Gordon Pacific Ltd v Paul Stewart
[2000] NSWDDT 10
•18 October 2000
CITATION: Gordon Pacific Ltd v Paul Stewart [2000] NSWDDT 10
PARTIES: Paul Stewart
Gordon Pacific Ltd
Comet Valley Gold Mines Pty Ltd
Bernie Lacey Pty Ltd
Whybaton Pty Ltd
New England Antimony Mines NL
Manufacturers Mutual Insurance Ltd
TITLE OF COURT: Dust Diseases Tribunal
JURISDICTION: Original
MATTER NO/S: 62 of 1996
DELIVERED ON: 18 October 2000
DELIVERED AT: Sydney
HEARING DATES: 12 October 2000
JUDGMENT OF: Curtis J
NUMBER OF PARAGRAPHS: 21
CATCHWORDS: Dust Diseases Proceedings - Workers Compensation Act - s 151AB -s 231 Insolvent Corporation - Insurance Guarantee Fund
REPRESENTATION
PLAINTIFF/RESPONENT
Mr CRR Hoeben SC with Mr P Braham instructed by Turner Freeman appeared for the plaintiff/respondent
DEFENDANT/APPLICANT
Mr JT Johnson instructed by PW Turk and Associates appeared for the defendant/applicant
Dust Diseases Tribunal of New South Wales
Matter No 62 of 1996
Gordon Pacific Limited
v
Paul J Stewart
18 October 2000
JUDGMENT
CURTIS J
Gordon Pacific Limited now moves the Tribunal for orders that the statement of claim against it be dismissed and that the plaintiff pay its costs.
On 17 April 1996 the plaintiff issued a statement of claim in this tribunal claiming damages from four mining companies in respect of the disease of silicosis which he contracted over many years in his occupation as a miner. The first named defendant was Silver Valley Minerals NL.
On 31 August 1987 Silver Valley Minerals NL changed its name to Gordon Pacific Limited. On 13 February 1995 an order was made pursuant to s 411(4)(b) of the Corporations Law by the Supreme Court of Queensland approving a scheme of arrangement between Gordon Pacific Limited and its creditors; this scheme terminated on 10 March 1998. The plaintiff having a contingent claim for damages in negligence and breach of statutory duty was a scheme creditor within cl 2 of the scheme of arrangement. Cl 13 of that scheme provided that no scheme creditor shall at any time as from the commencement date and during the continuance of the scheme institute any legal proceedings against the company.
On 9 March 1998 the first defendant, relying upon an affidavit of Phillip Graham Downie, the Administrator of the scheme, deposing to these facts, moved the Tribunal for orders that the plaintiff's statement of claim be amended by the substitution of Gordon Pacific Limited for Silver Valley Minerals NL as first defendant, and that the proceedings against that first defendant be struck out and that the defendant have its costs. Written submissions filed by the defendant concluded as follows:
It is therefore submitted that at the commencement date of the scheme of arrangement the respondent/plaintiff was a person with a future claim in tort against the company for liquidated damages. It follows therefore that he was a creditor of the company within the meaning of the scheme of arrangement in Pt 5.3A of the Corporations Law. A creditor bound by the scheme is not entitled to institute or continue to prosecute legal proceedings against the company: cl 13A.
That motion was listed for hearing on 15 May 1998. On that day the substantive orders sought by the defendant were made by consent including the order for costs. A concession was achieved by the plaintiff in relation to the costs order recorded in the following memorandum.
With regards to the applicant/first defendant's Notice of Motion listed for hearing on 15 May 1998 the respondent/plaintiff's solicitors agree to hold in trust such sum as is claimed by the applicant/first defendant in respect of costs incurred in that motion. Such sum will be held in trust by the solicitors for the respondent/plaintiff immediately on receipt of any moneys in favour of the plaintiff/respondent as a consequence of the subject claims against other defendants in these proceedings.
The respondent/plaintiff agrees to pay immediately such costs out of such trust moneys to the applicant/first defendant on agreement or assessment of such costs. Dated 15 May 1996. (signed Solicitor for the plaintiff/respondent-solicitor for first defendant).
On 27 March 2000 the matter came again before the Tribunal when O'Meally P with the consent of the other defendants granted the plaintiff have leave to amend his statement of claim by the addition of Gordon Pacific Limited as an additional defendant. Gordon Pacific Limited was not served with notice of this application and did not appear.
Gordon Pacific Ltd now moves the Tribunal for an order that the statement of claim be struck out pursuant to Pt 13 r 5 of the Supreme Court Rules upon the basis that no reasonable cause of action is disclosed [Pt 13(5)(1)(a)] and that the proceedings are an abuse of the proceedings of the Court [Pt 15(5)(1)(c)]. The question at issue is whether the plaintiff's claim is absolutely hopeless. Mr Johnson for Gordon Pacific Limited advances three reasons.
DEED OF ARRANGEMENT
The defendant submits that Cl 13 of the Deed of Arrangement, binding on the plaintiff by force of s 444D(1) and s 444A(4)(i) of the Uniform Companies Code, operates as a complete bar to the institution of these proceedings. Cl 13A of the Deed of Arrangement is in the following relevant terms:
13. COMPROMISE
The scheme creditors and the company hereby agree:-
(a)that … as and from the commencement date and during the continuance of this scheme no scheme creditor shall at any time during the continuance of this scheme institute any legal proceedings for or continue to prosecute any legal proceedings instituted on or before the commencement date against the company or any asset of the company in relation to any debt, liability, claim or demand in respect of which such scheme credit is bound by its provisions hereof...
I do not accept this submission. I believe this clause acts as a moratorium upon proceedings rather than a bar. First, if the disentitlement were to operate as and from the commencement date as a permanent bar the words “and during the continuance of the scheme” would be otiose and have no work to do. Second, cl 17 of the deed provides as follows:
17. INTEREST
No debt, claim or demand owed by the company or made against the company to or by any scheme creditor shall bear interest after 21st day of April 1992.
These words, in contradiction to the language employed by s 13 are couched in unambiguous language apt to serve the purpose of a bar in relation to the matter of interest. Third, the reading of the clause as a moratorium makes commercial sense. There may be good reasons, both in the interests of the company seeking protection in a scheme of arrangement, and an interested creditor, which would permit the company to be relieved from the burden of a present debt during the period of arrangement and the creditor to forego the advantage of a sum certain, by postponement of the claim in the chance that the company traded out of its difficulty and became sufficiently solvent to permit payment of the debt in full. In any event the present claim, if successful will be paid from an insurance fund.
CONTRACTUAL UNDERTAKING
The defendant asserts that the plaintiff has bound himself by the following term to be implied in a contract made on 15 May 1998 by which the earlier claim was concluded.
That the proceedings having been struck out no further action will be taken against the defendant at all until the disposition of the proceedings against the other defendants by judgment.
I do not accept that such a term is to be implied into the agreement by which those proceedings were struck out.
The defect in the early proceedings was not that the plaintiff may fail to make out the assertions in his pleading, the defect related solely to the issue of the statement of claim during a period when the defendant was under a scheme of arrangement which in its terms precluded the action. If I am right in construing cl 13 as a moratorium the proceedings could have been properly reissued upon the day following the disposition of the motion because the term of arrangement had then expired.
The mutual intention sufficient to establish an applied term in a contract was expressed by the Privy Council in BP Refinery (Western Port) Pty Limited v Hastings Shire Council (1977) 52 ALJR at 26 as follows:
For a term to be implied the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that `it goes without saying'; (4) it must not contradict any express term of the contract.
The onus of proving that a terms should be implied into a contract rests on the parties so contending (Hineman v The Commonwealth (1938) 38 SR (NSW) 691 at 695) and for a term to be implied it should be obvious. In Sherlaw v Southern Foundries(1926)Limited (1939) 2 KB 206 at 227 MacKinnon LJ said:
Prima facie that which is not in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying: so that, if, while the parties were making their bargain, an officious bystander were to suggest some provision for it in their agreement, they would testily suppress him with the common quote `oh, of course'.
Upon the material before me it is not obvious that the plaintiff in conceding that the earlier proceedings were instituted at a time when the proceedings were precluded by a scheme of arrangement then in place also conceded that those proceedings would also be precluded by operation of a bar rather than a moratorium. Nothing in the material before me leads me to conclude that either party turn their mind to that issue. I am unable then to find that more probably than not the plaintiff would have agreed had such an implied term as is now proposed have been drawn to his attention for acceptance. The question was not addressed by the written submission prepared for the defendant at the time. The concession in relation to the time at which the defendant’s costs were to be paid is a concession equally consistent with recognition of a plaintiff’s inability to pay as it is with concession secured by waiver of a right to sue.
S 231 OF THE WORKERS COMPENSATION ACT 1987
The defendant asserts that by subs(7) of s 231 of the Workers’ Compensation Act 1987, the plaintiff is not entitled to exercise his rights to sue Gordon Pacific Limited without the consent of the Workcover Authority, and this consent has not been obtained. An implication arising from the present proceedings is that the consent will be withheld.
The following further facts are relevant. The plaintiff claims damages in respect of an occupational disease within the meaning of s 151 AB of the Workers Compensation Act. The insurer of Gordon Pacific Limited when the plaintiff was last employed by that company in an occupation to the nature of which his disease was due was NEM General Insurance Association Limited, an insurer now in liquidation and an insolvent insurer within the meaning of s 225 and s 226 of the Workers Compensation Act 1987. In consequence the WorkCover Authority as manager of the Insurance Guarantee Fund established by s 227 is by the operation of s 234 obliged to pay from that fund the amount of any judgement obtained by the plaintiff against Gordon Pacific Limited in respect of his damages.
S 231 is in the following terms,
(1) The authority is by this section appointed the agent and attorney of an employer and a worker insured under a policy of insurance issued by an insolvent insurer.
(2) As agent and attorney of such an employer, the authority may exercise the rights and discharge the obligations of the employer -
(a) for the purpose of dealing with and finalising any claim against which the employer is indemnified under the policy of insurance;
(b) for the purpose of satisfying any such claim or any judgment or award against which the employer is indemnified under the policy of insurance;
(c) For any other purpose prescribed by regulations.
(3) As agent and attorney of such an employer or a worker the authority may exercise the rights of the employer or worker in connection with a policy of insurance -
(a) for the purpose of proving in the winding up of the insolvent insurer and receiving any dividends or other money payable to the employer or worker in the winding up;
(b) For the purpose of recovering any money which the employer or worker is entitled to recover under s 151(z) of this Act or s 64 of the former Act;
(c) For the purpose of recovering any money which the employer or worker is entitled under the policy of insurance to recover from the person who issued the policy, being a policy referred to in paragraph (b) of the definition of ‘Policy of insurance issued by an insolvent insurer’ in s 225;
(d) For any other purpose prescribed by the regulations.
(4) The authority may exercise rights and discharge obligations as agent in the name of the employer or worker concerned, or in its own name.
(5) All rights vested in an insurer or insolvent insurer and all obligations imposed on an insurer or insolvent insurer, being rights or obligations -
(a) arising from or relating to a policy of insurance issued by the insolvent insurer to the employer; and
(b) which may or shall be exercised or discharged for the purpose of -
(i) dealing with and finalising any claim against which the employer is indemnified under the policy; or
(ii) satisfying any claim, judgment or award, against which the employer is indemnified under the policy, are vested in or imposed on the employer.
(6) Subsection (5) shall not be construed so as to vest in or impose on an employer, or to affect in any other way -
(a) a right of an insurer or an insolvent insurer to be indemnified be a reinsurer or an obligation of an insurer or insolvent insurer to be indemnify an employer; or
(b) any other prescribed right or obligation.
(7) If the authority is under this section empowered to exercise any rights or to discharge any obligations, of an employer or a worker as agent and attorney the employer or worker is not entitled, without the consent of the authority, to exercise those rights or discharge those obligations.
(8) The appointment affected by this section may be revoked only by an Act.
The submission of the Defendant overrates the power of agency conferred on the authority by the section. The authority is appointed agent of the worker only for those purposes set out in subs(3). Those purposes do not include the purpose of exercising a right to sue.
The Workers’ Compensation Act 1987 is beneficial legislation. It can hardly have been the purpose of the legislature to confer on the Workcover Authority a power to protect the fund established for the benefit of injured workers by denying a worker the right to exercise his right of suit.
Motion dismissed.
Mr C R R Hoeben SC with Mr P Braham instructed by Turner Freeman appeared for the plaintiff (respondent to the motion).
Mr J T Johnson instructed by PW Turk and Associates appeared for the defendant (applicant on the motion).
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