Brazier v ICI Australia Operations Pty Ltd
[2000] NSWDDT 5
•26 April 2000
(2000) 19 NSWCCR 623
BRAZIER v ICI AUSTRALIA OPERATIONS PTY LTD
[2000] NSWDDT 20
Dust Diseases Tribunal of New South Wales: Armitage J
26 April 2000
Dust Diseases Tribunal - Proceedings - Appointment of designated insurer - Discretion not to appoint a particular insurer - Discretion to appoint another insurer whose period of risk precedes that particular insurer - Workers Compensation Act 1987 (NSW), s 151AC - Dust Diseases Tribunal Rules 1990 (NSW), r 12
J.L. Sharpe, for the plaintiff
J.A. McIntyre SC, for the defendant
N.E. Chen, for FAI Traders Insurance Co Pty Ltd
G.J. Parker, for the WorkCover Authority of NSW
L.M. Virtue (solicitor), for CGU Insurance Ltd
A. Capelin (solicitor), for FAI Insurance (Workers Compensation) Pty Ltd
Ex tempore
ARMITAGE J: This is an amended notice of motion filed by the defendant, ICI Australia Operations Pty Ltd, claiming in the first paragraph thereof, orders that either CGU Insurance Ltd, the WorkCover Authority of New South Wales, as the agent or attorney of National Employers Mutual General Indemnity Association Ltd (NEMGIA), an insolvent insurer, or FAI Traders Insurance Co Pty Ltd be designated as the insurer of the defendant pursuant to the provisions of s 151AC of the Workers Compensation Act 1987 (the Act) in respect to any liability on the part of the defendant to the plaintiff prior to 4.00 pm on 30 June 1987. In the event, FAI Insurance (Workers Compensation) Pty Ltd is also represented today by a solicitor, Miss Capelin, it having been notified of the motion, but the motion has not been amended to seek orders against that insurer.
Precautionary orders are sought in par 2 in the event of the plaintiff amending his statement of claim, but it seems to me that rather than make self-executing orders in such an event, it is proper that I wait until it occurs before making such further orders as may be appropriate.
The first thing I should note is that the WorkCover Authority, by its counsel Mr Parker, offers an undertaking that in the event of factual findings being made at the trial triggering such an obligation, it will comply with s 232(1) of the Act to indemnify the defendant which was the plaintiff’s employer.
Mr Parker was careful not to paraphrase that obligation, and properly so, since he represents a statutory body with obligations defined within the four corners of the statute constituting it, but effectively that undertaking would seem to me to mean that if findings of fact are made which would, but for the insolvency of NEMGIA, have resulted in that insurer being liable under s 151AB of the Act, then the WorkCover Authority will indemnify the defendant in respect of what would otherwise have been the contractual obligation of NEMGIA to meet any judgment against the defendant.
The WorkCover Authority by its counsel, Mr Parker, otherwise contends that it is not an insurer within the meaning of s 151AB of the Act. That was one of the matters which was agitated before me in Chubb Australia Ltd v Mercantile Mutual Insurance (Workers Compensation) Ltd (1999) 17 NSWCCR 537. I am told from the bar table by various counsel, including Mr Parker, that a notice of appeal has been filed by the WorkCover Authority in that case, and that the hearing of the appeal in the Court of Appeal is pending. It follows that my decision in Chubb Australia may be reversed by the Court of Appeal and that that Court may hold that the submission of the WorkCover Authority today that it is not an insurer within the meaning of s 151AB of the Act is correct.
It seems to me in those circumstances, therefore, that if I were to nominate the WorkCover Authority as the designated insurer within s 151AC of the Act, the result may well be that the WorkCover Authority may seek to preserve its position and immediately file a notice of appeal and refuse to indemnify the defendant in respect of any verdict in the plaintiff’s favour against it in the proceedings.
Quite apart from that, as Mr McIntyre for the defendant urges, the WorkCover Authority may also contend that any factual findings made in the proceedings do not trigger its obligation to indemnify under s 232(1), so that the defendant loses the benefit of the scheme provided by s 151AC, which, Mr McIntyre contends, has the purpose of preventing a defendant employer, which has complied with its obligations under the Act and has at all times maintained workers compensation insurance, having nevertheless to meet personally, out of its own pocket, any verdict and of course any order for costs found against it in proceedings brought by any of its employees, including the plaintiff in the present case, and then to seek indemnity from its insurers.
I agree with Mr McIntyre’s observations as to the purpose of the section and as to the undesirability of the state of affairs to which he refers. The Court of Appeal in QBE Insurance Ltd v Bull (1999) 18 NSWCCR 169 would appear to me to have recognised that the purpose of s 151AC is, at least in part, as Mr McIntyre contends. The Court of Appeal also recognised that another purpose of the section is to ensure a speedy trial for plaintiffs who are often suffering life-threatening conditions.
Section 151AC of the Act is to be read alongside s 33(4)(n) of the Dust Diseases Tribunal Act 1989 (the Tribunal Act) and r 12 of the Dust Diseases Tribunal Rules 1990 (the Rules), made in exercise of the power conferred in s 33(4)(n), which commenced on 18 December 1998. Those provisions were referred to obiter at 174 in Bull, to which I was referred by counsel before me, in the context of the observation by the Court at 174 [16] that “the provision is not a straitjacket” and that “flexibility and innovation are clearly contemplated”.
Rule 12 of the Rules provides that the Tribunal:
may, if it thinks fit, order that all or any of the provisions of s 151A(c) of the Workers Compensation Act 1987, do not apply in or in relation to a particular case, or in relation to a particular insurer:
(a) of its own motion; or
(b) on application by a party or by an insurer who is not a party.
The result of the rule and of Bull’s case generally would appear to me to be to confer on me a discretion not to apply s 151AC at all, or as to which insurer of the defendant I may nominate as the designated insurer under s 151AC. To make it plain, s 33(4)(n) of the Tribunal Act and r 12 of the Rules appear to give me a discretion not to apply s 151AC of the Act to the WorkCover Authority in respect of the period of risk of the insolvent NEMGIA on proper grounds being shown.
The factors pointing to designation of the WorkCover Authority are that the plaintiff alleges exposure to asbestos in the course of his employment with the defendant, giving rise to liability in it to pay damages, up to and including the year 1982, and NEMGIA was the insurer on risk at that time. Prima facie, therefore, s 151AC(3)(a) would apply to it. Mr Parker’s undertaking on his client’s behalf to indemnify the defendant in terms of s 232 discussed above is also to be noted in this regard.
The factors pointing to designation of CGU Insurance Ltd, the insurer on risk immediately prior to the period of risk of NEMGIA, are that, as I have already observed and as Mr McIntyre urges on behalf of the defendant, the WorkCover Authority contends that it is not an insurer within the meaning of s 151AB of the Act and so contended in Chubb Australia in which the decision of the Court of Appeal is pending, and that quite apart from this, the WorkCover Authority may, in the event of factual findings in the proceedings between the plaintiff and the defendant suggesting this course, deny its liability to indemnify the defendant under s 232, and also in order to preserve its position in relation to its contention that it is not an insurer within s 151AB. Such eventualities would inevitably delay recovery of any verdict by the plaintiff, whose interests s151AC is also designed to protect, as observed in Bull (see above).
I agree with Mr McIntyre that it seems likely that the WorkCover Authority would immediately file a notice of appeal in the event of the Tribunal holding in the proceedings between the plaintiff and the defendant that it is an insurer within s 151AB. Mr Parker for the WorkCover Authority contends that that issue does not arise because of the undertaking he makes, but that does not dispose of Mr McIntyre’s second contention that it may in the event deny that the conditions of s 232 apply, depending on the factual findings made by the Tribunal between the plaintiff and the defendant.
It seems to me that in those circumstances Mr McIntyre’s submission is correct that in that event the defendant would be denied the benefit of the scheme provided by s 151AC. Mr Parker urges, as did Mr Virtue for CGU Insurance Ltd as I understood him, that the appropriate course was for me to refuse any order that a designated insurer be appointed, and to leave the defendant to conduct its own defence and to seek indemnity from whichever insurer was liable, depending on the factual findings made by the Tribunal. That course also, and more obviously, seems to me to deny to the defendant the benefits of s 151AC and I do not propose to take it.
I have some misgivings about appointing CGU Insurance Ltd as the designated insurer, in view of Mr Virtue’s well argued submission that on the pleadings, upon which he says I should decide this motion, the period of risk, if I may so call it loosely, which is last in line on the plaintiff’s own allegation of exposure to asbestos until the year 1982 is that of NEMGIA and, he says, if the Tribunal makes a factual finding of negligent asbestos exposure until 1982, the obligation under s 232 of the WorkCover Authority to indemnify the defendant is triggered. That may be so, but it seems to me that the purpose of s 151AC is to provide the defendant with an insurer which will conduct the proceedings on its behalf and meet any verdict against it, subject to the right of that insurer to seek indemnity elsewhere. That purpose will only be effected, it seems to me, if I designate CGU Insurance Ltd as the designated insurer.
I therefore order that CGU Insurance Ltd be designated as the insurer of the defendant pursuant to s 151AC of the Act, in relation to any liability of the defendant to the plaintiff in the proceedings. I further order that the costs of today be reserved, except that the plaintiff’s costs of this motion are to be the plaintiff’s costs in the proceedings. I have so ordered because as Mr Sharpe for the plaintiff contends, the plaintiff is in no way responsible for the state of affairs which has led to the present motion being filed, he being a stranger to the dispute between the defendant and the WorkCover Authority and the insurers of the defendant as to who should be appointed as the designated insurer.
I make it clear that in the event of the plaintiff amending his statement of claim to allege exposure to asbestos after 1982, any party has liberty to apply as to the orders I have made today. In that regard, I note that the plaintiff’s interrogatories of the defendant, which conceivably may admit asbestos exposure after 1982, are still outstanding and that it undertakes to answer them within seven days.
Orders accordingly
Solicitors for the plaintiff: Turner Freeman
Solicitors for the defendant: Phillip Fox
Solicitors for FAI Traders Insurance Co Pty Ltd: Sparke Helmore
Solicitors for the WorkCover Authority of NSW: PW Turk & Associates
Solicitors for CGU Insurance Ltd: Leigh Virtue & Associates
Solicitors for FAI Insurance (Workers Compensation) Pty Ltd: Moray & Agnew
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