FAI General Insurance Company Ltd v MMI CMI Insurance Ltd (No 2)
[1992] TASSC 72
•15 April 1992
Serial No 18/1992
List “A”
CITATION: FAI General Insurance Company Ltd v MMI – CMI Insurance Ltd (No 2) [1992] TASSC 72; A18/1992
PARTIES: FAI GENERAL INSURANCE COMPANY LTD
v
MMI – CMI INSURANCE LTD ROGER JOSEPH MORRISSON and THE MAYOR, ALDERMEN & CITIZENS OF THE CITY OF BURNIE
COURT: SUPREME COURT OF TASMANIA
FILE NO/S: LCA4/1992
DELIVERED ON: 15 April 1992
JUDGMENT OF: Zeeman J
Judgment Number: A18/1992
Number of paragraphs: 10
Serial No 18/1992
List "A"
File No LCA4/1992
FAI GENERAL INSURANCE COMPANY LTD v MMI – CMI INSURANCE LTD ROGER JOSEPH MORRISSON and THE MAYOR, ALDERMEN & CITIZENS OF THE CITY OF BURNIE (NO 2)
REASONS FOR JUDGMENT ZEEMAN J
15 April 1992
Practice – Tasmania – Jurisdiction of Supreme Court generally – Grant of indemnity certificate – Nature of the discretion.
On 1 April 1992 I upheld the appeal herein (No 14/1992). I did so not upon a basis raised by the notice of appeal, but rather upon the basis that the Workers' Compensation Commissioner had determined a question which he had no jurisdiction to determine. Counsel for the appellant and counsel for the first respondent had urged the learned Commissioner to determine that question, which, at least in part, was seen as determining the question as to which of those parties was liable to indemnify the third respondent as to payments of compensation to be paid by it to the second respondent. Both counsel maintained that position upon the hearing of the appeal, although the appellant argued that the learned Commissioner had reached an erroneous conclusion.
Counsel for the applicant sought an order for costs against the first respondent. Having regard to the circumstances of the matter, in the exercise of my discretion I refused to make such an order. Counsel for the first respondent then made an application that there be granted to his client an indemnity certificate in respect of the appeal pursuant to the Appeal Costs Fund Act 1968, s8(1). Counsel for the first respondent put his application upon the basis that all counsel who appeared before the learned Commissioner had urged him to decide the matter which the Commissioner did decide, and that counsel did so having the best interests of the second respondent at heart, namely, to avoid the necessity of him being called to give evidence in any other proceedings. In the light of the condition from which the second respondent has apparently been suffering, counsel's aim was commendable. It was also put to me that the parties had made concessions before the learned Commissioner to that same end, and that to some extent all parties and the learned Commissioner had proceeded upon the basis of a misreading of Howell v The Uniting Church; C E Heath (Third Party) No 8/1990. It was submitted that those matters made it appropriate that I exercise my discretion in favour of granting an indemnity certificate. Whilst I do not consider it to be in any way determinative of the present application, I observe that the matters urged upon me by counsel for the first respondent as favouring the grant of an indemnity certificate to his client could equally have been argued on behalf of the appellant were it not for the fact that it is not a respondent to whom a certificate may be granted under s8(1).
In In the Matter of Richard Pitt & Sons Pty Ltd No. 17/1980 Cosgrove J expressed some views as to the scheme of the Act, at pp2 – 3, in the following terms:
"It is plain that the scheme of the Act is a form of compulsory insurance. Litigants build up a Fund which protects them against judicial death, illness, retirement, accidental abortion of proceedings, disagreements of juries, perverse verdicts, and errors of law by judicial officers. Entitlement to payment follows automatically on the happening of the nominated event, except in the cases of (a) discontinuance of current proceedings, and (b) appeals. As I have said, in the first of these cases, a judicial officer is required to certify in effect that the event causing the discontinuance was accidental. In the second, the court appears to be given a general discretion as to the grant of an indemnity certificate. No guidelines are laid down for the exercise of the discretion. However, on pondering the scheme of the Act, it seems to me that Parliament intended that the grant of a certificate would flow as a matter of course, unless there was some circumstance which disentitled the party applying from receiving it. Where proceedings are discontinued, the event which would disentitle a party or parties to payment is spelled out in the statute. It would have been difficult to anticipate and provide for all the circumstances which might in appeals lead to disentitlement. So the court was given a discretion to refuse to grant a certificate. That, it seems to me, is the key. It is a discretion to refuse."
The other members of the court do not appear to have shared the view that the Act requires a positive exercise of the discretion not to grant a certificate. I do not consider that case to provide binding authority to the effect that an unsuccessful respondent has a prima facie entitlement to an indemnity certificate unless there is a positive discretionary reason not to grant such a certificate. With respect to Cosgrove J, I find it somewhat difficult to follow his reasoning. His Honour does not appear to have had regard to the Act, s14, which in its then form appeared to confirm that the grant of an application for an indemnity certificate required a discretionary judgment in favour of granting it. His Honour did not refer to the judgment of the Full Court of the Supreme Court of Western Australia in Richards v Faulls Pty Ltd [1971] WAR 129 at pp137 – 139. In that case, the Court was concerned with the Suitors' Fund Act 1964–1969, s10(1), which, for relevant purposes, was in terms indistinguishable from those appearing in the Act, s8(1). In particular, the court said, at pp137 – 138:
"The question is whether the power which is conferred upon the Court should be exercised. It is a discretionary power and the grant of the certificate follows upon and requires the exercise of the discretion. Hence it is a discretion to grant; it is not a discretion to refuse. Hence it is not the position, adapting to this case the words of the joint judgment of Latham, C.J., Rich and Dixon, JJ., in Main v. Main (1949), 78 C.L.R. 636, at p. 643, that once facts are proved bringing the case within s. 10(1) a certificate should be granted unless the court thinks on discretionary grounds that the certificate should be withheld; on the contrary, the unsuccessful respondent to an appeal must show some ground calling for the exercise of the discretion in his favour and he does not do this merely by showing that the appeal has succeeded on a question of law: Reeve v. Fowler, [1965] N.S.W.R. 110, per Walsh, J., at p. 111. Of course the nature of the case may in itself show that a certificate should be granted and not infrequently the court is able to act without further evidence or argument."
I adopt the view expressed in Richards v Faulls Pty Ltd (supra) so that it is for the first respondent to satisfy me that there is a positive reason for the exercise of my discretion in its favour.
It is quite inappropriate to attempt to define the circumstances in which a certificate will or will not be granted. Nevertheless, it is appropriate to consider each individual exercise of the discretion by reference to the legislative policy as evinced by the Act. In that respect, I adopt the observations made by Moffitt J (as he then was) in Acquilina v Dairy Farmers Co–operative Milk Co Ltd (No 2) [1965] NSWR 772. His Honour was there considering the Suitors' Fund Act 1951 (NSW) but I consider the observations made by him, to which I am about to refer, as having equal force to the Act. In dealing with applications for an indemnity certificate, his Honour said (at p773):
"The grant of such relief, it can be inferred, proceeds on the assumption that the law is known so that if an error of law occurs in a court of first instance, or an inferior appellate court, such error may ordinarily be attributed to a fault in the administration of justice rather than of the parties so that the costs of having the error rectified ought not ordinarily to lie on the unsuccessful respondent to the appeal, but to be paid from a fund contributed to by all litigants ..."
To similar effect is the dictum of Maguire J in Pataky v Utah Construction & Engineering Pty Ltd [1966] 1 NSWR 689 at p695, in the following terms:
"It is desirable, perhaps, to say a little more as to the objects and purposes of the Suitors' Fund Act. These do not extend to the promotion of litigation; nor is it an Act to provide legal aid or legal assistance in the broad sense at the expense of the Fund. Its real purpose and intention was to relieve a litigant from the burden of costs of an appeal where he had obtained a favourable decision which was reversed because the Court which found in his favour had acted on a mistaken view of the law."
It is appropriate to observe that their Honours' references to a question of law were relevant in the context of the New South Wales section which was limited to appeals which succeeded on a question of law. A similar restriction was contained in the Act, s8(1), prior to its amendment in 1990. The legislative intent expressed by Maguire J was followed by the Full Court in Richards v Faulls Pty Ltd (supra) at p138.
In the present case, the Workers' Compensation Commissioner relevantly had before him a reference under s42 by the second respondent. The matter which fell for determination was whether the second respondent was entitled to payment of weekly compensation under the Act. Although it appears that by the time the matter came before the learned Commissioner all parties were agreed that the worker was entitled to that payment, no formal determination to that effect was made by the learned Commissioner. However, he acceded to submissions that he ought to embark upon a consideration of when the second respondent had suffered the relevant injury, for purposes quite unrelated to the entitlement of the second respondent to receive a weekly payment. The learned Commissioner proceeded to determine that question. As I have already held, he had no jurisdiction to embark upon that course. He did so because the parties urged him to do so. The first respondent having joined in urging the Commissioner to do so, ought the Appeal Costs Fund to now bear the first respondent's costs when it has been determined that the Commissioner was devoid of jurisdiction? I think not. This is not a case where the Commissioner's decision on a particular matter is reversed or modified. It is a case where it has been held that he had no jurisdiction to make any relevant determination. The first respondent having been a party to persuading the learned Commissioner to deal with a matter which was outside his jurisdiction, I am not persuaded that it ought to have a certificate. As no party has obtained an order for costs against the first respondent, at most an indemnity certificate would entitle the first respondent to be paid from the fund an amount equal to its costs of the appeal and the costs of taxing those costs (s9(1)(b) and (c)) although there is a power to further limit those costs which is conferred by s14(1)(c). The costs of the appeal primarily relate to argument addressed on the matter determined by the learned Commissioner (which, in the circumstances, was found to be of no relevance) and argument on the issue of the learned Commissioner's jurisdiction when I raised the matter. The circumstances to which I have referred do not make it appropriate that those costs be paid out of the fund.
The application is dismissed.
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