Mammoth Investments Pty Ltd v GIO General Insurance Ltd - [2003] WADC 259

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: MAMMOTH INVESTMENTS PTY LTD -v- GIO GENERAL INSURANCE LTD [2003] WADC 259

CORAM: VIOL DCJ

HEARD: 20 AUGUST 2003

DELIVERED : 28 NOVEMBER 2003

FILE NO/S: CIV 2061 of 2002

BETWEEN: MAMMOTH INVESTMENTS PTY LTD (ACN 008 735 797)
Appellant
AND
GIO GENERAL INSURANCE LTD (ACN 002 861 583)
Respondent

Catchwords:

Appeal - Application for summary judgment - Claim for premiums due under Workers' Compensation and Rehabilitation Act 1981 - Whether Court has jurisdiction - Turns on own facts

Legislation:

Interpretation Act 1984

Workers' Compensation and Rehabilitation Act 1981

Result:

Appeal allowed
Application for summary judgment refused

Representation:

Counsel:

Appellant: Mr J A Davies
Respondent: Mr T J Kavenagh

Solicitors:

Appellant: Dawson Davies
Respondent: BHK Legal

Case(s) referred to in judgment(s):

Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Clarke v The Union Bank of Australia Ltd (1917) 23 CLR 5
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109

Case(s) also cited:

Attwood v Lamont [1920] 3 KB 571
Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1977) 143 FLR 18
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Goldsoll v Goldman [1915] 1 Ch 292
Hitchcock v Giddings (1817) 4 Price 135; (1817) 146 ER 418
Huddersfield Banking Company Ltd v Henry Lister & Son Ltd [1895] 2 Ch 273
Lewkowski v Bergalin Pty Ltd, unreported; SCt of WA; Library No 7675; 26 May 1989
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177
Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68
Solle v Butcher [1950] 1 KB 671
Svanosio v McNamara (1956) 96 CLR 186
Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410

VIOL DCJ: The appellant ("Mammoth") is a company engaged in a number of businesses including some in agriculture. The respondent ("GIO") is a provider of insurance and an "approved insurance office" within the meaning and pursuant to s 161 of the Workers' Compensation and Rehabilitation Act 1981 ("the Act"). As such it is able to issue and/or renew policies of insurance to an employer against its liability to pay compensation under the Act.
The Act provides a system by which the premiums to be charged by an insurer to an employer are to be fixed; a Committee is appointed to deal with this and the fixing of the rates to apply is determined according to criteria under s 151 of the Act. Generally, Pt VIII of the Act governs premiums and their application. Section 151 of the Act is in the following terms:
"151. Fixing premiums
For the purpose of fixing premium rates to be charged for insurance in respect of all insurable risks under this Act, the following provisions apply -
(a)the Committee shall from time to time -
(i)fix categories of businesses or groups of businesses each with a different insurable risk and specify the types of business or occupation within each category;
(ii)on the basis formulated pursuant to paragraph (b) fix the appropriate recommended premium rate for each category; and
(iii)fix an additional industrial disease premium to cover claims in respect of pneumoconiosis and mesothelioma arising from employment in any mine or mining operation and claims in respect of other industrial diseases as may be specified by the Minister from time to time by notice published in the Gazette, which industrial disease premium shall be paid by employers in classes to be specified by the Committee pursuant to paragraph (c) in respect of such claims;
(b)formulate a basis expressed as a loss ratio for a category or group of categories on which basis the Committee may fix for each category a recommended premium rate pursuant to paragraph (a)(ii); and
(c)the Committee may specify classes of employers specially fixed by the Minister the employers within which class are liable to pay the industrial disease premium at a rate specified by the Committee for that class."
The Act provides for minimum premiums to be charged and loadings which can be charged on recommended premium rates.
Upon the issuing of a policy, or a renewal thereof, involving premiums payable by an employer there is an appeal procedure provided by s 154 of the Act:
"154. Appeals
(1)An employer who is dissatisfied with -
(a)the type of business or occupation on the basis of which an insurer charges the premium required to insure him under this Act;
(b)the amount of the premium which an insurer assesses as required to insure him under this Act at the time of issue or renewal of the policy,
may appeal against the classification to the Commission or against the assessment to the Committee in the manner and within the time provided in subsections (2) and (4).
(2)Within one month of being informed of the classification or assessment to which he objects the employer may give written notice of appeal -
(a)where it is against classification, to the Commission, the Committee, and the insurer; or
(b)where it is against assessment, to the Committee and the insurer,
stating the grounds of his objection and the classification or assessment, as the case may be, he seeks.
(3)Notwithstanding the notice of appeal the employer is to pay the premium as assessed by the insurer and the insurer is to issue or renew the policy.
(4)The Commission or the Committee, as the case requires, may fix a time and place for the hearing of an appeal pursuant to subsection (1) and laying down its own procedure may hear and determine the appeal and in the case of the Commission decide the proper classification or in the case of the Committee decide the proper assessment of the premium not exceeding that assessment initially sought by the insurer.
(5)If the effect of a decision on the appeal is that a lesser sum is payable by way of premium than that already paid to the insurer the insurer shall forthwith repay to the employer the amount of the overpayment and if he does not do so the employer may sue and recover the amount from the insurer.
...
(10)The decision on an appeal provided for in subsection (1) or subsection (7) is final and binding on the parties thereto."
GIO agreed to insure the business of Mammoth in the years 2000 and 2001. Acting on information provided by Mammoth as to estimated wages GIO agreed to insure Mammoth for the year 2000 with a premium required in the sum of $35,978.25. Mammoth paid this premium. In due course an adjusted premium was issued by GIO upon information from the appellant as to the actual wages paid for that year in the sum of $92,021.58. This left a balance of $56,043.33. This amount was not paid by the appellant.
A similar process took place in relation to the year 2001. A premium was ultimately calculated by GIO in the sum of $107,004.01 of which Mammoth paid $45,959.55. This left an amount of $61,044.46. This amount was not paid by the appellant. The total amount of the two "final premiums", that is, $117,087.79, was claimed by the respondent by writ of summons in the District Court. A defence was filed denying liability. There was an application for summary judgment and, to a degree, this was granted by a learned Deputy Registrar of this Court on 20 March 2003. The reasons bear the same date. This is an appeal from the decision of the learned Deputy Registrar in relation to that application.
One of the issues relevant to the matter is the jurisdictional effect of s 154 of the Act. It was the submission of the appellant that such section was permissive, not mandatory. The learned Deputy Registrar appears to have proceeded on the basis that it was the former. In my opinion that interpretation is the correct one; the Interpretation Act 1984, s 56 supports this conclusion, ie that the right to appeal "may be exercised or not" at the discretion of the insured. Further the Act and, in particular, s 154 in its terms does not confer exclusive jurisdiction upon the Committee to deal with disputes arising in relation to the premiums assessed and charged. The legislative framework and the language of the Act suggests strongly, in my view, that the determination of the premiums not only as to the basis but also the rates can be the subject of challenge in a court of competent jurisdiction without the lodging of a notice of appeal to the Committee. I will proceed on the basis that the claim by the respondent, and the defence to it by the appellant, are within the jurisdiction of this Court. As mentioned below, however, this jurisdictional question is very much a matter in issue between the parties.
Turning now to the claim itself and, in so doing, the reasons of the learned Deputy Registrar (and bearing in mind that this appeal is a hearing de novo), after summarising the history of this matter, considering the legislative framework of the Act, the method of calculation of premiums and the affidavits filed on behalf of the parties, the learned Deputy Registrar set out to answer, inter alia, a number of questions:
1.The basis on which the respondent had in fact assessed the premiums;
2.The meaning and intent of the insurance contract relied on by the parties; and
3.The factual basis relied on by each party.
In doing so, the learned Deputy Registrar confirmed that there were difficulties in determining these matters, among others. For example he concluded, at page 3, that the policy document was deficient in that it failed to stipulate the percentage of the wages which are to comprise the premiums and, at page 4, there was no agreement as to the basis upon which premiums are to be re‑calculated. As to the calculation of premiums generally, the actual figures provided were, he found, "somewhat inscrutable". He noted further that he was unable, from the figures provided, "to do anything but make the vaguest of guesses as to precisely how the figures were calculated", citing examples of his difficulties at page 5 and page 6 of the reasons. Also he found that the affidavits were deficient as to the basis of the type of business upon which the respondent issued the policy. Finally he found it difficult to ascertain within the description of businesses and the scales provided under and pursuant to the Act, to find a category to fit that mentioned by the appellant in its application for the insurance.
Having read the Act, papers and generally, I have had similar difficulties - it is very difficult to answer the three questions considered by the learned Deputy Registrar on the pleadings and other documents provided to me.
Notwithstanding the learned Deputy Registrar concluded that, as to the first year's premiums, the respondent should be granted summary judgment for the increased premiums based on the "base rate propagated by the scale" available to him and gave the appellant leave to defend as to the balance of the claims for that year. As to the premiums for the second year, because the respondent had made known to the appellant the rate of calculations to apply and that there was an apparent acceptance of that rate by the appellant, summary judgment should be granted to the respondent for the full amount of that claim.
Finally the learned Deputy Registrar invited counsel to make calculations which would "enable (him)" to quantify the judgments. Having perused the judgment, Act and papers, I have been unable to reach the same conclusion as the learned Deputy Registrar, that is, to place myself in such a position as to be able, on the information and arguments presented to date, to conclude, firstly, that judgment should be entered for the respondent and, secondly, as to any particular amount. In arriving at this result I find that I am in agreement with the appellant as to a number of matters of fact which require argument and resolution before this claim can properly be dealt with. It is said that a mistake was made as to the category of businesses to be used for the calculation of premiums such that the intervention of equity is called for. Whether such a mistake was made and the circumstance in which it was made are matters very much to the issue in this case. Before that can be determined the facts and legal basis upon which the premiums are to be properly calculated must also be determined. If it were to be found that the premiums were based upon a mistake there are consequent issues of law to be determined, that is, as to whether the mistake was "common" or "mutual". Other issues arising therefrom have correctly, in my view, been advanced by the appellant - firstly, whether or not s 153 of the Act has been contravened and the result of such statutory contravention, also, what relief should be granted to the appellant in the event of a mistake being found to have been made as to the basis of calculation. In addition there is an issue as to whether, in the provision of information, the insurance agent was acting as agent for GIO or for Mammoth.
Importantly, also, there is the jurisdictional question arising under s 154 of the Act.
Thus, having considered the available information, both factual and statutory, I have been unable to arrive at a basis upon which a decision as to the application for summary judgment can properly be made.
There are, therefore in my view, important issues of law and fact to be considered and dealt with before this dispute can be properly determined. The appellant has satisfied me that there is a basis upon which this matter should be tried and that therefore summary judgment should not be granted as to any part of the claim by the respondent. There is arguably a good defence on the merits (Clarke v The Union Bank of Australia Ltd (1917) 23 CLR 5 at 8) and there are clearly issues in dispute which should be tried (Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 at 110). Finally, bearing in mind the difficulties encountered by the learned Deputy Registrar including those I agree with and have also found to exist in this matter, there must be real uncertainty as to the plaintiff's right to summary judgment (Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 at 335).
Therefore I conclude that the application for summary judgment should not succeed and that the appeal should be allowed.