Durno v Coal Mines Insurance Pty Ltd

[2018] NSWDDT 7

Dust Diseases Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:	Durno v Coal Mines Insurance Pty Ltd; (ACN 000 011 727) [2018] NSWDDT 7
Hearing dates:	19 July 2018
Date of orders:	23 July 2018
Decision date:	23 July 2018
Before:	Scotting J
Decision:	(1) The separate question set out in [2] of this judgment should be answered, ‘No’. (2) The plaintiff is granted leave to continue the proceedings against the defendant on the cause of action pleaded in the Statement of Claim. (3) Costs of the plaintiff’s Notice of Motion are to be costs in the cause. (4) The defendant is to pay the plaintiff’s costs of the Notice of Motion relating to the separate question, on the ordinary basis, as agreed or assessed.
Catchwords:	DUST DISEASES – plaintiff – coal CIVIL PROCEDURE – leave to continue proceedings CONTRACTS – construction – interpretation – whether deed of release barred claim for damages in respect of dust diseases OTHER – coal miner – prior work injury compensation claim settled – redemption of employer’s liability – deed of release barred future claims
Legislation Cited:	Civil Liability (Third Party Claims Against Insurers) Act 2017 Workers Compensation Act 1987
Cases Cited:	BCCL v Ali [2001] 1 All ER 961 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Grant v John Grant and Sons Pty Ltd (1954) 91 CLR 112 Iletrait Pty Limited v McInnes (NSWCA, 17 April 1997, unreported) Investors Compensation Scheme v West Bromich Building Society [1998] 1 WLR 896 Karam v ANZ Banking Group Limited & Ors [2001] NSWSC 709 Salkeld v Vernon [1758] EngR 153 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45
Texts Cited:	Uniform Civil Procedure Rules 2005
Category:	Procedural and other rulings
Parties:	James Durno v Coal Mines Insurance Pty Ltd (ACN 000 011 727)
Representation:	Counsel:   Mr G Parker SC (Plaintiff)        Mr T Rowles (Defendant)   Solicitors:   Maurice Blackburn Lawyers (Plaintiff)        Sparke Helmore (Defendant)
File Number(s):	31 of 2018
Publication restriction:	None

Judgment

1. James Stewart Durno (the plaintiff) seeks leave pursuant to section 5 Civil Liability (Third Party Claims Against Insurers) Act 2017 to proceed against the defendant on the cause of action pleaded in the Statement of Claim filed in the Dust Diseases Tribunal on 14 February 2008.

2. Coal Mines Insurance Pty Ltd (the defendant) seeks to have a separate question determined pursuant to rule 28.2 Uniform Civil Procedure Rules 2005 being:

Is the Deed of Release signed by the plaintiff in 2001, a bar to the plaintiff proceeding in a claim for damages against Clarence Colliery and/or against the defendant in so far as the claim for damages relates to his employment at Clarence Colliery?

3. It is agreed between the parties that if the Deed of Release:

1. operates to bar the plaintiff’s proceedings, then the plaintiff should not be granted leave and the proceedings in so far as they relate to Clarence Colliery Pty Ltd should be dismissed; or

2. if it does not, then the plaintiff should be granted leave to continue the proceedings.

Factual Background

4. The plaintiff was born on 3 January 1944.

5. Between August 1980 and January 1986 and from April 1986 to February 1998 the plaintiff was employed by Clarence Colliery Pty Limited as a coal miner.

6. Between January 1986 and April 1986 the plaintiff was employed by Wallerawang Collieries as a coal miner at the Clarence Colliery.

7. On 18 August 2000 in matter number 4605/00 the plaintiff consented to commutation/redemption of the employer’s liability to pay compensation under the Workers Compensation Act 1987, and agreed to settle a common law claim commenced in the District Court of New South Wales. The redemption was approved by Judge Armitage of the Compensation Court. The terms of that redemption and settlement were not relevant to the present interlocutory applications.

8. On 16 May 2001, the plaintiff consented to a further commutation/redemption of the employer’s (Clarence Colliery Pty Ltd) liability to pay compensation under the Workers Compensation Act 1987 from 1 January 1970 in respect of the injuries referred to in the Application for Determination. The redemption amount was $45,000. The redemption was approved by Judge Bishop sitting in the Compensation Court at Katoomba.

9. The plaintiff signed a document entitled “Consent to Redemption Application” dated 16 May 2001. The effect of that document was explained to him by his solicitor, Mr Higgins and/or his counsel Mr Baker. In addition, Short Minutes of Order were filed in Court, signed by Mr Baker. The Short Minutes of Order were explained to the plaintiff by Mr Higgins and/or Mr Baker. The plaintiff was called to give evidence in the redemption application before Judge Bishop. The plaintiff’s evidence was that the terms of the settlement were explained to him, that he understood them and that he consented to the orders.

10. The Short Minutes of Order provided:

1   Liability of employer to make weekly payments:

…

(b)   in respect of the injury(ies) referred to in the Application for Determination and in the Schedule of Injuries attached hereto and marked with the letter “A” may be redeemed in whole as from the 1st of January 1970 by the payment of forty-five thousand dollars in addition to any payments made.

2   …

3 Noted that the worker agrees that the said sum also redeems liability under sections 10 and 16 of the Workers Compensation Act 1926 (as amended) and under Divisions 3 or 4 of Part 3 of the Workers Compensation Act 1987 (as amended) excluding industrial deafness.

4   Noted that the worker undertakes to the employer to execute a common law release if called upon to do so.

5   Other orders or notations:

(a)   payment of the lump sum will also redeem the employer’s liability in respect of injuries and incidents of injury arising out of or in the course of the worker’s employment with the employer including injuries from the nature and conditions of the said employment and including injuries to the head, whole of spine, pelvis, both shoulders, both upper and lower limbs, functional overlay and the aggravation, acceleration or causation of any disease including diseases of the heart or lungs including industrial deafness, except as provided in paragraph (c);

…

11. The Application for Determination provided:

1   (a)   Date of injury - period of employment 1980 to 1997.

   (b)   Place where injury happened - Clarence Colliery.

   (c)   What work was being done at the time of the injury - coal mining.

   (d)   How did the injury occur - nature and conditions of employment.

2   (a)   Nature of injury - osteoarthritis and torn and retracted supraspinatus in the right shoulder and injury to the lumbar spine.

12. The Consent to Redemption provided:

I, James Stuart Durno, consent to the making of an award in accordance with the annexed Short Minutes of Order.

…

In giving this consent I appreciate that the payment of the lump sum referred to in the said Short Minutes will bring to an end as from 1st January 1970 my right to all entitlements under the Workers Compensation Act, 1926, or under the Workers Compensation Act, 1987 in respect of the injury(ies) the subject of the said Short Minutes which I have or may have in the future including:

…

(I agree to execute, if called upon to do so, a document wherein I shall release the employer for all liability at common law or for breach of statutory duty and which may be used to prevent me from succeeding in any action for damages in any other Court in respect of the abovementioned injury(ies).)

Dated the 16th day of May 2001.

Signed

Worker

13. Sometime after the Redemption in 2001, the plaintiff executed the Deed of Release.

14. The Deed of Release relevantly provides:

RECITALS

A   The Releasor suffered injuries and damage in the course of the Releasor’s employment with the Releasees.

B   The Releasor claims that the injuries and damages were caused by the negligence or breach of statutory duty or some other breach of obligation of the Releasees.

C   The Releasees deny all liability, negligence and breach of duty in respect of the injuries and damage.

THIS DEED WITNESSETH

3   In consideration of the Releasees paying the Releasor Forty-five thousand dollars pursuant to the Consent to Redemption Application in the Workers Compensation Court Proceedings Number 39313 of 2000 (the “payment”), the Releasor releases the Releasees and provides an indemnity as set out in this Deed.

4   The Releasor releases the Releasees from all actions, causes of action, arbitrations, debts, damages, costs and demands (including dust diseases but excluding industrial deafness) at law or in equity or under any statute which the Releasor has or might, but for this Deed, have at any time against the Releasees in any way connected with the accident or the Releasor’s injuries.

5   The Releasor agrees to indemnify the Releasees against all actions, claims, demands, damages, judgments, costs and expenses of any kind in any way connected with the accident or the Releasor’s injuries (except for the payment) including without limitation any claim by any provider of medical services under the Motor Vehicles (Third Party Insurance) Act 1942, the Motor Accidents Act 1988, the Workers Compensation Act 1926 and the Workers Compensation Act 1987.

6   …” [1]

1. Underling added.

15. From about 2007 to 2009 the plaintiff experienced breathing difficulties. In about October 2016, Dr Edwards told the plaintiff that he was suffering from chronic obstructive pulmonary disease (COPD) as a result of his employment as a coal miner.

The plaintiff’s evidence on the motions

16. The plaintiff affirmed an Affidavit on 28 May 2018. The plaintiff relevantly deposed to the following:

7   Following the incident in 1997 I contacted Ross Higgins of Higgins & Higgins Lawyers in Lithgow and instructed him to bring a compensation claim against my employer for my facial and shoulder injuries.

8   Ross Higgins managed my claim and I didn’t have much input into the process. I accepted and was guided by his advice.

9   …

10   I did not instruct Ross Higgins to bring any compensation claim in relation to any dust disease. I did not do so because I did not suffer from any dust disease at that time nor at any time prior.

…

14   I understood that various conditions applied to the settlement. My recollection is that these conditions were:

(a)   my claim against my employer for all previous diagnosed injuries was now over and I was unable to receive any more compensation from them in relation to my previously diagnosed injuries; and

(b)   I was unable to work as a coalminer in New South Wales again.

15   These conditions as set out above and the sum of money were acceptable to me and I instructed Ross Higgins to accept the offer.

16   Shortly afterwards, I had to speak in Court before a Judge. I can’t remember precisely what was said, but my recollection is that the Judge asked me if I was happy with the settlement amount. I said yes.

17   At the time of settlement and ever since my understanding was and has always been that my claim against my employer was for previously diagnosed injuries only including my facial, shoulder and jaw injuries.

18   I was shocked when I was told by Maurice Blackburn Lawyers that Coal Mines Insurance believes that I had released my employer for future dust diseases injury. As mentioned my understanding of the settlement was that I had brought a claim against my employer for diagnosed injuries and that I settled my claim for those injuries only.

17. The plaintiff was cross-examined. He did not have much memory of the precise details of what happened at Court on 16 May 2001. He was adamant, consistent with the evidence in his affidavit, that his understanding was that he had not given up any future rights to bring a dust diseases claim because he did not know that he had a dust disease at the time of his appearance in Court.

18. The plaintiff called Mr Higgins, his solicitor in the Compensation Court and Mr Baker, his counsel to give evidence. Neither Mr Higgins nor Mr Baker remembered the precise details of what happened at Court on that day. Both of them gave evidence about their usual practice in representing clients in those types of proceedings.

The relevant law

19. Section 4 Civil Liability (Third Party Claims Against Insurers) Act 2017 relevantly provides:

(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)   …

(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)   …

20. Section 5 Civil Liability (Third Party Claims Against Insurers) Act 2017 relevantly provides:

(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.

21. Section 7 Civil Liability (Third Party Claims Against Insurers) Act 2017 relevantly provides:

In proceedings brought under section 4, the insurer is entitled to rely on any defence or any other matter in answer to the claim or in reduction of its liability to the claimant:

(a)   that the insurer would have been entitled to rely on in a claim made by the insured person under the contract of insurance, or

(b)   that the insured person would have been entitled to rely on in proceedings brought by the claimant against the insured person in respect of the insured liability.”

22. The principles of contractual interpretation can be stated as follows.

23. First, interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all of the background knowledge which would reasonably have been available to the parties at the time of entering into the contract: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]. The purpose of the contract, i.e. what the parties were trying to achieve, is important: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.

24. Second, evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the meaning is ambiguous or susceptible of more than one meaning: Codelfa at 352 per Mason J, confirmed by the High Court as binding authority in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 at [3]-[5].

25. Third, the meaning which a document would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammar; the meaning of a document is what the parties using those words against the relevant background would have reasonably understood them to mean: Investors Compensation Scheme v West Bromich Building Society [1998] 1 WLR 896 per Lord Hoffman.

26. Fourth, the rule that words should be given their ‘natural and ordinary meaning’ reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. Even if something must have gone wrong with the language the law does not require judges to attribute to the parties an intention which they plainly could not have had: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429.

27. In Karam v ANZ Banking Group Limited & Ors [2001] NSWSC 709 at [406] Santow J set out the principles applicable to construing releases or purported releases by reference to the following propositions:

(1) In construing a release... the Court should ascribe to the release the meaning that the release would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time that they signed the document containing the release: ICS v West Bromwich BS [1998] 1 All ER 98 per Lord Hoffman at 114.

(2)    In order for the Court to give effect to what in an objective sense the contracting parties intended, it is clear that a party may agree to release claims or rights of which it is unaware and of which it could not be aware, provided clear language is used to make plain that that is its intention: see Salkeld v Vernon [1758] EngR 153; (1758) 1 Eden 64, 28 ER 608 per Lord Keeper Henley.

(3)    Consistent with this emphasis on intention, general words in a release are limited to what was specifically in the contemplation of the parties at the time when the release was given: Grant v John Grant and SonsPty Ltd (1954) 91 CLR 112 per Dixon CJ, Fullagar, Kitto and Taylor JJ; Iletrait Pty Limited v McInnes (NSWCA, 17 April 1997, unreported) per Priestley JA with whom Grove AJA and Handley JA agreed).

(4)   Although there are no special rules of construction, such as a contra proferentem requirement, in the absence of clear language courts have been slow to infer that a party intended to surrender rights and claims of which it was unaware and could not have been aware: BCCL v Ali [2001] 1 All ER 961 at 966 per Lord Bingham, (contrast Lord Nicholls in BCCL v Ali(supra) at 971-72 who was of the view that for the purposes of construction a general release is simply a term in the contract).

(5)    Although each release should be considered against its own matrix of facts, an example of this line of "cautionary principle" (Lord Bingham’s phrase) is the frequently cited judgment of the High Court of Australia in Grant v John Grant & Sons Pty Limited (supra), where Dixon CJ, Fullagar, Kitto and Taylor JJ (at 125) referred with approval to the proposition put by Sir Frederick Pollock in his “Principles of Contract” (Stevens: London, 1950) 13th ed at 412, that "in equity a release shall not be construed as applying to something of which the party executing it was ignorant."

(6)    Despite the fact that, strictly speaking, releases are subject to no special rules of construction, a transaction in which one party agrees in general terms to release another from any claims upon it does have special features: BCCL v Ali at 984 per Lord Hoffman.

(7)    In such circumstances it may well be appropriate to imply an obligation upon the beneficiary of such a release to disclose the existence of claims of which it actually knows and which it also realises might not be known to the other party: BCCL v Ali at 984 per Lord Hoffman, for such an obligation is consistent with a concern to protect parties from sharp practice, by preventing advantage being taken of the known ignorance of the conceding party; BCCL v Ali per Lord Nicholls at 973.

Consideration

28. The Short Minutes of Order and the Consent to Redemption Application recorded the plaintiff’s agreement to execute a common law release if called on to do so.

29. Sometime after the redemption was approved by Judge Bishop, the plaintiff signed the Deed of Release, which remained undated. By so doing, the plaintiff fulfilled his promise to execute a common law release if called on to do so.

30. The terms “injuries” and “the accident” were not defined in the Deed of Release. The plaintiff’s worker’s compensation benefits that were being redeemed were those relating to a nature and conditions claim for back and shoulder injuries sustained between 1980 and 1997. The plaintiff did not suffer any relevant accident.

28. The Recitals of the Deed of Release recorded in the past tense that the plaintiff “had suffered injuries and damage” in the course of his employment with Clarence Colliery.

29. I would interpret the phrase “injuries and damage” used in Recitals A and B of the Deed of Release to be the same injuries and damage, that is the injuries and damage that the plaintiff had suffered at the time of entering into the Deed of Release.

30. Clause 4 of the Deed of Release provided for a release of past and future causes of action “in any way connected with the accident or the [plaintiff’s] injuries”.

31. Clause 5 of the Deed of Release provided that the plaintiff indemnified Clarence Colliery for any claims “in any way connected with the accident or the [plaintiff’s] injuries”.

32. In other words, the present or future causes of action to be released, or for which the plaintiff would provide an indemnity, had to demonstrate some connection with the injuries that the plaintiff had suffered and that had caused him damage, rather than the injuries that may have been contemplated in the other documents.

33. The phrase “in any way connected with the accident or the [plaintiff’s] injuries” was not the same as “in any way connected with the plaintiff’s employment’ and if that was the intention of the parties, the use of those words would have made such intention beyond doubt.

34. I am satisfied that the plaintiff was unaware and did not have in contemplation that he was suffering from a dust disease on 16 May 2001 and that the release should be restricted to the injuries of which he was aware at the time of executing the Deed of Release, which are the subject of the words used in clauses 4 and 5 of the Deed of Release.

35. I am satisfied on the terms of the Deed of Release that the plaintiff did not release the claim which he now seeks to pursue.

36. If I am wrong on the terms of the Deed of Release and there is some ambiguity surrounding the meaning of the plaintiff’s injuries, it is necessary to examine the terms of the Short Minutes of Order and the Consent to Redemption Application. I cannot place much weight on the oral evidence. Each witness was giving evidence of what occurred 17 years ago and cannot be reasonably expected to have a clear recollection of what was said on that day. The contemporaneous documents are the best evidence of what occurred. I accept the plaintiff’s evidence that he was unaware on 16 May 2001 that he suffered from a dust disease of any kind.

37. In the Short Minutes of Order, the plaintiff’s injuries are defined in paragraph 1(b) by reference to the injuries referred to in the plaintiff’s Application for Determination and a schedule of recorded injuries that the plaintiff suffered during the course of his employment. That schedule did not contain any relevant injury for the purposes of these applications.

38. Paragraph 4 of the Short Minutes of Order recorded the plaintiff’s undertaking to execute a common law release if called on to do so.

39. Paragraph 5(a) recorded the plaintiff’s agreement that the redemption of liability to make payments pursuant to the Workers Compensation Act 1987, included “any injuries or incidents of injury arising out of or in the course of” the plaintiff’s employment with Clarence Colliery, and that included injuries to the whole of his body by reference to a description of various body parts.

40. By the terms of the Short Minutes of Order there was no link between the injuries described in paragraphs 1(b) or 5(a) and the extent of the common law release provided for in clause 4.

41. The Consent to Redemption Application provided that the plaintiff consented to the making of an Award in the terms of the Short Minutes of Order. The injuries referred to were the “injury(ies) the subject of the … Short Minutes which I have or may have in the future”. The document recorded the agreement to execute a common law release “which may be used to prevent me from succeeding in any action for damages in any other court in respect of the abovementioned injury(ies)”.

42. In my view, the injuries that were the “subject of the Short Minutes” of Order were those defined in paragraph 1(b).

43. For these additional reasons I am satisfied that the Deed of Release did not release the claim which the plaintiff now seeks to pursue.

44. The plaintiff also seeks to avoid the terms of the Deed of Release by applying the maxim, non est factum. For the reasons given, the scope of the common law release that the plaintiff agreed to give in the Short Minutes of Order and the Consent to Redemption Application was not well defined. I am not satisfied that the common law release proffered was wider than that eventually executed by the plaintiff and cannot be satisfied that there was any vitiating conduct on the part of Clarence Colliery.

Orders

48. The orders I make are as follows:

1. The separate question set out in [2] of this judgment should be answered, ‘No’.

2. The plaintiff is granted leave to continue the proceedings against the defendant on the cause of action pleaded in the Statement of Claim.

3. Costs of the plaintiff’s Notice of Motion are to be costs in the cause.

4. The defendant is to pay the plaintiff’s costs of the Notice of Motion relating to the separate question, on the ordinary basis, as agreed or assessed.

**********

Endnote

Amendments

20 November 2019 - Catchwords added

Decision last updated: 20 November 2019