Black v Luke and Singer Pty Ltd

[2024] NSWDDT 16

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:

Black v Luke and Singer Pty Ltd [2024] NSWDDT 16

Hearing dates:

25 November 2024

Date of orders:

29 November 2024

Decision date:

29 November 2024

Before:

Russell SC DCJ

Decision:

(1) Grant leave to the plaintiff pursuant to ss 4 and 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) to bring proceedings against QBE Insurance (Australia) Ltd.

(2) Order that QBE Insurance (Australia) Ltd be substituted for the first defendant in these proceedings.

(3) Grant leave to the plaintiff to file a Further Amended Statement of Claim in the form of Exhibit PX 4.

(4) Order that the plaintiff pay the costs of QBE Insurance (Australia) Ltd of and incidental to the Notice of Motion filed on 19 September 2024.

Catchwords:

DUST DISEASES – insurance – application for leave to proceed against an insurer – whether insurance policy covered the last date of employment – different last employment date and last exposure date – insurer on risk on date of last exposure – leave granted

DUST DISEASES – costs – plaintiff to pay insurer’s costs despite succeeding on the Motion – plaintiff sought leave to amend Statement of Claim by oral application at the hearing of the Motion – three forms of the plaintiff’s pleading implied a last date of exposure after QBE was no longer on risk – pleading handed up in court finally accorded with plaintiff’s instructions and his Statement of Particulars

Legislation Cited:

Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) ss, 4, 5

Workers Compensation Act 1987 (NSW) s 151AB

Cases Cited:

Avant Insurance Ltd v Burnie [2021] NSWCA 272

CGU Insurance Limited v AAI Insurance Limited [2016] NSWCA 335

Mrdajl v Southern Cross Constructions (NSW) Pty Ltd(In Liq) [2018] NSWSC 161

Category:

Procedural rulings

Parties:

David Brian Black (Plaintiff)
Luke and Singer Pty Ltd (First Defendant)
Amaca Pty Ltd (Second Defendant)
QBE Insurance (Australia) Ltd (Respondent)

Representation:

Counsel:
S Tzouganatos (Plaintiff)
M Smith (Respondent)

Solicitors:
Slater & Gordon (Plaintiff)
Mills Oakley Lawyers (Second Defendant)
Moray & Agnew Lawyers (Respondent)

File Number(s):

DDT 2024/272317

Publication restriction:

Nil

JUDGMENT

Introduction

1. The plaintiff Mr David Black suffers from mesothelioma. By a Statement of Claim filed on 24 July 2024 Mr Black sued a former employer Luke and Singer Pty Ltd (Luke and Singer) as first defendant and Amaca Pty Ltd as second defendant. Luke and Singer is a deregistered company.

2. By a Notice of Motion filed on 19 September 2024 Mr Black seeks leave to sue QBE Insurance (Australia) Ltd (QBE) as the insurer of the liabilities of Luke and Singer. That claim is brought pursuant to ss 4 and 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (the Third Party Claims Act).

The Third Party Claims Act

3. Section 4 of the Third Party Claims Act provides as follows:

“4   Claimant may recover from insurer in certain circumstances

(1)  If an insured person has an insured liability to a person (the claimant), the claimant may, subject to this Act, recover the amount of the insured liability from the insurer in proceedings before a court.

(2)  The amount of the insured liability is the amount of indemnity (if any) payable pursuant to the terms of the contract of insurance in respect of the insured person’s liability to the claimant.

(3)  In proceedings brought by a claimant against an insurer under this section, the insurer stands in the place of the insured person as if the proceedings were proceedings to recover damages, compensation or costs from the insured person. Accordingly (but subject to this Act), the parties have the same rights and liabilities, and the court has the same powers, as if the proceedings were proceedings brought against the insured person.

(4)  This section does not entitle a claimant to recover any amount from a re-insurer under a contract or arrangement for re-insurance.”

4. In Mrdajl v Southern Cross Constructions (NSW) Pty Ltd(In Liq) [2018] NSWSC 161 at [12], Walton J identified four elements in s 4 as follows:

1. There is an insurer in existence.

2. The insurer has issued a policy to the relevant defendant.

3. The policy covers the risk.

4. The policy was in place at the time of the risk.

5. Elements 1 and 2 are not presently in dispute. Elements 3 and 4 are in dispute.

6. Section 5 of the Third Party Claims Act provides as follows:

“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.”

7. In Avant Insurance Ltd v Burnie [2021] NSWCA 272 at [8] the Court of Appeal held that an applicant for leave under s 5 of the Third Party Claims Act is required to establish the following three elements:

1. That there is an arguable case against the holder of the insurance policy.

2. That there is a reasonable possibility that the holder of the insurance policy will be unable to satisfy any judgment.

3. That there is an arguable case that the holder of the insurance policy would, if found liable to the plaintiff, be entitled to indemnity under the policy - to put it another way, that any liability of the holder of the insurance policy to the plaintiff is, in the language of s 4 of the Third Party Claims Act, an “insured liability”.

8. Elements 1 and 2 are not in dispute. Element 3 is in dispute.

The Pleadings and the Particulars

9. The original Statement of Claim was filed on 24 July 2024. In relation to the claim against Luke and Singer, the allegation was that Mr Black had been employed by Luke and Singer from 1962 to 1980. The pleading alleged that Mr Black wore asbestos gloves and mitts on a daily basis and was required to handle, manipulate, cut, install and remove asbestos containing insulation. It also pleaded that Mr Black was exposed by being in areas where other workers were working with asbestos. The impression gained from the original Statement of Claim is that the exposure to asbestos covered the entire period of employment from 1962 to 1980.

10. An Amended Statement of Claim was filed on 5 September 2024. The allegations against Luke and Singer remained the same, including an implication that the exposure to asbestos occurred between 1962 and 1980.

11. The plaintiff’s Statement of Particulars was filed on 17 September 2024. It stated that the only employer who exposed Mr Black to asbestos was Luke and Singer.

12. In par 4.1 of the Statement of Particulars Mr Black set out the facts regarding his exposure to asbestos during employment by Luke and Singer. He gave details about the asbestos gloves which he used during hot metal processes involved in his work. As part of this material, Mr Black said the following:

“k. Myself and the other die setters used the asbestos gloves until about 1969. At that time we then switched to using leather gloves that had a backing on them.

l. In the last ten years of my employment with Luke and Singer I was employed as a foreman and I was no longer required to work on the hot processes, however, I worked in the factory supervising other workers.

m. I do not recall any exposure to asbestos once the leather gloves started being used.”

13. Thus it is plain that the Statement of Particulars, which Mr Black verified by Statutory Declaration on 12 September 2024, said that his exposure to asbestos was between 1962 and 1969. The date range of 1962 to 1980 in the pleading related to the start and end dates of his employment, but were not accurate statements of the years in which Mr Black was exposed to asbestos while working for Luke and Singer.

Affidavit Evidence

14. The plaintiff relied upon the affidavit of his solicitor Ms Valenti dated 19 September 2024 (PX 1). Ms Valenti recited her instructions that the plaintiff was exposed to asbestos dust from about 1962 to about 1969, while working for Luke and Singer. The balance of the affidavit concerned the deregistration of Luke and Singer on 13 May 2003 and material received from QBE showing that it was the insurer responsible for workers compensation policies issued by Mercantile Mutual Insurance (MMI) “for the relevant period”. By this phrase Ms Valenti must have meant the period between 1962 and 1969, rather than the period between 1962 and 1980 pleaded in the Statement of Claim and the Amended Statement of Claim.

15. Ms Valenti annexed to that affidavit a proposed Further Amended Statement of Claim. Unfortunately, this document perpetuated the impression that it was during the entire employment of the plaintiff by Luke and Singer, from 1962 to 1980, that there was asbestos exposure.

16. Ms Valenti sought to correct the mistaken impression given by the proposed pleading annexed to her first affidavit, by sending an email dated 1 November 2024 (PX 3). That email attached a different version of the Further Amended Statement of Claim.

17. The new version of the pleading became Exhibit PX 4 on the hearing of the Motion. Paragraph 7 of the proposed pleading states that during the course of the Luke and Singer employment the plaintiff wore asbestos gloves and mitts on a daily basis “from about 1962 to about 1969”. Paragraph 8 of the proposed pleading says that in the course of the Luke and Singer employment the plaintiff worked in areas in which other workers wore asbestos gloves and mitts “from about 1962 to about 1969”.

18. Thus it was not until this fourth iteration of the pleading that the information contained in the proposed pleading became congruent with the statement about the years of exposure contained in the Statement of Particulars.

19. Ms Valenti swore a second affidavit dated 22 November 2024 (PX 2), which set out her instructions from Mr Black. Mr Black maintained that the contents of the Statement of Particulars was correct and that his exposure to asbestos while employed by Luke and Singer ran from 1962 to 1969. The instructions of Mr Black reiterated that he only ever used asbestos gloves until 1969 and that after that year he did not work in an environment where asbestos was present.

20. QBE relied upon an affidavit by its solicitor Mr Taylor-Jones dated 8 November 2024 (DX 1). Mr Taylor-Jones said that QBE is the successor to the liabilities of MMI and that QBE had located records of MMI showing that it had underwritten workers compensation policies covering Luke and Singer between 19 November 1958 and 30 June 1978. QBE was not the insurer of Luke and Singer after 1978.

Last Date of Employment

21. Section 151AB(1) of the Workers Compensation Act 1987 (NSW) provides that liability for certain occupational diseases is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due. Mesothelioma is one such “occupational disease”. Section 151AB requires the Court to make a finding as to the date of last employment of the worker, which exposed the worker to the risk of inhalation of asbestos particles: CGU Insurance Limited v AAI Insurance Limited [2016] NSWCA 335 at [17]-[24].

Consideration

Amendment of the Pleading

22. I find that I should grant leave to the plaintiff to amend his pleading in accordance with the latest version of the proposed Amended Statement of Claim (PX 4). The plaintiff said in his Statement of Particulars that his exposure to asbestos with Luke and Singer was restricted to the years 1962 to 1969. He verified this by Statutory Declaration. For whatever reason, the pleading, prepared not by Mr Black but by his solicitors, was capable of giving the impression that the period of exposure was between 1962 and 1980.

23. If indeed that was the case, then leave would not be granted to sue QBE, as it was not the insurer for Luke and Singer on the last date relevant to s 151AB of the Workers Compensation Act 1987 (NSW). However, as pointed out by counsel for the plaintiff, Luke and Singer had insurance for the entire period, and there was a different insurer after QBE ceased to provide cover in 1978. Further, Mr Black himself has always said that his exposure was caused only by using asbestos gloves and mitts and that this ceased in 1969. This is not a case where a plaintiff is tailoring his evidence to suit the insurance position.

24. Mr Black’s instructions concerning the years of exposure have been consistent throughout. The existing versions of the Statement of Claim did not explicitly state that there was exposure up until 1980, but are certainly capable of being read to give that impression. It is appropriate to grant leave to amend, to clarify the pleadings so that it accords with what Mr Black has been saying all along. Leave will be granted to amend the Statement of Claim in the terms set out in Exhibit PX 4.

Grant of Leave to Sue the Insurer

25. Because Mr Black has always said that his exposure ended in 1969, and because leave has now been granted to clarify that issue on the pleadings, it is appropriate to grant leave for Mr Black to sue QBE as the insurer on risk for Luke and Singer in 1969. It was not in dispute that QBE is the appropriate insurer, being the successor in title to MMI, which was the workers compensation insurer for Luke and Singer in 1969.

26. I make the following findings:

1. QBE, the successor of MMI, was in existence at the time the liability arose.

2. MMI had issued a policy to Luke and Singer.

3. The policy covered the risk.

4. The policy was in place at the time of the risk.

5. There is an arguable case against Luke and Singer being the holder of the insurance policy.

6. There is a reasonable possibility, indeed a certainty, that Luke and Singer will be unable to satisfy any judgment.

7. There is an arguable case that Luke and Singer would, if found liable to Mr Black, be entitled to indemnity under the policy for which QBE is presently responsible.

27. In light of those findings it is appropriate to grant leave to sue QBE, as sought by the plaintiff.

Costs

28. The plaintiff has come to court to seek an indulgence, not just in relation to obtaining leave to sue an insurer, but also by seeking leave to amend the Statement of Claim so that the allegations about the years of exposure are correctly set out in the pleading. As previously recited, the three forms of the pleading prior to PX 4 all give the impression that exposure occurred right up until 1980.

29. In those circumstances QBE was entirely justified in opposing the grant of leave. It appears that the latest version of the Statement of Claim, while sent by Ms Valenti on 1 November 2024, did not come to the attention of the solicitor for QBE. Certainly the written submissions made by counsel for QBE (MFI 1) proceed on the basis that the proposed amended pleading is that annexed to PX 1. The application for leave to amend the Statement of Claim in the form of PX 4 was only made by an oral application at the hearing of the Notice of Motion.

30. In those circumstances the appropriate order for costs is that the plaintiff should pay the costs of QBE of and incidental to the Notice of Motion. If the pleading had correctly reflected Mr Black’s instructions from the beginning, there would most likely have been no contest about the granting of leave to sue QBE.

Orders

31. The orders of the Tribunal are:

1. Grant leave to the plaintiff pursuant to ss 4 and 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) to bring proceedings against QBE Insurance (Australia) Ltd.

2. Order that QBE Insurance (Australia) Ltd be substituted for the first defendant in these proceedings.

3. Grant leave to the plaintiff to file a Further Amended Statement of Claim in the form of Exhibit PX 4.

4. Order that the plaintiff pay the costs of QBE Insurance (Australia) Ltd of and incidental to the Notice of Motion filed on 19 September 2024.

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Decision last updated: 29 November 2024