CGU Insurance Limited v June Davies as Legal Personal Representative of the Estate of the Late Eric James Davies and Anor; Allianz Australia Insurance Limited v Pomfret and Anor
[2015] HCATrans 225
[2015] HCATrans 225
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S32 of 2015
B e t w e e n -
CGU INSURANCE LIMITED
Applicant
and
JUNE DAVIES AS LEGAL PERSONAL REPRESENTATIVE OF THE ESTATE OF THE LATE ERIC JAMES DAVIES
First Respondent
ACN 000 008 195 PTY LTD (FORMERLY R FOWLER LTD)
Second Respondent
Office of the Registry
Sydney No S34 of 2015
B e t w e e n -
ALLIANZ AUSTRALIA INSURANCE LIMITED
Applicant
and
WADE ALFRED POMFRET
First Respondent
WALLABY GRIP (BAE) PTY LIMITED
Second Respondent
Applications for special leave to appeal
BELL J
KEANE J
TRANSCRIPT OF PROCEEDINGS
FROM SYDNEY BY VIDEO LINK TO MELBOURNE
ON FRIDAY, 11 SEPTEMBER 2015, AT 11.40 AM
Copyright in the High Court of Australia
_____________________
MR B.W. WALKER, SC: May it please the Court, in CGU, I appear with my learned friends, MR G.F. LITTLE, SC and MR T.T. BORS, for the applicant. (instructed by Curwoods Lawyers)
MR D.F. JACKSON, QC: I appear with MR S. TZOUGANATOS for the first respondent. (instructed by Turner Freeman Lawyers)
MR D.J. HOOKE, SC: May it please the Court, I appear with my learned friend, MR D.R.J. TOOMEY, for the applicant, Allianz. (instructed by Rankin Ellison Lawyers)
MR B.M. TOOMEY, QC: May it please the Court, I appear with my learned friend, MR A.L. McSPEDDEN, for the respondent in Allianz. (instructed by Turner Freeman Lawyers)
BELL J: We had in mind that a convenient course might be to hear from the applicants in sequence and then the respondents, unless there is something you wish to say on that, Mr Walker.
MR WALKER: No, not all, your Honour.
BELL J: Is there an agreed order?
MR WALKER: I am starting, your Honour.
BELL J: Yes, very well, thank you, Mr Walker.
MR WALKER: If it please the Court. Your Honours, you are aware, of course, that they are an organic pair.
BELL J: Yes. It is the same point, is it not, yes.
MR WALKER: The reasons against us are quite explicit. The reasons on the main point in Pomfret – we, of course, treat the reasons as a curate’s egg. It is very good in parts, in particular, the part that says - in paragraph 8 of Justice Basten’s reasons in Pomfret, application book 44 – that a “literal reading” of the provision is in favour of our argument. That is a good start and should have been the finish. We also rely on the self‑evidently correct and important proposition found at paragraph 32 in Justice Meagher’s reasons in Pomfret, application book, page 51 – the matter is of “general application and importance”.
I then come to the reasons why, in our submission, notwithstanding a Bench of five has, as it were, settled the matter, as a matter of authority this Court should have another look at why there should be a grant of special leave. In so doing, that is, in reaching the conclusions their Honours did reach, as you will be aware from the, with respect, clarity of the reasons in the judgment of Justice Meagher, plus the reinforcement, with respect, supplied by those of Justice Basten, one finds that a position is taken concerning, in particular, the crucial phrase “employment to the nature of which the disease was due”.
In that regard, and by way of illustration of the significance of the interpretation we have suffered, could I remind you of the way in which the case actually presented itself as a real piece of litigation on pages 3 and 4 of the application book? This is from the reasons of the learned trial judge. In paragraph 2, he records that:
As a consequence of his employment by Fowler and Seapip –
Fowler was, for part of the period of its employment of Mr Davies, our insured – or our predecessor’s insured. As a consequence of that employment:
Mr Davies contracted silicosis and progressive massive fibrosis (PMF) –
and they are diseases of the kind specified in section 151AB(6) as being acquired by gradual process, the phenomenon to which these provisions have long been addressed.
In paragraph 9 on page 4 of the application book, you will see the way in which the same kind of problem as was presented by Smith v Mann all those years ago in the High Court arose in this case. It is the kind of problem that will arise because employment does not naturally cease with the day upon which policies of insurances indemnifying employers cease. So, there was exposure in his employment with Fowler which continued after the dates selected by a tactical amendment in the pleading, a tactical amendment in order to ensure that the last time of employment coincided with an insurer being – or the identified insurer, I should say – being on risk. That, in our submission ‑ ‑ ‑
KEANE J: But to say that it is a tactical amendment is just to use pejorative language to describe the plaintiff’s choice of cause of action.
MR WALKER: Your Honour, I am disappointed that your Honour would suppose that I thought the word “tactical” was pejorative. It is not at all pejorative. You employ such tactics as are appropriate to advance your client’s cause. His Honour recorded that in paragraph 12. The question is whether the artifice of saying “of a continuing exposure” – that I am only suing for so much of it as concluded with the conclusion of the last‑known insurance policy, whether that is within the meaning of the statutory deeming provisions. It is tactical, of course. It is an artifice, of course, and none the worse for that if it is effective. Indeed, part of the lawyer’s duty.
So, your Honours, it comes down, as I say, to that critical expression – “employment to the nature of which the disease was due”. What has happened is that the word “liability”, which is also an important one in this formula and has the context supplied by subsection (2) which refers to which I might call “matters of litigation”, “liability” has been read as if it means the liability for which the plaintiff has sued the employer. I cannot say that is an unnatural reading. On the other hand, it means that there could be not quite an infinite number but a very large number of periods of employment, depending upon what day was picked as the last day for which suit was brought.
BELL J: But that reading is one that accords with the section in its previous form, the subject of FAI v HIH and a line of decisions.
MR WALKER: Now, I think the short answer is, to a degree, yes, but not materially for our point. These two cases are the first cases that have directly addressed this question in a way that called for decision and decided the case. There have been, in our submission, otherwise a variety of cases, hence the Bench of five, and as to one which is extremely important, namely, Chubb, to which your Honours have seen reference, there is an inconclusive, we think, fate dealt it by the decisions for which we seek special leave. Can I illustrate?
You will have noticed in the way our learned friends put their reply in writing at application book page 93, paragraph 22, that by adopting Justice Meagher’s explanation of Chubb, an explanation which does not conclude with the proposition that Chubb was wrong, that there has been a reading into these provisions of a critical distinction between so‑called divisible and indivisible disease which, with respect, may be a legal term of art, may not be a medical science at all but masquerades as the latter in judgments by judges, and that becomes critical because it explains why Chubb is right and why, in the case covered by Chubb, the so‑called indivisible diseases, mesothelioma being the obvious exemplar, a pleading artifice would not avail.
That appears to be entailed in the way in which Justice Meagher and those others who agreed with him will deal with that case. Justice Basten, as your Honours appreciate, takes a harsher view of what is the position if that is entailed indeed in Chubb and, with respect, Justice Basten raises in a way which in our submission is compelling as a matter of unresolved concern, hence special leave being sought, namely, is there any room for this distinction between divisible and indivisible truly to drive opposite outcomes about the adoption of a pleading artifice in the way that the majority explains falls out from Chubb remaining as an authority of the Court of Appeal and Davies and Pomfret, as a pair being an authority in the Court of Appeal in relation to so‑called divisible diseases, silicosis, in our case.
Now, in our submission, the first thing that can easily be seen from the positive assertions by Justice Basten and the lack of any countervailing discussion by the majority in Justice Meagher’s reasons is that there is no textual footing at all for this distinction, divisible/indivisible, describing diseases in the way Lord Phillips explains it in Sienkiewicz, with which your Honours are familiar, as being driving opposite outcomes about what the word “employment” means.
In our submission, once one realises that the workers compensation history, the full 20th century history from the United Kingdom into Australian jurisdictions of such provisions, when one recognises that they had to do with the perceived invidious difficulty for injured workers of identifying a time at which an injury was sustained originally, obviously in no fault jurisdiction but adapted for tortious liability as well, when one considers that and when one considers the choice that was taken as to the last, being the point at which the plaintiff, the injured worker, would be able to look, with various statutes providing variously as to whether the person so designated could seek contribution as it were, in their own time and at their own expense, when one considers that legal history, that legislative history, there is, in our submission, no mandate at all to look to a point at which true actual liability was incurred in the sense of the very first time that loss was suffered.
Now, your Honours will appreciate that it is clear - I do not know whether it is going to be clear from the reasons in Savic but the decision certainly is in accordance with this notion, that you can suffer loss so as to have a cause of action without knowing it, indeed, in circumstances which for all practical intents and purposes are unknowable.
Now, if that be so, in our submission, the very invidious difficulty that the judges and legislators for about 100 years have noted in this context, namely that it is impossible to designate when was the first time that loss was suffered for which a cause of action accrued, there being only one cause of action, there may be more than one tortfeasor by a succession of employers, but only one cause of action, that, in our submission, ceases to have the explanatory force it ought to have if the Court of Appeal’s decisions remains because they have been driven by the perception that one should not so construe these words as to permit an insurer to be statutorily at risk if that insurer’s insured and in the period stipulated by the policy in question came after liability had already fallen in.
That, in our submission, reverses, turns inside out, subverts the whole purpose of the simplicity and the arbitrariness of looking at what might be called the overt history, no medical speculations necessary, just look at who employed whom, and then look at the overt history, the kind of employment. We know what “nature” means - we know it means hazardous or risky. It does not mean demonstrated causation for an individual plaintiff, far from it.
This is a regime starting in workers compensation. It has social import. It was intended to address as well a mischief affecting individual claimants, and when one addresses it in that fashion, in our submission, there is every reason to doubt the correctness of the conclusion against us and certainly the cogency of the reasoning because it leaves a case like Chubb explicable only by the adoption of a distinction which is almost certainly scientifically unstable and legally utterly absent from the text of the statute. It might be thought as well that the ‑ ‑ ‑
BELL J: Mr Walker, the provision has been amended on occasions since FAI v HIH.
MR WALKER: It has.
BELL J: The provision, for example, setting out the statutory purpose, I think, has not been re‑enacted.
MR WALKER: I am not suggesting that is material one way or the other.
BELL J: Nonetheless, the essential features of the legislation respecting the liability question are as they were in FAI v HIH.
MR WALKER: Yes, that is fair.
BELL J: I think Justice Basten noted that whilst one might not always assume that the Parliament is cognisant of every decision, substantial sums turn on this and one might well think that in amending the legislation after FAI v HIH the Parliament acted on an acceptance of the correctness of that decision and that is the settled basis upon which matters have proceeded for a long time since. Now, what is wrong with that?
MR WALKER: Well, your Honour, one thing wrong with it, it is not the only thing that flows as a conclusion concerning the appropriateness of an issue for this Court from the fact which may be accepted not merely as polite convention but as actual political fact in this case, namely, this is legislation which is produced by a highly advertent interaction between legislators, those who advise legislators, and those who lobby the latter. That may be accepted.
The history that one finds in Hansard records concerns being raised and the like. That is the first thing. The second thing is, however, the iteration of legislative looks and relooks, adaptations and tweaking that one sees in the sequence that has been traced and the various reasons does not produce, in our submission, at all anything like the clear implication that there has been an acceptance of the correctness of a decision on a previous form of the statute which has been therefore, as it were, incorporated into an understanding of the new form of the statute.
For a start, that is not ordinarily the way one sees it unless the latest form of the legislation borrows language, or uses language, derived from concepts to be found in judicial reasons construing an earlier form, that is, for more abundant caution. May I say, with great respect, in legislation of this kind one does not find a history of Parliament going back for its hat after it has received an interpretation of which the governing parties approve from the Court of Appeal. So this is not a pattern where you can say, well, here is a later amendment, it is to be taken as an approval of a judicial pronouncement on an earlier form. That is not the case.
KEANE J: But what that – I mean, it is not a question of – I am sorry, I will start again. What one can see though is the Parliament addressing itself specifically to this legislation ‑ ‑ ‑
MR WALKER: Yes.
KEANE J: ‑ ‑ ‑ and dealing with it in a way that reflects contentment with the construction that the provision has been given.
MR WALKER: Your Honour, with respect ‑ ‑ ‑
KEANE J: Bearing in mind that so far as the special leave question is concerned, is that this is a peculiarly New South Wales statute.
BELL J: A Bench of five judges of the senior court in New South Wales has authoritatively confirmed the interpretation that has been the settled understanding in New South Wales for a very long time.
MR WALKER: The last part no, emphatically not. It is not a settled understanding. You do not get it either from the case law or from what I will call industry practice but, with respect, the other aspects of what your Honour put to me are correct. A Bench of five – I have to say a Bench of three, if it is the last Bench of three who speaks, settles the matter.
There is no doubt about that, but that is why the special leave power exists because, in our submission, it settled the matter in a way that leaves outstanding a whole new area of dispute, namely, divisible, indivisible, and is that really a distinction which will drive outcomes, because it has to be remembered in Chubb the point was said, taken up by Justice Meagher in Pomfret, incorporated into Davies, that the point about Chubb is that until there came the time – whether you call it threshold or the priming of a trigger, it does not matter – until it came the time there was no loss, and therefore it had to be employment, the nature of which is something about which you could say the disease was due – the disease was due.
In other words, investigation, it was said, of which of the earlier ones were over the threshold and which were before the threshold is absolutely beside the point. The clarity and beneficial arbitrariness of the selection of the last insurer would govern, the last insurer during the employment to the
nature of which. Why one would go back and then look for these abstruse, probably impossible to locate biological junctures in a biography of the plaintiff in order to ascertain this arbitrary allotment of liability for the purpose of a policy of insurance but not do it for the plaintiff’s own case is, in our submission, bewildering in relation to the policy that is to be seen in all of the iterations of legislative attention to this problem.
My last point is this. The way in which these words have been employed which emphasises that there is a fiction being employed means that one cannot be looking at when the actual liability was incurred because it is to be taken to have arisen by provisions which would not be necessary if you were to simply look at what I will call the common law rule as to the accrual of the cause of action. You do not have liability being taken to have arisen when the law would otherwise have it arising as a statutory provision. It is counterfactual. It is saying this is what we will take it as.
The choice was made in a way that, as your Honours appreciate intuitively, is against the weight of facts in this area. The last employment is in many cases with diseases of latency the least likely to be causatively involved. It was already caused, fully caused, but the last one will be the one where more likely than not documents have not been lost and it is beneficial social legislation, the last policy is likely, and in a couple of centuries of inflation as we have experienced, to be the one that is most adequate. It is for those reasons, in our submission, that important issues are raised for which the Court should give special leave.
BELL J: Thank you, Mr Walker. Mr Hooke.
MR HOOKE: Thank you, your Honour. Your Honours, we of course adopt what was put to your Honours by our learned friend, Mr Walker, but would add these matters. Your Honours, the authorities in New South Wales on this provision were, in our submission, all one way until 2011 when the Court of Appeal introduced the distinction between divisible and indivisible diseases into the construction of 151AB.
The decisions in Baker and in FAI Traders were, with respect, quite different, and indeed, Baker upon which FAI Traders was based expressly held that 151AB had no application in the case. That point was picked up and endorsed subsequently by Justice Heydon in the Colgate Palmolive Case to which your Honours would have seen reference. So, in our submission, nothing in reality of substance comes from Baker or FAI Traders and the distinction which is then seen to be grafted onto the words of the section as it now stands, which extends back to the 1906 Act in the United Kingdom, is at best illusory.
Your Honours, in Colgate Palmolive, Justice Heydon, with whom Justices Priestley and Sheller agreed, endorsed the decision in ABB Installation which had endorsed the conclusion in Baker and FAI Traders that 151AB had no role to play and followed a decision of the Court of Appeal in CIC v Alcan in which Chief Justice Gleeson set out and approved the long line of authorities to which we have referred going back to Blatchford.
The Chief Justice gave various examples in relation to what he considered to be a clear operation of the section, that is, relating to diseases simpliciter and gave examples of the application of the section to asbestosis which is divisible to silicosis which is divisible and to lead poisoning which we do not know, it may be divisible, it may be indivisible, but that perhaps would present an area of intense dispute should a question arise on the construction favoured by the Court of Appeal.
KEANE J: A dispute presumably to be resolved by medical science, not by lawyers.
MR HOOKE: Well, it would be resolved by a judge on the basis of evidence.
KEANE J: Evidence, not on a fortiori reasoning from legal categories.
MR HOOKE: No, quite, your Honour, but the point we make about it is that it throws up an area of dispute which does not exist on the simple construction that we propound, that is, if you treat a disease as a disease and simply look at the last date of employment to which the nature of disease is due, then one does not need to get into potentially complex, costly and protracted fights about what the nature of the disease is and what its ideology is.
BELL J: Let that be so, going back to the terms of the provision and the construction that was adopted in FAI v HIH, it is for my part rather difficult to see why one would depart from that against the background that is set out in the judgment of the Court of Appeal.
MR HOOKE: Well, your Honours, the terms of the section were different to start with. They spoke in terms of the identification of the insurer to the insurer liable to pay the full amount of the damages.
BELL J: But the point was the liability and there being no difficulty with what has been described as the artifice of pleading, the liability is the liability for which the plaintiff brings his or her suit.
MR HOOKE: Yes, but in those cases there was the underlying matter which was that the Parliament had after 30 June 1987 removed the liability of the employer.
BELL J: Yes.
MR HOOKE: That does not operate here. There was no liability and there could be no liability at law, pleading or not, after 30 June 1987, and that was a point that was made by the Chief Justice in Baker and by Justice Handley in FAI Traders. But the difference, in our submission, is that this section, or the section as it is presently framed, speaks directly to the liability of the employer, not the liability of the insurer. The point is perhaps more starkly raised in Pomfret where the insurer was joined under section 6 of the 1946 Law Reform Act because, of course, the insurer cannot be in any worse position apropos of the worker than it would have been apropos of its insured.
Now, that is where the defences that were recognised in Wunderlich and in Alcan and Colgate and in ABB all come into operation, because in each of those cases the Court of Appeal recognised that for the purpose of dealing with the worker’s claim against the employer one could look at the pleaded case and decide it within the parameters of the pleading, but when one then came to deal with the claim for indemnity, one had to look at the broader picture and that enabled the employer who was on risk at the times found relevantly for the workers claim not to be on risk ultimately.
That is where this distinction, and we say it finds no support in either the words of the statute or in longstanding high authority, between so‑called divisible and indivisible diseases becomes important and works a significant injustice because, of course, the arbitrary nature of the scheme operates so as to spread commercial risk and what is done here on the Court of Appeal’s construction is to interfere with that allocation of risk by the Parliament. We say, with respect, that the words of the section are so startlingly clear that, as my learned friend Mr Walker said, the observation by Justice Basten at paragraph 8 should have been the end of it.
Indeed, Chief Justice Gleeson in Alcan, having given the various examples of the different disease types, having been urged to find a different construction that perhaps attached to the findings of fact made on the basis of the worker’s pleading, said it was not enough to displace the force of the reasoning in the earlier authorities, or the weight of that line of authorities, to point out that the adoption of a different approach would simplify a dispute resolution, and nor had it been shown, as we say it has not in this case been shown, that the construction supported by authority gives rise to major difficulties. It does not make it difficult to decide the present case, and it appears to make good sense.
Your Honours, the other matter is that Justice Leeming, in a decision delivered about the time that these cases were argued, University of New South Wales v AAI Limited, to which we have referred in writing ‑ ‑ ‑
BELL J: Where do we find that?
MR HOOKE: I am sorry – we are just turning that up, your Honour.
BELL J: What was the name of it?
MR HOOKE: It is University of New South Wales v AAI Limited.
BELL J: I do not think it is in the authorities that you refer to in paragraph 27 of your submissions.
MR HOOKE: No, I am sorry, your Honour. The citation is [2014] NSWCA 153.
BELL J: What is the significance of it?
MR HOOKE: Justice Leeming, in dealing with section 151AB, referred to the statutory fiction created by the section being:
the time when the liability arose (which is to say, the time when the occurrence to which the insurance policy responds occurred) is the time when the worker was last employed in employment to whose nature the disease was due. This amounts to an exhaustive statement of when the occurrence is taken to have taken place. The effect may be to impose liability upon an insurer which would otherwise not be liable, and to relieve other insurers of liability for losses for which they would otherwise have been liable –
That ties in very neatly with what Viscount Sumner said in Blatchford, which is that the scheme is arbitrary and it fixes a singular arbitrary point in time. He made the point in terms that the worker is not empowered to implead another party, another employer. The section operates according to its terms, and that, in our respectful submission, is an essential element of that longstanding line of authority that stood for 90 years. That needs to be understood as being part of the ratio of all of those decisions, including Smith v Mann, and what have you that have followed it subsequently.
The decision in AAI is in fact referred to in our learned friend’s submissions at page 87 of the application book, at the end of footnote 12, your Honour. Justice Leeming made the point, which hardly needed to be made, that the regime reflects a practical working out of the disputed
obligations of two or more insurers to indemnify their insured. It is not merely a regime which favours the insured employer and the worker. The provisions also attempt to accommodate the rights of the insurers as between themselves. His Honour regarded it as a code. It would appear that it is expressed in that case at odds with this one, certainly as to the manner in which the section ought to be approached. Those are our submissions, your Honours.
BELL J: Thank you, Mr Hooke. Mr Jackson.
MR JACKSON: Your Honours, may I start by submitting that the distinction that is sought to be drawn between divisible and non‑divisible diseases and relied on as a basis for special leave is not one that it is appropriate for the Court to consider in this case. I say that first because it is apparent from the reasons for judgment of the primary judge that he decided that silicosis and PMF were both divisible diseases on the basis of the evidence that was before him.
Your Honours will see that in the Davies application book at page 6 in paragraphs 16 through to 19 and in particular the judge recognised in paragraph 19 that it was a question of evidence rather than a question of judicial precedent. In the particular case, one then sees if one goes to the reasoning of the Court of Appeal in the Davies Case at page 32 in paragraphs 19 to 21 and in particular in paragraph 20 that it was agreed that the estate was:
entitled to recover $300,000 by way of damages.
As the judge said, that was:
an admission by the appellant . . . that Fowler was liable to Mr Davies for damages on the basis claimed -
that being the one referred to in the preceding paragraph. So the case was one where the distinction between divisible and indivisible did not achieve the significance that our learned friends seek to have. This was a case of a disease which was found on the evidence to be a divisible disease and your Honours will see in paragraph 25 on page 33 that his Honour says in the second sentence:
The relevant liability, which in this case was agreed, is for an occupational disease caused only by exposure to the silica dust during a particular period.
Now, your Honours, that is the first thing I wanted to say. The second thing was that Justice Basten’s reasons in this book I think at page 44, paragraph 8, and our learned friend, Mr Walker, relied on them and recognised that it was, in effect, a curate’s egg and it must have been a fairly modest egg because if one looks at the first sentence and then reads on you will see Justice Basten immediately saying that:
if the words are read in their context bearing in mind the nature of the subject matter with which they deal, it is almost inevitable that some limitation must be placed on that meaning.
Your Honours, if one goes to the suitability of this case for the grant of special leave this is a case where a court of five was constituted to hear these two cases. All five members of the court arrived at conclusions adverse to the applicant and in doing so they arrived at conclusions which were consistent with the earlier decisions of the court in Baker and FAI which you will see referred to at page 65 of the application book in paragraphs 68 and 69.
In relation to each of those decisions, this Court refused special leave. Your Honours, it should not be a case of third time lucky, rather, we would say three strikes and you are out, if one uses that expression. But, your Honours, if I could go then to the actual nature of the argument and the question whether the decision is arguably sufficiently wrong to merit the grant of special leave, your Honours, we would submit that the applicant’s argument does not give sufficient weight to the condition on which the operation of section 151AB(1) turns. That condition is found, as the court below said, in the opening words of the provision, namely:
If an employer is liable . . . for damages for an occupational disease contracted by a worker –
It gives rise to the question, what is the liability for damages to which that provision applies? The liability is for damages for the occupational disease in the period for which the claim is made, and if one is talking about a disease that has been found to be divisible in the sense that it goes on and on and on and there is an injury on a number of occasions, then what one sees, your Honours, is that in respect of part of that period, then, the plaintiff is able to claim for the injury sustained in a particular period.
That is the basis, perhaps, for saying, well, if you have got something that is non‑divisible in the sense that the cause of action only accrues at the end of the period of exposure, that is one thing, but in the case of one that is divisible and found to be then, in our submission, the judgment of the court below was perfectly correct and we would submit that if one goes to the Court of Appeal’s judgment in Pomfret, which is relevantly at page 71 of the application book in this case, what Justice Meagher said in paragraph 85 was completely correct.
Your Honours, if one looks – this is the last thing I wanted to say – if one looks at a matter of this kind from the point of view of the interests of justice, there does not seem, with respect, much justice in the situation where an insurer can escape liability for an admitted cause of action because the employee worked on for two months when the employer was not insured. Your Honours, those are our submissions.
BELL J: Thank you, Mr Jackson. Mr Toomey.
MR TOOMEY: May it please your Honours, we gratefully adopt Mr Jackson’s submissions. Can I just make some submissions to your Honour on the last point on which he touched which is the justice of the case? This is a case in which a plaintiff was affected by a disease of gradual onset. For the purposes of this case he was last exposed in 1978. He was diagnosed with the condition of asbestosis in 2007, that is, 39 years after the exposure. During that period, the employer who was primarily liable for his condition had been deregistered and there was no one for him to pursue.
If one looks at the provision in that light and says that there are two possible constructions of section 151AB(1), one of which means that an insurer would be caught up in the swings and roundabouts provision provided by the legislature so that a loss would be spread over insurers by the chance of when someone hit the fence, as it were, or the alternative was that the worker, now 70 years of age, was left with no insurance and no employer to sue, and when one considers that in the light of the fact that this is remedial social legislation, not necessarily this section, but this legislation since the first German workers compensation cases in, I think, 1876 to date greatly developed by the English legislature over that period, it is difficult to say that where there is a powerful argument in favour of the worker that he should lose his case, he should lose his action. May it please, your Honours.
BELL J: Yes, Mr Walker.
MR WALKER: Your Honours, the first thing on what might be called ad misericordiam arguments is that this is not a question which by dint of the statutory interpretation is prejudicial to workers any more than it is prejudicial to one insurer as against another insurer. Extraneous questions of the insolvency or deregistration of a former employer or the inability to find in the archives insurance policies that cannot and should not affect the interpretation of these provisions, the mischief to which they are directed have to do with a quite different difficulty and it was directed in a way which was plainly beneficial to – favourable to – the interests as a class of workers. That is the first thing.
The second thing is two months has got nothing to do with it. It could be two years, it could be 20 years for how much longer the employment continued after the last policy issued by the insurer in question. In our submission, finally – I should say penultimately, it is not the case that one can say as if there is a course of authority, each case applying that which preceded it, conveyed by what my learned friend, Mr Jackson, referred to as a “consistency” between these two decisions and the cases that have been named and written about that preceded them, or at least it needs to be observed that the consistency in question is the lack of inconsistency that may have produced an overruling.
As has already been pointed out in writing and in various addresses today, the consistency that can be perceived in particular is between cases that did not regard 151AB’s terms as decisive, not least because in the leading one of them there was only one insurer. So there is no course of authority and these are the two cases that have thrown the matter up. The way in which Chubb has been left by the majority reasoning is enough to indicate that the five person Bench has not settled the matter.
The final point is this. It is, of course, correct that neither case raises doubts at an evidentiary level, with respect. The way Justice Keane put that is one that we would adopt in relation to the distinction between divisible and indivisible. Of course they do not turn on that and that is not the purpose for which we have drawn it to attention. The reason we have drawn it to attention is that it is clear by the treatment of Chubb in relation to the course of authority against the legislative history which informed that part of Justice Meagher’s reasoning that that distinction is being adopted, precisely in order, in our submission, to drive critically different outcomes according to that characterisation. That is non‑textual. That is what, in our submission, raises, perhaps unusually, a case of statutory interpretation with one State’s legislation as an apt case for special leave. May it please the Court.
BELL J: Thank you, Mr Walker. Mr Hooke.
MR HOOKE: A couple of matters, your Honours. The first is our learned friend, Mr Jackson, makes the submission that suitability of Davies is compromised because of the agreement on damages. That, of course, is not a feature of Pomfret. Secondly, we make the point in relation to FAI Traders that the ratio of Justice Handley’s decision was the absurdity of the result, as his Honour saw it, that one could have later insurers coming on risk at different times and at different stages.
That, of course, has been accepted to be the case in relation to indivisible diseases, and we say, well, in that case the absurdity is either
accepted as a consequence of the arbitrary scheme or it is not. It is not a basis for distinguishing and it, with respect, undermines the ratio of that decision.
Thirdly, our learned friend, Mr Toomey, puts the submission that the justice of the case requires that leave be refused because of the hardship that would be caused to the worker and we adopt in that respect what our learned friend, Mr Walker, put to your Honours but would add this. In Pomfret, one is confronted with a strikingly internally inconsistent pleading because as against Allianz, Mr Pomfret seeks to confine the period of exposure in the course of his employment with Ceeco, but as against the second respondent, pleads a continued exposure in the course of his employment with Ceeco to the products of the second respondent.
So a corollary of the Court of Appeal’s decision is that the court in determining the matter is asked to make inconsistent findings of fact and reach inconsistent judgments and, of course, one then moves on to consider what happens in subsequent proceedings such as cross‑claims for contribution or indemnity.
Finally, on the hardship to the workers, your Honours, this is a question of statutory construction and the statute ought to be construed in accordance with a principle. If there is an injustice by reason of the difficulty in identifying insurers or insolvency of insurers, then that is a matter of social rectification for the Parliament. It is not to be achieved by saddling those who happen still to be around and able to be found to be saddled with those liabilities.
BELL J: Thank you.
In our opinion the decisions of the Court of Appeal in each case are not attended by sufficient doubt to warrant the grant of special leave to appeal. In each application special leave is refused with costs.
The Court will now adjourn to reconstitute.
AT 12.33 PM THE MATTERS WERE CONCLUDED
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