Bennett v WMC (Olympic Dam Corporation) P/L & Akula P/L (in Liq) & CGU Insurance Ltd - [2008] SADC 42

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
BENNETT v WMC (OLYMPIC DAM CORPORATION) P/L & AKULA P/L (IN LIQ) & CGU INSURANCE LTD & ORS
[2008] SADC 42
Judgment of Her Honour Judge Simpson
18 April 2008
PROCEDURE - DISCOVERY AND INTERROGATORIES
Appeal from decision of the Master to postpone determination of an application by third parties for the defendant to provide particulars of documents for which legal professional privilege is claimed and for discovery by the defendant of any insurance policy to which the defendant is a party and which does or may respond to the plaintiff's claim - Held: application should be determined - no order for particulars of documents for which legal professional privilege is claimed - documents relating to insurance policy directly relevant to an issue arising on the pleadings - order made for discovery of any insurance policy to which the defendant is a party which does or may cover in whole or in part the occurrence which is the basis of the plaintiff's claim.
District Court Act 1991 s 43; District Court Rules 1992 rr 58A.03, 58A.05, 58A.06, 58A.07, 97.01; District Court Civil Rules 2006 rr 17, 292, referred to.
Australian Coal and Shale Employees' Federation v Commonwealth (1953) 94 CLR 621; House v The King (1936) 55 CLR 499; Mullett and another v Gabriel and another (1989) 52 SASR 330; Thomas v Thomas [2000] SASC 408; Citicorp Australia Ltd and others v Cirillo and another [2000] SASC 399; Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49; Attorney-General (NT) v Maurice (1986) 161 CLR 475, applied.
Beneficial Finance Corporation and others v Price Waterhouse (1996) 68 SASR 19; Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166; Bradley Phillips Pty Ltd and another v Burn Brite Lights (Vic) Pty Ltd and another [2002] SASC 145; Pickering and others v Edmunds and others (1994) 63 SASR 357, distinguished.

PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS
Appeal from decision of the Master directing that the plaintiff's claim against the defendant proceed to trial separately before the third party proceedings are heard - Held: The application by the plaintiff for a separate trial in the action against the defendant should be considered afresh - the plaintiff has not established that it is in the interests of justice to depart from the procedure determined by the rules - the third party proceedings should be tried together with the trial of the plaintiff's action.
District Court Rules 1992 r 37.05, referred to.
Port Pirie City and Districts Council v Leenders & Partners Pty Ltd [2001] SASC 208; Mulvaney (as liquidator of the Hellenic Athletic & Soccer Club of SA Inc) v Commissioner of Taxation for the Commonwealth of Australia [2004] SASC 166, applied.
Barclays Bank v Tom [1923] 1 KB 221; New World Oil and Developments Pty Ltd and another v 163 Clarence Street Pty Ltd and others [1995] FCA 1108; Shrimp v Landmark Operations Limited [2007] FCA 1468, considered.

BENNETT v WMC (OLYMPIC DAM CORPORATION) P/L & AKULA P/L (IN LIQ) & CGU INSURANCE LTD & ORS
[2008] SADC 42

This is an appeal against a decision of a Master. The appeal is brought pursuant to section 43 of the District Court Act 1991, which relevantly provides:
(1)A party to an action may, in accordance with the rules of the appellate court, appeal against any judgment given in the action.
(2)The appeal lies—
(a) in the case of a judgment given by a Master or the Court constituted of a Master—to the Court constituted of a Judge;
Previously, under the District Court Rules 1992, rule 97.01 provided that:
…an appeal pursuant to section 43(2) of the Act against an interlocutory judgment of a Master shall be by way of rehearing and, in matters involving the exercise of a discretion, the Judge may exercise his own discretion without regard to the manner in which it was exercised in the decision, order or direction appealed against.
The present rules, District Court Civil Rules 2006, make different provision in relation to appeals from a decision of a Master. DCR 17 provides that an appeal lies as of right from a judgment of a Master to the Court constituted of a Judge. Pursuant to DCR 292:
(1)An appeal is to be by way of rehearing (unless the law under which the appeal is brought provides to the contrary).
(2)Subject to any limitation on its powers arising apart from these rules, the Court may determine an appeal as the justice of the case requires despite the failure of parties to the appeal to raise relevant grounds of appeal, or to state grounds of appeal appropriately, in the notice of appeal.
(3)Subject to any limitation on its powers arising apart from these rules, the Court may—
(a)     draw inferences of fact from evidence taken at the original hearing and, in its discretion, hear further evidence on a question of fact;
(b)     amend or set aside the judgment subject to the appeal and give any judgment that the justice of the case requires;
(c)     remit the case or part of the case for rehearing or reconsideration;
(d)     make orders for the costs of the appeal.
There is no rule which allows the Judge to exercise his own discretion without regard to the manner in which it was exercised by the Master. While the appeal is in the nature of a rehearing, it is nevertheless relevant to bear in mind the principles which guide an appeal from a discretionary decision on an interlocutory application, i.e., there is a strong presumption in favour of the correctness of the decision appealed from and the decision should be affirmed unless the court is satisfied that the decision is a product of the decision maker acting on a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. It is not enough to find that if I had been in the position of the learned Master, I would have taken a different course or exercised the discretion differently. (Australian Coal and Shale Employees' Federation v Commonwealth (1953) 94 CLR 621 at 627: House v The King (1936) 55 CLR 499 at 504-505; Mullett and another v Gabriel and another (1989) 52 SASR 330 at 333; Thomas v Thomas [2000] SASC 408)
The plaintiff in this action, Jason John Bennett, has brought a claim in negligence for damages in respect of personal injury against the defendant, WMC (Olympic Dam Corporation) Pty Ltd (‘WMC’). WMC claims indemnity from the employer of the plaintiff, the first third party, RaiseBore Australia Pty Ltd (‘RaiseBore’) for breach of the contract between WMC and RaiseBore. RaiseBore, now Akula Pty Ltd, is in liquidation.
WMC also claims to be entitled to indemnity from the insurers of RaiseBore, the second third parties, CGU Insurance Ltd, AMP General Insurance Ltd, Vero Insurance Ltd, SGIC Insurance Ltd and Employers Reinsurance Corporation (collectively referred to as ‘CGU’), pursuant to an insurance policy issued in favour of RaiseBore (‘the RaiseBore insurance policy’).
In its defence, CGU relies on a term of the RaiseBore insurance policy requiring an insured making a claim to advise of other insurance which may cover the relevant event, a term in respect of which CGU alleges WMC is in breach.
WMC has discovered documents described as correspondence between WMC and its insurer, and its insurer and its solicitors. WMC claims legal professional privilege in respect of those documents.
CGU filed an application on 9 February 2007 seeking orders as follows:
1.The defendant identify the insurer with which the defendant and the defendant’s solicitors have exchanged correspondence and in relation to which the defendant has claimed legal professional privilege; and
2.The defendant provide sufficient particularity to the description of documents in paragraphs 1.47 and 1.48 of the defendant’s list of documents dated 21 March 2003 to show whether there may have been an implied waiver of legal professional privilege by their contents being relevant to a matter pleaded; and/ or in the alternative
3.Discovery of any insurance policy to which the defendant is a party which does or may respond to the plaintiff’s claim.
It appears from the schedule exhibited to the affidavit of WMC’s solicitor, sworn on 6 March 2007, that since about June 2005 the solicitors for CGU have on a number of occasions sought details from the solicitors for WMC of any other insurance held by WMC and discovery of any other insurance policy relevant to the plaintiff’s claim.
In correspondence between solicitors on 23 October 2006, exhibited to the affidavit, the solicitors for CGU referred on more than one occasion to their request for disclosure of the insurer referred to in lists of documents filed by WMC and to the fact that the ‘policy pursuant to which WMC is seeking indemnity from CGU and its co-insurers contains a contractual obligation to disclose any other relevant policy.’
According to the affidavit, in response to demands from the solicitors for CGU for ‘details regarding the existence of any insurer and any policy of insurance which might exist with respect to WMC’, WMC has consistently maintained that the identity of any other insurer and the content of any other policy of insurance are confidential to WMC.
The plaintiff filed an application also on 9 February 2007 for the following orders:
1.That the action be listed for trial on the issues of liability and quantum of damages as between the plaintiff and defendant only.
2.That the determination of contribution issues between the defendant and third parties be deferred pending the resolution of interlocutory issues between those parties.
In support of the plaintiff’s application, the solicitor for the plaintiff filed an affidavit on 9 February 2007. He says the plaintiff has been ready for trial since May 2005. The action was not listed for trial because there was a prospect of mediation. A mediation to resolve the issues between all the parties was discussed over a number of months and finally arranged for November 2006. A draft index to mediation books was prepared. However, despite the efforts of the plaintiff, the outstanding issue of discovery between WMC and CGU prevented the mediation taking place and has caused delay in the matter proceeding to trial.
It was agreed between the parties that the application brought by CGU should be determined before the plaintiff’s application. Following submissions on CGU’s application and in the course of considering it, the learned Master concluded that it was arguable that determination of the application brought by CGU should await determination of the issue of liability between the plaintiff and the defendant, WMC. Submissions were then made on the plaintiff’s application.
On 30 November 2007 the learned Master made orders on the applications, including the following:
1.I grant the plaintiff’s application (FDN 47[1]) and order that the plaintiff’s claim proceed to trial.
2.I refuse the orders sought in FDN 50[2] at this stage. I give leave to the second third parties to re-agitate the application following determination of the plaintiff’s claim.
[1] 9 February 2007
[2] Application of CGU 9 February 2007
This is an appeal by CGU and WMC against the decision of the Master. By Notices of Appeal filed on 18 December and 21 December 2007 respectively, WMC and CGU appeal against the decision to postpone the determination of the application brought by CGU and instead seek its resolution on this appeal. CGU seeks orders in accordance with the application filed on 9 February 2007. WMC by Notice of Cross Appeal filed on 21 December 2007 seeks an order dismissing the application of CGU.
CGU and WMC both seek to set aside the order providing for the trial initially to be limited to the issues between the plaintiff and the defendant. The plaintiff supports the order made on his application by the learned Master for the trial to proceed on the issues only of the liability of WMC to the plaintiff and quantum of damages.
The pleadings
There is no dispute that the plaintiff was employed by RaiseBore as a trainee driller at the Olympic Dam mining site in August 1998. By his statement of claim dated 8 August 2001 the plaintiff claims that he suffered injuries in the course of his employment with RaiseBore, in particular as a result of the discharge of explosives by an employee of WMC while the plaintiff was operating an electric/hydraulic drill rig at an Olympic Dam site known as 36 Purple 80. The plaintiff alleges that WMC was the occupier and operator of the mining site, which came within the definition of a workplace for the purposes of the Occupational Health, Safety and Welfare Act 1986.
By its amended defence filed on 28 April 2003, WMC admits that it carried on business at Olympic Dam and that the plaintiff was at all material times performing his duties pursuant to a contract between WMC and RaiseBore, as his employer. WMC asserts further, amongst other things, that pursuant to the contract, RaiseBore undertook the management, control, direction and supervision of the plaintiff and was in effective occupation of the Olympic Dam site.
WMC alleges in its defence that pursuant to the contract, RaiseBore agreed inter alia:
1.to supply plant, labour, supervision, materials, services and equipment associated with the drilling for the expansion of the tunnel known as 36 Purple 80 (the works);
2.that all persons engaged in the works would be suitably qualified and licensed;
3.that at least one qualified supervisor experienced in all aspects of the works would be on site;
4.to adhere to the project safety plan in carrying out the works;
5.to implement and maintain and operate a quality management system to ensure adequate management, direction and control of the quality of work;
6.to be responsible for the safety of the works;
7.to provide and ensure its employees and subcontractors observed a safe system of work at all times and comply with all relevant Acts and regulations;
8.to ensure that it adopted safe working practices together with safety procedures;
9.to perform the works in strict compliance and conformity with the contract; and
10.to carry out the works with due diligence and efficiency.
By its defence WMC further alleges that at the time of the plaintiff’s accident, RaiseBore and its employees, including the plaintiff, were carrying out the works under the contract, that RaiseBore was directing, supervising, managing and in control of the activities being carried out by the plaintiff and that RaiseBore was a qualified and specialised independent contractor engaged by the defendant. WMC denies it owed a duty of care to the plaintiff, or in the alternative, asserts that the duty was discharged by the engagement of RaiseBore as an appropriately qualified and specialised subcontractor.
By its second further amended third party statement of claim filed on 27 February 2004, WMC claims indemnity from RaiseBore on the basis of those matters raised in the defence and set out above.
In addition, WMC claims that it was a term of the contract with RaiseBore that RaiseBore would procure and maintain a comprehensive public liability insurance policy naming WMC as an insured and to be deemed primary to any insurance effected by WMC.
If WMC is found liable to the plaintiff, WMC claims indemnity from RaiseBore on account of RaiseBore’s failure to perform its works obligations properly or, if not, and RaiseBore is found to have failed to procure appropriate insurance indemnifying WMC pursuant to the contract with WMC, then WMC seeks a declaration that it is entitled to a full and complete indemnity on that account from RaiseBore.
RaiseBore filed an amended defence to the amended third party statement of claim on 16 October 2003. It admits that it entered into a contract with WMC in the terms alleged by WMC. RaiseBore denies it was the occupier of the Olympic Dam site, denies it agreed to procure insurance in the terms alleged and denies that WMC is entitled to indemnity from it in respect of the plaintiff’s injuries, which RaiseBore alleges were caused by the negligence of an employee of WMC or one of its other contractors.
By the second further amended third party statement of claim WMC also seeks a declaration that if WMC is found to be liable to the plaintiff, RaiseBore’s insurers, CGU, are liable to indemnify WMC pursuant to a public and products liability insurance policy issued in favour of RaiseBore.
In his affidavit filed on 9 February 2007 in support of the application by CGU, the solicitor for CGU says that his instructions are that Harbour Pacific Underwriting Management Pty Ltd as agent for CGU, issued a Public and Product Liability Policy to RaiseBore and associated entities covering the period 30 June 1998 to 30 June 1999 being policy No GPL001012, a policy of insurance relied on by WMC in these proceedings. It appears that the company Harbour Pacific Underwriting Management Pty Ltd was first joined as the second third party following an order made on 4 December 2003. CGU was substituted for Harbour Pacific Underwriting Management Pty Ltd following an order made on 26 February 2004.
By the amended defence filed on 10 April 2007, CGU does not dispute that a public and products liability policy was issued in favour of RaiseBore. CGU denies that the terms of the policy entitle WMC to indemnity. In the alternative, CGU alleges that WMC has made a claim under the policy and pursuant to the provisions of the policy of insurance, as a claimant WMC is obliged to advise CGU of full details of any other insurance which does or may cover in whole or in part the occurrence which is the basis of the plaintiff’s claim. CGU alleges that, in spite of requests made to it, WMC has failed to advise of any other relevant insurance, on that account WMC is in breach of the terms of the insurance policy and as a result is not entitled to indemnity.
In its reply filed on 7 May 2007, WMC alleges that:
1. WMC claimed indemnity from CGU by letter dated 8 April 2003;
2.CGU refused indemnity by letter dated 20 October 2003 and thereby wrongfully repudiated its obligations under the RaiseBore insurance policy;
3.CGU is not entitled to rely on the provision in the policy requiring a claimant to advise it of other relevant insurance.
The issues on the pleadings to be resolved at trial as between the plaintiff and WMC include:
·whether WMC or RaiseBore was the occupier of the Olympic Dam site;
·whether WMC owed a duty of care to the plaintiff, and if so, whether it was discharged by the engagement of RaiseBore;
·if WMC owed the plaintiff a duty of care, whether it was in breach of the duty of care;
·in the alternative, whether WMC was in breach of a statutory duty pursuant to the Occupational Health, Safety and Welfare Act 1986; and
·the quantum of any damages for which WMC is responsible.
As between WMC and RaiseBore, and WMC and CGU, on the pleadings the issues are:
·If WMC is found liable to the plaintiff, WMC claims indemnity from RaiseBore on the basis of the provisions of the contract between them and in particular, RaiseBore’s failure to perform its contractual obligations properly.
·If WMC is found liable to the plaintiff, WMC claims indemnity from CGU pursuant to the RaiseBore insurance policy. CGU denies liability under the policy according to its terms, and in particular, on the basis that WMC did not provide advice of other relevant insurance at the time of making a claim under the policy.
·If WMC is found liable to the plaintiff and CGU is not liable to indemnify WMC under the terms of the RaiseBore insurance policy, WMC claims indemnity from RaiseBore on the basis of its failure to procure appropriate insurance indemnifying WMC pursuant to the contract with WMC.

Unlike the circumstances in Beneficial Finance Corporation Limited and others v Price Waterhouse ((1996) 68 SASR 19), a decision on which the learned Master placed some weight, the claim by the defendant in this case, WMC, against its insurer, the second third parties CGU, arises directly on the pleadings. In Beneficial Finance, the insurer of the defendant was not a party. There was no evidence of a dispute between the defendant, Price Waterhouse, and its insurer, which had not declined indemnity, but had not been able to say at that stage in the proceedings that the defendant insured was entitled to indemnity. It was the plaintiff, Beneficial Finance Corporation Limited, which brought an application for discovery of the defendant’s professional indemnity insurance policy, in which it had no interest and in respect of which no issue arose in the proceedings. It was in that context that Lander J observed that the underwriters could not be sure until the litigation between the plaintiff and the defendant was completed, whether the circumstances would still be such that the defendant insured was entitled to indemnity (at p 46-47).
The decision of the learned Master to postpone the determination of the application brought by CGU in my opinion did not give sufficient weight to the right of the second third parties to have the application made on 9 February 2007 determined, without waiting until the plaintiff’s rights as against WMC were resolved at trial. In my opinion, the second third parties, CGU, are entitled to have the application of 9 February 2007 for orders against WMC dealt with in any event. Both CGU and WMC wish to have the application resolved.
In my opinion, the outcome of the application brought by CGU is relevant to the application brought by the plaintiff. In the circumstances, the plaintiff’s application should be considered afresh.
The application of the second third parties
The proceedings were instituted prior to District Court Civil Rules 2006 coming into operation. The applicable rules in relation to the parties’ obligations of discovery are District Court Rules 1992.
DCR 58A.06(1) provides that a ‘list of documents must identify the documents discovered in such a manner that it is subsequently practicable to ascertain precisely what are the documents referred to, but it is only to contain a concise general description of them’. DCR 58A.07 allows for the court to order a party to file a supplementary list of documents identifying specifically each document contained within a general description of documents in a previous list, where it is in the interests of justice. In accordance with DCR 58A.05 if a claim is made by a party for privilege for a document, the claim and the grounds for it, are to be included in that party’s list of documents.
Apart from seeking particulars of documents described in the List of Documents filed on 21 March 2003, the subject of this application, the solicitors for CGU have previously sought particulars relating to documents for which privilege is claimed by WMC, for example, by letter to the solicitors for WMC dated 1 September 2006, in which particulars were sought of documents described in seven separate Lists of Documents filed on behalf of WMC between 30 January 2003 and 28 April 2005. The description of the documents for which privilege is claimed varies, but includes a reference to correspondence between WMC and its insurer ‘for the purpose of obtaining information necessary in giving of legal advice’, between the solicitors of WMC and its insurers giving legal advice, and between the solicitor for the insurer of WMC[3] and the solicitor of WMC seeking legal advice. The details of the date, author and recipient and the general nature of the correspondence were sought by CGU in each case.
[3] It appears incorrectly described in the letter as 'the insurer of the solicitor for the first Defendant'.
By letter dated 5 December 2006 in reply, the solicitors for WMC asked why the further detail was sought and if CGU would meet any cost associated with the request. In any event no particulars have been given.
CGU seeks an order that WMC identify the insurer and ‘provide sufficient particularity to the description of documents in paragraphs 1.47 and 1.48 of the defendant’s list of documents dated 21 March 2003 to show whether there may have been an implied waiver of legal professional privilege by their contents being relevant to a matter pleaded.’ The documents for which legal professional privilege is claimed by WMC are described in its List of Documents dated 21 March 2003 as:
1.47Correspondence from the insurer of the Defendant to the solicitors of the Defendant seeking legal advice.
1.48Correspondence from the solicitors of the Defendant to the insurer of the Defendant giving legal advice.
Four principles may be relied on as a general rule:
1.      A description of a document should be sufficient ‘to disclose quite readily (without disclosing contents) whether or not it is in fact a document to which the head of privilege relied upon can extend’; and
2.      ‘The party seeking discovery is not entitled to ascertain indirectly the contents of protected documents by insisting upon too much detail in the description – thus getting through the back door what he could not get through the front door’.
(Kadlunga Proprietors and others v Electricity Trust of South Australia and others (1985) 39 SASR 410 at 413-414)
3.      What amounts to a sufficient description will depend on the pleadings and the nature of the claim in each case. (Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 194)
4.      Having regard to the terms of DCR 58A.05 and DCR 58A.06, a concise general description of documents for which legal professional privilege is claimed is likely to be sufficient in most cases. (Citicorp Australia Ltd and others v Cirillo and another ([2000] SASC 399) [4]
[4]    I have been unable to identify any unreported decision of Debelle J in Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co said to have beeen delivered on 11 December 2000 and referred to by his Honour Judge Burley in Bradley Phillips Pty Ltd and another v Burn Brite Lights (Vic) Pty Ltd and another, below
In my opinion, no basis has been established for an order that WMC identify the insurer referred to in its discovered documents.
I am not asked on this application to decide if the circumstances of this case in fact attract a waiver of legal professional privilege by virtue of the nature of the issues arising in it. Nevertheless, before making an order that WMC provide the particulars sought in relation to documents for which legal professional privilege is claimed, documents all apparently relating to legal advice sought from or provided by solicitors for the insurer of WMC, the issue giving rise to any imputed waiver would need to be squarely identified.
By claiming legal professional privilege for them, the documents described in WMC’s list of documents are specifically identified as documents brought into existence either with the dominant purpose of its author, or the person under whose direction it was brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of the litigation. (Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at 69)
Unlike the circumstances for example in the cases referred to by Bleby J in Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 190-192) and by Judge Burley in the case of Bradley Phillips Pty Ltd and another v Burn Brite Lights (Vic) Pty Ltd and another ([2002] SASC 145), in this case, the seeking of or obtaining or reliance on legal advice in itself is not an issue on the pleadings. The issues on the pleadings are the validity of a claim by WMC on the RaiseBore insurance policy and the defence to the claim for indemnity on the basis of a failure by WMC to advise CGU of details of any other relevant insurance policy.
It is not apparent in this case that it would be unfair or misleading to allow WMC to refer to or use that material and yet assert that it, or material associated with it, is privileged from production. (Attorney-General (NT) v Maurice (1986) 161 CLR 475, referred to in Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 190-191; Pickering and others v Edmunds and others (1994) 63 SASR 357) Having regard to the issues raised on the pleadings and bearing in mind the possibility of imputed waiver of legal professional privilege, I am not satisfied that CGU has established any ground for an order that WMC provide further particulars of the description of documents for which legal professional privilege is claimed, pursuant to DCR 58A.07 or at all.
The application of CGU for orders that:
·WMC identify the insurer with which WMC and its solicitors have exchanged correspondence, and
·WMC provide sufficient particularity to the description of documents in paragraphs 1.47 and 1.48 of the list of documents dated 21 March 2003 to show whether there may have been an implied waiver of legal professional privilege by their contents being relevant to a matter pleaded,
is refused.
Pursuant to DCR 58A.03 a party is under an obligation to discover only the documents which are or have been in his possession, custody or power which are directly relevant to any issue arising on the pleadings.
There are many definitions of relevance. One of the most commonly adopted is that of Sir James Stephen in his Digest of the Law of Evidence, 5^th Ed (1887) Art 1 p2. See for example Palmer v The Queen (1998) 193 CLR 1 at 24 per McHugh J:
"The word 'relevant' means that any two facts to which it is applied are so related to each other that according to the common course of events one either taken by itself or in connection with other facts proves or renders probable the past, present, or future existence or non-existence of the other."
For the purpose of the application of that test to Rule 58A.03, the first fact referred to is that proved by the document. The other fact referred to is the fact in issue on the pleadings.
(Southern Equities Corporation Ltd (In liquidation) v Arthur Andersen & Co (No 5) [2001] SASC 335 unreported, 21 September 2001, per Bleby J at [7-8])
On the pleadings, WMC claims to be an insured in respect of the RaiseBore insurance policy and has made a claim on it. Pursuant to clause 11 of the policy, if the occurrence, in respect of which a claim is made, is or may be covered in whole or in part, the insured must advise CGU of the full details of such other insurance when making a claim. CGU pleads in its defence that WMC is in breach of the condition. The question of any other insurance held by WMC in respect of an occurrence for which a claim has been made under the RaiseBore insurance policy is directly relevant to an issue arising on the pleadings between the parties to the litigation, in contradistinction to the circumstances in Beneficial Finance Corporation Limited and others v Price Waterhouse ((1996) 68 SASR 19).
While correspondence relating to legal advice may properly be the subject of legal professional privilege, documents which otherwise relate to any other insurance in respect of the occurrence for which indemnity is sought by WMC from CGU under the RaiseBore insurance policy are directly relevant to an issue which arises on the pleadings. In my opinion, documents in the possession, custody or power of WMC evidencing the fact or details of any other insurance which may cover in whole or in part the incident which is the basis of the plaintiff’s claim are clearly connected to a fact in issue on the pleadings. Other than those for which legal professional privilege can be claimed, they cannot be confidential in the circumstances of this litigation. They are discoverable because WMC claims in these proceedings against CGU pursuant to a contract of insurance, a term of which it is alleged required WMC, as a claimant, to advise CGU, as the insurer, of those details, and which it is alleged WMC, as claimant, has breached.
The discovery of any document of that description cannot be resisted by WMC’s asserting that the issue on the pleadings is not the fact of other insurance but rather the non-disclosure of other insurance, and therefore the document evidencing any other insurance is not relevant. On the pleadings, the fact of other insurance, if any, not just its non-disclosure, is an issue relevant to the claim by WMC and defence of the claim by CGU.
Documents in the possession, custody or power of WMC which are directly relevant to the claim by WMC pursuant to the RaiseBore insurance policy and to the issue raised by WMC itself, the refusal by CGU of indemnity, that is, the entitlement or otherwise of CGU to rely on the provision in the RaiseBore insurance policy requiring a claimant to advise it of other insurance which may cover in whole or in part the incident which is the basis of the plaintiff’s claim, are discoverable.
There is no reason to suppose, and no evidence has been advanced to suggest that discovery of any insurance policy to which the defendant is a party which does or may respond to the plaintiff’s claim will be associated with any delay or significant expense to WMC.
The application of the plaintiff
Pursuant to DCR 37.05(a) unless the court otherwise directs, the third party proceedings are to be tried together with the trial of the plaintiff’s action. As the learned Master noted, Lander J has said that there are good reasons for that:
First, a trial which involves all parties simultaneously is the most cost effective way of deciding competing rights. Secondly, all parties obtain a decision at the same time. There is no hiatus when one party is subject to a judgment but cannot prosecute a claim for contribution or indemnity. The plaintiff in this very case is an example of a party prejudiced by a claim proceeding without all parties, who might be called upon to contribute, being present. Thirdly, it avoids the possibility of conflicting findings and conflicting verdicts. It is inimical to the administration of justice for the Court to be called upon to consider the same factual circumstances twice. One court may be presented with different material to another or reach different views on the credibility or reliability of witnesses with the result that different findings of fact are made, and different and inconsistent verdicts reached.
The purpose of third party proceedings is to bring all interested parties before the court at the same times and to decide all of the common and disparate issues simultaneously, thus binding all parties. (Port Pirie City and Districts Council v Leenders & Partners Pty Ltd ([2001] SASC 208, unreported, 20 June 2001, at [36-37])
It is true that the plaintiff has been ready for trial since May 2005 and that a mediation to resolve the issues between all the parties was unable to proceed in the absence of resolution of the outstanding issue of discovery as between CGU and WMC.
On the other hand, while the plaintiff points to the frustration and the prejudice necessarily attached to any delay in the proceedings related to his claim for damages arising from an incident in 1998, the plaintiff does not assert any particular detriment arising from delay occasioned by the resolution of the interlocutory issue of discovery between WMC and CGU.
The plaintiff received weekly payments of income maintenance from WorkCover until about 30 June 2006. WorkCover’s liability for future weekly payments has since been redeemed by payment to the plaintiff of a lump sum pursuant to section 42 of the Workers Rehabilitation and Compensation Act 1986.
Although he is no longer in receipt of weekly payments of income maintenance, the plaintiff does not dispute the findings in a vocational assessment report dated 18 July 2002 referred to in the affidavit of the solicitor for WMC, sworn on 3 October 2007. The plaintiff did not sustain any physical injuries in the incident of 13 August 1998, but he experienced an acute stress disorder and anxiety, a diagnosis which was subsequently revised to Post Traumatic Stress Disorder, and was unable to return to pre-injury underground work as a driller. He was certified fit to undertake modified (above ground) work duties by his treating doctor. Vocational assessments identified a number of employment options, some of which were cleared by his treating doctor.
There is no evidence to support a conclusion that an order for WMC to discover any relevant insurance policy will occasion significant further delay. On the contrary, it has been suggested that it will only facilitate resolution of the plaintiff’s claim either by its proceeding to trial or to mediation.
There is no question in this case of determination of the claim by WMC against CGU before the plaintiff’s claim is heard. The question is whether the interests of justice require a direction that there be two separate trials, the first in relation to the claim by the plaintiff against WMC, and the second in relation to the claim between WMC and RaiseBore and CGU. (Port Pirie City and Districts Council v Leenders & Partners Pty Ltd ([2001] SASC 208, unreported, 20 June 2001, at [45]; Mulvaney (as liquidator of theHellenic Athletic & Soccer Club of SA Inc) v Commissioner of Taxation for the Commonwealth of Australia [2004] SASC 166, unreported, 2 April 2004)
The plaintiff has not established that the delay attached to the resolution of the issue of discovery between CGU and WMC is a circumstance sufficient to require a direction, in the interests of justice, that there be a separate trial on the issue of the liability of WMC and quantum of damages. Any benefit to the plaintiff in having a separate trial is outweighed in my opinion by the desirability of having all parties bound by the decision between the plaintiff and the defendant so as to avoid the possibility of inconsistent findings, the burden of the additional cost and expense of two trials, the disadvantages to WMC in two trials, including reliance on the plaintiff having to be available to give evidence for a second time in the trial between WMC and CGU, and WMC’s possibly having to satisfy a judgment in favour of the plaintiff well before its claim against the third party is determined. (Barclays Bank v Tom [1923] 1 KB 221; New World Oil and Developments Pty Ltd and another v 163 Clarence Street Pty Ltd and others [1995] FCA 1108, unreported, 6 March 1995; Shrimp v Landmark Operations Limited [2007] FCA 1468, unreported, 19 September 2007)
In my opinion, for the reasons articulated in Port Pirie City and Districts Council v Leenders & Partners Pty Ltd ([2001] SASC 208, unreported, 20 June 2001, at [36-37]) the third party proceedings should be tried together with the trial of the plaintiff’s action, in accordance with the rules.
Orders
1.I set aside the orders made by the learned Master on 30 November 2007.
2.I order that the defendant, WMC (Olympic Dam Corporation) Pty Ltd, make discovery of any insurance policy to which the defendant is a party which does or may cover in whole or in part the occurrence which is the basis of the plaintiff’s claim.
3. The plaintiff’s application of 9 February 2007 is refused.
4. I will hear the parties as to the question of costs.