Franklin v Coal Mines Insurance Ltd

[2024] NSWDDT 11

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:

Franklin v Coal Mines Insurance Ltd & Ors [2024] NSWDDT 11

Hearing dates:

25 June, 8 July, 22 August, 30 August, 9 October 2024

Date of orders:

16 October 2024

Decision date:

16 October 2024

Before:

Russell SC DCJ

Decision:

(1)   Subject to order (2) grant leave nunc pro tunc to commence and continue these proceedings against the first defendant Coal Mines Insurance Ltd in relation to the claims pleaded in the Second Further Amended Statement of Claim against deregistered companies.

(2)   Decline to grant such leave in relation to the claim pleaded in pars 95-103 of the Second Further Amended Statement of Claim.

(3)   Reserve the costs of and incidental to the Amended Notice of Motion filed on 25 June 2024.

Catchwords:

DUST DISEASES – insurance – application for leave to proceed against insurer of deregistered companies – whether policy was issued – whether insurer was insurer on risk – policies issued to deregistered employers – work performed within description of business covered by policy – dual insurance not relevant to entitlement to grant of leave

DUST DISEASES – occupational diseases – date of last employment – deeming provisions – business of employers in the coal industry

Legislation Cited:

Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), ss 4, 5

Coal Industry Act 2001 (NSW)

Dust Diseases Tribunal Act 1989 (NSW), s 11A

Workers Compensation Act 1987 (NSW), ss 7A, 151AB

Workers’ Compensation (Dust Diseases) Act 1942 (NSW)

Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 9A

Cases Cited:

Avant Insurance Ltd v Burnie [2021] NSWCA 272

Central West Group Apprentices Ltd v Coal Mines Insurance Ltd [2008] NSWCA 348

Mrdajl v Southern Cross Constructions (NSW) Pty Ltd(In Liq) [2018] NSWSC 161

Kuypers v Ashton Coal Operations Pty Ltd [2014] NSWSC 1276

Category:

Procedural rulings

Parties:

Luke Verne Franklin (Plaintiff)
Coal Mines Insurance Ltd (First Defendant)
Workers Compensation Nominal Insurer (Fourth Defendant)

Representation:

Counsel:
S Tzouganatos (Plaintiff)
L King SC / T Rowles (First Defendant)
D Andersen solicitor (Fourth Defendant)

Solicitors:
Slater & Gordon (Plaintiff)
Sparke Helmore (First Defendant)
HWL Ebsworth (Fourth Defendant)

File Number(s):

DDT 2023/7576

Judgment

Introduction

1. By a Second Further Amended Statement of Claim filed by leave in court on 28 August 2024 the plaintiff Mr Franklin seeks damages in respect of the following injuries:

1. Silicosis.

2. Chronic obstructive pulmonary disease (COPD).

3. Mixed dust pneumoconiosis (MDP).

4. Persistent depressive disorder.

2. Mr Franklin alleges that he contracted these diseases through the negligence of his employers, and mine operators, while working in coal mines.

3. Damages are sought on a final basis, where the injuries are said to be attributable to exposure to dust in the State of Queensland. Provisional damages pursuant to s 11A of the Dust Diseases Tribunal Act 1989 (NSW) (the DDT Act) are sought in relation to the injuries if found to be attributable to exposure to dust in New South Wales. An order is also sought for further damages, if additional injuries develop which are attributable to dust exposure in New South Wales.

4. The Second Further Amended Statement of Claim sues nine defendants. Two of those defendants are insurers and the other seven are companies which are still in existence.

5. Mr Franklin also pleads that he was employed by several companies which have since been deregistered. The allegations made in the Second Further Amended Statement of Claim against the deregistered companies are summarised in the following table:

De-registered employer	Dates of Employment	Place of Work	Short Version of Company Name
Bentham Constructions Pty Ltd	April 1979 – September 1979	Clarence Colliery in Lithgow, NSW	Bentham
ACN 000 076 086 Pty Ltd (formerly Allied Construction Pty Ltd)	September 1979 – August 1984	Coal mines at Bulli, Bargo, Huntley, Tahmoor and Lithgow, NSW	Allied Construction
ACN 000 076 086 Pty Ltd (formerly Allied Construction Pty Ltd)	January 1989 – January 1991	Coal mines at Bulli, Bargo, Huntley, Tahmoor, Lithgow and Appin, NSW	Allied Construction
W.G.W. Pty Ltd (formerly Colrok Constructions (NSW) Pty Ltd)	February 1991 – July 1991	Tahmoor, North Cliff, West Wallsend, Westcliff and Metropolitan Collieries, NSW	Colrok
ACN 003 553 099 Pty Ltd (formerly known as Shaft and Tunnel Pty Ltd)	1992 – February 1997	Coal mines at Huntley, Westcliffe and Cordeaux, NSW South Blackwater Coal Mine and Gordonstone Coal Mine, QLD Sewerage plant in Manly, NSW	Shaft and Tunnel
Allied Meridian Pty Ltd	March 1997 – 30 June 1997	Various coal mines, NSW	Allied Meridian
075 964 519 Pty Ltd (formerly Allied Mining Pty Ltd)	1 July 1997 to June 1999	South Bulli Coal Mine, NSW	Allied Mining
Allied Mine Services Pty Ltd (formerly Allied Mining Services Australia Pty Ltd)	1 July 1999 – June 2000	South Bulli Coal Mine, NSW	Allied Mine Services
Thin Seam Mining Pty Ltd	April 2003 – October 2003	Russell Vale Mine in Wollongong, NSW	Thin Seam
Alterrain Pty Ltd	January 2004 – 2010 and 2011 – 2015	Various coal mines around Wollongong, NSW	Alterrain
ACN 001 546 130 Pty Ltd (formerly Alminco Pty Ltd)	November 2003 – May 2004	Various coal mines around Wollongong, NSW	Alminco

6. I will refer in this judgment to the deregistered companies set out in the table above by the short name in the fourth column of the table. I will refer to those companies collectively as “the deregistered companies”.

7. In relation to each of the deregistered companies, the Second Further Amended Statement of Claim pleads that:

1. Coal Mines Insurance Ltd (CMI) was the employer’s indemnity insurer for that company in the coal mining industry in New South Wales.

2. Pursuant to s 151AB of the Workers Compensation Act 1987 (NSW) (the WC Act), CMI is liable to indemnify each company for damage caused to Mr Franklin by negligence of that company.

3. CMI is sued pursuant to the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (the Third Party Claims Act) in relation to allegations against that company.

8. A plaintiff requires a grant of leave to sue the insurer of a deregistered company.

9. By an Amended Notice of Motion filed by leave in court on 25 June 2024 Mr Franklin seeks orders that he be granted leave to continue the proceedings against CMI as the first defendant and the Workers Compensation Nominal Insurer (WCNI) as the fourth defendant. Such leave is sought pursuant to the Third Party Claims Act. The Amended Notice of Motion also seeks a costs order against CMI. Counsel for Mr Franklin acknowledged that he could not, and did not, seek a grant of leave against CMI in relation to any exposure to dust in the Queensland mines.

10. CMI opposed the grant of leave.

11. WCNI was represented at the hearing by Mr Andersen, solicitor. An order was made by consent granting leave to sue WCNI in respect of the alleged liability of Shaft and Tunnel, arising from Mr Franklin’s work as a tunneller at the sewerage treatment plant at Manly.

The Third Party Claims Act

12. Section 4 of the Third Party Claims Act provides as follows:

“4   Claimant may recover from insurer in certain circumstances

(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)  The amount of the insured liability is the amount of indemnity (if any) payable pursuant to the terms of the contract of insurance in respect of the insured person’s liability to the claimant.

(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)  This section does not entitle a claimant to recover any amount from a re-insurer under a contract or arrangement for re-insurance.”

13. In Mrdajl v Southern Cross Constructions (NSW) Pty Ltd(In Liq) [2018] NSWSC 161 at [12], Justice Walton identified four elements in s 4 as follows:

1. There is an insurer in existence.

2. The insurer has issued a policy to the relevant defendant.

3. The policy covers the risk.

4. The policy was in place at the time of the risk.

14. Those four matters were put in issue by CMI, although by the conclusion of the hearing some limited admissions were made.

15. Section 5 of the Third Party Claims Act provides as follows:

“5   Leave to proceed

(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.”

16. In Avant Insurance Ltd v Burnie [2021] NSWCA 272 at [8] the Court of Appeal held that an applicant for leave under s 5 of the Third Party Claims Act is required to establish the following three elements:

1. That there is an arguable case against the holder of the insurance policy.

2. That there is a reasonable possibility that the holder of the insurance policy will be unable to satisfy any judgment.

3. That there is an arguable case that the holder of the insurance policy would, if it found liable to the plaintiff, be entitled to indemnity under the policy - to put it another way, that any liability of the holder of the insurance policy to the plaintiff is, in the language of s 4 o the Third Party Claims Act, an “insured liability”.

17. There was no real debate as to whether the plaintiff could establish these matters. Rather, the dispute was whether CMI was the insurer on risk for each deregistered company.

Occupational Diseases and Date of Last Employment

18. Section 151AB(1)(a) of the WC Act provides as follows:

“151AB   Special insurance provisions relating to occupational diseases

(1)  If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purposes of any policy of insurance obtained by the employer—

(a)  the liability is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due, subject to paragraph (b),”

19. Section 151AB(6) of the WC Act defines “occupational disease” to mean a disease of such a nature as to be contracted by a gradual process. The definition includes a dust disease as defined by the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) (the 1942 Act).

20. The respiratory diseases for which Mr Franklin sues are “occupational diseases” within the meaning of s 151AB. Section 151AB(1)(a) requires the court to make a finding as to the date of last employment of the worker. It is at this date that liability is taken to have arisen. It is then necessary to establish which insurer, if any, was on risk on the last date of employment.

Coal Industry Insurance Before 2002

21. While there was much evidence, and eventually a certain degree of agreement, about the dates when CMI policies were in force, what Mr Franklin must establish for any liability before 2002 is the existence of an appropriate policy of insurance which was current on his last day of work for each of the deregistered companies.

22. Further, Mr Franklin must establish that the work which he did for each deregistered company fell within the description of the business covered by the policy (Tcpt 25/6/24 pp 16/28-17/37 and Tcpt 9/10/24 p 15/11).

23. I have come to the conclusion, for the reasons expressed below, that for each of the pre-2002 deregistered companies:

1. The evidence establishes that there was a CMI policy in force on the last day of each period of employment.

2. The evidence establishes that Mr Franklin was performing work which fell within the description of the business covered by the policy.

24. Counsel for Mr Franklin advanced an alternative argument that s 7A of the WC Act (which is discussed below) is retrospective and thus there is no need to establish the two matters listed in the preceding paragraph. Because I have come to the conclusion that there were in existence, prior to 2002, CMI policies which cover the risk, I will not deal with this alternative argument. It may well arise for decision in a case in the future, if a plaintiff cannot establish the existence of a CMI policy.

Coal Industry Insurance After 1 January 2002

25. Section 7A of the WC Act is as follows:

“Application of Act in respect of coal industry

7A Application of Act in respect of coal industry

(1) The workers compensation company (within the meaning of the Coal Industry Act 2001) is taken to be a licensed insurer that is a specialised insurer under, and for the purposes of, this Act.

(2) However, the following provisions of this Act do not apply to or in respect of the workers compensation company-

(a) Division 6 of Part 4,

(b) sections 156 and 156B,

(c) Divisions 1A, 2-5, 6A and 7 of Part 7.

(3) For avoidance of doubt-

(a) an employee of an employer in the coal industry is not eligible to make a claim under Division 6 of Part 4, and

(b) a person who is taken, under Schedule 1 to the Workplace Injury Management and Workers Compensation Act 1998, to be a worker employed by another person is not entitled to make a claim referred to in paragraph (a) if the other person by whom the person is taken to be employed is engaged in the coal industry.

(4) The workers compensation company is taken to be the insurer under this Act of all employers in the coal industry (whether or not any such employer maintains a policy of insurance with that company).

(5) In this section-

employer in the coal industryhas the same meaning as in the Coal Industry Act 2001.”

26. Section 9A of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the WIM Act) is as follows:

“Application of Act in respect of coal industry

(1)  The workers compensation company (within the meaning of the Coal Industry Act 2001) is taken to be a licensed insurer that is a specialised insurer under, and for the purposes of, this Act.

(2)  However, the following provisions of this Act do not apply to or in respect of the workers compensation company—

(a)  sections 146 and 146A,

(b)  Parts 3, 4, 5, 6, 7, 8 and 9 of Chapter 5.

(3)  For avoidance of doubt—

(a)  an employee of an employer in the coal industry is not eligible to make a claim under Part 9 of Chapter 5, and

(b) a person who is taken, under Schedule 1, to be a worker employed by another person is not entitled to make a claim referred to in paragraph (a) if the other person by whom the person is taken to be employed is engaged in the coal industry.

(4)  The workers compensation company is taken to be the insurer under this Act of all employers in the coal industry (whether or not any such employer maintains a policy of insurance with that company).

(5)  In this section—

employer in the coal industry has the same meaning as in the Coal Industry Act 2001.”

27. Both sections were inserted into the legislation by the Coal Industry Act 2001 (NSW) (the CI Act).

28. It was agreed between the parties that the reference in both sections to the “workers compensation company” is a reference to CMI.

29. Senior Counsel for CMI accepted that for liabilities which arose after 1 January 2002 (when s 7A of the WC Act came into force), CMI would be the insurer on risk “if the business of the employers is in the coal industry, policy or no policy” (Tcpt 25/6/2024 p 16/7).

30. CMI submitted (MFI 3, par 14), and I accept, that:

1. Since 1948 employers in the coal industry have been obliged to insure their workers compensation liabilities with CMI.

2. Section 7A(4) of the WC Act and s 9A(4) of the WIM Act do no more than recognise and continue the long-standing obligation of employers in the coal industry to insure with CMI.

31. The legislative history leading to these conclusions is set out in MFI 3 pp 5-8 and also in Central West Group Apprentices Ltd v Coal Mines Insurance Ltd [2008] NSWCA 348 at [13]-[31] (“Central West”).

Evidence for the Plaintiff

Email dated 5 February 2024 (PX 1)

32. On 5 February 2024 the solicitor for CMI set out a list of CMI policies which applied to some of the deregistered companies. The information in this email is the same as the information in Exhibit PX 5, which is discussed below.

Affidavit of J Wade dated 15 March 2023 (PX 2)

33. Ms Wade, the solicitor for Mr Franklin, swore an affidavit which establishes the initial existence, and the deregistration, of the deregistered companies.

34. Ms Wade stated that WCNI was the insurer on risk for Shaft and Tunnel as at February 1997 for tunnelling work.

Affidavit of J Wade dated 18 October 2023 (PX 3)

35. Ms Wade swore her second affidavit based upon information and belief, from instructions supplied to her by Mr Franklin. Those instructions were as follows:

Bentham

1. Bentham was a mining engineering business. During the time the plaintiff was employed by Bentham, the only contract that company had was to perform work at the Clarence Colliery in Lithgow. The two Bentham brothers, who were the owners of the business, worked with Mr Franklin underground in the coal mine. The duties of the plaintiff as an underground coal miner included dry bore drilling and roof support. This was the first time Mr Franklin had worked in a coal mine, and for that reason he was sent for a medical examination, including a chest x-ray, with the Coal Board.

Allied Construction

1. Mr Franklin was employed for two periods with Allied Construction. That company performed shaft sinking and underground mining construction and provided development services for the coal mining industry. During the time the plaintiff worked for Allied Construction, he only worked in coal mines. During the time he worked for Allied Construction, Mr Franklin made two claims for workers compensation. Both claims were paid by the first defendant CMI. The report in relation to the first injury, completed by Allied Construction, stated that the plaintiff was paid under the Coal Mining Industry (Miners) Award. The report in relation to the second injury stated that Mr Franklin was working at Westcliff Colliery and was paid under the Coal Mining Industry (Miners) Award.

Colrok

1. Mr Franklin says that when he worked for Colrok, the bosses were two brothers being John Rutledge and Paddy Rutledge. They worked underground with Mr Franklin and the company did not work outside of the coal mining industry.

Shaft and Tunnel

1. Mr Franklin says that he was employed as a miner and a mining supervisor by Shaft and Tunnel. Shaft and Tunnel was a civil works and engineering company that worked in both tunnelling and mining. The work the plaintiff did for Shaft and Tunnel was operating a road header. He worked at least 90% of his time in coal mines. He also worked for a period of time in the excavation of the tunnels for the Manly Sewerage Treatment Plant.

Allied Meridian

1. Mr Franklin says that Allied Meridian took over the sublease of the coal lease at the Metropolitan Colliery in Helensburgh, NSW. Allied Meridian only worked at the Metropolitan Colliery and the South Bulli Colliery during the time of the plaintiff’s employment.

Allied Mining

1. Mr Franklin says that Allied Mining was a flow-on company from Allied Construction. It was the same people running the company. Mr Franklin says he was employed as a coal miner and he worked underground operating a road header in the Myuna Colliery. He later moved to the South Bulli Colliery where he ran the mains development and ancillary work.

Allied Mine Services

1. Mr Franklin says that Allied Mine Services was a flow-on company from Allied Mining and Allied Construction. The same people ran the company. Allied Mine Services provided services to the underground coal mining industry in Australia. Mr Franklin says that he was employed as a coal miner and that he worked underground operating a road header in the South Bulli Colliery. Mr Franklin ran the mains development and ancillary work.

Thin Seam

1. Mr Franklin says that Thin Seam was an American company that was brought in to specially perform mining on coal seams that were less than 1.5 metres in thickness. Mr Franklin worked on the Balgownie seam of the Russell Vale Mine as an underground miner.

Alterrain

1. Mr Franklin says that he worked for Alterrain as an underground miner on the South Bulli Mine and the Wongawilli Mine. In the first two years of his employment he did 60% coal work and 40% civil work. In the later years he did 30% coal work and 70% civil construction.

Alminco

1. Mr Franklin says that he was employed by Alminco to perform work recovering the Thin Seam equipment that had been abandoned in the mine when Thin Seam went broke. Mr Franklin worked for Alminco for six weeks to recover the equipment from the mine. Mr Franklin was then moved to another project and was involved in excavating a tunnel between the Avon Dam and Kembla Grange.

Affidavit of J Wade 25 October 2023 (PX 4)

36. The third affidavit of Ms Wade refers to her conferences with Mr John Marsden Williams, who was a director of a number of the deregistered companies. A statement of Mr Marsden is annexed to the third affidavit. Ms Wade says that Mr Williams has approved the statement and has indicated that he is prepared to give evidence to the effect of the statement if he is served with a subpoena.

37. The statement of Mr Williams deals with the coal mining activities of:

1. Allied Construction.

2. Allied Meridian.

3. Allied Mining.

4. Allied Mine Services.

5. Alterrain.

6. Alminco.

38. Omitting formal parts, Mr Williams says in his statement (pars 5-20):

“5.   I was a director of Allied Constructions Pty Limited (ACN 000 076 086) from 30 December 1991 to 2016. The company was established by my father and he was a director from 1948 to 1991. My father established a number of companies with the name Allied at the start of the name. The Allied companies were part of a group of companies controlled initially by my father and then by me.

6.   I was involved in the operations and became intimately aware of the business of Allied Constructions Pty Limited from the 1970's, even before I became a director of the company.   My father started the business, but I was just keeping an eye on it all. From the commencement of my involvement in business, Allied Constructions Pty had a substantial connection with the coal mining industry and performed at least half of its work in the development of coal mines. About the other half of its business was in civil mining and tunnelling.

7.   Our company did so much work in the coal mining industry and employed many workers in the coal mines, and to the best of my knowledge Allied Constructions Pty Limited always had an employers' indemnity insurance policy with Coal Mines Insurance.

8.   Allied Constructions Pty Limited were contracted to the owners of the coal mines to do ‘whole projects’ including the complete development of coal mines. The development phase of coal mining involves mining and sinking shafts, drives and roads through rock and coal.   Coal cannot be extracted from any coal mine without development work being undertaken. Allied Constructions Pty Limited had a substantial connection with the coal mining industry, and for as long as I was involved in the company it maintained a very substantial part of its business employing coal miners and other workers in the development of coal mines including mining shafts, drivages and roads through rock and coal.

9.   During my many years in the coal mining industry, I became very familiar with a company called Allied Meridian Pty Limited. I was not a director of that company but I was involved in its business. Allied Meridian was part of the family of Allied companies conducting substantial business/work in the coal mining industry.   One of my companies Allied Constructions (Contractors) Pty Ltd (now called Allied Industrial Services Pty Limited) was a large shareholder in Allied Meridian Pty Limited. I was a director of Allied Constructions (Contractors) Pty Ltd as was my father and that is how I know about the operations of Allied Meridian Pty Limited.

10.    Two of the directors of Allied Meridian were Geoffrey O'Donnell and Hugh Gordon. They were also directors of Allied Constructions Pty Limited and Allied Constructions (Contractors) Pty Ltd. I know both men very well and worked with them for many years.

11.   The sole business of Allied Meridan [sic] Pty Limited was "development" of and in coal mines. It employed coal miners who mined shafts, roads and drivages through rock and coal in coal mines. Anyone who worked for Allied Merdian [sic] was working in a coal mine, either on the development phase or as coal miners extracting coal. Allied Meridian did not do any business in the civil construction industry - its business was only in the coal mines. Allied Meridian had a very substantial connection with the coal industry. To the best of my knowledge, it paid yearly insurance premiums to Coal Mines Insurance to maintain employers' indemnity insurance for its workers.

12.   I was a director of Allied Mining Pty Ltd (ACN 075 964 519) between 2004 and 2007. This was another company in the Allied family of companies. I am intimately aware of the business of Allied Mining Pty Limited as it was another company related to Allied Constructions Pty Limited and within the Allied family of companies. Hugh Gordon and Geoffrey O'Donnell who were directors of Allied Constructions started Allied Mining Pty Ltd.

13.   Allied Mining Pty ltd only every [sic] worked in the coal industry. It employed coal miners to perform the development phase work in coal mines and it also employed coal miners to extract coal. This company did not do any work/business outside of the coal mines. During the time I was involved with Allied Mining Pty ltd, to the best of my knowledge, it held an insurance policy with Coal Mines Insurance and it paid the premiums to Coal Mines Insurance every year for employers' indemnity insurance.

14.   I was a director of Allied Mine Services Pty Limited (formerly known as Allied Mining Australia Pty Limited) ACN 087 983 560 from November 1999 to October 2003. Geoffrey O'Donnell was also a director of this company.

15.   During the time I was involved with Allied Mine Services Pty Limited from 1999 to 2003 the company always worked in the coal industry. To the best of my knowledge It always held an insurance policy with Coal Mines Insurance and it always paid the premiums to Coal Mines Insurance every year. Allied Mine Services did contracts and projects in coal mines. The contracts and projects concerned the ‘development phase’ of the coal mines, and focused on the development roads in and out of the coal mines. It also employed coal miners who worked extracting coal. The company did not do any business outside of the coal mining industry. It always had a very substantial connection to the coal mining industry.

16.   I was a director of Alterrain Pty Limited, ACN 107 287 702. Luke Franklin was also a director and employee of this company. I was a director from 2003 to 2009 and I was company secretary from 2003 to March 2013.

17.   During the time I was involved with Alterrain the company performed substantial work in both the coal industry and the civil construction industry. When Luke took over the company he did more civil work than coal work but the company always maintained a very substantial connection with the coal mining industry and derived very significant amount of its business working in coal mines. To the best of my knowledge, the company always had insurance in place with Coal Mines Insurance and paid the premiums every year.

18.   I was a director of Alminco Pty Limited (ACN 001 546 130) from January 1992 to about June 2004.

19.   During the time I was involved with Alminco Pty Limited the company provided machinery and equipment predominantly for the coal mining industry. It employed workers to ensure the coal mining machines were operational and also to problem solve any issues with the machines. To the best of my knowledge, it always held an insurance policy with Coal Mines Insurance and it always paid the premiums to Coal Mines Insurance every year.

20.   I am aware of the company called Allied Plant Services Pty Limited (ACN 104 715 559). It is now called BIS Quarries Pty Ltd.   I was a director of this company from 14 May 2003 to 7 October 2003. This company was a plant hire company similar to Alminco and it supplied machinery and equipment to the steel and mining industries. It always had a very substantial connection with the coal mining industry and derived significant business from it. To the best of my knowledge, it always had insurance with Coal Mines Insurance for its workers in the coal mining industry.”

Affidavit of J Wade dated 24 June 2024 (PX 5)

39. Ms Wade annexed to her affidavit a paginated bundle of documents which had been provided to her by the solicitors for CMI.

Other Insurers

40. Pages 1-29 of the annexure consisted of enquiries made with the State Insurance Regulatory Agency (SIRA) to ascertain whether the deregistered companies had taken out workers compensation insurance. SIRA provided a table (pp 23-27 of the annexure) showing that such policies had been taken out with insurers, other than CMI, by: Allied Constructions; Shaft and Tunnel; Allied Meridian; Allied Mining, Thin Seam, Alterrain and Alminco.

Alterrain

41. One of the documents annexed was a bundle of material from CMI relating to Policy M030 issued in favour of Alterrain. The relevant part of the insuring clause is clause 3(b) which is to be found at p 32 of the annexures. It provided that CMI will indemnify Alterrain against any amount which Alterrain becomes liable to pay “independently of the Act” (meaning a payment other than compensation under the WC Act) for any injury to any person.

42. Clause 4 of the Policy (p 32 of the affidavit) provided that the policy applies to a business or industrial activity described in the Schedule of Employee Particulars.

43. The Schedule of Employer Particulars is at p 40 of the annexures. The business or industrial activity of Alterrain was said to be “Earthworks”. The location of the operations was said to be “Metropolitan Colliery”.

Allied Construction

44. Page 79 of the annexures to the affidavit is a reference provided on the letterhead of Tahmoor Colliery by A J Pryor, Master Sinker. The reference is dated 30 May 1990 and speaks highly of Mr Franklin “as a miner and shiftboss at Tahmoor No. 3 Shaft”. This would have been during the second period of employment with Allied Construction.

Thin Seam

45. Page 80 of the annexures to the affidavit is a “Form of Appointment by Manager” on the letterhead of Thin Seam. By the form, Mr Paul Coxhead, manager of the Balgownie No. 1 Colliery appoints Mr Franklin to give technical instructions under various legislation and codes of practice. Mr Coxhead has signed the appointment against the date 8 April 2003, but Mr Franklin has accepted the appointment by signing against the date 8 April 2002.

Affidavit of T Keizer dated 7 June 2024 (PX 6)

46. Ms Keizer is the Group Leader of Legal Services in the employ of CMI. Ms Keizer sets out the policies (of which she was then aware) that CMI issued relating to certain of the deregistered companies. Those policies were:

1. Bentham: Policy B678 for the period 3 January 1977 to 1 October 1984.

2. Allied Construction: Policy B543 for the period 1 October 1969 to 30 June 1999.

3. Shaft and Tunnel Pty Ltd: Policy B805 for the period 3 March 1993 to 19 November 1999.

4. Allied Meridian: Policy B852 for the period 3 February 1997 to 24 April 1999.

5. Thin Seam: Policy P021 for the period 1 August 2001 to 6 June 2003.

6. Alterrain:

1. Policy P171 for the period 13 September 2004 to 20 September 2006.

2. Policy M030 for the period 7 February 2011 to 3 June 2011.

3. Policy M692 for the period 17 April 2014 to 30 June 2014.

Newspaper Article (PX 7)

47. The plaintiff tendered an article from the Sydney Morning Herald newspaper dated 3 November 2003. The article concerned the financial collapse of Thin Seam, which had been engaged to do specialised mining in the Illawarra area.

Thin Seam Letter (PX 8)

48. The plaintiff tendered a letter dated 25 July 2001 from Thin Seam to the General Manager of CMI. The letter was presented by Thin Seam in support of their request for CMI to provide workers compensation insurance in its first year of operation. Attached to the letter was a CMI Employer’s Indemnity Proposal indicating that the nature of the business of Thin Seam was “Contract Coal Mining”. Also attached to the letter was a CMI Premium Quotation Sheet by which CMI noted that the risk to be covered was an “underground coal mine at Russell Vale”. This document was signed by CMI as being agreed on 13 August 2001.

Affidavit of J Wade dated 5 August 2024 (PX 9)

49. Ms Wade deposes that CMI produced four more files on 12 July 2024 evidencing the existence of further insurance policies and files which may relate to the proceedings. This led Ms Wade to issue a further Notice to Produce which is annexure JLW-4 to this affidavit.

Plaintiff’s Further Tender Bundle (PX 10)

50. This bundle contained further documents produced by CMI which related to the existence of CMI policies issued to some of the deregistered companies, or which contained correspondence concerning CMI insurance provided to some of the deregistered companies. In view of the analysis of all of the material in the case, contained in the CMI document MFI 13, it is unnecessary to describe this material in detail.

Plaintiff’s Second Further Tender Bundle (PX 11)

Colrok

51. PX 11 is paginated. Pages 1-9 of PX 11 is an ASIC search for W.G.W. Pty Ltd. The search showed that the prior name of that company was “Colrok Constructions (NSW) Pty Ltd”. Pages 10-11 of PX 11 contained an Employers’ Indemnity Proposal made to CMI by “Colrok Constructions”. It is dated 3 June 1975. The Proposal contained the policy number “B654”.

52. PX 11 pp 12-13 is an Employers’ Indemnity Proposal made to CMI. The name of the employer is “Colrok Constructions Pty Ltd trading as Colrok”. This Proposal is dated 19 October 1982. The Proposal relates to policy number “654”.

53. PX 11 p 14 is a letter dated 22 April 1988 from Mr Thomas, the accountant for “Colrok Constructions (NSW) Pty Ltd”. It advises the Insurance Manager of the Joint Coal Board that Colrok Constructions Pty Ltd has undergone a name change to Colrok Constructions (NSW) Pty Ltd. The letter asks that the name change be recorded on the workers compensation insurance policy number B654.

54. PX 11 p 15 is a Policy Advice on the letterhead of the Joint Coal Board which contains the remark:

“Change of policy name from Colrok Constructions Pty Ltd to Colrok Constructions (NSW) Pty Ltd.”

55. This is noted as a “policy variation” to policy number B654. The document is dated 27 April 1988.

56. PX 11 p 16 is a Workers’ Compensation Renewal Notice issued by CMI to “Colrok Constructions”.

57. PX 11 p 18 is a letter from CMI dated 6 June 1991 to “Colrok Constructions (NSW) Pty Ltd” confirming the currency of workers compensation policy number B654. The letter confirms that an endorsement has been made on the policy in relation to work at the North Cliff Colliery.

58. PX 11 pp 19-20 is a letter dated 5 September 1995 from “Colrok Australia Pty Ltd” to CMI. The letter refers to a meeting with CMI and confirms a request made for review of the current premium rate. The letter says that “Colrok Constructions” ceased trading in October 1994 and “Colrok Australia” was formed in November 1994 with a new shareholder structure. The letter says that in the 1992/1993 year, Colrok Constructions had approximately 49 employees working in the NSW coal industry.

Allied Mine Services

59. PX 11 p 21 is a handwritten document stating that an original CMI policy B543 in favour of Allied Mining Pty Ltd has been transferred to a new policy B927 for Allied Mining Australia Pty Ltd.

60. PX 11 p 22 relates to claims lodged by Allied Mining Australia Pty Ltd on policy B927 from 1 June 1999 to 30 June 2000.

61. PX 11 p 24 is a letter dated 14 June 2000 from CMI to Allied Mining Australia Pty Ltd confirming that the company is fully covered for workers employed in various coal mines in NSW by the CMI policy.

62. PX 11 p 25 is a letter from CMI dated 14 September 1999 to Allied Mining Pty Ltd enclosing a copy of policy B927, which is subject to renewal on 1 October each year.

63. PX 11 p 26 is a Joint Coal Board Policy Advice in relation to policy B927. It records a change of name of the policyholder to Allied Mining Australia Pty Ltd which commenced on 1 July 1999.

64. PX 11 p 27 is a CMI policy for Allied Mining Australia Pty Ltd for the period 1 July 1999 to 1 October 1999 in relation to “Construction in Coal Mines”.

Findings Concerning Whether There Were Applicable CMI Policies

65. As the hearing of the Amended Notice of Motion has progressed in a piecemeal fashion, more and more documents have been obtained by the plaintiff’s solicitors from CMI. The Keizer affidavit (PX 6) dated 7 June 2024 indicates that by that date CMI was only aware of policies covering the last date of employment for Bentham, Allied Construction, and Allied Meridian. CMI was then also aware of policies for Shaft and Tunnel, Thin Seam, and Alterrain, but those policies were thought to be not current as at the last date of employment. CMI did not acknowledge the existence of any policies for Colrok, Allied Mining, Allied Mine Services or Alminco.

66. By the final day of hearing, further documents obtained from CMI were tendered, and Senior Counsel for CMI produced a table setting out CMI’s final position regarding insurance for each deregistered company (MFI 13).

67. As recited above, a plaintiff seeking leave under the Third Party Claims Act must show the following elements:

1. There is an insurer in existence.

2. The insurer has issued a policy to the relevant defendant.

3. The policy covers the risk.

4. The policy was in place at the time of the risk.

Element 1: There is an Insurer in Existence

68. Element 1 is satisfied in relation to each deregistered employer. CMI has been in existence since 1948.

Element 2: The Insurer Has Issued A Policy To The Relevant Defendant

69. In relation to Element 2, the following table, adapted from the CMI document MFI 13, summarises the evidence by setting out the short name of each deregistered company, the end date of the period of alleged employment, and the CMI policy issued to the deregistered company and in force on the last date of employment:

Short Name of Company	Last Date Period of Alleged Employment	CMI Policy in Force on Last Date of Employment
Bentham	September 1979	B678 (3/1/1977-1/10/1983)
Allied Construction	January 1991	B543 (1/10/1969-30/6/1999)
Colrok	July 1991	B654 (9/6/1975-29/10/1994)
Shaft and Tunnel	February 1997	B805 (3/3/1993-19/11/1999)
Allied Meridian	30 June 1997	B852 (3/2/1997-28/4/1999)
Allied Mining	June 1999	B543 (30/1/1997-30/6/1999)
Allied Mine Services	June 2000	B927 (1/7/1999-1/7/2003)
Thin Seam	October 2003	P021 (1/8/2001-6/6/2003)
Alterrain	2015	M692 (17/4/2014-30/6/2014)
Alminco	May 2004	No CMI policy in evidence

70. Thus, CMI accepts that it issued policies to all deregistered companies except Alminco.

Issues Raised by CMI in MFI 13

71. MFI 13 CMI raises the following issues in relation to the existence and applicability of CMI policies:

1. In relation to Bentham, Allied Construction, Shaft and Tunnel, Allied Mining and Allied Mine Services, there was a CMI policy, but because there were workers compensation policies issued by other insurers, there is “dual insurance”.

2. Colrok – CMI does not indemnify Colrok, because its policies were issued to different entities.

3. Thin Seam – the last date of employment is outside the period of insurance, invoking s 151AB of the WC Act.

4. Alterrain – the last date of employment is outside the period of insurance, and Alterrain was not an employer in the coal industry.

5. Alminco – there is no CMI policy of insurance in evidence, and Alminco was not an employer in the coal industry.

Dual Insurance

72. CMI tendered a large folder of material (DX 1) which showed that many of the deregistered companies had taken out workers compensation policies with insurers other than CMI. A summary of the workers compensation policies taken out with insurers other than CMI was provided to the court as part of MFI 13. The plaintiff did not dispute that many of the deregistered companies had taken out such policies.

73. The existence of dual insurance has no relevance to the application made by Mr Franklin for leave to proceed against CMI. If he is entitled to that leave because he can satisfy the requirements of the legislation, then it does not matter that there is dual insurance. If there truly is dual insurance, and if CMI proves to be liable to Mr Franklin upon a final hearing, then CMI can pursue its rights against those other insurers in accordance with the principles of dual insurance.

74. This was a matter acknowledged by Senior Counsel for CMI (Tcpt 9/10/24 pp 3/7, 6/40).

Colrok

75. I am satisfied from the evidence, particularly the evidence summarised above from PX 11, that CMI did provide indemnity to Colrok Constructions (NSW) Pty Ltd between February 1991 and July 1991 under policy B654. Mr Franklin’s case is that he was last employed by Colrok in July 1991. On 6 June 1991 CMI wrote to Colrok (PX 11 p 18) confirming the currency of policy B654, and in particular, advised of an endorsement for the policy to cover work at North Cliff Colliery. This is where Mr Franklin says that he worked for Colrok. That same letter notes that policy B654 ran until 1 October 1991. Thus, the policy described at PX 11 p 18 issued by CMI was in force as at July 1991 when Mr Franklin says that he was last employed by Colrok.

Conclusion on Element 2

76. I find as a fact that CMI had issued policies to all of the deregistered companies, except Alminco. While Mr Williams said in his statement that to the best of his knowledge Alminco had a CMI policy, Mr Williams does not say what his knowledge was or how he acquired such knowledge. I am unwilling to draw the inference that there was an Alminco policy from that vague statement.

Element 3: The Policy Covers the Risk

77. All of the CMI policies are in a statutory form which cover workers compensation liabilities, which of course includes any liability for damages as well as statutory compensation.

78. For pre-2002 liabilities, I find that the work which Mr Franklin did for each deregistered company (Bentham, Allied Construction, Colrok, Shaft and Tunnel, Allied Meridain, Allied Mining and Allied Mine Services) fell within the description of the business covered by the policy. The evidence which will be called from Mr Franklin himself (set out extensively in PX 3, which is summarised above) shows that he worked in underground coal mines, usually as a coal miner.

79. For post-2002 liabilities, I am satisfied (subject to Element 4 dealt with below) that the CMI policies for Thin Seam and Alterrain covered the risk. Mr Franklin says that he worked for Thin Seam as an underground miner in the Balgownie Seam of the Russell Vale Mine, and for Alterrain as an underground miner at the South Bulli Mine and the Wongawilli Mine.

80. In relation to Alminco, I am not so satisfied, for the following reasons:

1. There is no evidence of a CMI policy. One would expect the plaintiff’s detailed forensic analysis of all documents produced in these proceedings by CMI would have turned up a CMI policy if one existed, given that the Alminco employment was later in Mr Franklin’s career.

2. For s 7A of the WC Act to apply to deem CMI to be the insurer, the phrase “employer in the coal industry” requires “a substantial connection between the entity and the coal industry… beyond merely being the employer of a person who works in and about a mine” – Central West at [50]; Kuypers v Ashton Coal Operations Pty Ltd [2014] NSWSC 1276 at [55] (Kuypers).

3. Mr Franklin did not work as a coal miner for Alminco, but says he was performing work for Alminco recovering the Thin Seam equipment which had been abandoned in the mine. There is no description of the work actually performed. Whether he was even working in the mine itself is not explained.

4. Mr Williams says that the business of Alminco was providing machinery and equipment for the coal mining industry. He says nothing about recovering the Thin Seam equipment.

81. The evidence thus does not establish that Alminco was an employer in the coal industry, meaning that s 7A of the WC Act does not operate to effectively deem CMI to be the insurer on risk.

Element 4: The Policy was in Place at the Time of the Risk

82. For all of the pre-2002 periods of employment, the evidence establishes that there was a CMI policy in place as at the last date of employment by each of the deregistered companies.

83. For Thin Seam and Alterrain, there is evidence of policies in existence at dates earlier than the last date of employment. In relation to Thin Seam, there was a CMI policy which ran until 6 June 2003, but there is no evidence of a policy in place as at October 2003. In relation to Alterrain, there was a CMI policy which ran until 30 June 2014, but there is no evidence of a policy in place at the last date of employment, which was an unspecified date in 2015.

84. However, Thin Seam and Alterrain employed Mr Franklin as an underground coal miner. That means that both were employers in the coal industry, as that phrase is to be understood in accordance with the decisions in Central West and Kuypers. Thus s 7A(4) of the WC Act applies and CMI is “taken to be the insurer” of Thin Seam and Alterrain, “whether or not any such employer maintains a policy of insurance with that company [CMI]”.

85. I find that CMI is taken to be the insurer of Thin Seam and Alterrain at the time of the risk.

86. I decline to make such a finding in relation to Alminco, for the reason set out above ie s 7A does not apply and thus CMI is not taken to be the insurer of Alminco.

Conclusion and Orders

87. It is appropriate to grant leave to Mr Franklin under s 5 of the Third Party Claims Act to sue CMI for the liabilities of all deregistered companies, except Alminco, because:

1. There is an arguable case in negligence against each holder of a CMI insurance policy.

2. It is certain that the holder of each CMI insurance policy will be unable to satisfy any judgment, as it is a deregistered company.

3. There is an arguable case that the holder of each CMI insurance policy would, if it found liable to Mr Franklin, be entitled to indemnity under the policy.

88. The parties requested that the costs of this application be reserved.

89. The orders of the Tribunal are:

1. Subject to order (2) grant leave nunc pro tunc to commence and continue these proceedings against the first defendant Coal Mines Insurance Ltd in relation to the claims pleaded in the Second Further Amended Statement of Claim against deregistered companies.

2. Decline to grant such leave in relation to the claim pleaded in pars 95-103 of the Second Further Amended Statement of Claim.

3. Reserve the costs of and incidental to the Amended Notice of Motion filed on 25 June 2024.

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Decision last updated: 16 October 2024