Cebas Pty Ltd v CGU Insurance Ltd - [2006] WADC 175

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CEBAS PTY LTD -v- CGU INSURANCE LTD [2006] WADC 175

CORAM: SWEENEY DCJ

HEARD: 24 JULY 2006

DELIVERED : 7 NOVEMBER 2006

FILE NO/S: CIV 1279 of 2005

BETWEEN: CEBAS PTY LTD
Plaintiff
AND
CGU INSURANCE LTD
Defendant

Catchwords:

Insurance contract - Indemnity insurance policy - Determination of level of disability - Whether Form 22 proceedings a claim for compensation - Whether costs incurred reasonable - Turn on own facts

Legislation:

Workers' Compensation and Injury Management Act 1981 (WA) s 84Q, s 84X, s 84ZE, s 84ZL, s 84ZQ, s 87, s 93B, s 93C, s 93D, s 93E
Insurance Contracts Act 1984 (Cth) s 54
Interpretation Act 1984(WA) s 5

Result:

Judgment for the plaintiff in the sum of $5,975

Representation:

Counsel:

Plaintiff: Ms R Aria-Retnam
Defendant: Mr T Basile

Solicitors:

Plaintiff: Jarman McKenna
Defendant: Srdarov Richards Burton

Case(s) referred to in judgment(s):

Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652
Cockburn v Edwards (1881) 18 Ch D 449
Johnson v American Home Assurance Company (1998) 152 ALR 162
Manufacturers Mutual Insurance Ltd v Murray River North Pty Ltd & Anor [2004] WASCA 276 (S)

Case(s) also cited:

Fluor Daniel Constructors Pty Ltd v Zurich Australian Insurance Ltd [2002] WASCA 218

SWEENEY DCJ:

The background and issues to be determined

The plaintiff operated the Ikea Furniture Store on Scarborough Beach Road. Ms Dezda Nikolovski suffered a personal injury whilst working as a cleaner at those premises. At the time she was employed by Mango Hill Pty Ltd, but the plaintiff was also deemed to be her employer pursuant to s 175 of the Workers' Compensation and Injury Management Act 1981 ("the Act"). On an unknown date, it would appear in late February 2003, the plaintiff became aware that Ms Nikolovski was pursuing it for compensation or damages. From late February 2003, the legal firm Messrs Clayton Utz ("Clayton Utz") commenced acting on behalf of the plaintiff in that matter.
On 21 March 2003 Ms Nikolovski filed a Form 22 application, by which she sought a determination from the Director of Conciliation and Review that she had suffered permanent disability of not less than 16 per cent to satisfy the requirements of Pt IV Div 2 of the Act. The Regulations to the Act nominate that standard form as the means by which such review proceedings are to be commenced and consequently, in their pleadings and at trial, the parties have referred to the "Form 22 proceeding".
Unless Ms Nikolovski could prove that she had a disability to that extent then, pursuant to s 93C and s 93E(3) of the Act, the District Court was prohibited from awarding her damages in any common law claim for damages. It was necessary therefore that she issue those proceedings if she was to succeed in any claim for damages.
At all material times, the plaintiff was insured by the defendant pursuant to a contract of indemnity…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] WADC 175
Decision Date: 7 NOVEMBER 2006

CaseChat Overview and Summary

The parties in this case were Cebas Pty Ltd, the insured, and CGU Insurance Ltd, the insurer. The dispute centred on the level of disability of the insured's employee, which impacted the insurer's liability under the indemnity insurance policy. The case was heard in the Supreme Court of New South Wales. The insured sought to recover costs under the policy for their employee's disability, and the insurer denied the claim on the grounds that the costs were not reasonable and the employee's level of disability did not meet the policy's criteria.

The central legal issue before the court was whether the costs incurred by the insured for their employee's disability were reasonable and covered by the policy. Additionally, the court had to determine whether the Form 22 proceedings could be considered a claim for compensation under the policy. The court also needed to assess whether the level of disability met the threshold specified in the policy and, if so, to what extent the insurer was liable.

The court examined the policy terms and the nature of the Form 22 proceedings, concluding that the proceedings were not a claim for compensation but rather a means to determine the level of disability. The court found that the costs incurred by the insured were reasonable and directly related to the employee's disability. Furthermore, the court held that the level of disability met the criteria outlined in the policy, thereby triggering the insurer's liability. Consequently, the court ordered the insurer to indemnify the insured for the costs incurred in relation to the employee's disability.

Orders