Glenys Anne Syred (As Administratrix of the Estate of Gary Vernon Syred) v BGC (Australia) Pty Ltd
[2004] WASC 87
GLENYS ANNE SYRED (As Administratrix of the Estate of GARY VERNON SYRED) -v- BGC (AUSTRALIA) PTY LTD [2004] WASC 87
| Link to Appeal : | [2005] WASCA 224 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 87 | |
| Case No: | CIV:2861/2001 | 13, 14 & 29 APRIL 2004 | |
| Coram: | PULLIN J | 13/05/04 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Claim dismissed | ||
| B | |||
| PDF Version |
| Parties: | GLENYS ANNE SYRED (As Administratrix of the Estate of GARY VERNON SYRED) BGC (AUSTRALIA) PTY LTD (ACN 005 736 005) |
Catchwords: | Tort Whether duty of care owed by employer to employee to give advice concerning superannuation death cover Whether duty of care owed by employer to employee to give timely advice of cessation of employment to superannuation fund Damages Causation Loss of chance Standard of proof where chance depends on plaintiff's decision to exercise an option to gain a right Evidence Collation of information about insurance premiums Section 79C of the Evidence Act 1906 |
Legislation: | Evidence Act 1906 |
Case References: | Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 Darvall McCutcheon v HK Frost Holdings Pty Ltd (in liq) (2002) 4 VR 570 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 Hill v Van Erp (1997) 188 CLR 159 Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 Meeks v Kirkham [2000] WASCA 94 Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 Perre v Apand Pty Ltd (1999) 198 CLR 180 Price Higgins & Fidge v Drysdale [1996] 1 VR 346 QBE Insurance Ltd v Moltoni Corp Pty Ltd [2000] WASCA 82 Scally v Southern Health Board [1992] 1 AC 294 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Subramaniam v Public Prosecutor [1956] 1 WLR 965 Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16 Bennett v Minister for Community Welfare [1990] A Tort Rep 81048 Caparo Industries plc v Dickman [1990] 2 AC 605 Commonwealth v Amman Aviation Pty Ltd (1991) 174 CLR 64 Cook v Cook (1986) 162 CLR 376 Donoghue v Stevenson [1932] AC 562 Fink v Fink (1946) 74 CLR 127 IlievskaDieva v SGIO Insurance Ltd [2000] WASCA 161 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd [1967] 1 AC 617 Paris v Stepney Borough Council [1951] AC 367 Sullivan v Moody (2001) 207 CLR 562 Tepko Pty Ltd v Water Board (2001) 206 CLR 1 Wyong Shire Council v Shirt (1980) 146 CLR 40 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
BGC (AUSTRALIA) PTY LTD (ACN 005 736 005)
Defendant
Catchwords:
Tort - Whether duty of care owed by employer to employee to give advice concerning superannuation death cover - Whether duty of care owed by employer to employee to give timely advice of cessation of employment to superannuation fund
Damages - Causation - Loss of chance - Standard of proof where chance depends on plaintiff's decision to exercise an option to gain a right
Evidence - Collation of information about insurance premiums - Section 79C of the Evidence Act 1906
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Legislation:
Evidence Act 1906
Result:
Claim dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr M L Bennett
Defendant : Mr M L Greenland
Solicitors:
Plaintiff : Bennett & Co
Defendant : Greenland Brooksby
Case(s) referred to in judgment(s):
Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529
Darvall McCutcheon v HK Frost Holdings Pty Ltd (in liq) (2002) 4 VR 570
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241
Hill v Van Erp (1997) 188 CLR 159
Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
Meeks v Kirkham [2000] WASCA 94
Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170
Perre v Apand Pty Ltd (1999) 198 CLR 180
Price Higgins & Fidge v Drysdale [1996] 1 VR 346
QBE Insurance Ltd v Moltoni Corp Pty Ltd [2000] WASCA 82
Scally v Southern Health Board [1992] 1 AC 294
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
Subramaniam v Public Prosecutor [1956] 1 WLR 965
Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16
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Case(s) also cited:
Bennett v Minister for Community Welfare [1990] A Tort Rep 81048
Caparo Industries plc v Dickman [1990] 2 AC 605
Commonwealth v Amman Aviation Pty Ltd (1991) 174 CLR 64
Cook v Cook (1986) 162 CLR 376
Donoghue v Stevenson [1932] AC 562
Fink v Fink (1946) 74 CLR 127
IlievskaDieva v SGIO Insurance Ltd [2000] WASCA 161
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd [1967] 1 AC 617
Paris v Stepney Borough Council [1951] AC 367
Sullivan v Moody (2001) 207 CLR 562
Tepko Pty Ltd v Water Board (2001) 206 CLR 1
Wyong Shire Council v Shirt (1980) 146 CLR 40
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1 PULLIN J: The plaintiff, in her personal capacity and as administratrix of the estate of her late husband, Gary Vernon Syred, sues the defendant for damages for breaches of duties of care which the plaintiff says the defendant owed to the deceased.
2 In 1999, Mr Syred worked for the defendant as a subcontractor, installing metal roofing on buildings. For a short time between 21 June 1999 and 11 August 1999, Mr Syred worked as an employee of the defendant. He soon became unhappy about the tax that was being deducted from his wages. His sister-in-law (and accountant), Mrs Jill Amanda Stiles, advised him to go back to being a subcontractor. That is what he did on the latter of the two dates referred to above.
3 During the period he was an employee, he became a member of the Buckeridge Group Superannuation Fund. The trustee of the Buckeridge Group Superannuation Fund was a company called Masan Pty Ltd, and it delegated administration of the activities of the Fund to Sedgwick Noble Lowndes, and after July 1999 to William M Mercer Pty Ltd. The defendant made contributions to the Buckeridge Group Superannuation Fund for the benefit of the plaintiff and some of its other employees. Mr Syred had the right to choose what superannuation fund should receive the contributions. He became a member of the Buckeridge Group Superannuation Fund, and the employer contributions were paid to it. Masan Pty Ltd, as trustee of the Fund, held an AMP life insurance policy, pursuant to which employees, including Mr Syred, were insured persons, and under the Fund trust deed, Mr Syred's personal representatives or dependants were entitled to the moneys paid by AMP to Masan Pty Ltd in the event of his death. The AMP policy provided that cover terminated, in effect, 30 days after an employee ceased to be an employee. There was a right conferred under the Fund AMP insurance policy on ex-employees, to obtain a life insurance policy for an amount payable on death not exceeding the amount of the cover under the Fund policy. To obtain this policy, it was necessary for an ex-employee to make an application within two months of ceasing to be a member of the Fund in the form prescribed by AMP. AMP, under the terms of the Fund policy, agreed that it was obliged to issue the new policy upon receipt of such application without requiring any evidence of the ex-employee's health.
4 Late on the night of 7 October 1999, or early in the morning of 8 October 1999, Mr Syred, an apparently fit young man, died suddenly and unexpectedly of a intra-cerebral haemorrhage. This was 58 or 59 days after his employment had ceased.
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5 None of the above facts are in dispute, and I find accordingly.
6 The plaintiff sues the defendant for damages. The plaintiff alleges that the defendant owed to Mr Syred a duty of care:
(a) "to provide accurate and full advice in respect of the contracts of insurance effected pursuant to the Buckeridge Group Superannuation Fund;" and
(b) "to provide to the administrator of the Buckeridge Group Superannuation Fund appropriate and timely information concerning members of the fund leaving employment with the Defendant."
7 The plaintiff pleads that these duties arise as a matter of law and as an incident of the relationship between the defendant, as employer and "sponsor of its own superannuation fund", and Mr Syred, as employee. The plaintiff alleges that the defendant breached these duties.
8 The defendant denies that it owed any duties of the kind alleged. It alternatively denies any breach of the duties if they existed. Finally, it denies that the alleged breaches caused any loss.
9 The plaintiff pleads that some advice about insurance was given to Mr Syred before he became a member of the Buckeridge Group Superannuation Fund, but contends that the advice was not accurate. The defendant denies that it gave any advice at all, but, in effect, does not deny that it conveyed to Mr Syred some information from Masan Pty Ltd about superannuation. There is some uncertainty as to exactly what was given to Mr Syred, and I will therefore relate the evidence and make findings about this point.
10 A Mr Mark Edward Booth gave evidence that he commenced employment with the defendant as the metal roofing manager for the BGC Roofing Division in Bunbury in April 1999. He met Mr Syred in that role. He gave evidence that he remembered that Mr Syred was employed as a contractor installing metal roofing at the time, and that later he became an employee on 21 June 1999. Mr Booth was his immediate supervisor. Mr Booth said that he recalled a meeting with Mr Syred at the beginning of Mr Syred's term as an employee of the defendant. The purpose of the meeting was to hand to Mr Syred certain documents constituting an employee "starter kit". It included an income tax declaration form, a bank details form, an employee contract, and some information about superannuation. The superannuation documents were
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- three in number: a copy of an annual report from Masan Pty Ltd about the Buckeridge Group Superannuation Fund, a single page form for enrolment for membership of the Fund, and, thirdly, a document outlining the superannuation being offered by the Fund. This latter document was described during the evidence as variously a "leaflet" or a "flier". I will refer to it as the "leaflet".
11 Mr Booth, in his evidence-in-chief, said that he had obtained for himself a set of these documents from a more senior employee, a Mr Eric Thompson. He said that he photocopied the leaflet and gave it to Mr Syred. After he left the employment of the defendant earlier this year, he said he took with him the original copy of the leaflet which he said that he had photocopied. This became exhibit "E". Exhibit "E" had two page 7s, no page 8, and the order of pages 9 and 10 were reversed. Mr Booth had not noticed this until this year. Then, in cross-examination, he agreed that it was a possibility that he had obtained a master copy of the leaflet from Mr Thompson which may have had page 8 in it.
12 Interrogatories were administered by the plaintiff, and the interrogatories annexed a version of the leaflet (referring to Mercers as the administrator rather than Sedgwick), with a page 8, without the duplication of page 7, and with pages 9 and 10 in the correct order. The interrogatory administered by the plaintiff asked the deponent, on behalf of the defendant, to look at this version of the leaflet and say whether it was provided to Mr Syred by the defendant or a representative of the defendant. The answer was "no". However, Mercers, on 27 February 2000, before litigation commenced, wrote to the plaintiff's solicitors enclosing a copy of this version of the leaflet and said it was "handed to all employees by BGC for their information when they complete Fund application forms". A Mr Dearson, who worked first with Sedgwicks and then (after its merger with Mercer) with Mercer, gave evidence. In his testimony, he was unable to say what version of the leaflet was actually given to Mr Syred. A perusal of a complete version of the leaflet and exhibit "E", shows that, apart from the missing pages, the only material difference between them was the reference to the name of the administrator.
A leaflet setting out the continuation option was given to Mr Syred by the defendant
13 I find that Mr Booth did give a complete and properly sequenced leaflet to Mr Syred. I find that in the leaflet given to Mr Syred, Sedgwicks was referred to as the administrator. I reach this conclusion
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- because Mr Dearson, who drafted the leaflet, did not make any change to show Mercer as the administrator until a date after Mr Syred received his copy of the leaflet. For clarity, I find that a copy of a leaflet similar to that forming part of exhibit 17 was given to Mr Syred. The only difference between the copy given to Mr Syred and Exhibit 17, is that in the copy given to Mr Syred, the administrator referred to was Sedgwicks rather than Mercer.
14 There are two passages of particular relevance in the leaflet given to Mr Syred. The first is under a heading which reads: "What if I already have cover outside of the Fund?". This is a reference to insurance cover provided by the superannuation fund. Under that question appears the following:
"If you already have cover outside of the Fund, please consider the following issues: …
• If you leave the Fund before age 60, you will be able to take a 'Continuation Option' which allows you to continue the insurance cover for Death and Salary Continuance, (the Total and Permanent Disablement Cover Continuation Option only applies if you leave before age 50). With this 'rollover' of your insurance, you can remain insured without any additional medical evidence, though premiums will rise to personal rate levels."
15 The second passage appeared under a question which read: "What happens when I leave the Fund?"
"If you leave the Fund before age 60, you will be able to take a 'Continuation Option' which allows you to continue the insurance cover for Death and Salary Continuance, (the Total and Permanent Disablement Cover Continuation Option only applies if you leave before age 50). With this 'rollover' of your insurance, you can remain insured without any additional medical evidence, though premiums will rise to personal rate levels. Please contact the Fund on (08) 9426 7700 within 60 days of your termination if you wish to take up this cover."
16 This latter passage in the leaflet is said by the plaintiff to be misleading. Counsel for the plaintiff submitted that it was:
"… a notice that doesn't say to the employee, 'Your death cover terminates 30 days after cessation of employment'. Quite
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- misleadingly, … it says, 'Please contact the fund within 60 days of your termination if you wish to take up this cover', thereby in the context of the paragraph in its entirety, … mistakenly conveying to a layperson that the effect of the policy was that … death cover continued for 60 days."
17 It is true that the leaflet did not disclose that death cover continued for 30 days, but the fact that such a benefit was not revealed is not something which can found a successful claim by the plaintiff. In my opinion, the leaflet gives the impression that cover ceased when the employee ceased to be a member of the Fund, which was at the time of termination of employment. In fact, the cover continued for 30 days. This error is irrelevant.
18 I do not agree with the submission that the leaflet conveys to a lay person that death cover continued for 60 days. The leaflet indicated to an employee that the employee "will be able to take a 'Continuation Option'". It says that this will allow an ex-employee "to continue the insurance cover for Death". It indicates that "with" this rollover of insurance "you can remain insured without any additional medical evidence". It informs an employee that the premiums would rise to "personal rate levels", and it also informs an employee that should he leave the Fund he must "contact the Fund … within 60 days of your termination if you wish to take up this cover". (I have added italics for emphasis).
19 It unambiguously informs an employee that the "Continuation Option", the "rollover" of insurance, will only happen if the employee "takes" such insurance, which requires the person once an ex-employee, to make contact with the Fund in order to "take up" the cover; that the ex-employee "can", and is "able" to, take up the offer to "remain" insured if he takes the action stated, ie the ex-employee has the ability to take up the offer. Although expressed in language different from the policy itself, it makes it clear that action from the ex-employee is necessary if insurance cover is to be obtained, and that is what the policy required.
No breach of alleged duty to provide advice
20 As a result, even if there were any duty imposed on the defendant to give accurate advice, the information in the leaflet was advice informing employees of the benefit they could obtain, ie a life insurance cover without having to undergo a medical examination. The fact that the leaflet referred to 60 days, rather than two months, is not a significant error on the facts in this case. In my opinion, there was no breach of the alleged duty to provide accurate and full advice in respect of the right to
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- gain further cover with AMP. In my opinion, neither of the quoted passages gives the impression that cover continues for 60 days after termination of employment if the ex-employee takes no action.
21 I will make findings about whether there was a duty as alleged later in these reasons.
No duty to give timely information to the Fund about members leaving defendant's employment
22 I now turn to the second duty alleged to have been breached, namely the alleged failure to provide "appropriate and timely information concerning members of the fund leaving employment with the Defendant."
23 It was not until 21 October 1999 that the defendant informed the Buckeridge Group Superannuation Fund administrator, William M Mercer Pty Ltd, of the fact that Mr Syred's employment with the defendant had terminated on 11 August 1999. This was, of course, after Mr Syred's death. Following receipt of this information, William M Mercer Pty Ltd, on 5 November 1999, wrote to Mr Syred (not being aware that he had passed away), enclosing an eligible termination payment statement which had on it a note which read:
"Insurance Continuation Option
Under the current terms and conditions of the Fund's Group Insurance Contract, your cover of $276,035.00 continues for 60 days after you have left employment. During this time, you may have the option to continue your Death Only cover under a personal policy with limited health evidence requirements.
Please call the Fund Administrator of your Fund … for further details."
24 The first sentence in this note is incorrect, because the "Death Only cover" did not continue for 60 days. It continued only for 30 days. The second sentence correctly stated the position. What was said by William M Mercer Pty Ltd, however, cannot, in any way, make the defendant liable for damages. The plaintiff's case is that if the defendant had given advice promptly after Mr Syred's employment terminated, this letter would have been sent by William M Mercer Pty Ltd before Mr Syred died and Mr Syred, in response, would have then taken up the cover AMP offered, before he died.
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25 The first question, therefore, is whether there was any duty on the defendant to provide to the administrator of the Buckeridge Group Superannuation Fund, timely information (meaning at least before Mr Syred's death) concerning the fact that Mr Syred had left employment with the defendant. If there were such a duty, then it was not discharged, and it would then be necessary to make a finding about whether or not Mr Syred would have taken up the continuation insurance.
26 It can be assumed that good administration would require such information to be given, and given as promptly as possible. The issue is, however, whether there exists a duty of care in tort, the breach of which would expose the defendant to a claim for damages
27 In my opinion, there was no such duty imposed on the defendant. Damages for pure economic loss are not recoverable if all that is shown is that the defendant's negligence was a cause of the loss and the loss was reasonably foreseeable. In Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529, Stephen J isolated a number of "salient features" which combined to constitute a sufficiently close relationship to give rise to a duty of care owed to Caltex for breach of which it might cover its purely economic loss. Chief among those features was the defendant's knowledge that to damage the pipeline which was damaged was inherently likely to produce economic loss. Since the Caltex Oil case, and most notably in Perre v Apand Pty Ltd (1999) 198 CLR 180, the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. "Vulnerability", in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, "vulnerability" is to be understood as a reference to the "plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant": Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16 at[22] and [23] per Gleeson CJ, Gummow, Hayne and Heydon JJ. Their honours then referred to Hill v Van Erp (1997) 188 CLR 159 and Perre v Apand Pty Ltd (supra) as cases where persons suffering economic loss could do nothing to protect themselves from the economic consequences of the defendant's actions. Their Honours also referred to Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241, where the financier could itself have made inquiries about the financial position of the company to which it was to lend money, rather than depend upon the auditor's certification of
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- the accounts of the company. See also McHugh J [80] and Kirby at [68] in the Woolcock case (supra).
28 What then is the position in this case? In my opinion, the plaintiff was not, in the required sense, vulnerable as a result of the defendant not informing the administrator of the Fund until 18 October 1999 of Mr Syred's cessation as an employee. Mr Syred had the ability to look after his own interests by making his own enquiries and by informing the Fund administrator that he had ceased employment. If he had wished, he could have told the Fund administrator on the day his employment ceased. He could have (as the leaflet said "contact[ed] the Fund … to take up" the cover with AMP). As a member of the Fund, he was entitled to information under the provisions of the trust deed, and he had been provided with information in the leaflet when he became an employee, advising him, in effect, that upon his employment ceasing and upon him ceasing to be a member of the Fund, he had to do something if he wanted to continue to have "Death Only cover" from AMP. If Mr Syred had contacted the Fund administrator, he would have discovered that if he wanted to continue to have death cover after the expiry of cover under the policy held by Masan Pty Ltd, he needed to fill in an application form in order to obtain the insurance. If Mr Syred had contacted the Fund administrator, he would have been provided with information. Under cl 1.19.1 of the trust deed, the trustee was authorised to provide information to members. Under s 101 of the Superannuation Industry (Supervision) Act 1993, Masan Pty Ltd was required to take steps to ensure that a person in Mr Syred's position could make inquiry about the operation of the Fund in relation to him. There is no suggestion that the trustee, or its administrator, refused to provide information to its members. Indeed, I find that Masan Pty Ltd did provide information, particularly about life insurance held by the trustee for the benefit of members. This is evidenced by the leaflet given to new employees.
29 The Buckeridge Group Superannuation Fund was established in 1993, when Masan Pty Ltd and Esther Investment Pty Ltd (defined in the trust deed as the principal employer) executed the Buckeridge Group Superannuation Fund trust deed. It appears that the defendant was included "in the Fund" (cl 1.14) as an "Associated Employer", whereupon employees of the defendant were then eligible to become members of the Fund (see cl 1.14). Under the trust deed, the "Principal Employer" was entitled to information from the trustee (cl 1.19.2), but there was no provision that an associated employer was entitled to information. However, because of a concession made by counsel for the defendant that the defendant nominated three of the directors to the board of Masan Pty
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- Ltd, and a concession that those directors would have known of the benefits provided to members, and in particular the benefits they might gain under the insurance policy, the defendant de facto had information about the AMP policy.
30 Nevertheless, Mr Syred, as a beneficiary, was in as good a position as the defendant, and in legal terms was better placed, to obtain information from the trustee about the terms of the AMP policy. Thus, it cannot be said that Mr Syred had any inability to protect himself from the consequences of lack of information in a way which should impose a duty, as alleged, onto the defendant. There would only be a duty imposed on the defendant to give timely information, if Mr Syred had been vulnerable in the sense mentioned in the Woolcock case. Mr Syred was not unable to protect himself from the consequence of the defendant's failure to give prompt notice of termination of employment. Mr Dearson gave evidence that many ex-employees contact the administrator of the trust fund to advise that their employment has ceased. These are employees who pay close attention to their own affairs. This provides evidence to support my conclusion that Mr Syred, in fact, had the ability to provide to, and obtain from, Masan Pty Ltd, relevant information about his superannuation, and hence to protect himself from the consequences of any delay on the defendant's part in providing information to the trustee.
31 The leaflet given to Mr Syred by the defendant informed him of the benefit he could obtain under the AMP policy. In my opinion, it was not foreseeable to a reasonable employer in the place of the defendant, who knew that Mr Syred had been given the leaflet, that delay in notifying the Fund trustee of Mr Syred's termination as an employee, would expose Mr Syred to the risk of loss in the way alleged by the plaintiff. A reasonable employer would have reasonably assumed that an employee, if he were interested in continuing to have death cover, would contact the Fund in order to do so, and he had been advised in the leaflet. As a result, the alleged loss was not foreseeable. Foreseeability is a necessary (but not sufficient) condition for recovery: Woolcock Street Investments Pty Ltd v CDG (supra) [34]. I should add that the other factors mentioned by McHugh J at [74] would not otherwise prevent a duty arising.
32 As a result of the foregoing, I find that there was no duty of care owed by the defendant to Mr Syred, requiring the defendant to give Masan Pty Ltd appropriate and timely information about Mr Syred's termination of employment.
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No duty to provide advice
33 Similarly, I hold that the defendant had no duty to Mr Syred to provide any advice in respect of the contracts of insurance effected pursuant to the Buckeridge Group Superannuation Fund. Once again, it was Mr Syred who was legally entitled to ask for information from the Fund about his rights as a member of the trust fund. All that the defendant had an obligation to do, was to make contributions to whichever superannuation fund Mr Syred chose as his superannuation fund. The fund was the Buckeridge Group Superannuation Fund. The defendant had no duty to examine and familiarise itself with the rights of beneficiaries under the fund chosen by employees. It is true that the defendant did have knowledge of the benefits offered under the Buckeridge Group Superannuation Fund through its directors. However, that knowledge created no duty on the defendant to then give advice to the plaintiff about the terms of the AMP policy or other benefits due to Mr Syred as a beneficiary of the Buckeridge Group Superannuation Fund.
34 This is not a case like Scally v Southern Health Board [1992] 1 AC 294, where it was held that there was an implied term in the employment contract, obliging the employer to take reasonable steps to inform an employee of a valuable right contingent on his exercising an option. Reference was made by counsel for the parties in this case, to the cases of Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075 and Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170. Both cases have some similarity to the facts in this case. In both cases, the employee lost the claims brought against the employer. However, neither case, in my opinion, establishes any point of principle bearing upon the issue about whether or not any duty of care was owed by the defendant to Mr Syred.
Causation
35 Finally, I turn to the issue of causation. In view of the findings I have made above, it is not strictly necessary for me to consider this issue, but I will provisionally deal with this subject in case I am wrong in my conclusion that the defendant was under no duty as alleged by the plaintiff and, in any event, did not breach the first duty alleged by the plaintiff.
36 This is a case of pure economic loss, and the loss of the chance which the plaintiff says Mr Syred suffered, was the loss of the chance he had to take up the continuation insurance before he died. The plaintiff has, of course, proved, on the balance of probabilities, that there was
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- insurance to take up. That is a past historical fact. Whether or not the plaintiff would have taken up the insurance is an issue about a past hypothetical fact. In QBE Insurance Ltd v Moltoni Corp Pty Ltd [2000] WASCA 82, Ipp J at [57] referred to Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 and Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 and said that these cases "indicated that where past historical facts are dealt with, the matter in dispute has to be established on the balance of probabilities, but where the court has to rely on past hypothetical facts, it is not possible to decide the issue on the balance of probabilities."
37 However, this is a case where the past hypothetical fact, the realisation of the chance, depended upon whether or not Mr Syred would have decided to take up the insurance before he died. This must be proved on the balance of probabilities, because the plaintiff, in the loss of chance case, must first prove that some loss has been sustained: see Price Higgins & Fidge v Drysdale [1996] 1 VR 346 at 355; Darvall McCutcheon v HK Frost Holdings Pty Ltd (in liq) (2002) 4 VR 570 [29]. If the conclusion is that Mr Syred would have taken up the insurance policy, then the civil standard of proof does not apply to the assessment of quantum of damages. However, there would be no uncertainties or contingencies which would have to be taken into account on the facts in this case, and damages would be assessed at the amount which would have been paid out under the AMP policy, which was $276,035 less the premium for such cover.
38 The significant issue in relation to causation is, therefore, whether Mr Syred would have taken up the option to continue to have death cover if he had been told about it. In considering this issue, I must assume (contrary to my finding that Mr Syred had been told of the option) that he had not been told about the option.
39 Mr Syred is to be respected as a hard and diligent worker who put in very long hours and looked to further the interests of his family through his work and investments. However, he was a man who did not consider all aspects of his financial wellbeing, and did not give sufficient attention to the position his family might find itself in if he did unexpectedly die. This was doubtless because he was young and appeared to himself and others to be, in all respects, fit and in good health. He had a substantial debt burden totalling $460,000 in July 1999. Mrs Syred was concerned about the level of debt and the lack of cover for Mr Syred. Mr Syred held some life insurance policies, but they only provided cover of about $67,000. It was therefore not enough to cover the debt which had accumulated in his development activities (even if the cover under the
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- AMP policy in the Fund is taken into account). The lack of insurance troubled Mrs Syred so much that, in July 1999, she discussed the topic with Mr Syred's sister-in-law, Mrs Stiles (who was an accountant), who made some inquiries about the premiums chargeable for life insurance by Mercantile Mutual.
40 The submission on behalf of the plaintiff was that Mr Syred, if he had been informed about the option under the AMP policy, would have taken it up because he was too busy to undergo a medical examination in order to gain other insurance. However, to take up the insurance he had to make a telephone call and obtain an application form and fill it in. It is not probable that he would have done so before he died. I take into account the fact that Mr Syred had failed to deal promptly with paperwork given to him at the commencement of his employment. He failed to nominate his wife as a dependant in relation to the benefits payable under the superannuation fund. Mrs Syred, who was worried about lack of insurance cover, discussed with her husband the need for more cover in July 1999. However, he had done nothing about it by the date of his death in October.
41 In my opinion, taking all those factors into account, and if there were any duty imposed on the defendant and breaches of either of the duties, then I find, on the balance of probabilities, that Mr Syred would not have taken any steps before he died to exercise the option for continued cover with AMP, even if he had been told about it immediately after he had left the employment of the defendant. As a result, a breach of the alleged duties would not have caused any loss. As I have said, this is a provisional finding, because my finding is that he had, in fact, been told in the leaflet about the option to obtain an AMP policy, and told of the need to make contact with the Fund in order to do so.
42 My conclusion that Mr Syred would not have taken steps to obtain the AMP cover before he died, is fortified by the fact that Mr Syred was keen to do well financially. It would have been relatively expensive to have taken the continuation option with AMP. A significant number of other insurance companies offered a premium lower than the premium offered by AMP and, in my opinion, it is unlikely that Mr Syred (advised by Mrs Stiles) would have been prepared to pay the high premium offered by AMP, as opposed to the cheaper premium rates charged by many other insurance companies. It is true that Mr Syred showed no signs of concern about saving small sums of money, but it was a matter of what would have been easier. To obtain cheaper insurance, he would have to have attended a doctor for a medical check-up. On the other hand, to gain the
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- AMP cover, he had to make contact with the Fund administrator and fill in forms. The easiest course would have been to ask his sister-in-law to obtain a quote and help him gain insurance and make a brief visit to a doctor. In my opinion, Mrs Stiles would have recommended insurance with a company which charged cheaper premiums. It is likely this would have been with Mercantile Mutual.
Reserved ruling concerning the evidence of Mr Rice and MFI 29 and 29A
43 I reserved my decision in relation to an objection made by counsel for the plaintiff in relation to the evidence of Mr Rice and MFI 29 and 29A.
44 Mr Rice was called by the defendant in order to prove what premiums were on offer in 1999 by insurers for $250,000 death cover for a male smoker of Mr Syred's age. The issue arose because the defendant pleaded that even if the defendant did owe a duty of care as alleged by the plaintiff, and there was a breach of that duty, then it did not cause any loss, because Mr Syred would have taken the continuation option in the AMP policy because the premium demanded by AMP was more than the premium for the same cover from other insurers. The evidence of Mr Rice was objected to, and in particular the objection was to the production of a table 26 (MFI 29) from a loose-leaf book prepared and published by Mr Rice's firm, Rice Kachor, which listed premiums charged by over 40 different insurance companies. Rice Kachor sold the book to insurance companies so that they would then have information about what competitors charged when setting their own premium rates. This book was produced and sold as part of Rice Kachor's business and it had a "high saturation rate of sales".
45 Mr Rice was the person with overall responsibility for production of the loose-leaf book and table 26. He supervised staff who gathered the information. The staff who actually gathered the information were maths graduates, who were employed because they were "numerate" and could record the information in a database maintained in Rice Kachor's computer system. The staff were instructed how to gather the information from insurers about their premiums and to gather information about discounts and loadings (for example, loadings in relation to smokers). The insurers provided this information in leaflet or other written form, or orally. This information was then gathered and reproduced in table 26.
46 The fact in issue is what insurers offered (or what invitation to treat was made by the insurers) by way of premiums for "death cover" in the sum of $250,000 for a person of Mr Syred's age and who was a smoker
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- (Mr Syred smoked cigarettes). Evidence of statements made orally or in writing by the insurance staff would be provable by any person who received or heard the statement. The hearsay rule does not prevent a witness from giving evidence of what was said to him by another person, unless the object is to establish the truth of what is contained in the statement: see Subramaniam v Public Prosecutor [1956] 1 WLR 965 at 969 and Meeks v Kirkham [2000] WASCA 94. This is a case where the truth of what the insurers stated as their premium, was not in issue. What was in issue was the premium the insurers demanded.
47 The employees of the insurers who made the statements about the premiums charged were not called. The persons who received the written statements, or heard the insurers state the premium, have not been called. Mr Rice is called to prove that the staff of Rice Kachor recorded the insurers' employees' statements and then entered that information into a computer database, and then from that database table 26 was printed out and incorporated into the loose-leaf book referred to above. Mr Rice proved the system which was used. MFI 29A recorded information given by insurers to Rice Kachor's staff that there had been no adjustment to the relevant part of table 26 in the time up to publication of the book. The question is whether the objection to the production of MFI 29 and MFI 29A and to Mr Rice's evidence should be upheld.
48 The defendant calls in aid s 79C(1) and s 79C(2)(a) of the Evidence Act 1906. These sections read:
"(1) Subject to subsection (2), in any proceedings where direct oral evidence of a fact or opinion would be admissible, any statement in a document and tending to establish the fact or opinion shall, on production of the document, be admissible as evidence of that fact or opinion if the statement -
…
(b) directly or indirectly reproduces or is derived from one or other or both of the following -
(i) information in one or more statements, each made by a qualified person;
…
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- (2) Where a statement referred to in subsection (1) is made by a qualified person or reproduces or is derived from information in a statement made by a qualified person, that person must be called as a witness unless -
(a) he is dead;
…"
"(3) This section makes a statement admissible notwithstanding -
(a) the rules against hearsay;
(b) the rules against secondary evidence of the contents of a document;
(c) that the person who made the statement or the person who made a statement from which the information in the statement is reproduced or derived is a witness in the proceedings, whether or not he gives evidence consistent or inconsistent with the statement; or
(d) that the statement is in such a form that it would not be admissible if given as oral evidence,
but does not make admissible a statement which is otherwise inadmissible."
"'qualified person', in relation to a statement, means a person who -
(a) had, at the time of making of the statement, or may reasonably be supposed to have had at that time, personal knowledge of the matters dealt with by the statement; or
(b) where the statement is not admissible in evidence unless made by an expert on the subject of the statement, was at the time of making of the statement such an expert;"
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51 The word "statement" is also defined in s 79B and it is:
"'statement' includes any representation of fact or opinion whether made in words or otherwise."
52 The "statement" or rather "statements" in MFI 29 and MFI 29A, record the representations of fact by the employees of 40-odd insurers that they offer death cover of $250,000 for a smoker of Mr Syred's age at the premiums set out in table 26. The representations of fact were made by insurers' employees who were qualified persons, because it may reasonably be supposed that each insurers' employee who gave out information about the premium which the insurer demanded, had personal knowledge of that fact.
53 Section 79C(2) provides that the person (ie the qualified person, ie the insurer's employee) must be called as a witness unless one of the paragraphs in s 79C(2) is satisfied. I am satisfied that par (f) and par (g) have been satisfied. In particular, having regard to the time which has elapsed since the insurance employees made statements about the premiums charged, it is unlikely, and it cannot reasonably be expected, that those employees would have any recollection of the conversations and the statements made to Rice Kachor's employees in 1999. Furthermore, having regard to the circumstances of the case, there would be undue delay, inconvenience, and expense in requiring the defendant to subpoena and call over 40 employees of insurance companies to give evidence about the premiums charged by those insurance companies in 1999.
54 I am therefore of the opinion that the evidence of Mr Rice may be admitted into evidence, along with MFI 29 and MFI 29A.
55 I also consider that the same evidence should be admitted pursuant to s 79C(2)(a). This provision allows business records to be tendered under certain conditions. A "business record" is defined in s 79B as:
"'business record' means a book of account or other document prepared or used in the ordinary course of a business for the purpose of recording any matter relating to the business;"
56 In this case, the business record is table 26 of the loose-leaf book referred to above, along with MFI 29A. Table 26 is a document prepared or used in the ordinary course of the business of Rice Kachor for the purpose of recording a matter, namely the premiums charged by insurers.
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- This related to the business of Rice Kachor, which was in the business of selling the loose-leaf books containing the information to the insurance market. The same applies to MFI 29A.
57 Direct oral evidence of the fact that insurers would charge premiums would be admissible on Subramaniam grounds. That statement is recorded in the business record (ie table 26) which is produced, and the statement, having been recorded by the process described above, is now derived from the business records of Rice Kachor.
58 I am satisfied that the loose-leaf book and table 26 (MFI 29) and MFI 29A are genuine business records.
59 The second-hand account given by Mr Rice of what was said by the insurers to the Rice Kachor employees would be objectionable if it were not for s 79C. Objections at common law could be advanced on the ground that the rule against hearsay was infringed insofar as Mr Rice sought to give evidence of what the insurers told his employees, and an objection might have been taken on the basis that table 26, in some part, was secondary evidence of written statements made by insurers about their premiums. Those objections, however, cannot succeed by reason of s 79C(3)(a) and (b).
60 I therefore overrule the objections to Mr Rice's evidence and the two documents marked for identification during his evidence. The two documents marked for identification become exhibits 29 and 29A.
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