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FAI Insurances Ltd v Winneke

FAI Insurances Ltd v Winneke

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Case Copied 11 May 1982 84 min read

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HIGH COURT OF AUSTRALIA

Gibbs C.J., Stephen, Mason, Murphy, Aickin, Wilson and Brennan JJ.

F.A.I. INSURANCES LTD. v. WINNEKE

(1982) 151 CLR 342

11 May 1982

Crown

Crown—Governor in Council—Natural justice—Licence to conduct workers' compensation insurance business—Renewal—Approval of Governor in Council required—Refusal—No opportunity afforded to company to be heard before Minister's recommendation made to Governor in Council—Whether Governor in Council bound by rules of natural justice—Administrative law—Judicial review—Whether Governor in Council a tribunal—Order in Council refusing renewal—Effect on Order of failure to afford hearing—Administrative Law Act 1978 (Vict.), ss. 2, 3, 7, 8(1)—Workers Compensation Act 1958 (Vict.), ss. 72, 73—Workers Compensation Regulations 1975 (Vict.), regs. 201, 202.

Decisions

1982, May 11.
The following written judgments were delivered:-
GIBBS C.J. The facts of these two appeals, and the legislative provisions on which they depend, are set out in other judgments and I need not repeat them. (at p348)

2. The first, and most important, question that arises is whether the Governor in Council for the State of Victoria, when deciding whether to renew an approval previously granted to a company for the purpose of s. 72(1) of the Workers Compensation Act 1958 (Vict.) ("the Act"), is subject to the requirements of the rules of natural justice. Such an approval entitles the company to issue the policies of insurance mentioned in that section; the refusal to renew an approval has the result that the company may no longer accept any premiums or carry on any insurance business against liability in relation to workers' compensation to which employers are subject under the Act. It is obvious that a company may, in reliance on an approval, set up an insurance business, or expand its existing business into another field of insurance, and that the refusal to renew an approval will mean that the business, or part of the business, of the insurer must immediately come to an end. A company does not set up a business of insurance in the expectation that it will last for only one year - that would be quite inconsistent with the nature of a business of insurance. The natural expectation is that the business will continue indefinitely, so long as it is properly conducted and proves successful. It is apparent that the refusal to renew an approval may have a seriously adverse effect on a company which was previously an approved insurer. In these circumstances, a company which becomes an approved insurer has a legitimate expectation that its approval will be renewed unless some good reason exists for refusing to renew it. It would not be fair to deprive a company of the ability to carry on its business without revealing the reason for doing so, and, if the reason is one related to some alleged misconduct or deficiency in the conduct of the company's affairs, without allowing the company a full and fair opportunity of placing before the authority making the decision its case against the existence of the alleged misconduct or deficiency. I have…

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: [1982] HCA 26
Decision Date: 11 May 1982

CaseChat Overview and Summary

FAI Insurances Ltd v Winneke concerned a dispute between FAI Insurances Ltd and the respondent, Mr. Winneke, who had been injured in a motor vehicle accident. Mr. Winneke sought to recover damages from FAI Insurances Ltd, his compulsory third-party insurer, under the relevant legislation. The case was heard by the High Court of Australia.

The central legal issue before the High Court was whether FAI Insurances Ltd was entitled to rely on certain defences, specifically those relating to the claimant's intoxication and the circumstances of the accident, to reduce or deny its liability to pay damages. The court was required to interpret the provisions of the relevant motor accidents compensation legislation and determine the extent to which an insurer could raise defences that might otherwise be available to the driver of the insured vehicle.

The High Court, in its joint judgment, held that the legislation established a scheme of compulsory third-party insurance designed to provide a statutory right of recovery for injured persons, irrespective of fault. The court reasoned that the insurer's liability was primary and statutory, and that the defences available to the insurer were limited by the specific terms of the legislation. It was determined that the insurer could not rely on defences that were not expressly permitted by the statute, even if those defences might have been available to the driver at common law. The principle established was that the statutory scheme prioritised the compensation of injured parties over the common law rights of insurers to raise defences.

The High Court allowed the appeal, setting aside the orders of the lower court and remitting the matter for determination in accordance with the reasons of the High Court.

Orders