Royal & Sun Alliance Assurance Australia Ltd v Falzon

[2002] TASSC 52

[2002] TASSC 52

CITATION:              Royal & Sun Alliance Assurance Aust Ltd v Falzon [2002] TASSC 52

PARTIES:  ROYAL & SUN ALLIANCE ASSURANCE
  AUSTRALIA LTD (ACN 008 3413 545)

v
FALZON, Frank John

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  304/2001
DELIVERED ON:  22 August 2002
DELIVERED AT:  Hobart
HEARING DATE:  2 August 2002
JUDGMENT OF:  Cox CJ

CATCHWORDS:

Procedure - Discovery and interrogatories - Interrogatories - Answers - In general - Objections - Time for making - Form.

Procedure - Discovery and interrogatories - Interrogatories - Upon what matters - What questions disallowed - Irrelevance - General irrelevance.

Supreme Court Rules 2000 (Tas), rr409 and 410.
Aust Dig Procedure [67]

REPRESENTATION:

Counsel:
             Appellant:  M Settle
             Respondent:  R J Phillips
Solicitors:
             Appellant:  McMahon Fearnley
             Respondent:  Phillips Taglieri

Judgment  Number:  [2002] TASSC 52
Number of paragraphs:  12

Serial No 52/2002
File No 304/2001

ROYAL & SUN ALLIANCE ASSURANCE AUSTRALIA
LTD (ACN 008 413 545) v FRANK JOHN FALZON

REASONS FOR JUDGMENT  COX CJ

22 August 2002

1. This is an appeal and cross-appeal from a decision of the Master made in respect of certain interrogatories pursuant to an application under the Supreme Court Rules 2000, r410, by the cross-appellant ("the plaintiff"). The plaintiff had delivered interrogatories for the examination of the appellant ("the defendant") and the latter had objected to answering interrogatories numbered 12, 14 and 17. The Master disallowed interrogatories 12 and 14, but ordered the defendant to answer interrogatory 17. The defendant appeals the order in respect of interrogatory 17 and the plaintiff cross-appeals the disallowance of interrogatories 12 and 14. The cross-appeal is slightly out of time, but application was made for an extension, which I allowed.

1. The relevant interrogatories and answers are as follows:

"12Subsequent to issuing the Policy to the Plaintiff did you request any information from Dr Klonaris with respect to the Plaintiff's past medical history and in particular past back pain or injury and if so on what date."

Answer:"I object to answering this interrogatory, as it is too wide and objectionable."

"14What information, material or documents did you consider for the purposes of determining the Plaintiff's claim."

Answer:"I object to answering this interrogatory as it is in the nature of cross-examination and objectionable."

"17Look at the document annexed hereto marked 'C' and state:

(a)     Is the 'underwriter' referred to in the last paragraph of the last document an agent, employee or servant of the Defendant, stating which.

(b)     The name of the 'underwriter'.

(c)     Is Berndene Gordon an agent, servant or employee of the Defendant, stating which.

(d)     What was the title or position of Berndene Gordon on the date the document was created.

(e)Whether Berndene Gordon was:

(i)authorised; or

(ii)permitted;

to create the document on behalf of the Defendant."

Answer:"(a)  I object to answering this interrogatory as it is not relevant as it does not relate to a matter in issue between the parties and is objectionable.

(b)I object to answering this interrogatory as it is not relevant as it does not relate to a matter in issue between the parties and is objectionable.

(c)I object to answering this interrogatory as it is not relevant as it does not relate to a matter in issue between the parties and is objectionable.

(d)I object to answering this interrogatory as it is not relevant as it does not relate to a matter in issue between the parties and is objectionable.

(e)I object to answering this interrogatory as it is not relevant as it does not relate to a matter in issue between the parties and is objectionable."

1. As a preliminary point, Mr Phillips for the plaintiff argued that the defendant was confined to the objections taken in the above answers and should not be permitted to raise any further ground.

1. Rule 405 permits the delivery of interrogatories to the opposite party prior to the filing of the certificate of readiness or an order that the proceeding be set down for trial.  Rule 406 sets out the matters in respect of which a party may interrogate.  Rule 409(1) contains the requirement that the party interrogated answer each interrogatory by a document identifying each separate interrogatory by its distinctive number, followed by:

"(a)     the answer to that interrogatory; or

(b)the objection to answering it with a concise statement of the reasons for the objection."

Notwithstanding that subrule, r409(3) permits the party interrogated within the time limited for answering the interrogatories to apply to a judge to disallow the interrogatories:

" … on the ground that they are unnecessary, unduly prolix, oppressive, vexatious or otherwise should not be allowed having regard to ¾

(a)       the circumstances of the case; and

(b)       the costs involved in answering them; and

(c)       the subject matter of the action."

Rule 409(4) directs that such an application be determined in a summary way and so as to avoid unnecessary cost and delay.

1. An alternative way in which an objection to answering the interrogatories or any one or more of them can be determined is for the party interrogating to apply under r410 for an order that the party interrogated answer the interrogatory which he or she has objected to answering. Subrule (3) provides:

"410     …

(3)      On the hearing of an application, the Court or a judge may –

(a)  disallow any interrogatory to which the application relates if –

(i)the interrogatory is scandalous or irrelevant or not in good faith for the purpose of the proceeding; or

(ii)the matters inquired into are not sufficiently material at that stage; or

(iii)the cost of administering interrogatories is not justified having regard to the circumstances of the case, including the subject matter of the action; or

(iv)on any other grounds, the Court or judge considers it should be disallowed; or … "

1. It was submitted that as the defendant was required by r409(1) to state in writing the objection to answering any given interrogatory "with a concise statement of the reasons for the objection", no other ground of objection could be canvassed when the issue was put to the test under r410. I see no warrant for so limiting the Court's power under the latter rule. Subrule (3) does not fetter the Court's power to disallow an interrogatory on the grounds specifically nominated in pars (a)(i)-(iii) or "on any other grounds that Court or judge considers it should be disallowed". It was submitted that fairness required this limitation and that the interrogating party could otherwise be taken by surprise. Such surprise, however, could be remedied by an adjournment on just terms. It was submitted that in this case an adjournment had been offered, but only on terms unacceptable to the plaintiff that he should pay the costs of the adjournment. However, he declined the adjournment and elected to proceed.

1. Reliance was placed on the case of Church v Perry (1877) 36 LT 513 where on appeal to the Common Pleas Division from an order in Chambers refusing to direct further answers to certain interrogatories, the court declined to hear objections to certain other interrogatories, Grove J saying during argument, at 513:

"It is necessary to object specifically to particular interrogatories and a party is not at liberty to object to a whole series in general terms". 

Lopes J said in his reasons for judgment:

"I am strongly of opinion that we can only deal with the answers which were the subject of an appeal to the learned judge in Chambers, and on which he has exercised his discretion." (Ibid)

The case does not support the contention that the court cannot consider other grounds of objection than those specifically raised.  I do not consider that the preliminary point has any merit.

1. The action is one seeking specific performance of a contract of insurance or for damages consequent upon its breach.  According to the pleadings, on 29 May 1998 the plaintiff made an application for a disability policy with the defendant that was issued on 29 June 1998.  On 1 December 1998, the plaintiff ceased work due to an inability to work caused by low back strain and pain.  He had sustained an injury at work on 5 March 1998 prior to the issue of the policy.  In about March 1999, he made a claim for payments under the policy and the defendant accepted the claim on about 28 September 1999.  Thereafter the defendant made 11 payments to the plaintiff until October 2000 when they were terminated.  A total sum of $46,674 was paid.  The defendant defends the termination of the contract and counter-claims for the return of the sums paid, less premiums paid, on the basis that the plaintiff failed to disclose the work injury sustained by him in March 1998 and had made material misrepresentations but for which the defendant would not have entered into the contract.  The particulars of non-disclosure were that:

(a)       on or about 5 March 1998, he had suffered a back injury;

(b)on 11 March 1998, he had consulted Dr Dimitrios Klonaris, a general medical practitioner, concerning the back injury suffered on or about 5 March 1998 and had obtained a medical certificate for three days of "light duties non bending no more than 5kg lifting";

(c)       a lumbo-sacral spine x-ray was performed on 18 March 1998; and

(d)       on 18 May 1998 he had consulted Dr Klonaris at which time the back injury was discussed.

The misrepresentations alleged in par18 of the defence were:

(a)The plaintiff made a declaration on 29 May 1998 whereby he declared that his answers in his application form were true and complete answers.  He declared that he had last consulted Dr Klonaris in January 1998 for a "jaw strain".

(b)The plaintiff had disclosed that he had Scheuerman's Disease "at a very early age" that had affected his back.  The plaintiff made a declaration on 9 June 1998 when he signed a "back disorder questionnaire" and to the question 10 "Have you had any recurrence of back trouble", answered "No" and to question 11 "State dates and periods of time lost from your occupation through your back disorder", answered "never required any time off".

(c)On 23 June 1998 he made a further declaration that "since the date of the application there has not been any material alteration in any circumstances, including health, occupation, hazardous pursuit which could affect final acceptance of the risk".

By way of reply, the plaintiff pleaded that he had disclosed to the defendant in his application for the insurance policy dated 29 May 1998 that he had suffered a back injury prior thereto, but that it was mis-recorded as having occurred in February 1998 rather than March 1998, such disclosure being sufficient to have put the defendant on notice that the plaintiff had recently suffered a back injury.  Similarly he claimed to have disclosed that he had consulted Dr Klonaris and that an x-ray had been performed, albeit that the date was similarly mis-recorded.  Furthermore, he denied that any of the representations alleged in par18 of the defence were misrepresentations.

1. Interrogatory 12 enquires into whether the defendant, after issuing the policy, sought any information from Dr Klonaris with respect to the plaintiff's past medical history and in particular past back pain or injury and if so, on what date.  The written objection was that the interrogatory was too wide, but counsel for the defendant argued that in any event the interrogatory in question was objectionable on the ground of irrelevance.  In my view, the matter enquired into is not irrelevant.  A fact directly in issue between the parties is whether or not the alleged non-disclosure of the back injury in March 1998 and its effect upon the plaintiff was a matter but for which the defendant would not have issued the policy.  A fact, the existence or non-existence of which is relevant to the existence or non-existence of that fact in issue, is whether or not, having regard to the fact that the defendant did make payments under the policy for almost twelve months between 30 September 1999 and 18 September 2000 those payments were made by the defendant with knowledge acquired from Dr Klonaris of the plaintiff's condition prior to the issue of the policy.  Similarly the fact that the defendant made no enquiry of Dr Klonaris "though not a fact directly in issue, is a very material fact with regard to the inference that may be drawn from it as to the fact in issue" (per Lord Esher MR in Marriott v Chamberlain (1886) 17 QBD 154 at 162). I do not consider the interrogatory too wide as alleged in the written objection, but in any event I note that in argument before me the objection was put on the basis of irrelevance. I order that it be answered by the defendant.

1. Interrogatory 14 enquires into what material or documents the defendant considered for the purposes of determining the plaintiff's claim.  The written objection was that it was in the nature of cross-examination, but in argument it was also claimed to be irrelevant.  The claim referred to is that made by the plaintiff in March 1999 and which was accepted on or about 28 September 1999.  In a document discovered by the defendant as one relating to the matters in question in this action (the subject matter of interrogatory 17) and dated 23 August 2000, that is before the cessation of payments, the author referred to medical reports of Dr Klonaris dated 11 January 1999 (that is, prior to the submission of "the claim" to the defendant) and on 11 November 1999 as containing information concerning the consultation with him on 11 March 1998 and 18 May 1998 and the plaintiff's then condition.  The defendants gave an affirmative answer to interrogatory 15, which was not objected to and which was "Prior to accepting the Plaintiff's claim did you request any medical information or a report from Dr Klonaris?"  In these circumstances, I regard interrogatory 14 as merely fishing for further information as to what information the defendant may have had.  It is cross-examinational in nature and was rightly disallowed.

1. The defendant seeks to be relieved of the obligation imposed by the Master to answer interrogatory 17 on the ground of irrelevance.  The document enquired about is described in the defendant's list of documents as "copy letter to Bronwyn Carey, Disability Claims, Royal & Sun Alliance from Bernadene (sic) Gordon, Underwriting Royal & Sun Alliance dated 23 August 2000".  On the face of it, the document is potentially against the defendant's interests.  In part it reads:

"I refer to the medical reports from Dr Klonaris dated January 11, 1999 and November 11, 1999 and note the following:

•          Client first consulted for back pain March 11, 1998, X‑ray performed

•          Diagnosed as musculo‑ligamentous strain aggravated by his employment

•Treatment was strengthening exercise, physiotherapy and alleviation of work duties. The client was advised that his occupation was incompatible with his back condition in the long term.

•Seen again 18 May for another condition however the back complaint was discussed.

Had we been aware of the result of the x‑ray performed March 11, and the diagnosis with advice regarding his occupation and back condition, cover for disability income would have been declined. [However the client disclosed to RSA the dates of the consultation, the investigations performed (ie x‑ray) and the recommendation to perform exercises for the back problem. At this stage no time had been lost from work. RSA recognised the need more information and requested a PMAR however details of the 98 consultation were not provided neither were follow up enquiries made.

The current situation is a direct result of omission by the underwriter who was on notice as to the clients recent back problems."

1. The interrogatory seeks details of the identity of the underwriter referred to in the last paragraph and the status and authority of the author.  None of these matters, in my view, are facts in issue, nor are they facts, the existence or non-existence of which is relevant to the existence or non-existence of any fact directly in issue between the parties.  On the face of it, it is the defendant's document and it has been disclosed as a relevant document, but its authenticity is not sought to be established by the interrogatory (cf Drew v Drew [1917] SA LR 286).  What seems to be sought is confirmation that the author was in a position to bind the defendant by such admissions as are said to be made in the document.  In my view, at best, the facts which might be established by an answer go only to issues of credit rather than the fact in issue, whether or not the non-disclosure and/or misrepresentations, if proved, would have resulted in the policy cover being refused.  I disallow interrogatory 17.