Scobie and Glover Engineering Pty Ltd v Scobie
[2004] TASSC 116
•15 October 2004
[2004] TASSC 116
CITATION: Scobie & Glover Engineering Pty Ltd v Scobie [2004] TASSC 116
PARTIES: SCOBIE & GLOVER ENGINEERING PTY LTD
v
SCOBIE, Leone Yetta
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 42/2004
DELIVERED ON: 15 October 2004
DELIVERED AT: Hobart
HEARING DATES: 8 October 2004
JUDGMENT OF: Underwood J
CATCHWORDS:
Contracts – Particular parties – Principal and agent – Creation of relationship of agency – Authority of agents – Construction and extent of authority – Other cases – Whether general common law rule ousted by terms of statute.
Workers Rehabilitation and Compensation Act1988 (Tas), s81A(1).
J M Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693, applied.
Vincent v Johnstone Shire Council (1995) 89 LGERA 382; R v Justices of Kent (1873) LR 8 QB 305; Jackson & Co v Napper (1887) 35 Ch D 162, followed.
Aust Dig Contracts [171]
Workers Compensation – Proceedings to obtain compensation – Determination of claims – Procedure before hearing – Whether insurer has authority to decide to dispute claim and give statutory notices – Subrogation – Agency – Capacity of agent governed by terms of policy.
Workers Rehabilitation and Compensation Act1988 (Tas), s81A(1).
Aqua Distributors Pty Ltd v Roff (2002) 11 Tas R 192, discussed.
Aust Dig Workers Compensation [146]
REPRESENTATION:
Counsel:
Appellant: C N Dockray
Respondent: A I Gaggin
Solicitors:
Appellant: C N Dockray
Respondent: Murdoch Clarke
Judgment Number: [2004] TASSC 116
Number of Paragraphs: 24
Serial No 116/2004
File No LCA 42/2004
SCOBIE & GLOVER ENGINEERING PTY LTD
v LEONE YETTA SCOBIE
REASONS FOR JUDGMENT UNDERWOOD J
15 October 2004
Introduction
The shareholders and directors of the appellant are the respondent and her son. On 22 January 2004, the respondent made a claim for workers compensation. The claim speaks of stress, depression and nervous breakdown. Allianz Australia Insurance Ltd was the appellant's insurer.
By letter dated 16 March 2004, Allianz purported to dispute liability to pay compensation in accordance with the provisions of Workers Rehabilitation and Compensation Act 1988 ("the Act"), s81A(1). The letter asserted that Allianz was acting "through subrogative rights and/or as agents of the [respondent]". To support its right to so act, Allianz relied upon a term in its workers compensation policy. The Workers Rehabilitation and Compensation Tribunal ("the Tribunal") found that the term did not authorise Allianz to act as it purported to act, consequently the employer had not formed an intention to dispute the claim as is required by the Act, s81A(1), and the referral was dismissed. This appeal is brought from that order of dismissal.
Settled law
The following is taken from the written submissions made by Mr Dockray, counsel for the appellant:
1The employer has the onus of proof on a s81A(1) referral. See GIO Australia Limited v Lovell [2000] TASSC 75.
2The formulation by an employer of the intention to dispute a claim pursuant to s81A(1) is a condition precedent to the issuing of an effective s81A(l)(a) notice that an employer disputes liability pursuant to s81A(1). See Caterpillar Elphinstone Pty Ltd v Hazelwood 34/1997 at 3; State of Tasmania v Wylie [2000] TASSC 128 at 6.
3An employer's obligation under s81A(1)(a) and (b) is met if the notice disputing the claim is given by the employer or the employer's properly authorised agent, provided that the employer has formed the requisite state of mind to dispute liability. See Freemasons Homes for the Aged v Price A2/1994 at 5. The fact that the s81A(1)(a) notice or s81A referral is signed by a purported agent is not evidence of the circumstances of that agent's appointment, nor is it evidence as to the extent of the agent's authority, nor is it evidence that the employer had in fact formed the requisite intention to dispute the claim. See GIO Australia Limited v Lovell (supra) at 5 ‑ 6.
(4)An employer's obligations under pars2 and 3 cannot be met by the employer's insurer acting alone. See FAI General Insurance Co Limited v De Saye A23/1992; State of Tasmania v Wylie (supra).
(5)In cases where the existence of an employer's state of mind or an agent's authority is put in issue, the Tribunal must determine that preliminary issue on the evidence: Freemasons Homes for the Aged v Price (supra) at 5.
The contentions
Mr Dockray submitted that the following term in the policy of insurance was sufficient authority for Allianz to exercise the statutory rights of an employer conferred by the Act, s81A(1):
"7 Subrogation
The Insurer shall be entitled to use the name of the Employer and any Employees of the Employer in respect of anything indemnified under this Policy including the bringing, defending, enforcing or settling of any legal proceedings for the benefit of the insurer. The Employer and any Employee shall give all necessary information and assistance and forward all documents to enable the Insurer to settle or resist any claim that the Insurer may think fit. The insurer shall be entitled to use the name of the Employer and any Employee in any proceedings to enforce for the benefit of the Insurer, any order made for costs or otherwise shall have the right of subrogation in respect of all rights which the Employer and any Employee may have against any person or persons who may be responsible to the Employer or otherwise in respect of any claim covered by this Policy and the Employer and any Employee shall as and when required, execute any necessary documents for the purpose of vesting such rights in the Insurer."
Counsel for the appellant in the Tribunal (not Mr Dockray) made the same submission in the Tribunal and the three grounds in the notice of appeal contend that in rejecting that submission, the Tribunal erred in law.
Mr Gaggin for the respondent made two submissions on the hearing of the appeal, viz:
· the terms of s81A(1) were such that those powers could not be exercised by anyone other than the employer; and
· the term in the policy of insurance did not authorise Allianz to exercise the powers conferred by the Act, s81A(1).
The general common law rule is that an adult of full capacity is entitled to appoint an agent to act on his or her behalf. This was articulated by Blackburn J in R v Justices of Kent (1873) LR 8 QB 305 at 307 and by Griffiths CJ in J M Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693 at 700. It was affirmed by the Full Court of the Federal Court in Deputy Commissioner of Taxation v Boxshall (1988) 83 ALR 175 at 178. The rule is encapsulated in the Latin maxim qui facit per alium, facit per se. The general common law rule must, of course, give way to any statutory expression to the contrary. In J M Christie v Permewan, Wright & Co Ltd (supra), it was held that where the statute required the prosecution to be taken in the name of the Collector of Customs for the State, the statute did not prevent an agent from bringing the prosecution, provided he or she brought it in the name of the Collector.
The authorities make it clear that the general common law rule will stand unless the statute expressly, or by clear implication, ousts it. In In re Whitely Partners, Limited (1886) 32 Ch D 337, it was held that the general common law rule was not ousted by a provision in the Companies Act 1862 that required seven or more persons forming a company to subscribe their names to a memorandum of association. In that case, the agent signed the name of the subscriber without indicating that he did so as agent. It was held that as he was in fact authorised to do that, there had been compliance with the statute.
In Vincent v Johnstone Shire Council (1995) 89 LGERA 382, the Local Government (Planning and Environment) Act 1990 (Qld), s4.3(a), required an objection to "be in writing and signed by each person who makes the objection". In that case, a solicitor wrote a letter setting out the names of the persons for whom he acted, the fact that they were objecting and the grounds of the objection. He signed the letter with his own name. At 384, Dowsett J, with whose judgment the other members of the Queensland Court of Appeal agreed, cited with approval the following passage from McRae v Coulton (1986) 7 NSWLR 644 at 663 (Court of Appeal):
"The first question is whether the applicants must sign personally or whether signature by an agent on behalf of the applicant was permissible. It has long been the law that, where a provision of a statute or of delegated legislation requires that a document shall be signed by a particular person, prima facie that provision does not exclude the common law rule qui facit per alium facit per se and if the person authorises another to sign on his behalf, a signature made by that other pursuant to the authority is equivalent to the signature of the person giving the authority. ... An intention that a personal signature is required may appear from the language of the statute or delegated legislation or from its subject matter. Thus other provisions in the statute or in cognate legislation expressly authorising signature by agents may preclude the application of the principle where no such provision is made ...".
Dowsett J then went on to say, at 385:
"The general rule requires that we examine the legislation to see if some contrary intention appears, keeping in mind the strength of the presumption demonstrated by the cases. Agency is an indispensable aspect of modern society. The conduct of business or, indeed, society generally would not be facilitated by the creation of a substantial body of exceptions to the general presumption. The words in question, 'signed by each person who makes the objection', are neutral, suggesting that the presumption should apply."
Dowsett J concluded his judgment with the following masterly statement of common sense, at 386:
"What must be done is to make it clear that the execution is on behalf of the principal. One way of doing this is by writing the principal's name, with or without the further subscription, 'pp' and the name of the agent. In either case, the agent is asserting his authority to sign. The same effect is achieved by the agent signing his own name and asserting that he signs as agent for the principal. In the present case, the agent recited that he was formally objecting on behalf of the appellants and signed in his own name. He thus held himself out as having authority to do so, and I can see no practical or theoretical justification for criticising this course."
Perhaps the following statement taken from the judgment of Stirling J in Jackson & Co v Napper (1887) 35 Ch D 162 at 172 is apposite:
"I take it that, subject to certain well-known exceptions, every person who is sui juris has a right to appoint an agent for any purpose whatever, and that he can do so when he is exercising a statutory right no less than when he is exercising any other right."
There is nothing in the words of the Act, s81A(1), nor in its context, to suggest that the well established general common law rule qui facit per alium, facit per se should be excluded. It is true, as Mr Gaggin submitted, there are a number of sections in the Act, such as ss42, 68, 69(8) and 88, that expressly confer a power on the licensed insurer as well as the employer to invoke the jurisdiction of the Tribunal. However, I do not see that fact as a reason to infer that the Parliament intended that the powers conferred on an employer by the Act, s81A(1), could not be delegated. There is no reason why the statutory powers conferred on an employer should not be exercised by a duly authorised agent of the employer. This leads directly to the other contention; was Allianz authorised by the appellant to exercise the statutory rights conferred on it by the Act, s81A(1)?
In Aqua Distributors Pty Ltd v Roff (2002) 11 Tas R 192, I was asked to consider whether the terms of the following clauses in a workers compensation policy authorised the insurer to exercise the statutory rights conferred by the Act, s81A(1).
"7 Subrogation. We shall be entitled to use your name and any of your Employees' names in respect of anything indemnified under this Section including the bringing, defending, enforcing or settling of legal proceedings for our benefit. You and any employee shall give all necessary information and assistance and forward all documents to enable us to settle or resist any claim as we may think fit. We shall be entitled to use your name and any Employee's name in any proceedings to enforce for our benefit, any order made for costs or otherwise we shall have the right of subrogation in respect of all rights which you and any Employee may have against any person or persons who may be responsible to you or otherwise in respect of any claim covered by this Section and you and any Employee shall as and when required execute any necessary documents for the purpose of vesting in us such rights.
...8 Conduct of Defence and Recovery Actions
Subject to the Insurance Contracts Act 1984 we shall be entitled to take over and conduct in your name or the name of any other party covered by the policy, the defence or settlement of any claim and to take recovery action or prosecute for our benefit, any claim for indemnity or damage or otherwise and we shall have full discretion in the manner in which any proceedings or settlements are conducted. If you or any other party covered by the policy wish to join with us in any action legal costs will be proportionately shared."
I observed, at par16, that there appeared to be nothing in cl 7 to authorise the insurer to exercise the employer's statutory powers. With respect to cl 8, I said, at par18:
"With respect to cl 8 of the policy, the question arises whether the words 'conduct in your name ... the defence ... of any claim', are sufficiently wide to authorise the insurer to decide to dispute the claim and give all necessary notices in the name of the appellant? Prima facie it seems to me that this would appear to be so, as these are the first steps that are taken in the case of defending any claim."
Those observations were all obiter dicta as the terms of those policies were not in evidence before the Tribunal. I held that the court had no power to receive evidence on the hearing of an appeal and, accordingly, it could not be shown that error occurred in the Tribunal.
In the present matter, the policy does not contain a clause the same as, or similar to, cl 8 in Aqua. The Tribunal concluded that there was no distinction to be drawn between cl 7 in this case and cl 7 in Aqua and followed the obita dictum.
I agree with the Tribunal that there is no material distinction to be drawn between the provisions of cl 7 in the present matter and cl 7 in Aqua. Stripped of the immaterial words, cl 7 in the present matter provides:
"The Insurer shall be entitled to use the name of the Employer and any Employees of the Employer in respect of anything indemnified under this Policy including the bringing, defending, enforcing or settling of any legal proceeding for the benefit of the insurer.
The insurer shall be entitled to use the name of the Employer in any proceedings to enforce for the benefit of the Insurer, any order made for costs or otherwise shall have the right of subrogation in respect of all rights which the Employer may have against any person who may be responsible to the Employer or otherwise in respect of any claim covered by this Policy."
Although Mr Dockray relied in part upon the second half of the paragraph I have just set out, I am of the view that it is not relevant. Mr Dockray relied upon the width of the expression "In respect of any claim covered by this Policy". However, that expression is confined to "the right of subrogation". The right of subrogation does not arise until a payment has been made under the policy. See Simpson v Thomson (1877) 3 App Cas 279 at 284; Castellain v Preston (1883) 11 QBD 380 at 389. As the Tribunal observed in its reasons for judgment, no payment has been made in this case.
The issue for consideration does not involve subrogation. The issue is whether, upon its proper construction, cl 7 of the policy authorises Allianz to exercise the statutory powers conferred on the appellant by the Act, s81A(1). Only the first part of cl 7 set out above is relevant to this issue.
In Aqua, I took the view that by exercising the powers conferred by s81A(1), the employer was not defending any legal proceeding because making a claim for compensation did not amount to a legal proceeding. Bearing in mind the risk of applying an interpretation of a word or phrase enacted in one statute to it when enacted in another statute, I refer to Herbert Berry & Associates v Inland Revenue Commissioners [1977] 1 WLR 1437. That case concerned the exercise of distress upon a company's goods and chattels and whether that process fitted within the ambit of the statutory expression, "any other action or proceeding against the company". At 1446, Lord Simon of Glaisdale said:
"The Companies Act 1948 is a statute dealing with technical matters, and one would expect the words therein to be used in their primary sense as terms of legal art. The primary sense of 'action' as a term of legal art is the invocation of the jurisdiction of a court by writ, 'proceeding' the invocation of the jurisdiction of a court by process other than writ."
In Aqua, cl 8 of the policy of insurance, which has no equivalent in the present case, spoke of taking over and conducting the defence of any claim. The reference to "claim" does not appear in cl 7. This distinction between the two clauses led me to make express the dictum in Aqua to which I have referred.
Mr Dockray submitted that what Allianz purported to do in this case was take the first step towards bringing a legal proceeding as agent of the employer. He accepted that making a claim for compensation was not a legal proceeding, but submitted that referring the claim to the Tribunal pursuant to the Act, s81A(1)(c) was bringing a legal proceeding, and that the decision to dispute the claim was the necessary first step that had to be taken to bring such legal proceeding. This argument did not occur to me at the time I wrote Aqua, nor was it put to me by way of submission from counsel. I might add that this argument was not put to the Tribunal in this case either. However, novelty is not necessarily a bar to success. Clause 7 authorises (inter alia) the bringing, in the name of the appellant, of any legal proceeding for the benefit of Allianz. For the purposes of the Act, a legal proceeding is brought when the jurisdiction of the Tribunal is invoked. Relevant to the facts in this case, that is done when the procedure to invoke that jurisdiction is followed. As I observed in a different context in Aqua, making a decision to dispute the claim is the first step, or a condition precedent, to referring the matter to the Tribunal in accordance with s81A(1)(c). Upon the referral being made, the jurisdiction conferred by s81A(2A), (2B) and (2C) is exercised. Clause 7 clearly confers capacity on Allianz to invoke the jurisdiction of the Tribunal. It would be perverse not to include within that capacity the power to decide, in effect, to invoke the jurisdiction.
I conclude that the Tribunal (understandably) fell into error and the appeal should be allowed. The order of the Tribunal is quashed. The parties agreed that there was ample evidence to support the Tribunal's conclusion that there was a genuine dispute concerning the liability of the appellant to pay compensation and that in the event of me reaching the conclusion that I have reached, I should make an order myself rather than send it back to the Tribunal. There will be orders that compensation by way of weekly payments is not to be paid by the appellant to the respondent, and that benefits payable under the Act, Div2, PtVI, are not to be paid by the appellant.
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