 of the Third Party Claims Act provides: 5 Leave to proceed (1) Proceedings may not be brought, or continued, against an insurer under section 4 except by leave of the court in which the proceedings are to be, or have been, commenced. (2) An application for leave may be made before or after proceedings under section 4 have been commenced. (3) Subject to subsection (4), the court may grant or refuse the claimant's application for leave. (4) Leave must be refused if the insurer can establish that it is entitled to disclaim liability under the contract of insurance or under any Act or law.
In Clark v Avant Insurance Ltd; Stevens v Avant Insurance Ltd [2022] NSWCA 175 Meagher and Beech-Jones JJA and Lonergan J explained at [27] that to obtain a grant of leave, a plaintiff must demonstrate: …. first, that they have an arguable case that the insured is liable to the plaintiff; secondly, that there is an arguable case that the insurer's policy responds to that liability; and thirdly, that there is a real possibility that the insured will be unable to satisfy any judgment against them in full.
Even when a plaintiff satisfies the three elements, the court still has a residual discretion not to grant leave: Clark at [28]; Wayland v Bird [2017] NSWCA 26.
Allianz accepted that the plaintiff had prima facie satisfied all three jurisdictional preconditions for a grant of leave to join them as the insurer of the second defendant. This meant, as the plaintiff pointed out, that in relation to the second defendant, the only question was whether the Court should exercise a discretion not to permit the joinder.
Allianz did not initially accept that the preconditions were met in relation to the first defendant. Allianz submitted that there was no information before the Court about the first defendant's capacity to pay a judgment debt, meaning the third precondition had not been met. At the hearing on 21 February 2023, Allianz initially opposed the plaintiff's attempt to amend her notice of motion to include joinder of Allianz as insurer to the first defendant. Acceptance of this submission would inevitably have led to an adjournment, perhaps for some time.
During argument, I expressed the tentative view that an inference about the first defendant's lack of financial capacity was available based on the notice of intended withdrawal of the first defendant's solicitor. Mr Walsh, who appeared for Allianz, then took instructions and subsequently accepted the tentative conclusion I had suggested to him in argument that the plaintiff had also prima facie satisfied all three threshold elements for a grant of leave with respect to the first defendant. I am grateful to Mr Walsh and those who instructed him at Allianz. Their conduct was a model of compliance with Part 6 of the Civil Procedure Act 2005 (NSW).
I find that the jurisdictional precondition to the joinder of Allianz has been met in relation to the first and second defendants.

Allianz's Submissions

Allianz nonetheless sought the exercise of the discretion to refuse joinder in its capacity as insurer to both defendants. It is appropriate to consider their submissions first.
The original submissions made by Allianz may be disposed of quickly. The first submission was that the Supreme Court of New South Wales was a forum non conveniens. That submission was not pressed before me.
Allianz's submissions about discretion essentially addressed what it submitted were weaknesses in the plaintiff's substantive case, which individually and collectively militated against a grant of leave.
These matters were: 1. the effect of the Motor Accidents (Compensation) Act 1979 (NT) (MAC Act), which Allianz said extinguished the plaintiff's claims; 2. the absence of a contract between the plaintiff and the defendants; 3. the lack of a causal nexus between the claimed unconscionable conduct and the plaintiff's injury; 4. a two-year statutory limitation in German law which, if applicable, would bar the plaintiff's contract claim; and 5. the "vehicle exclusion" in clause 3.19 of the insurance policy document, which according to Allianz excluded cover for injury relating to the tour bus.
Allianz also raised the operation of s 275 of the Australian Consumer Law: 275 Limitation of liability etc. If: (a) there is a failure to comply with a guarantee that applies to a supply of services under Subdivision B of Division 1 of Part 3-2; and (b) the law of a State or a Territory is the proper law of the contract; that law applies to limit or preclude liability for the failure, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of any liability, for a breach of a term of the contract for the supply of the services.
This provision, Allianz argued, applied the MAC Act to extinguish the plaintiff's claim under s 60 of the Australian Consumer Law. Allianz conceded that this interpretation is correct only if there is a relevant contract whose proper law is that of the Northern Territory.
Allianz further refined its submissions at the hearing before me. Mr Walsh described all submissions he pressed as based on pleadings in the proposed Amended Statement of Claim which were "fundamentally bad". He pressed his submissions that no agency argument was available on the proper construction of the written contract between the plaintiff and Boomerang, and that the way that the plaintiff pleaded agency was so vague that his client could not contradict it.

Plaintiff's Submissions

The plaintiff's initial submissions were filed prior to the second defendant exiting external administration. In her reply submissions, filed after the second defendant exited external administration, the plaintiff addressed the substance of the complaints then made by Allianz.
The plaintiff's overarching contention was that even if Allianz's submission that the merits of the plaintiff's claim are weak were accepted, this would not be a proper basis to refuse leave to join Allianz. Further, the plaintiff disputed Allianz's characterisation of her case as weak. She did so on six grounds: 1. the MAC Act did not apply to the plaintiff's New South Wales proceedings, because the Act should not be construed with extra-territorial effect; 2. the contract was outside the operation of the MAC Act, because its proper law was German law, not Northern Territory law; 3. the MAC Act did not extinguish the Australian Consumer Law claims, because the Australian Consumer Law overrides state and territory provisions. The plaintiff cited Pritchard v Racecage Pty Ltd (1996) 64 FCR 96 at 119-121 and Pritchard v Racecage Pty Ltd (1997) 72 FCR 203 at 214; 4. Allianz was wrong in submitting that there was no contract, because it failed to engage with the plaintiff's pleadings of agency; 5. Allianz could not yet rely on the German limitation period, because only a "clear" statutory limitation should be applied at the interlocutory stage; and 6. difficult issues in the construction of the contract or the insurance policy should be determined only at final hearing, after evidence and argument. The existence of these issues, such as the correct interpretation of the vehicle exclusion in clause 3.19 of the insurance policy, did not leave the plaintiff's case unarguable at the interlocutory stage.

Consideration

As I have said, the threshold elements under s 5 of the Third Party Claims Act have been met. The sole question was whether I should exercise my undoubted discretion not to grant leave to join Allianz to the proceedings.
The cases on s 5 offer limited guidance about how the discretion is to be exercised. However, a similar discretion existed under the now-repealed s 6 of the Law Reform Miscellaneous Provisions Act 1946 (NSW), which the Court in Clark described as the "predecessor-provision" to s 5 of the Third Party Claims Act.
Under that provision, the Court had an unlimited discretion to refuse a grant of leave: Opes Prime Stockbroking Ltd (In Liq) (Scheme Administrators Appointed) v Stevens [2014] NSWSC 659 at [17] per Ball J. The sole restriction was that the discretion had to be exercised for the purpose for which it was granted, which was to ensure that insurers were not exposed to unnecessary, unwarranted or inappropriate claims: Oswald v Bailey (1987) 11 NSWLR 715 at 717F-G, 725E; Tzaidas v Child (2004) 61 NSWLR 18 at [17], [107]; Wayland v Bird [2017] NSWCA 26 at [20]-[26]; DSHE Holdings Ltd (receivers and managers appointed) (in liq) v Abboud; National Australia Bank Limited v Abboud [2017] NSWSC 579 at [21]. In Petersen Superannuation Fund Pty Ltd v Bank of Queensland Limited [2017] FCA 699 at [104], Yates J found that the purpose of the discretion under s 5(4) of the Third Party Claims Act was the same as under s 6 of the Law Reform (Miscellaneous Provisions) Act.
In considering whether to exercise the discretion not to grant leave, I therefore must be guided by the purpose of not exposing an insurer to an unnecessary, unwarranted or inappropriate claim. For the reasons that follow, I am not satisfied that a grant of leave in this case would expose the insurer to an unnecessary, unwarranted or inappropriate claim. I have therefore decided not to exercise my discretion against a grant of leave.
Allianz's submissions about the exercise of the residual discretion all relied on different asserted weaknesses in the plaintiff's case. Assessed in the necessarily broad and high-level way appropriate to an interlocutory application, the plaintiff's pleaded case against Allianz should be allowed to proceed. In reaching this conclusion, I am not ruling on the merits of the arguments raised by the plaintiff. The plaintiff's pleading raises matters which are at least arguable. It is inappropriate that I finally determine any of those matters in an interlocutory hearing. This case is very different to one where one of the jurisdictional preconditions is not met, such as in Clark. To ensure that the merits of these arguments are addressed as soon as possible, I will case manage these proceedings and will direct that evidence be filed by each of the parties and the matter brought back before me shortly. Before doing so I will briefly address each of the matters raised by Allianz.
First, the various pleading points made by Allianz, which raised matters of substance, are inappropriate to be determined in an interlocutory hearing where the sole issue is the exercise of discretion. Resolution of these pleading issues should await, at least, the filing of evidence. If any difficulty in identifying the plaintiff's case remains after the exchange of evidence, I will craft case management solutions to address those issues.
Secondly, the construction of the insurance policy document, including the vehicle exclusion in clause 3.19, should not be determined on an interlocutory basis. The plaintiff's construction is sufficiently plausible that resolution of the issue should await a final hearing.
Thirdly, issues of limitation (including limitation under foreign law as may be the case here) should not be decided at an interlocutory hearing except "in the clearest of cases": Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 533 (Mason CJ, Dawson, Gaudron and McHugh JJ) and Murgolo v AAI Ltd t/as AAMI (2019) 101 NSWLR 376 at [62]-[63] (Basten JA, Macfarlan JA agreeing).
Fourthly, if Allianz is correct that there was no contract between the plaintiff and the defendants, or even if there was a contract, that the MAC Act extinguished any contract claims arising from the accident, that does not necessarily mean that the plaintiff's Australian Consumer Law claims must fail. If there is no contract, the plaintiff's reliance on the Australian Consumer Law s 60 statutory guarantees remains at least arguable, despite s 275 of the Australian Consumer Law and the MAC Act. Even if there is a contract, and Northern Territory law applies to that contract, the plaintiff's Australian Consumer Law s 21 case is not extinguished by s 275 of the Australian Consumer Law. Those are matters best addressed on a final basis and not on an interlocutory basis where the sole question is the exercise of a discretion.
Fifthly, issues about the causal nexus between the alleged unconscionable conduct and the plaintiff's injuries are essentially matters for a final hearing and should rarely (if ever) be determined on an interlocutory question of discretion such as the present.
All of the issues raised in this interlocutory hearing are matters of some complexity. Those issues should not be addressed in an interlocutory hearing where the sole issue is the exercise of discretion.

Conclusion and orders

I am satisfied that the plaintiff has made out the elements required to obtain a grant of leave pursuant to s 5(1) of the Third Party Claims Act, and that this is not a case where I should exercise the residual discretion to refuse leave to join Allianz. Accordingly, I made the orders at [2] above.
To give effect to my decision to closely case-manage these proceedings, on 23 February 2023 I made the following case management orders: 1. All defendants to file and serve their defences to the Amended Statement of Claim by 21 March 2023. 2. Plaintiff to file and serve all evidence in proceedings by 18 April 2023. 3. All defendants to file and serve all evidence in proceedings by 13 June 2023. 4. Matter listed before Payne JA on 16 June 2023 at 9:30am.

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: 24 February 2023

Australian Consumer Law Law Reform Miscellaneous Provisions Act 1946(NSW)

Law Reform Miscellaneous Provisions Act 1946(NSW)

(2019) 101 NSWLR 376

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