Power Technologies Pty Ltd v Vero Insurance Ltd

[2009] NSWDDT 21

Dust Diseases Tribunal

of New South Wales

CITATION:	Power Technologies Pty Ltd v Vero Insurance Ltd [2009] NSWDDT 21
PARTIES:	Power Technologies Pty Ltd (Cross Claimant, Applicant on Notice of Motion) Vero Insurance Ltd (Cross Defendant, Respondent to Notice of Motion)
MATTER NUMBER(S):	325/4 of 2000
JUDGMENT OF:	Curtis J at 1
CATCHWORDS:	DUST DISEASES TRIBUNAL :- Motion to reopen case and adduce further evidence after Court of Appeal remits proceedings.
CASES CITED:	Smith v New South Wales Bar Association (1992) 176 CLR 256 Akens v National Australia Bank (1994) 34 NSWLR 155 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 Mosca v RTA of the NSW [2007] NSWLEC 79 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2009] NSWCA 178 ASIC v Rich (2006) 235 ALR 587 Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 Queensland v J L Holdings Pty Ltd [1996-1997] 189 CLR 146
DATES OF HEARING:	31 August 2009
DATE OF JUDGMENT:	8 September 2009
LEGAL REPRESENTATIVES:	Mr Paul Webb QC with Mr T M Rowles instructed by Carroll and O’Dea appeared for the Applicant on the Motion Mr Bret Walker SC with Mr D Talintyre instructed by Piper Alderman appeared for the Respondent to the Motion

JUDGMENT:

Dust Diseases Tribunal of New South Wales

Matter Number 325 of 2000/4

(Re Ross Lloyd Barlow)

Power Technologies Pty Ltd

v

Vero Insurance Ltd

8 September 2009

CURTIS J

RULING

The Matter in Issue

1. On 29 August 2007 the Court of Appeal remitted to the Tribunal the determination of whether Power Technologies Pty Ltd (‘Power Technologies’) (formerly ICAL) had complied with its obligation under Condition 4 of the Policy of Insurance to ‘exercise reasonable care that only competent employees are employed’.

2. By notice of motion dated 23 February 2009 Power Technologies seeks an order that it have leave to reopen its case and call fresh evidence. The motion is opposed by Vero Insurance Ltd (‘Vero’).

The Evidence in Question

3. The relevant period is 1967-1973. The evidence which Power Technologies wishes to call is contained in statements by Mr Victor Bilbow dated 22 October 2008 and Mr David McCreadie dated 24 October 2008.

4. Mr Bilbow was in 1967 employed by ICAL to work as a commissioning engineer, and later resident engineer, at the Vales Point power station. In 1970 he was transferred to Munmorah power station as senior commissioning engineer where he remained until 1974. He appears well qualified to speak of whether Power Technologies employed competent employees at the relevant time.

5. Mr McCreadie was 23 years of age and a recent graduate in mechanical engineering from Sydney Technical College working in ICAL’s Ryde drafting office, when he was transferred in 1966 to the Munmorah power station. He worked as a member of the Commissioning Team, testing various components of the works, before final acceptance by the client, Delta Electricity.

6. Mr McCreadie may be qualified to speak on the matter in issue, but his evidence must be of lesser weight. If the evidence of Mr Bilbow is to be admitted, the time and expense of adducing further evidence from Mr McCreadie will not be justified.

7. Because I have concluded that Power Technologies should have leave to call evidence from Mr Bilbow, I refuse leave to call evidence from Mr McCreadie.

Principle

8. There is nothing in the Dust Diseases Tribunal Act 1989, the Dust Diseases Tribunal Rules 1990, the Dust Diseases Tribunal Regulation 2007, the Civil Procedure Act 2005 or the Uniform Civil Procedure Rules 2005 which bears upon the question as to whether, or in what circumstances, fresh evidence is permitted for the determination of a remitted issue. The general principles relating to fresh evidence on a remitted hearing are to be extracted from the case law.

9. In Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266-7, the High Court (Brennan, Dawson, Toohey and Gaudron JJ) said that:

If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to enquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised.

10. Pursuant to s75A(7)-(8) of the Supreme Court Act 1970, the Court of Appeal may receive further evidence upon the hearing of an appeal but, after a trial on the merits, may not receive such evidence ‘except on special grounds’.

11. In Akens v National Australia Bank (1994) 34 NSWLR 155 at 160 Clarke JA said:

Although it is not possible to formulate a test which should be applied in every case to determine whether or not special grounds exist there are well understood general principles upon which a determination is made. These principles require that, in general, three conditions need be met before fresh evidence can be admitted. These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.

12. The rationale for imposing such conditions was identified by the High Court in Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 141-2 in these terms:

Such a stringent rule in that ordinary class of case is supported by considerations of both justice and public interest. Considerations of justice support it in that it would be unfair to the successful party if he were to be deprived of a verdict obtained after a trial on the merits and be subjected to the expense, inconvenience and uncertainty of a further trial merely because some relevant evidence had, without fault on his part, been unavailable to the unsuccessful party at the time of the trial. Considerations of public interest support it in that it is desirable in the public interest that there be finality in litigation in other than the truly exceptional case. If all that was necessary to procure the setting aside of a regularly obtained verdict was that the unsuccessful party show that fresh evidence which might have affected the outcome of the trial has become available after the trial, the verdicts of the courts would be of a provisional character only, being subject to the discovery of further relevant evidence.

13. In Mosca v RTA of the NSW [2007] NSWLEC 79, Biscoe J addressed a similar application to call fresh evidence in a matter remitted by an appellate court. After a review of the authorities in which he referred to Smith v New South Wales Bar Association and Commonwealth Bank of Australia v Quade, he said at [12] and [13]:

The considerations relevant to the exercise of the discretion are, in my view, normally similar to those which are to be taken into account when a party applies to re-open a case and adduce further evidence after judgment has been delivered. Such leave to re-open should only be granted “in very limited circumstances".

In circumstances where leave is sought to re-open the proceedings following delivery of judgment, the appeal rules relating to fresh evidence, whilst not determinative, provide a “useful guide” as to the manner in which the discretion should be exercised.

14. In Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2009] NSWCA 178 (3 July 2009), Basten JA, with whom Beazley and Young JJA agreed, noted that the approach of Biscoe J in Mosca had support in the Full Court of the Federal Court in McCarthy v McIntyre [2000] FCA 1250, and said that ‘This Court would not decline to follow that judgment unless convinced that it might be distinguished or was clearly wrong’.

15. Nevertheless, Basten JA did question the aptness of the analogy to the appeal rules. He said at [92]:

It is sufficient for present purposes to say that the aptness of the analogy is by no means self-evident, in two respects. First, once the initial judgment has been set aside as erroneous, the more obvious analogy is with reopening prior to delivery of judgment. Alternatively, that may be seen as the appropriate analogy in so far as the proposed further evidence relates to matters which have not been properly decided, as opposed to those findings which are apparently unaffected by the appellate reversal. Secondly, the circumstances of remittal may involve a degree of complexity not found in an application to reopen a trial. The danger of relying upon analogy is that it will distract attention from the specific circumstances of the particular case. Appropriate guidelines promote uniformity of approach and are desirable; guidelines adopted by analogy may be helpful in some situations, but not in others.

16. The cases of Smith, Akens, Quade, McCarthy, Mosca and Walker Corporation each involved an attempt by a party, initially unsuccessful in the trial on the merits, to deprive the successful party of the fruits of victory. In the present case, the moving party is a claimant who succeeded, albeit contingently, at trial. The opponent is not, as yet, a successful party. The policy that holds it generally unfair for a successful party to be deprived of a verdict obtained after a trial on the merits because the unsuccessful party had, for whatever reason, failed to call relevant evidence, is not directly engaged.

17. In ASIC v Rich (2006) 235 ALR 587 at [18] Austin J listed the factors that he agreed were relevant to the exercise of the court's discretion to permit the plaintiff, in a civil penalty proceeding, to adduce further evidence after it had closed its case:

(a) The nature of the proceeding;

(b) Whether the occasion for calling the further evidence ought reasonably to have been foreseen;

(c) The consideration of fairness that the defendant is entitled to know all of the evidence he has to meet in taking forensic decisions as to cross-examination and the nature and extent of the evidence he will himself adduce on the matters in question;

(d) The extent to which the plaintiff has embarked upon calling evidence on the issue in question in its case in chief;

(e) The importance of the issue on which the further evidence is sought to be adduced to the pleaded issues in the case;

(f) The degree of relevance and probative value of the further evidence sought to be adduced and its potential to involve an undue waste of time;

(g) The prejudice to the defendant in terms of delay in the completion of the proceeding and the consequential costs;

(h) The public interest in the timely conclusion of litigation;

(i) What explanation is offered by the plaintiff for not having called the evidence in chief.

18. Upon the current state of authority, while the appeal rules relating to fresh evidence remain a useful guide to the manner in which the discretion should be exercised, they are not determinative. Where the initial judgment has been set aside, not necessarily because it is wrong, but for want of stated reasons, the specific circumstances of the particular case may indicate that considerations relevant to the exercise of the discretion where a party has closed its case and seeks to reopen before judgment, are to be weighed concurrently with the appeal rules.

Application of the Appeal Rules

The First Condition

19. The evidence of Mr Bilbow could, with reasonable diligence, have been obtained for use at the trial. That it was not is the fault of Mr Beale, Power Technologies’ solicitor. Mr Beale assumed carriage of the Dust Diseases Tribunal practice of Carroll & O'Dea Solicitors in July 2001. That practice included approximately fifty Power Technologies claims.

20. In late 2001 Mr Beale conducted the defence by Power Technologies to a cross-claim brought by Delta Electricity in the matter of Swan. In the course of preparing that defence he was provided with a statement made by Mr Bilbow on 25 January 2000, which was relevant to Mr Swan’s exposure to asbestos at the Vales Point Power Station during rehabilitation of boilers in the 1980s. That statement contained these introductory sentences:

I commenced with ICAL on 2 May 1967 as a Commissioning Engineer and I progressed through to the position of Construction Manager/Resident Engineer. I worked at Vales Point, Munmorah, Wallerawang, Mount Isa, Whyalla, APM Melbourne, then I returned to Vales Point, then to Wallerawang, followed by Newport in Victoria, after which I returned to Vales Point until the contracts ended.

Sometime in 2001 Mr Beal conferred with Mr Bilbow in relation to the Swan matter, which was later settled.

21. In August 2005 Mr Beale was served with the amended defence in this matter, which took the Condition 4 point and raised the issue of whether ICAL did ‘exercise reasonable care that only competent employees are employed’. From at least October 2005 Mr Beale understood that his client bore the legal onus of proving satisfaction of this condition, and cast around for material by which that onus might be discharged.

22. He gave this evidence:

I did conduct a search through all of my files, and I did not appreciate the significance of that statement which was contained in another file in my practice. That is, the Bilbow statement of approximately 2000.

Q. Well when you say you didn't appreciate the significance, you mean you saw it, read it, but it didn't occur to you that it was relevant for the March’06 Barlow trial, is that what you mean?

A. Yes.

23. Mr Beale went on to say that when he read the 2000 statement, he did not appreciate that Mr Bilbow would be able to give evidence relative to an issue in this case, because that statement was directed to the exposure of Mr Swan in 1980, and not directly relevant to the exposure of Mr Barlow between 1967 and 1973. He agreed in cross-examination that had he, in 2005, read the 2000 statement by Mr Bilbow ‘through the prism of your then inquiry to discharge your clients’ onus in relation to clause 4’ then Mr Bilbow was an obvious person to whom inquiries should be directed.

24. It was only after the special leave application to the High Court in this case, that it occurred to Mr Beale that Mr Bilbow may be of assistance. He then engaged a private investigator to locate him.

25. In human terms the mental slip by Mr Beale is quite understandable, however it is not possible to conclude other than that the first condition laid down by the appeal rules for admission of fresh evidence is not satisfied.

The Second Condition

26. The second condition, that the evidence should be such as to lead to high probability of a different verdict, illustrates the difficulty of applying the appeal rules analogously to the circumstances of this case.

27. The present matter has been remitted because I did not give reasons for judgment on the competent employees issue, and is accordingly, on that point, not strictly, "One in which reasons for judgment have been delivered". The moving party in this application, Power Technologies, does not seek a different verdict, but the same verdict. The more appropriate analogy may be to a case that is "Simply one in which the hearing is complete" rather than "One in which reasons for judgment have been delivered". In such a case, as the High Court said in Smith, "It is difficult to see why… the primary consideration should not be that of embarrassment or prejudice to the other side".

The Third Condition

28. Accepting for this purpose Mr Bilbow’s statements as to his employment history, he is capable of giving credible evidence upon the issue.

ASIC v Rich Factors

Nature of the Proceedings

29. This is a test case. There are many outstanding matters in which Power Technologies seeks indemnity from Vero in relation to asbestos related claims in the Dust Diseases Tribunal. The parties agreed that this matter would be prepared and conducted as a test case, to limit the time and expense that would be involved in preparing the other cases for hearing and determination by the Tribunal.

30. That purpose would be frustrated if the matter were to be determined other than on a factual basis that will be common to the remaining cases. If the evidence in question is not permitted in this case, it will be necessary to conduct a further test case with multiplication of costs.

Foreseeability of the Need for the Evidence

31. It was obvious from the start of the trial that the evidence in question, if not necessary, was highly desirable. This circumstance militates against the grant of leave.

Fairness to the Defendant

32. The evidence upon which Power Technologies relied on the issue was within very narrow compass, and none of it was oral. Vero was not called upon to make any forensic election as to cross examination.

33. The substance of Vero’s case on the competent employees issue was that ICAL was negligent, and an inference necessarily arises that this was because it failed to engage competent employees. It chose to go into evidence, rather than rely solely upon a submission that Power Technologies had failed to discharge its onus. Although the events in question took place over 30 years before the trial, Vero was able to tender the affidavits of five men who worked on the site, all of whom spoke of negligence on the part of ICAL.

34. In the event there was no forensic election by Vero in the conduct of the trial that would, as a matter of fairness, require that Power Technologies be precluded from calling the evidence.

35. It is true that three years have elapsed since the trial of this matter, and with the passage of time memories deteriorate and documents are mislaid. Nevertheless, the events occurred more than 30 years before the trial. I do not think that the elapse of a further three years has materially altered the ability of Vero to respond to the evidence of Mr Bilbow.

36. I bear in mind that Vero will suffer prejudice that cannot be entirely remedied in costs. For example, its managers will have been diverted from their primary tasks to attend to instructions in the matter, and reserves of funds will continue to be maintained against the possibility of the cross-claim succeeding.

The Extent of the Plaintiff's Evidence at Trial

37. A forensic election to lead no evidence upon an issue at trial, in the hope that the evidentiary gap would be filled when the opponent goes into evidence, would militate against the grant of leave to call evidence on remitter. Power Technologies did lead sufficient evidence at trial to avoid loss of the judgment in the Court of Appeal upon a no evidence point. I regard this factor as neutral.

38. Contrary to Vero's present submission, senior counsel for Power Technologies did not make any deliberate forensic election not to lead additional evidence on the competent employees issue. He indicated, in the course of the trial, that he did not believe that additional evidence existed.

The Importance of the Issue

39. If the issue were peripheral, upon which little turned, the potential trouble and expense of admitting further evidence would not be justified. In the present case the issue is of major importance, not only in the disposition of the instant case, but also in the economical disposition of those numerous other cases of which this is the test case. This factor militates strongly towards the grant of leave.

Relevance And Probative Value of the Further Evidence

40. The proposed evidence from Mr Bilbow is relevant. Vero submit that the statement does not demonstrate compliance with Condition 4 of the subject policy. That submission applies the wrong test. Power Technologies does not need to prove compliance with the policy to the extent of demonstration, but only to the extent of probability.

41. It is not appropriate that in this interlocutory proceeding I either form or express a concluded view as to the probative value of the evidence. Nevertheless the evidence appears, prima facie, relevant, credible, and if accepted, of probative value. I do not believe that it is of so little value that its reception will involve an undue waste of time.

Prejudice to the Defendant in Delay and Cost

42. The defendant has already been burdened with substantial delay because of judicial error on the part of the Tribunal. Although the grant of leave to call further evidence will occasion additional delay, the Tribunal is in a position to fix the hearing date within the next few weeks. The further delay is minimal.

43. The prejudice to the defendant in costs will be offset by a saving of the costs that would be otherwise generated by the determination of the same issue of fact in one of the other matters in which the parties are in dispute.

44. Even if Vero calls evidence in reply, this is not a case such as McCarthy v McIntyre, in which the reopening sought would require a review of thousands of pages of transcript and documentary material, and ‘put the parties to the immense expense that would follow from a retrial of substantially all the previous issues’.

Public Interest in the Timely Conclusion of Litigation

45. The further hearing will take place within weeks. Even if, improbably, the further evidence requires that the matter continue into the following day, the public interest in the conclusion of litigation without undue or lengthy delay is not engaged to a significantly greater extent than it would be if the Tribunal determined the remitted issue without the reception of further evidence.

The Plaintiff's Explanation for Not Having Called the Evidence in Chief

46. This factor invites enquiry, not only into the question of whether the evidence could have been discovered with reasonable diligence, but also into the degree of fault. A total lack of diligence on the part of a party's legal advisers, or egregious carelessness, would militate strongly against the grant of leave. That is not the case here.

47. Mr Beale's failure was not so much one of diligence, but one of adversion. The relevant events occurred more than 30 years ago. Mr Beale searched the contents of some 50 files with a view to unearthing relevant material. His failure to recall the detail of a conversation with Mr Bilbow held some four or five years earlier than his preparations for the trial is understandable. His failure in 2005 to seize upon the relevance of an introductory sentence in Mr Bilbow’s statement of 25 January 2000, which was otherwise directed toward an irrelevant period, may be seen as the consequence of momentary inadvertence.

48. That public policy pursuant to which legal practitioners are encouraged to greater efficiency in the conduct of litigation by the visitation of adverse consequences upon the clients of the negligent, the careless, the slipshod, or the lazy, is not necessarily advanced by effectively punishing a client whose solicitor cannot be so described.

Further Submissions by Vero

Inconsistent Findings

49. Vero has submitted that the further evidence should not be admitted because such evidence either contradicts findings made by this Tribunal in both the contribution judgment of 3 September 2004 and of the indemnity judgment of 22 March 2006, or there is a significant and dangerous potential for that to occur. The submission, put another way, is that it would be a futility to admit such evidence, because the findings in those judgments necessitated the conclusion that Power Technologies has breached the contractual condition that is the subject of the remitted question.

50. Although the relevant findings are not spelt out in this submission, I take them to be my conclusions that ICAL, through the agency of its employees, was negligent. Such negligence, as I understand the submission, is incompatible with discharge of its duty to the insurer to take all reasonable precautions to prevent bodily injury, and to employ competent staff.

51. The Court of Appeal has held that those acts of negligence by which Power Technologies incurred liability to Mr Barlow were not inconsistent with the discharge of its duty to take all reasonable precautions to prevent bodily injury.

52. Without in any way prejudging the issue that has been remitted, it is sufficient to observe that negligent acts or omissions by a defendant, giving rise to an action in negligence, need not be advertent. Competent employees, no less than competent motorists or solicitors, are capable of oversight.

53. I reject this submission as a sufficient reason to refuse leave to call fresh evidence.

Conversion of an Appeal on Law to an Appeal on Fact

54. Vero further submits that, in substance, the admission of new evidence would convert an appeal limited to a question of law to an appeal on fact. S32(1) of the Dust Diseases Tribunal Act 1989 limits appeals to the Supreme Court to questions of law.

55. I do not accept this submission. There is as yet no finding of fact. Because the Court of Appeal cannot perform this task, the matter has been remitted for determination in the Tribunal.

56. In making this determination, the Tribunal is to exercise the exclusive jurisdiction conferred by s11(1) of the Act.

57. Although not directly relevant here, the jurisdiction of the Tribunal to determine questions of fact is a very wide one. Pursuant to s13(6), the Tribunal may ‘Whenever appropriate… reconsider any matter that it has previously dealt with, or rescind or amend any decision that the Tribunal has previously made’.

For the Encouragement of Others

58. Mr Walker SC for Vero submits that I should refuse leave because ‘it is essential and salutary for the running of the system’ that solicitors know that their clients will suffer the consequences of professional misjudgement. I have found that Mr Beale’s judgment in the preparation of this matter was flawed. He candidly admitted as much.

59. I recognise that case management considerations, and questions of proper use of court resources must not be discounted in the exercise of my discretion (Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27). Nevertheless, as Kirby J said in Queensland v J L Holdings Pty Ltd [1996-1997] 189 CLR 146 at 170 "Efficiency…can sometimes be purchased at too high a price".

Conclusion

60. I accept the weight of the various factors advanced by Vero in opposition to the grant of leave, the most telling of which is that the evidence could have been obtained with reasonable diligence for use in the trial. I have nevertheless concluded that because the parties agreed, for the purposes of efficiency and cost saving, that this should be a test case, the interests of justice are best served by granting Power Technologies leave to reopen its case so as to call evidence from Mr Bilbow.

61. A condition of this leave is that Power Technologies pay, on an indemnity basis, the costs of Vero that are occasioned by the further hearing.

Orders

62. I grant leave to Power Technologies to reopen its case for the purpose of calling the evidence of Mr Victor Bilbow.

Stand the matter over for mention on Friday 11 September 2009 for the purpose of fixing a hearing date within the following four weeks.

Order that Power Technologies pay the costs of this motion on an indemnity basis.

Mr Paul Webb QC with Mr T M Rowles instructed by Carroll and O’Dea appeared for the Applicant on the Motion

Mr Bret Walker SC with Mr D Talintyre instructed by Piper Alderman appeared for the Respondent to the Motion