Franklin v Coal Mines Insurance Limited (No 2)

[2024] NSWDDT 13

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:	Franklin v Coal Mines Insurance Limited (No 2) [2024] NSWDDT 13
Hearing dates:	On the papers
Date of orders:	18 November 2024
Decision date:	18 November 2024
Before:	Russell SC DCJ
Decision:	(1)   Order that the first defendant pay the plaintiff’s costs of and incidental to the plaintiff’s application for leave to proceed against the first defendant.
Catchwords:	DUST DISEASES – costs – whether costs of application for leave to sue insurer should follow the event – failure to answer reasonable queries about the existence of insurance policies – incorrect assertion that CMI not the insurer – inaccurate assertions about which policies did exist – piecemeal and slow production of insurance documents – need for the monopoly insurer to have a much better system for providing accurate and timely information about coal mines insurance policies
Cases Cited:	Franklin v Coal Mines Insurance Limited &Ors [2024] NSWDDT 11
Category:	Costs
Parties:	Luke Verne Franklin (Plaintiff) Coal Mines Insurance Limited (First Defendant)
Representation:	Counsel: S Tzouganatos (Plaintiff) T Rowles (First Defendant) Solicitors: Slater & Gordon (Plaintiff) Sparke Helmore (First Defendant)
File Number(s):	DDT 2023/7576

JUDGMENT

Introduction

1. On 16 October 2024 judgment was delivered on the plaintiff’s application for leave to commence and continue proceedings against the first defendant Coal Mines Insurance Limited (CMI) in relation to claims arising from the employment of the plaintiff by deregistered companies – Franklin v Coal Mines Insurance Limited & Ors [2024] NSWDDT 11 (the primary judgment).

2. As requested by the parties, I reserved the costs of the plaintiff’s application for leave to proceed against CMI. This judgment concerns the costs of the application.

3. The plaintiff filed two further affidavits:

1. Affidavit of J Wade dated 9 October 2024 (PX 12).

2. Affidavit of J Wade dated 23 October 2024 (PX 13).

4. CMI filed an affidavit of R Brewster dated 6 November 2024 (DX 2).

5. The following written submissions on costs were filed:

1. Plaintiff’s written submissions dated 23 October 2024 (MFI 14).

2. CMI written submissions dated 6 November 2024 (MFI 15).

6. The affidavits of Ms Wade set out the history of correspondence between the parties, much of which was directed towards requiring CMI to produce copies of insurance policies issued to the deregistered companies, or correspondence concerning insurance so issued. The affidavit of Ms Brewster set out the procedural history of the matter.

7. In summary, the hearing of the Motion proceeded in a piecemeal fashion, with the plaintiff requesting further documents from CMI, and CMI producing further documents from time to time.

8. The end result of this protracted process was that the plaintiff was able to establish that there was a CMI policy in force on the alleged last date of employment with all of the deregistered companies except Alminco – primary judgment at [70].

9. The need for the plaintiff to serve several Notices to Produce upon CMI, which resulted in fragmentary production of insurance related documents, was most unfortunate. On 7 June 2024 a lawyer for CMI swore an affidavit (PX 6) setting out, on her instructions, the polices of insurance which had been issued by CMI to certain of the deregistered companies. In the end the plaintiff established more extensive insurance than was contained in the CMI lawyer’s affidavit.

Submissions for the Plaintiff

10. The plaintiff relied upon the following chronology of events:

1. Ms Wade wrote to CMI on 6 June 2022 and 7 March 2023 seeking information regarding the existence of relevant insurance policies in respect of the deregistered employers. CMI did not respond to these requests.

2. On 16 March 2023 the plaintiff filed his Motion seeking leave to proceed against CMI.

3. On 2 May 2023 the solicitor for CMI wrote to Ms Wade stating that CMI did not concede that it was the workers compensation insurer for the deregistered employers. The letter requested that the Motion be withdrawn.

4. On 13 November 2023 Ms Wade wrote to the solicitors for CMI requesting the same information she had requested a year earlier. No response was ever received.

5. On 5 February 2024 the solicitors for CMI sent an email to Ms Wade providing details of some CMI policies. Those details were ultimately found to be incomplete. No documents were provided. This incomplete information was the same as that set out in the affidavit of the lawyer for CMI (PX 6).

6. Ms Wade then served three Notices to Produce on 12 June 2024, 5 July 2024 and 31 July 2024 in order to obtain further insurance documents from CMI. Production was given “in a piecemeal fashion of these documents” – MFI 14 par 11.

7. The documents which were produced disproved the assertion made by CMI and its lawyers that there was no policy in respect of the deregistered employers Colrok, Allied Mining and Allied Mining Services. There was never any explanation provided for the disconnect between the denial of insurance for these companies and the discovery, because of the diligence of the plaintiff’s solicitor, that insurance cover did exist.

8. On 21 August 2024 and 18 September 2024 Ms Wade wrote to the solicitors for CMI, referring to the documents produced, and asked CMI to admit that it was on risk for all of the deregistered employers other than Alminco. No responses were ever sent to Ms Wade.

11. Counsel for the plaintiff submitted that while the plaintiff was required to file the Motion seeking leave, the approach of CMI, summarised in the correspondence annexed to the affidavit of Ms Wade (PX 12), meant that the plaintiff was put to the time and expense of obtaining documents by a lengthy process, when such documents should have been produced by an insurer at a very early stage of the proceedings.

12. Counsel for the plaintiff submitted that it would not be just to make an order that the costs of the Motion be costs in the cause, and that the appropriate order was for costs to follow the event, so that CMI was ordered to pay the plaintiff’s costs of and incidental to the application for leave to proceed.

Submissions for CMI

13. Counsel for CMI submitted that costs of the plaintiff’s Motion should be reserved until after the proceedings against CMI was determined. I reject that submission. I have all of the evidence I need to deal with costs now, not later. In the alternative, CMI submitted that an order should be made that costs of the application be costs in the cause.

14. CMI submitted as follows:

1. There are still active issues to be determined on a final hearing, including whether the plaintiff was employed by the deregistered employers as alleged, the periods of any such employment and whether or not any policy issued by CMI responds to the plaintiff’s claim.

2. The plaintiff has amended his proceedings from time to time, culminating in a Second Further Amended Statement of Claim filed on 22 August 2024. This amended pleading now makes allegations by reference to policy documents which the plaintiff obtained under Notices to Produce. Amendments to the Notice of Motion were made during the hearing of the application.

3. If any of the allegations made as to the plaintiff’s employment with any of the deregistered corporations are not made out, then the plaintiff will have obtained the relief granted in the primary judgment on an incorrect premise.

Consideration

15. Applications for leave to sue the insurer of a deregistered corporate employer are common in the Dust Diseases Tribunal. Such applications are usually made in claims for asbestos-related diseases. Workers compensation insurers regularly and promptly produce evidence of the existence of a policy, thus expediting urgent claims made for dying plaintiffs.

16. Claims relating to coal mine dust lung diseases are appearing more and more frequently in the Monday Dust Lists. CMI has been the monopoly insurer of NSW coal mines since 1948. It is disappointing that CMI was not able to give firm and timely answers to reasonable requests made by the plaintiff’s solicitors to confirm insurance coverage for the deregistered employers. This case demonstrates that CMI needs a much better system to record the past issuance of coal mines insurance, and to provide prompt and accurate responses to queries raise by solicitors acting for claimants with coal mine dust lung diseases.

17. As CMI submits, the entitlement to a grant of leave does not equate to a finding that the plaintiff will succeed against CMI in relation to his alleged periods of employment with deregistered employers. They are matters which will have to be proved by the plaintiff on a final hearing.

18. However, there is no doubt that the plaintiff has been put to considerable and unnecessary expense in issuing Notices to Produce, obtaining documents pursuant to those Notices, and analysing and tendering those documents for the purpose of the application for leave to proceed against CMI. In my view CMI should have been able to provide that information long ago.

19. I am of the view that the appropriate order for costs in relation to the application made by the plaintiff is that CMI should pay the costs of the plaintiff.

Orders

20. The order of the Tribunal is:

1. Order that the first defendant pay the plaintiff’s costs of and incidental to the plaintiff’s application for leave to proceed against the first defendant.

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Decision last updated: 18 November 2024