(Re McMichael) BP Australia Pty Limited v Allianz Australia Insurance Limited and Ors

[2007] NSWDDT 11

Dust Diseases Tribunal

of New South Wales

CITATION:	(Re McMichael) BP Australia Pty Limited v Allianz Australia Insurance Limited and Ors [2007] NSWDDT 11 This decision has been amended. Please see the end of the judgment for a list of the amendments.
PARTIES:	BP Australia Pty Limited Allianz Australia Insurance Limited Allianz Australia Workers Compensation (NSW) Limited WorkCover Authority of New South Wales Vero Insurance Limited
MATTER NUMBER(S):	7051 of 2007
JUDGMENT OF:	Curtis J at 1
CATCHWORDS:	Dust Diseases Tribunal :- Notice of Motion
LEGISLATION CITED:	Workers Compensation Act 1987 ss151AB, 151AC Dust Diseases Tribunal Rules
CASES CITED:	Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 ; Re British Concrete Pipe Association [1983] 1 All ER 203
DATES OF HEARING:	17 July 2007
DATE OF JUDGMENT:	20 July 2007
LEGAL REPRESENTATIVES:	Mr D Andersen of Church and Grace appeared for the defendant (Applicant on the Motion) Mr P O’Connor instructed by Ellison Tillyard Callinan appeared for Allianz Australia Insurance Ltd (1st Respondent) Mr G Rundle instructed by Hicksons appeared for Allianz Australia Workers Compensation (NSW) Ltd (2nd Respondent) Ms W Strathdee instructed by Lee and Lyons appeared for Vero Insurance Limited (4th Respndent)

JUDGMENT:

Dust Diseases Tribunal of New South Wales

Matter Number 7051 of 2007

(Re: Angus McGilvary McMichael)

BP Australia Pty Ltd

(Defendant/Applicant)

v

Allianz Australia Insurance Limited

(First Respondent)

and

Allianz Australia Workers Compensation (NSW) Limited

(Second Respondent)

and

WorkCover Authority of New South Wales

(Third Respondent)

and

Vero Insurance Limited

(Fourth Respondent)

20 July 2007

JUDGMENT

CURTIS J

The claim

1. BP Australia Pty Limited (BP) has been sued by a former employee, Mr Angus McMichael, for damages in respect of his disease of mesothelioma. BP presently moves the court for an order pursuant to s151AC(2) of the Workers Compensation Act 1987 that one of the respondent insurers be appointed the designated insurer liable to indemnify BP against liability to Mr Michael.

Uncontested Facts

2. Mr McMichael was employed by BP between 1974 and 1989. During this period the insurers of BP were as follows:

1973-1983; National Employers Mutual. (Now in liquidation and not subject to the provisions of s151AC )

1 July 1983-30 June 1986 Vero Insurance Ltd.

1 July 1986-30 June 1987 Allianz Australia Insurance Ltd.

1 July 1987-1989; Allianz Australia Workers Compensation (NSW) Ltd.

3. In his Statement of Claim Mr McMichael pleads that he was exposed to asbestos dust and fibre between 1974 and 1984.

The insurer's contentions

4. Mr O'Connor for Allianz Australia, and Mr Rundle for Allianz Australia Workers Compensation (NSW) Ltd, submit that, because the criteria for designating an insurer provided by s151AC(3) cannot be addressed without embarking upon a factual inquiry as to when "a liability…arose", evidence should be received as to:

(1) When the plaintiff was last employed by the employer in employment to the nature of which his disease was due, or at least;

(2) What allegations in that regard may possibly be made by the plaintiff in the trial of his action against his employer.

5. Over the objections of Mr Andersen who appeared for BP, Mr O'Connor and Mr Rundle tender correspondence and a medical report which suggest that Mr McMichael may have been exposed to asbestos at various times up to 1989. The relevance of this material is in question.

The legislation

151AB Special insurance provisions relating to occupational diseases

(1) If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purposes of any policy of insurance obtained by the employer:
(a) the liability is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due, subject to paragraph (b),

(b) if the worker was employed by the employer in employment to the nature of which the disease was due both before and after the relevant commencement, the liability is taken to have arisen both when the worker was last employed by the employer in employment to the nature of which the disease was due before the relevant commencement and when the worker was last employed by the employer in employment to the nature of which the disease was due after the relevant commencement.

….

(6) In sections 151AB and 151AC:

"occupational disease" means a disease of such a nature as to be contracted by a gradual process, and includes:

(a) a dust disease as defined by the Workers’ Compensation (Dust Diseases) Act 1942 , and

(b) …

(c) …

"relevant commencement" means:

…

151AC Further special insurance provisions relating to dust diseases

(1) Application of this section This section applies in relation to an employer who is liable independently of this Act for damages for a dust disease as defined by the Workers’ Compensation (Dust Diseases) Act 1942 contracted by a worker, where there is a dispute as to which of 2 or more insurers in a category of insurers is liable to indemnify the employer under any of the provisions of section 151AB.

(2) Designated insurer to be responsible pending resolution of dispute For the purposes of section 151AB, and pending resolution of the dispute, the insurer who is the designated insurer in the relevant category under this section is to be treated as being the insurer who is so liable to indemnify the employer. Section 151AB has effect, and is to be construed, accordingly.

(3) Identification of designated insurer The following provisions have effect for the purpose of determining which insurer among the following categories of insurers is the designated insurer for the purposes of this section:

(a) If, in the case of a liability that arose before the relevant commencement , there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB, the insurer who was the last of those insurers to be the employer’s insurer while the worker was employed before that commencement by that employer is the designated insurer.

(b) If, in the case of a liability that arose after the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB, the insurer who was the last of those insurers to be the employer’s insurer while the worker was employed after that commencement by that employer is the designated insurer.

(c) If, in the case of a liability that arose partly before and partly after the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB in respect of any liability that arose before that commencement, the insurer who was the last of those insurers to be the employer’s insurer while the worker was employed before that commencement by that employer is the designated insurer.

(d) If, in the case of a liability that arose partly before and partly after the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB in respect of any liability that arose after that commencement, the insurer who was the last of those insurers to be the employer’s insurer while the worker was employed after that commencement by that employer is the designated insurer. (Emphasis added)

….

…

6. S151AB provides that, for the purposes of any policy of insurance obtained by the employer, the liability is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due. The fact that this exposure may not have been causative of the plaintiff's damage is irrelevant, as is the fact that the insurer was not on risk at the time the employer's liability arose at common law.

7. S151AC(3) is then predicated upon some inquiry into when the liability of the employer arose by reference to the time at which the worker was last employed in employment to the nature of which his disease was due. This inquiry is more limited than the scope of the inquiry demanded by s151AB, being limited to whether the employer’s liability arose before or after 30 June 1987, or both before and after 30 June 1987. The section does not require the determination of exactly when it was, either before or after 30 June 1987, that the worker was last employed in work of the necessary character.

8. We are presently concerned with the scope of the inquiry.

9. S151AC is predicated upon the two assumptions that the time when the employer’s liability arose has not yet been established, and that the trial of the plaintiff's action should not be delayed by a trial of that issue.

10. In his second reading speech to the Bill introducing s151AC, the Minister said:

"Several of the other items in the Bill are aimed to make resolution of common law claims in the Dust Diseases Tribunal faster and more efficient. One of those items involved situations where the worker’s employer has been covered by two or more insurers over the period during which the worker was employed in dust exposed duties. At present, disputes between those insurers about which of them is liable, have the capacity to hold up payment of damages to workers who have a clear entitlement. The proposed changes address that problem by designating the last relevant insurer as the one responsible for dealing with the worker's claim. Separate arbitration arranged through the Tribunal is then provided to resolve the insurance issues, following determination of the worker's claim."

11. Parliament cannot have intended that s151AC required the Tribunal to receive evidence and make contested findings of fact as to the time at which the plaintiff was last employed in employment to the nature of which his disease was due. Such a literal reading of s151AC (3) leads to an absurd result.

12. Lord Scarman, in Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 at 238 said that it was legitimate to go beyond the literal meaning of statute if such meaning would "produce an absurdity which Parliament could not have intended, or destroy the remedy established by Parliament to deal with the mischief which the act is designed to combat."

13. In Re British Concrete Pipe Association [1983] 1 All ER 203, at 205 Sir John Donaldson MR said:

"If, giving words the ordinary meaning, we are faced with extraordinary results which cannot have been intended by Parliament, we then have to move on to a second stage in which we re-examine the words and see whether they must in all circumstances have been intended by Parliament to have a different meaning or a more restricted meaning".

14. Three circumstances should be borne in mind. First, s151AC provides procedural relief only, and does not finally determine the rights of the parties. Secondly, s151AC(4) permits the Tribunal to override s151AC(3). Thirdly, r12 of the Dust Diseases Tribunal Rules provides that the Tribunal may in any event order that all or any of the provisions of s151AC do not apply in a particular case.

15. I have concluded that the words, "in the case of a liability that arose", in s151AC(3) must be read as "in the case of a liability that upon the plaintiff's pleadings arose". Such a reading furthers the intentions of Parliament in dealing with the mischief which this section was designed to combat. It precludes the leading of evidence in what should be a routine administrative exercise before the Tribunal.

16. Circumstances might arise where a particular insurer possesses information inconsistent with the plaintiff's pleading. In such a case the insurer can make that information available to the plaintiff's solicitors, and request that the statement of claim be amended. It is for the plaintiff's solicitors to decide, on the strength of that material, whether an amendment is called for.

17. I hold that the evidence tendered is inadmissible in the present proceedings.

Which respondent should be identified as the designated insurer?

18. Mr McMichael's Statement of Claim pleads that he was last employed in employment to the nature of which his disease was due in 1984. Upon that pleading BP's liability arose before 30 June 1987 and s151AC(3)(a) applies. The last insurer of BP before 30 June 1987 was Allianz Australia Insurance Ltd.

Orders

19. I appoint Allianz Australia Insurance Ltd as the designated insurer responsible to indemnify BP in respect of the claim made by the plaintiff.

20. Allianz Australia Insurance Ltd is to pay BP's costs of this motion. Costs otherwise reserved.

Mr D Andersen of Church and Grace appeared for the defendant

Mr P O’Connor instructed by Ellison Tillyard Callinan appeared for Allianz Australia Insurance Ltd

Mr G Rundle instructed by Hicksons appeared for Allianz Australia Workers Compensation (NSW) Ltd

Ms W Strathdee instructed by Lee and Lyons appeared for Vero Insurance Limited

24/07/2007 - correct appearances - Paragraph(s) 5