Manufacturers Mutual Insurance Limited v Hooper

[1988] HCATrans 321

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S58 of 1988

B e t w e e n -

:MANUFACTURERS' MUTUAL INSURANCE

LIMITED

Applicant

and

JOHN EDWIN HOOPER

Respondent

Application for special leave to

appeal

MASON CJ

WILSON J

TOOHEY J

Manufacturers

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 DECEMBER 1988, AT 9.58 AM

Copyright in the High Court of Australia

S1T2/l/SH 1 9/12/88

MR C.G. GEE, QC:  May it please Your Honours, I appear with

my learned friend, MR J.D. HISLOP, for the applicant.

(instructed by Dexter, Healey & Co)

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friend, MR D. JENKINS, for the respondent.

(instructed by Michael Rosser & Co)

MR GEE:  Your Honours, this is an application which was stood

over from 12 August, pending the outcome of a matter

in this Court in which judgment had not yet been given.

MASON CJ:	Yes.
MR GEE:	The decision in question was a case of WORKERS'

COMPENSATION BOARD OF QUEENSLAND V TECHNICAL PRODUCTS

PTY LTD, Your Honours. I hand up four copies of that.

MASON CJ:  Yes. We have got pamphlet copies of that judgment.

Has it been reported in the meantime?

MR GEE:  Not that I know of, Your Honour, and I have only

got - - -

MASON CJ: Well, you need not concern yourself with handing

up the copies.

MR GEE:  Yes, I am obliged to Your Honour. I am also - we will

put in at the moment, Your Honours, copies of a
decision of His Honour Mr Justice Carruthers in the
supreme court in April this year of CROKER V HAINES,
the relevance of which, if any, to the application
is because it gives some insight into the number of

cases that could conceivably be affected by the point

at issue in this application.

MASON CJ:  Now, the legislation has been changed, has it not,

Mr Gee?

MR GEE: It has, Your Honour.
MASON CJ:	And CROKER V HAINES is designed to meet that possible

objection that this is a dead point for the future.

MR GEE:  Yes. That is the object of giving·Your Honours this

case. I am, therefore, anticipating what might be

put against us but - - -

MASON CJ:  Yes, I appreciate that. I think you are wise to

deal with it immediately	because, at the moment, it
does loom as an obstacle	to the success of this
application.

MR GEE:  Yes, I will do so, Your Honour. If Your Honours would

be good enough to go to the bottom of page 3 of the

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typescript of this judgment of His Honour

Mr Justice Carruthers, His Honour, in the very

last sentence, said:

It would be of assistance -

This was an application to dispense with a jury

for the hearing of a supreme court case, Your Honours
and one of the things that was agitated considerably

was the impact of delay upon the desirability of

getting rid of the jury which might have the effect

of slowing the proceedings and other proceedings.

So, His Honour concerned himself with collecting

some information about pending proceedings.	At
the bottom of page 3:

It would be of assistance if I referred to figures which have been made available to me

by Mr RA Walker ..... this morning.

The top of the next page:

The number of Jury cases awaiting hearing

in this Court is now 5,167. These are matters

where the case has been set down for hearing,

however -

but -

the rate at which -

they -

are being disposed of has decreased at an

alarming rate.

Pausing there, Your Honours, that would be a combination of the jury cases set down and, therefore,

does not include those cases pending in the supreme

court with juries which had not yet been set down

as at the date of this judgment.	We do not know
the exact number of those or even the approximate

number but it would be, in all probability,

substantial. Those jury cases would not,

Your Honours, I hasten to say, be exclusively

industrial accident cases where a question of

employer's liability insurance was involved. It

would include, for example, those de£amation cases

where a jury had been suimnonsed and cases such as
occupier's liability and other less frequently met

with causes of action but the vast bulk would be

industrial accident cases involving the questions

arising under the compulsory employer's liability

policy in New South Wales.

WILSON J:  But a very much smaller proportion would include

the question of injury suffered by a third party

in respect of the injury to the worker.

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MR GEE:  I accept that, Your Honour, yes. Yes, I do ~ccept

that, Your Honour, and I will come to that in a

moment.

WILSON J:	Yes.
MR GEE:	At the bottom of the page, after His Honour dealt at

length with the speed at which these cases were being

disposed of, His Honour then said, at the very bottom

of page 4:

In addition to this, there are 2,539

matters awaiting hearing in the Motor Vehicle
list; these are non-Jury matters of course.

There are 5,521 matters awaiting hearing in the non-Jury (industrial) list -

which, again', involves the question of the proper

operation of the employer's liability compulsory policy. Those are the figures from the judgment to which I would go, Your Honours, and make the

following further observations: one, leaving out
of account motor car which, of course, are
irrelevant for present purposes, there are something

of the order of 10,000 cases in the Supreme Court of

New South Wales set down, of which a clear 5500

undoubtedly involve the compulsory policy and the

bulk of another 5100 do so. That does, therefore,

not include those cases which have been filed but

not yet set down and it does not include those cases
where the statute of limitations has not yet run

against plaintiffs and where proceedings had not

been filed.

Further, Your Honours, and this, of course,

deals only with the Supreme Court of New South Wales
and business of a cognate nature is frequently

met with in the district court. So that there

must be, on the figures that we are able to put

before Your Honours, trying not to use extravagant

languaee, many thousands of cases in the State as

a whole in which the compulsory policy is in question.

Now, even if, Your Honours, as little as 5 per cent

of all those cases involved injury to third parties

such as in nervous shock claims or the admittedly

rare rescue cases, one·is still dealing with a

very substantial number of cases in which the

point will be very much alive and some of those

cases will be big; some of them will be small in

money terms - we accept that also - but there is a

considerable question of public importance remaining

in relation to the statutory form of policy in

New South Wales, in our respectful submission.

WILSON J: But all the policies would have been entered into

on the basis of RHEEM, would they not?

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MR GEE:  Not necessarily, Your Honour. Some of the policies

would pre-date RHEEM and have been renewed after

RHEEM.

WILSON J:	Yes.
MR GEE:	Yes, that is so, Your Honour.
WILSON J:	So that insurance companies would have ordered

their affairs on the basis of the decision that

you are seeking special leave to ask us to overrule.

MR GEE:  Well, with great respect, no, Your Honour. RHEEM,

after all, decided that the particular case of

consortium fell within the policy, admittedly,
and I have to accept, that there were some

observations obiter that it could embrace cases of other examples of third party injury but the particular point was confined to consortium and,

indeed, it would be, in my respectful submission,

fair to say that a very likely reason why this

Court refused special leave in RHEEM was because

I was naturally obliged to point to the fact that

the very cause of action, that is, loss of

consortium, in RHEEM had been abolished in

New South Wales even by the time the special leave

application came on and so that, when leave was

refused in that case, it was, at least in part,

for the reason that it was regarded as being

litigation about a small rump of cases in any

event and an extinct type of matter, having

regard to the intervention of that legislation.

MASON CJ:  None the less, is it not true to say that RHEEM

stood for the principle that liability under the

policy extended to liabilities consequent upon

an injury to a worker?

MR GEE:  That is so. It has been interpreted by the majority

in the case the subject of the present application,

Your Honour, and I would accept for present purposes

that that is what RHEEM purported to do.

MASON CJ:  So, since RHEEM, the industry generally should have

ordered its affairs on that view of RHEEM.

MR GEE:  Well, perhaps so, Your Honour, but for the reason I

tried to give a moment ago, until and unless there

was a real test and HOOPER is it - the instant case

is it - of whether the statutory policy in every

case extended to third party injury, the industry

could not be expected simply to adopt that position

and the problem with the matter now that it has been

thrust squarely forward in the nervous shock and

rescue contexts, in HOOPER, in our submission, is

that it throws up the fundamental anomaly that the

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third party injury of nervous shock or injury to

a rescuer does not necessarily depend upon any

injury to the worker, an anomaly which was pointed

out in the TECHNICAL PRODUCTS case and, indeed,

which was accepted below in this case and

Mr Gle~son acknowledged before the trial judge -

he, then, being counsel for the present respondent,

Your Honours - that, had there been no injury to the

worker, the policy could not have responded. Now,

that is the fundamental problem that we respectfully

submit must be agitated before this Court to determine.

MASON CJ:  The fact that it has taken four years to throw up a

suitable case on which or in which to challenge RHEEM

rather suggests that the, as it were, frequency of
this question arising is not as great as your

statistical figures might tend to suggest.

MR GEE: Well, Your Honour, that is, with all due respect, a

little speculative. It may be that there have been

a number of cases which, for some reason or other,

such as size, did not lend themselves to the process

and that cases which were looking extremely attractive

from the test point of view may, for example, have been

settled very favourably to insurers who would otherwise

have taken the matter forward and it happens,
Your Honour, that there was a passage of time which

Your Honour has adverted to but, in the world in which we are operating, it is not all that long,

especially having regard to the very delays in the

supreme court lists that His Honour Mr Justice Carruthers

mentioned in CROKER.

WILSON J:  When did the new legislation, the 1987 Act, come into

operation, Mr Gee?

MR GEE:	It came into operation, Your Honour, on 1 July 1987.
WILSON J:	87.

MR GEE:  Yes.

WILSON J: And it is materially different.

MR GEE:  Yes, and the wording of the statutory policy - a

statutory policy remains part of the structure but

the wording thereof is different.

WILSON J:	Yes.
MR GEE:	But, nevertheless, Your Honours, we have, in my

respectful submission, got to the point of showing

that a considerable body of cases in New South Wales

remain to be possibilities for the point. Secondly,

there is, in our respectful submission, a real

question for leave now that TECHNICAL PRODUCTS has

shown that, in the Queensland structure of the scheme,

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which is, for practical purposes, the same as

New South Wales, there is no reason for extending

the operation of the indemnity or the recourse to

the fund beyond the limits of injury to the worker

or his dependants.

MASON CJ:  Of course, TECHNICAL PRODUCTS did not throw doubt

on RHEEM expressly. RHEEM was distinguished on the

basis that it was a different, as it were, statutory

expression.

MR GEE:  Yes, Your Honour.

MASON CJ: But, I suppose you could say that a number of the -

or the reasoning in part would throw some shadow over

RHEEM.

MR GEE:  Your Honour, it is always a little difficult to choose

the right language in which to embody that sort of

idea but if one looks at, for example, the judgment

of Justices Deane, Dawson and Toohey at - - -

WILSON J:  You mean difficult for the Judges or difficult for

counsel talking about what the Judges have said?

MR GEE:  Difficult for counsel, Your Honour. To try and express,

with all proper respect, the proposition that, reading

between the lines - arid not needing a magnifying glass -
between the lines of the judgment I have just referred to

at 17 and 18, Their Honours did not by any means embrace

what had been said in RHEEM as being persuasive.

MASON CJ:  Yes. When you see a sentence commencing with respect

to another decision, it is sufficient for present

purposes to say of that decision.

MR GEE:  Well, Your Honour, I - - -

MASON CJ: It is not exactly a warm and enthusiastic embrace.

MR GEE:  No, Your Honour, and also if I could point to another

phrase that does similar work on the next page in which

Their Honours express themselves by saying that "that

provision was said to encompass liability and to

require the conclusion that" et cetera.

MASON CJ: Yes.

MR GEE:  Your Honours, one almost gets the feeling that the pen

was lifted for the next sentence but, for reasons that

are obvious, namely, that it was not necessary to write the next sentence, Their Honours did not actually offer

any further criticism of the decision but we can at least pray in aid, in addition to that very oblique situation, the fact that His Honour Mr Justice McHugh

in the instant case put forward what we submit are strong reasons for re-examining the matter now that

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the Court of Appeal has lifted RHEEM beyond its

four corners and into the realm of nervous shock

and rescue cases. At the end of the day, Your Honours,

what that process involves, if you reduce it to its

uttermost, is that a policy which says, "We will

indemnify the employer for liability for any injury

to any worker" is said to mean, "We will indemnify

you in respect of liability for damages for injury to somebody else" and that, at the end of the day,

is what is being said and it is being said, Your Honours,

if I may dare advance it a little further, in a context

where injury to the worker is not even a necessary

precondition for that liability in damages to the

third party injured.

Now, we respectfully submit that that demonstrates

that the bootstraps process pointed out by

Mr Justice McHugh has gone to the point where it is

no longer valid for this area.

I should also add, Your Honours, that in the

TECHNICAL PRODUCTS case, in the judgment of

Mr Justice Wilson and Justice Gaudron, there was

a passing reference to RHEEM in which it was simply

put on the basis that RHEEM was of no assistance in

determining the matter for that purpose and, in that

judgment, it was said RHEEM was concerned with a

policy in the form required by the WORKERS COMPENSATION

ACT, a statute which, in our view, is materially

different from the Queensland legislation and

Your Honours, particularly with respect to

His Honour Mr Justice Wilson now sitting, we would

be wanting to say, if we got leave, that that is not

necessarily the case; that the essential features of

both schemes are, in fact, the same, that is, absolute

obligation in the employer to pay compensation, an

expanded meaning of "worker" to include dependants
in the case of death; compulsory insurance in respect
not only of liability to pay compensation but also

liability for damages dehors the Act and so on and

that, at the end of the day, in our respectful

submission, it will be seen that there are no -_,

significant differences which, we would suggest

means that TECHNICAL PRODUCTS is a much firmer guide

than we had before, in relation to the true ambit of

the New South Wales workers compensation policy.

One also has the problem that there is, on any view - I have touched on it so I will not labour it -

the anomaly caused by the fact that liability for

nervous shock and to rescuers does not, itself,

depend, in theory, on injury to the worker. There

may be no injury to the worker.

WILSON J: How can that arise? It did, in this case, did it not?

MR GEE:  Yes.

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WILSON J: There was injury to the worker.

:MR GEE:  Yes, that is so, Your Honour.

WILSON J:  Yes. How can it arise in the absence of injury

to a worker?

:MR GEE:  Well, put in peril, Your Honour. There may be a

situation in which nervous shock is suffered by

somebody who - - -

WILSON J:	Sees a worker put in - - -
:MR GEE:	- - - sees a worker put in peril or a rescuer who

believes that somebody requires rescue, although,

in fact, no injury is sustained by the person

rescued.

WILSON J: Yes.

:MR GEE:  That was dealt with in the instant case by saying,

"Yes, well, that is all very well and that is a fine,

intellectual distinction but, in fact, there was an

injury in this case, so let us not worry about it"

but, in our respectful submission, that rather

elides the problem which is that there is a real

question posed by throwing up the anomaly as to the

true meaning of the policy and the true meaning of

the words under consideration.

The other thing that I would mention,

Your Honours, is that TECHNICAL PRODUCTS is important

in this way: that, in RHEEM, there was a tendency to

expand the word "for" to equate to "in respect of"

and then, having done so, the Court then said, "Well,

that means that we can give it the widest possible

meaning". Now, TECHNICAL PRODUCTS makes it clear

that even the phrase "in respect of" does not, of

itself, enable the broadest possible connection

between cause and effect to be embraced in the policy.

Those are the submissions for the applicant.

MASON CJ:  Thank you, Mr Gee. Yes, Mr Jackson.

:MR JACKSON:  Your Honours, there are three reasons, in some

respects, overlapping, why in our submission special

leave should not be granted. May I state them first

and then proceed to develop them?

MASON CJ:	Yes.
:MR JACKSON:	The first is that the case concerns the terms of

a policy provided for by statute. The statute has

now been repealed and the replacing statute does

not contain sufficiently similar provisions. The

second is that,even if the Act had not been repealed,

the insurance structure in New South Wales, unlike

that in Queensland, is such that the issue could

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only have arisen very infrequently and the third

thing is that, whatever might be the case if one

were looking at the issue entirely afresh, it is

one which has been treated in this State as

settled by a line of decisions.

Your Honours, could I go to the first of those

matters; that is, the repeal of the statute.

Your Honours, such general application as this case

might be thought to have or to have had, derives from

the fact that the form of policy follows that required

by a statute. Your Honours, I do not need, I think, to

go through the terms of the statute. It is sufficient

to say that there is simply no provision in the 1987

Act which, on any view, could equate to the relevant

part of section 18(1) of the former Act. What that

means, in short, is that the present issues have

relevance only to cases which are first, as yet

undecided and secondly, arose prior to 1 July 1987.

Your Honours, may I move from that to the second

aspect and it is this: the general relevance of the

case is very limited. That is emphasized when one

looks at the factual circumstances in which the issue

can arise. The first thing to note about that is that

the issue does not arise every time there is an injury
to a person who is not an employee, such as a person

seeking to effect a rescue or a person suffering

nervous shock. It does not arise in every such case.

The issue will not arise unless those circumstances

exist, of course, but something more is yet required

and that is that the employer is either uninsured in

respect of public liability or is insured in respect
of public liability but with an insurer other than the
workers' compensation insurer. So, the issue does not
arise in every case where there is rescue or nervous
shock. There has to be either a lack of insurance in

respect of public liability or insurance with another

insurer and those combinations of circumstances must

exist or have existed because it is all historical now,

of course, but rarely.

Your Honours, there was a much greater potential for them to occur in Queensland because there the

WORKERS COMPENSATION ACT, 1916, gave or gives the

Workers' Compensation Board a monopoly in this class

of insurance; that is, in respect of common law

extension, if I could call it that, so that the

potential for conflict exists in Queensland, has for

many years and continues to exist. That appears,

Your Honours, from section 8(1) of the Queensland

Act and I have copies here if Your Honours require those.

Your Honours, those two aspects are the first

two matters with which I wish to deal. The third

one is this: that the case does turn on the provisions

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of the now repealed New South Wales' enactment

and we want to say two things about that, with a

view to demonstrating that the decision of the

Court of Appeal is not attended with sufficient doubt on the one hand but, on the other hand, that

special leave should not be granted.

Your Honours, the first of the two matters is

that the applicant's case turns on section 18(1) of

the Act and turns, :in particular - I do not know if

Your Honours have copies of the WORKERS' COMPENSATION

ACT, 1926.

MASON CJ:	Yes, we have, up to 1 July 1987.
WILSON J:	Yes, I have not, Mr Jackson, I do not think. Have

you got a copy there?

MR JACKSON:	Yes, Your Honour.
MASON CJ:	I think we all need a copy of the old one.
MR JACKSON:	Yes, Your Honour.
MASON CJ:	The one I have apparently does not include the

old legislation.

MR JACKSON:  Your Honours, if one goes to page 127 of the document

I have just handed out, Your Honours will see

section 18(1) at the top of the page and it provides

that:

Every employer shall obtain from an insurer

..... a policy of insurance or indemnity,

conforming to this section, for the full

amount of his liability under this Act to

all workers employed by him and for an

unlimited amount in respect of his

liability independently of this Act for any

injury to any such worker -

Now, Your Honours, necessarily one would think, the

argument on behalf of the applicant would fasten

on the words:

An unlimited amount in respect of his liability

..... for any injury to ..... such worker -

and, no doubt, the case would turn on the relationship

intended to be conveyed by the expression "for".

Your Honours, if one looks at the Act itself,

without reference to any of the decided cases, it

does contain indications that the term "for" is used

as meaning at least 'in respect of". Now, Your Honours,

it may be that,maybe if one were to argue the whole

matter again, the term "in respect of" is to be

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treated as having a meaning which is synonymous

with "for" but the point I am seeking to make, at

this stage, is simply that one does see that the
term "for" is not the only expression used to

describe the relationship in the Act. Could I

give Your Honours two references in that regard.

The first is in section 18(6). That appears at

page 130 and, Your Honours, it deals with the

case:

Where several persons may become liable in

respect of an injury to the same worker, it

shall be sufficient to obtain a joint policy

in respect of such liability.

And Your Honours will see the words "liable in

respect of an injury to the same worker". One

sees also t-he expression "in respect of" used
in section 18(3B) which is at the bottom of page 129

and, Your Honours, one has to read that with section

6(5)(a): which deals with the position of persons who

are contractors but, it is, perhaps, sufficient to

say, Your Honours, that subsection (3B) says that:

A policy of insurance or indemnity obtained

..... by a principal referred to in section 6(5)(a)

shall to the extent to which it insures that

principal against liability independently of

this Act in respect of an injury to a worker - Now, Your Honours, those provisions suggest, it is

submitted, that the expression in section 18(1) is not to be narrowly construed and that the question

does turn, to some degree at least, upon the terms

of the New South Wales' Act.

Your Honours, the second aspect is that this case

is the third of three consistent decisions by the

Court of Appeal on the provisions, special leave

to appeal from the second decision having been

refused on the ground, amongst other things, that

the decision of the Court of Appeal was not attended

SH by sufficient doubt.

Your Honours, the first of the three cases was

FINDLAYV WESTFIELD DEVELOPMENT CORPORATION LIMITED,

(1972) 1 NSWLR 422. Your Honours, in that case it

was held that the terms of a policy within the
words of section 18(1) covered the liability of one

tortfeasor to contribute to another under the

tortfeasors contribution legislation.

The second case, Your Honours, was RHEEM,

(1984) 2 NSWLR 370, and it was held in that case

that a claim for loss of consortium was within the

policy.	May I take Your Honours to that decision
for a moment?	Now, Your Honours, the leading

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judgment in that case was that of Mr Justice Glass

with whose judgment Mr Justice Samuels agreed. And and D, His Honour said:

Once it is recognized that the indemnity

in respect of the employer's liability

independently of the Act covers its

liability to the worker's dependants under

the COMPENSATION TO RELATIVES ACT it

follows that the connotation of the phrase

"liability for any injury to any worker"

is necessarily extended beyond liability

to the injured worker himself.

Your Honours, at page 374D, in the sentence

commencing "The construction of the statutory indemnity",

Your Honours will see that the court does not follow an

earlier decision of Mr Justice MacFarlan

to the contrary effect, and then at page 375, Your Honours,
between letters A and Band immediately after the

reference to THIESS BROS PTY LTD V NEW ZEALAND

INSURANCE CO, His Honour says:

All these decisions in my view are founded upon a recognition that the liability of a

tortfeasor for an injury is in modern parlance

not limited to his primary liability to the

injured party but includes as well the

secondary liability he may incur to others

as a result of or consequent upon that injury.

And His Honour expands upon that proposition in the

next paragraph which I would ask Your Honours to

look at.

To the same effect is the judgment of

Mr Justice Mahoney at page 377, the whole of letter A, and also the paragraph of His Honour's judgment commencing between the letters D and E.

Now, Your Honours, in that case special leave

was applied for and refused on 27 December 1984.

And, Your Honours, may I hand Your Honours copies

of the proceedings on that application and the

decision appears at page 17, and the Chief Justice

said half-way down the page that special leave

would not be granted because there was:

not sufficient reason to doubt the correctness

of the conclusion reached by the Court of

Appeal.

Secondly, the matter is one of limited

importance and local importance.

Your Honours, of course, the repeal of section 18(1)

has made it of even more limited importance.

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Now, Your Honours, it is possible, no doubt,

that if one were looking at the matter afresh, the

case might be decided another way but, Your Honours,

the decisions of the Court of Appeal represent one of the possible solutions. Those decisions all go

in the one direction. The Court has already refused

special leave in relation to one of those decisions

and the Act has been repealed.

Finally, Your Honours, we would say two things:

to the extent to which it matters, the decision
reached in the Court of Appeal is, in a sense, the

more humane because it does make available an insured

defendant in circumstances where that might otherwise

not occur. The other feature of it is, as Your Honour

Justice Wilson observed, no doubt, insurers have

given consideration to their premiums in the light of

the decisions to which I have referred.

Your Honours, those are our submissions.

MASON CJ: Yes, thank you, Mr Jackson. Yes, Mr Gee?

MR GEE:  Your Honours, I do not say anything further about the

supposed effect of repeal of the old WORKERS

COMPENSATION provisions in relation to the importance

of the matter.

The question of frequency, in my respectful

submission, is really bound up with that and there
is no way of knowing a priori that there will be

some defendants who are uninsured and have no public

liability cover or that many defendants will have a

different public liability insurer from their

employers liability insurer.

What I wanted to do was to go quickly to the encapsulation by my learned friend of the way in

which he would, in effect, defend the position

on a substantive hearing. First of all, Your Honours,

he suggested that the word "for" in the policy

really must be taken to be the equivalent of "in

respect of" because of the indications he gave.

Your Honours, as I tried to put in my submissions

in-chief, even if one grants that the expression - - -

MASON CJ:	Mr Gee, I think I should interrupt you to say that
the Court does take the view that the question is an
arguable question.  The difficulty in the application,
as we see it, is that you seek to raise a question of
the interpretation in relation to a statute that has
been repealed.
MR GEE:	Your Honour, it is easy to put that and in the case

that I acknowledged before the Court when leave

was refused in RHEEM, it was difficult to answer

because there never would have been many consortium

cases arising out of injuries to female married workers

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Manufacturers

and those few were cut off by the legislation I

adverted to. So that it was quite proper, with
great respect to the Court that refused leave,

to say that that matter was local.

MASON CJ:  I think it is not merely a matter that there is a

reduced number of cases, the answer to which

depends on the resolution of the questior,but that
the legislation is for the future, dead; in other

words the Court's decision is not going to give

ongoing guidance for the future. That is the factor

~hat would weigh in my mind at any rate.

MR GEE:  In terms of injuries to people after 1 July 1987,

Your Honour, that has to be accepted as an unanswerable

proposition but in respect of all injuries prior to 1 July 1987 that could bring into play the problem,

that guidance is still, in our respectful submission,

very much needed and the evidence we have been able

to put before Your Honours suggest that the numbers
are not insignificant and the money is not insignificant.

I am sorry to allow a little heat to enter the

submissions, Your Honours, but - - -

MASON CJ:  I had not regarded it as "heat". I had regarded it

as your normal emotive expression, Mr Gee.

MR GEE:  I have to refrain from a quick answer to that.

Now, Your Honours, as an abstract proposition,

therefore, what Your Honour the Chief Justice puts

is so, that for the future in a general way this

decision will not affect anything but if it is

possible to say, as we submit it is being shown to

the extent available here, that the position of

a large number of parties and people is affected or

may be affected if it turns out that the decision

appealed from is in error, surely does not rob it

T2	of general importance. If it were so that, like
the marital consortium legislation, you could say "There never were many, it's dead, this is the only
one we have ever looked at", then the abstract
proposition would coincide with the grim reality
of practical politics but, in our respectful
submission, there is not that coincidence in the area here.

WILSON J:  But there is this further difficulty, is there not,

Mr Gee, that this is a case where insurers will have

been fixing premiums and conducting their business

in the expectation that the law did operate as it

had been understood to following the - - -?

MR GEE:  Your Honour, that is a speculation that my learned

friend asks the Court to make but even if	it were
the case it is not, with great respect, a	reason to
leave uncorrected error if error exists.	It simply
means that people confronted temporarily	with a
decision that was disadvantageous and

SlT3/l/PLC	15	9/12/88
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who have been awaiting an opportunity to correct it,

may have had to tailor their affairs accordingly.

MASON CJ: Surely, a prudent insurer would tailor its affairs

and arrange its finances in accordance with a

decision of an intermediate Court of Appeal. I would

have thought that from an accounting and other points

of view it would be singularly imprudent to tailor

one's affairs otherwise.

MR GEE: But, Your Honour, two propositions: first of all,

that is granted but I repeat,with r~spect,what I
said about the limited character of the decision
that appeared to throw that up and the basis upon

which special leave was refused in that case largely,

namely it was a dead issue; secondly, Your Honours,

in New South Wales - probably in Queensland but I

cannot speak - premiums for this class of business,

workers' compensation and employers' liability

extension are fixed not by the independent unilateral

decision of insurers acting as they may be guided by

their own internal considerations but by a body,

the Insurance Premiums Committee I believe it was

called under the old system, Your Honours, which does

that work for them and it is not legal to charge more

than the premium that is permitted.

It is not as if that freedom of the market-place

and that prudence that Your Honour the Chief Justice

referred to as being - - -

MASON CJ: But surely the industry would exhibit prudence and

take into account the interpretationaE the policy

decided upon by an intermediate Court of Appeal.

MR GEE:  Yes. That is difficult to resist, Your Honour, I

accept that, but that having been stated, it does

not, with great respect, follow that premiums should

continue to remain higher than they would have

otherwise been by reason of the application of that

prudence when the correction of what we respectfully

submit is error would enable a diminution in the

premiums chargeable. After all, that is the practical

consequence of the prudent course that Your Honour

the Chief Justice has identified: people are paying

more for workers' compensation policies than they did

before.

WILSON J:  But there is no room for any reduction now because

of the repeal of the legislation.

MR GEE:  If Your Honour will just allow me to think about that

for a second.

WILSON J: You see, they cannot change their position now, even

if the law was changed.

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Manufacturers

MASON CJ:  They are not going to refund premiums already paid,

are they, if they succeed in this appeal?

MR GEE:  I do not know, Your Honour. That is precisely what

the Insurance Premium Committee might require to occur. If there was an adjustment brought about

by prudent application of RHEEM, there is every

reason to think that there would have to be an

adjustment brought about by reversal of RHEEM which

is what, at the end of the day, this case is about.

WILSON J: Retrospectively?

MR GEE: It can happen, Your Honour. It has happened in

New South Wales.

MASON CJ: It sounds like the dawn of a new era to me.

MR GEE:  Your Honours, in our respectful submission, there are -

well, I am instructed that adjustment is performed

very frequently by the committee up and down and it

is done over five yearly periods which enable

employers to - Your Honours, all that has happened

is that a statement that the industry would have

conducted itself prudently in a certain respect in

the light of what we respectfully submit was error

is but a statement that the matter proves itself

to be of general importance.	Thank you, Your Honours,
those are the submissions.

MASON CJ: This application for special leave to appeal seeks

to raise a question of interpretation of the

statutory form of policy prescribed by the WORKERS

COMPENSATION ACT 1926 as amended as it stood until

July 1987. However, the Act was replaced in 1987

so that a decision on the questions sought to be

raised will have an impact only on such cases as

have arisen under the repealed legislation and are

still outstanding.

In this situation we do not consider that the point is of sufficient general importance to warrant

the grant of special leave to appeal, particularly
when the result of the proposed appeal, if successful,
would be to disturb the interpretation sanctioned by

the decision of the Court of Appeal in RHEEM

AUSTRALIA LTD V MANUFACTURERS' MUTUAL INSURANCE LTD,

(1984) 2 NSWLR 370, on the basis of which the industry

would presumably have ordered its affairs.

The application for special leave to appeal

is therefore refused.

MR JACKSON:	Your Honour, I ask for costs of the application?
MASON CJ:	You cannot oppose that, can you, Mr Gee?

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Manufacturers

MR GEE:  No, Your Honour.

MASON CJ: The application is refused with costs.

AT 10.44 AM THE MATTER WAS ADJOURNED SINE DIE

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Manufacturers