Mighell v Five Star Taxis Pty Ltd

[2004] QDC 426

DISTRICT COURT OF QUEENSLAND

CITATION:

Mighell v Five Star Taxis Pty Ltd [2004] QDC 426

PARTIES:

DANIEL LEE MIGHELL

(Plaintiff)

v

FIVE STAR TAXIS PTY LTD

(Defendant)

FILE NO/S:

3875/03

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

District Court

DELIVERED ON:

18^th October 2004

DELIVERED AT:

Brisbane

HEARING DATE:

13^th October 2004

JUDGE:

Forde DCJ

ORDER:

1. The plaintiff’s claim is dismissed
2. It is ordered that the plaintiff do pay the defendant’s costs of and incidental to the action including reserved costs if any to be assessed.

CATCHWORDS:

TRADE PRACTICES ACT – MISLEADING AND DECEPTIVE CONDUCT – STATEMENT BY EMPLOYER RELATING TO INSURANCE COVER - Measure of Damages

Trade Practices Act (1974) Cth ss52, 82, 87.

Campomar Sociedad Limitada v NIKE International Limited (2000)202 CLR 45.

Gates v The City Mutual Life Assurance Society Limited [1985-1986] 160 CLR 1.

Gould and Anor v Vaggelas and Anor [1983-1985] 157 CLR 215.

Henjo Investments Pty Ltd v Collins Marickville Pty Ltd No 1 (1988) 79 ALR 83.

Murphy v Overton Investments Pty Ltd (2004) 78 ALJR 324.

Patrick and Ors v Steel Mains Pty Ltd (1987-1988) 77 ALR 133.

Taco Co. of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177.

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525-526

COUNSEL:

Mr T Matthews for the Plaintiff

Mr D Campbell for the Defendant

SOLICITORS:

McInnes Wilson

Adamson Bernays Kyle & Jones

Introduction

1. On 11 December, the plaintiff, Daniel Lee Mighell, was sitting stationery in a taxi cab he was driving when it was hit from behind by a garbage truck.  The collision caused the driver’s seat to snap.  The plaintiff went backwards and injured his back.  It is not disputed that the plaintiff suffered a permanent disability to his back which prevents him from carrying out his duties as a taxi driver or similar duties[1].   He had only been driving for the defendant Five Star Taxis Pty Ltd for three weeks.   The taxi was owned by the defendant.

   [1] Exhibits 9 to 18; transcript 17.34-49

1. As part of his terms of employment as a self employed driver, the defendant allowed the plaintiff to contribute a daily sum for premiums on policies for the excess payable in the event of property damage and for an income protection scheme.  It is the latter with which this case is concerned.  The plaintiff alleges that the defendant by its servant or agent was misleading or deceptive in providing information as to the extent of the cover.  The plaintiff seeks to recover the sum of $200,000.00. 

Nature of the Insurance Policy

1. The policy held by the defendant was one adopted by the Taxi Council of Queensland.  It provided for 104 weeks of income protection following an injury whilst driving a taxi.  After that period, a lump sum of $200,000.00 is payable to the insured if he suffers from an event listed in the Table of Events[2].  It is common ground that his back injury does not qualify as an event listed in the table.

   [2] Exhibit 2B.

1. The plaintiff was paid the weekly sum for the period of 104 weeks. This amounted to a sum of 53,110.95. The insurer, American Home Assurance Company refused to pay the lump sum[3].  The plaintiff says that if he had known of the limitation in the Table of Events, he would have taken out another policy so that he could recover a lump sum.

   [3] Exhibit 8.

Issues

1. The issues in the case are:

1. The nature of the conversations which occurred on 20 and 24 of November 2000 when the plaintiff alleged that he was told that he was “fully covered” when he asked the defendant about insurance. 
2. Was the said alleged statement made on 20 November by Mr. O’Connor who was the general manager of the defendant, misleading and deceptive?
3. If the plaintiff’s case is accepted that the statement was misleading and deceptive, what loss or damage was suffered?

Nature of Conversations

20 November 2000

1. The plaintiff’s case was that a friend of his, Lance Bethune and the plaintiff,  wanted  to work in together driving the one taxi and working a morning and evening shift. They decided to leave Yellow Cabs where they were working and to seek employment with the defendant.  According to the plaintiff, they attended at the defendant’s yard on 20 November 2000 at about 9.30 a.m.  They met Mr. O’Connor.  The plaintiff asked questions about the condition of the cars, how often they were serviced and insurance.  The plaintiff gave evidence that he was concerned about income protection as there had been incidents concerning taxi drivers where they an not been covered.  After talking about the premium on excess insurance for property damage, the plaintiff asked about income protection insurance.

1. The plaintiff gave the following evidence in chief[4]:

“Now, was there any specific discussion with Mr. O’Connor about that income protection or disability insurance? – Yes, there was.  When we got to the income protection insurance, I said to Matt O’Connor – I said, “Okay, what are we covered for with the income protection insurance?” He said, “Well, you don’t have to worry about it, you’re fully covered.” And I said, “Well what you mean by that” – I said, “Can I have a look at the policy so that I know what I’m covered for, because you (sic) saying to me “your fully covered” I don’t know what that means?”  And he said, “Look, stop being a smart arse – here’s your cab – fuck off.”  And that was his words.  So, that was the end of the conversation”.

[4] Transcript 24.56.

1. This conversation is relied upon by the plaintiff as the basis for the misleading and deceptive claim. The conversation on 24 November is relied upon only as similar fact evidence[5].  Mr. Bethune gave evidence that he was present on 20 November.  He had been a friend of the plaintiff for over 20 years.  They had driven taxis for many years.  He said they went to the defendant’s yard early in the morning and saw Matt O’Connor and “Kevin”.  Mr. Bethune believed that they ran the business[6].  He said that they “just gave the impression that the insurance policy covered everything”[7].  Mr. Bethune said that they did not start that day but the next day.

   [5] Transcript 13.1.

   [6] Transcript 44.55.

   [7] Transcript 45.50.

1. The records of the defendant show in fact that Mr. Bethune was driving his taxi at 5 am. on 20 November 2000[8].  His further bookings were at 6:15 a.m, 7.20 a.m. and 10.38 a.m.  To be present for the discussion as alleged, Mr. Bethune would have been required to stop driving and go to the defendant’s depot.  He gave no evidence of this.  Rather, he believed he started work the next day having attended with the plaintiff on 20 November.

[8] Exhibit 21.

Conversation on 24 November 2000

1. The similar fact evidence related to a meeting on 24 November, the following Friday at the defendant’s depot.  The plaintiff said that he was speaking to Mr. O’Connor and “Kevin”.  A friend of the plaintiff, Mr. Craig Lucas was present according to the plaintiff. On that occasion the plaintiff said that the following occurred:

“Mr. Matthews:  Sorry, your Honour?  -- Well, we then both approached Mr. O’Connor and he said, “Look, all you need to know is that you’re fully covered and that’s all you need to know.”  And I said, “Well, what about seeing the policies (sic)?” And he said, “Well, Kevin’s over there – go and see him because he’s the depot manager”.

And did Mr. Lucas make any specific mention of any – any injury or difficulty he had with the policy? – A few years previously ----

No, no. Listen to my question? – Sorry.

Did he make any mention to O’Connor on the Friday afternoon at the end of the shift? – Yes, he did.  He said, “A couple of years ago I had a back injury lifting a suitcase out of a boot,” And Matt O’Connor said, “Look, you don’t have to worry – you’re fully covered.”

Had you been told that you weren’t fully covered or there were limitations in respect of any particular compensation payments for injuries back on the Monday morning before you started driving -  would you have done anything about that? – Yes.

What? – I would have contacted my financial adviser and got income protection to cover me.”

1. In his evidence Craig Lucas said[9]:

“I want to know what you discussed with Mr. O’Connor, you and Danny? – We asked him what we were covered for.  He told us we were fully covered, that we had nothing to worry about.  I mentioned that I had had the back problem before and that I had a whole heap of trouble with the insurance company.  I wanted to know who the insurance company was and they basically just turned us away, sort of thing, you know.  It was too much hard work to sort of give us simple answers”.

[9] Transcript 57.70.

1. In cross examination, Mr. Lucas said that his main concern was that he had not received his weekly or monthly payments after he had his back injury.  It did not relate to any lump sum[10].  Mr. Lucas stated that he had worked a day shift on 24 November 2000.  It was at the end of the shift and within the first week of the plaintiff starting work with the defendant.  In fact, the defendant’s records show that Mr. Lucas did not work on 24 November 2000[11].  Drivers who worked took advantage of the booking system.  The records show that Mr. Lucas did not log in on that day.  Mr. O’Connor denies any conversation with the plaintiff or anyone else on 20 or 24 November about income protection insurance.  He was adamant on this point throughout his cross examination.

   [10] Transcript 59.40.

   [11] Exhibit 22.

Post accident events

1. After the accident in December 2000, the plaintiff took a couple of days off work then went back to work with the defendant until 24 April 2001.  He then went to work with Windsor Taxi Centre which was owned by Mr. Tony Coco.  In July 2001, the plaintiff was told by a doctor that if he continued to work and fall or suffer another injury he might become a paraplegic or a quadriplegic[12].  He then ceased to work for Mr. Coco.  The plaintiff gave evidence that he rang Mr. O’Connor after he left his position with Mr. Coco.  The plaintiff said that Mr. Coco had told him that he did not have insurance at Windsor Taxi Centre and that Mr. Coco told him that the defendant would have had insurance to cover him.  In fact, Mr. Coco denied that the plaintiff spoke to him about insurance. I have no reason to doubt Mr. Coco’s evidence.    Mr. Coco gave evidence that the policy held by the defendant which he had previously owned was the only one available in the industry.  He had been the secretary of the Taxi Council.

   [12] Transcript 29.49.

1. In July 2001, the plaintiff said that he rang Mr. O’Connor about the insurance held by the defendant.  Mr. O’Connor said that there was a conversation about two weeks after the accident. The plaintiff said that the conversation related to his making a claim against the income protection policy.  He said that Mr. O’Connor gave him the name of the broker Oamps. The plaintiff said that he made notes of the conversation. The notes were not produced at trial. They were discovered and copies not called for.  It is open to find, and I do so, that the plaintiff spoke to Mr. O’Connor sometime after the accident requesting details of the name of the broker in relation to the income protection policy.

Findings in relation to the conversation on 20 November 2000

1. The evidence given by the plaintiff on this aspect of the case is difficult to accept.

1. The reasons for this are as follows:

a.   The plaintiff said that he and Mr. Bethune attended looking for work on 20 November.  In fact, Mr. Bethune was already working on that day.  Mr. Bethune denied that Mr. O’Connor used the words “fuck off” when asked about insurance. Overall, Mr. Bethune was a most unimpressive witness. He conceded he did not remember the exact conversation as he was not paying a lot of attention.[13]

b.   The plaintiff said that Mr. Lucas and he were present when Mr. O’Connor stated that they were “fully covered”.  Mr. Lucas was not working on that day and so it affects the reliability of the evidence of the plaintiff and Mr. Lucas.  Mr. Lucas was a close friend of the plaintiff. If there was a conversation about insurance it has not been proved when it occurred. It does not support any earlier alleged conversations on 20^th November 2000.

c.   The plaintiff said that he had asked Mr. Coco about insurance when he went to work for him in April 2001.  Mr. Coco denied this.  Mr. Coco had no interest in the outcome of the case.  He gave his evidence in a most forthright and concise manner. Mr. Coco had helped the plaintiff by providing a statement for his common law claim.

d.   The plaintiff although concerned about the insurance position had not made inquiries previously about the nature of the cover with previous employees nor with Mr. Coco, I find, after he left his position with the defendant. It is submitted that because he had suffered the back injury by the time he commenced with Mr. Coco in April 2001, the plaintiff “had become aware that he was probably precluded from full cover…”[14] That submission does not explain the conflict in evidence between the Plaintiff and Mr. Coco.

e.   The plaintiff was only concerned he says about income protection[15].  To say that he would have obtained another policy to cover a lump sum does not have a ring of truth about it given he was unaware of what other policies covered.  He received income protection for two years after claiming against the policy.

[13] Transcript 45.38-46.5.

[14] Written submissions of the Plaintiff, p5.

[15] Transcript 25.50.

1. It was argued by counsel for the plaintiff that Mr. Bethune and Mr. Lucas may have been confused by the date. It is more than that. The plaintiff’s case was that they were both present in that period of the first week. On the day’s chosen by the plaintiff, neither Mr. Bethune or Mr. Lucas were likely to have been present. It is a fundamental weakness in the plaintiff’s case.  If a conversation about insurance occurred on another occasion, I am satisfied on the evidence of Mr. O’Connor that there was no detailed discussion concerning an income protection policy or the extent of the cover.

Reliability of Mr. O’Connor’s evidence 

1. Except as to the conversation with the plaintiff occurred post accident, Mr. O’Connor was not shaken in cross examination.  The timing of the conversation was the main difference.  In this respect, the plaintiff’s evidence supports Mr. O’Connor relating to that conversation. When questioned about the insurance aspect, Mr. O’Connor gave a satisfactory answer.  He stated that each driver received a pay in sheet which set out the details of the premiums payable[16].  I accept that it was not necessary for it to be discussed in any detail[17].  Also, Mr. O’Connor gave evidence that in his experience drivers never raised the question of insurance until they had an accident[18].  Mr. O’Connor had left the employ of the defendant in 2002[19]. He did not have any barrow to push.  Mr. O’Connor had never seen the policy of insurance.  The reason he gave was that no one had ever asked him for it[20]. Mr. Coco’s evidence supported this proposition.  For example, when the plaintiff went to work with Mr. Coco in April 2001, he never asked Mr. Coco about the type of insurance he had[21].  Other drivers never asked about insurance[22].  In fact, Mr. Coco had a similar policy to that of the defendant. 

   [16] Transcript 78.1-23.

   [17] Transcript 78.40-60.

   [18] Transcript 70.1-5;79.1-5

   [19] Transcript 74.2.

   [20] Transcript 75.50-76.20.

   [21] Transcript 85.36-40.

   [22] Transcript 88.10.

1. It has not been established on the balance of probabilities that the conversations alleged by the plaintiff occurred in the manner described or on the occasions relied upon.  On balance, the evidence of Mr. O’Connor was more convincing. He was prepared to make concessions about the limited extent of his recall on other issues. Mr. Bethune supported his denial that he did not use abusive language.[23] 

[23] Transcript 48.2-10.

Misleading or deceptive conduct - s.52 Trade Practices Act 1974.

1. Paragraph 4 of the Amended Statement of Claim is the relevant pleading. A statement made in negotiations about employment had been held to be capable of being conduct, in trade or commerce, which is misleading or deceptive or likely to mislead or deceive[24].  A statement cannot be categorised as “misleading or “deceptive” unless in all of the circumstances, it contains or conveys a misrepresentation[25].

   [24]Patrick and Ors. v. Steel Mains Pty Ltd (1987-1988) 77 ALR 133 at 136.

   [25]Taco Co. of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 at 183; see also the discussion in Henjo

   Investments Pty Ltd v Collins (1988) 79 ALR 83 at 92-93.

1. What does the statement “fully covered” mean?  It is somewhat imprecise.  Whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and to the relevant surrounding facts, and circumstances[26].  In the present case, the plaintiff, I find, was concerned about income protection[27].  Even if he asked about same and was told that he was “fully covered” he received an accurate answer.  He was covered for income protection in the event of personal injury whilst driving the taxi[28]. No mention was made of disability insurance. The distinction was made by Mr. Vievers in his evidence[29].

   [26]Taco Co. of Australia op. cit; see also Campomar Sociedad Limitada v NIKE International

   Limited (2000)202 CLR 45 at 85-87.

   [27] Transcript 23:18;24.52;25.1;36.20-41;38.10-39.10.

   [28] Exhibits 2A, 2B, 2C.

   [29] Transcript 52.30-53.13.

1. It was suggested that Mr. Lucas mentioned to Mr.O’Connor the problem which he had with his back injury and his claim.  When cross examined the complaint by Mr. Lucas was about non payment of his claim rather than any complaint about the non existence of a lump sum.  Even if the evidence of Mr. Lucas were to be accepted on this point, it does not take the matter further.  The plaintiff received payment for two years for his back injury.  As it has not been established that the defendant’s agent made any misrepresentation, then it cannot be established that as a matter of causation a misleading representation induced the plaintiff to enter into his contract of employment with the defendant without taking out additional insurance[30]. 

   [30]Gould and Anor. v. Vaggelas and Anor [1983-1985] 157 CLR 215 at 228,238 and 250.

1. It may be argued that Mr. O’Connor should have spelt out that if the injury was not in the Table of Events, that no lump sum would be payable, that his failure to do so created a false impression. Silence may constitute misleading and deceptive conduct[31]. The plaintiff was only concerned with income protection.  The plaintiff’s complaint with the policy was that the insurer failed to pay a lump sum[32]. The question of lump sums did not arise on the plaintiff’s case in conversation.  Mr. Lucas was concerned about his weekly or monthly payments not lump sums. Even on the plaintiff’s case, it has not been established that there was a misrepresentation by the defendant’s agent Mr. O’Connor. Tested objectively, I find that the statement as alleged to be made by Mr. O’Connor that the plaintiff was “fully covered” was not misleading or deceptive.[33]  

[31]Henjo Investments Pty Ltd v Collins Marickville Pty Ltd No 1 (1988) 79 ALR 83 at 93.

[32] Transcript 31.48.

[33]Hornsby Building Centre Pty Ltd v Sydney Building Information Centre (1977-78) 40 CLR 216 at 227.

Evidence of Mr. Gregory Veivers

1. This evidence was called to establish that at the time that the plaintiff started his employment with the defendant in November 2000, there was available in the market place an insurance policy which would have enabled the plaintiff to get income protection with a weekly amount and a lump sum after a period of time[34].  The evidence avoided the problem which arose in Gates v The City Mutual Life Assurance Society Limited[35].  The plaintiff’s case was that he would have entered into a policy of insurance which paid a lump sum in the event of injury without the limitation contained in the policy held by the defendant[36] had it not been for his reliance on the alleged misrepresentation by Mr. O’Connor.

   [34] Transcript 50.10-52.15.

   [35] [1985-1986] 160 CLR 1.

   [36] Exhibit 2B.

1. The premiums payable would have been $49.22-68.36 per month for a non-smoker and twice those figures for a smoker.  It was not established whether the plaintiff was a smoker.  In fact he was paying $1.10 per day for cover under the defendant’s policy or about say $33.00 per month.  Under the Life Act, the plaintiff could have been insured for a weekly loss up to the age of 65.  However, under the Insurance Act according to Mr. Veivers the benefits are paid for up to two years. His assessment of the premium assumed a lump sum of $200,000.00 after the weekly benefits ceased and that the plaintiff was a non-smoker[37].  He was asked to make those assumptions. Mr. Veiver’s evidence was not challenged and it is accepted.

[37] Transcript 51.40.

Damages

1. The plaintiff’s case as pleaded sought the sum of $200,000.00 which in effect was the lump sum payable for those eventualities which appeared in the Table of Events.  In other words, there is no claim for benefits to age 65.  The plaintiff’s case is that if he had been told of the limitation in the Table of Events, he would have entered into a policy which gave him a lump sum. Surprisingly, there was no evidence led about the type of policy the plaintiff would have taken out as to the quantum of the lump sum. When asked what he would have done if he knew he was not “fully covered”, he answered “I would have contacted my financial adviser and got income protection to cover me.”[38] In Gates case[39] it was held that if the plaintiff’s case were established then the plaintiff might have been awarded damages equal to the benefits that would have been payable under that policy less the premiums paid or payable.  The difference between the premiums paid and those which the plaintiff might have paid over the period from 20 November 2000 to April 2001 when he finished work with the defendant was, I find, some $35.00 per month for six months.  This is a figure of $210.00.  On that principle, the plaintiff would be entitled to $199,790.00. The policy would have terminated in so far as premiums were concerned when he left the defendant’s employment[40]. No submissions were received on this aspect of quantum.

   [38] Transcript 25.48-50, see also 36.10-42.

   [39] op.cit. p.13 per Mason, Wilson and Dawson JJ.

   [40] Clause 5 (c) (ii) of Exhibit 2B.

1. There has been some discussion since Gates case about the method of determining the loss or damage under s.82 or s.87 of the Trade Practices Act[41].  It was held in Murphy’s case that references to “loss” and “damage” throughout the Act should be given a broad interpretation. An attempt has been made to calculate how much ‘worse off’ the plaintiff is[42].  Consistent with the approach of the cases, an assessment of damages for lost opportunity in the present case of $199,685.00 is not unreasonable. It is sufficient if the conduct plays a part in the plaintiff’s loss and damage, even a minor part.[43] It has been necessary to infer from Exhibit 2B that this was probably the amount of lump sum cover which the plaintiff would have elected if he had known the limitations imposed by the Table of Events. This inference is made to facilitate an assessment of damages. There is otherwise a gap in the plaintiff’s evidence on this issue.

[41]Murphy v Overton  Investments Pty Ltd (2004) 78 ALJR 324 at 332-333; see also Wardley Australia Ltd v

Western Australia(1992) 175 CLR 514 at 525-526.

[42]Murphy’s case op. cit.

[43]Gould v Vaggelas op. cit p236, 250-251.

Orders

1. The plaintiff’s claim is dismissed
2. It is ordered that the plaintiff do pay the defendant’s costs of and incidental to the action including reserved costs if any to be assessed.