Shortis v Mr Carpet (Gold Coast) Pty Ltd

[2003] QDC 377

DISTRICT COURT OF QUEENSLAND

CITATION:

Shortis v Mr Carpet (Gold Coast) Pty Ltd  [2003] QDC 377

PARTIES:

JOHN KINGSLEY SHORTIS

Applicant/Plaintiff

and

mr carpet (gold coast) Pty Ltd
(ACN 010 182 126)

First Defendant

and

hudson conway limited
(ACN 009 556 629)

Second Defendant

and

multiplex (qld) pty ltd
(ACN 010 898 816)

Third Defendant

and

workcover queensland

Fourth Defendant

FILE NO:

D630/1998

DIVISION:

Civil

PROCEEDING:

Application  

ORIGINATING COURT:

District Court of Queensland, Southport

DELIVERED ON:

26 August 2003

DELIVERED AT:

Southport

HEARING DATE:

12 August 2003

JUDGE:

Alan Wilson SC, DCJ

ORDER:

1.  That the plaintiff have liberty to take a new step in the action notwithstanding no step was taken for 2 years in the period 22 May 2001 to 28 May 2003

2.  That the question whether the plaintiff was at the time material to the action a “worker” as that term was defined in the Workers Compensation Act 1990 in the employ of the first defendant be determined separately before the trial in this action

3.  Liberty to apply on seven (7) days notice in writing to the other parties

CATCHWORDS:

PRACTICE AND PROCEDURE – DELAY – LIBERTY TO PROCEED – delay of more than two years – whether plaintiff should have leave to proceed under UCPR r389(2)

PRACTICE AND PROCEDURE – SEPARATE HEARING AND DETERMINATION OF ISSUES – whether question whether plaintiff a “worker” under Workers Compensation legislation should be determined before trial

Uniform Civil Procedure Rules, rr 389 and 483
Workers Compensation Act 1990, ss 5 and 8
Corporations Law, s 610AG

Cases considered:

Cairns City Council v Xontan Pty Ltd, unreported

CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601

Foster v Skilled Communication Services Pty Ltd and WorkCover Queensland (2002) QDC 213

Pagnon v WorkCover Queensland (2000) QCA 421

Raabe v Brisbane North Regional Health Authority (2000) QLC 257

Reading Australia Pty Ltd v Australian Mutual Providence Society (1991) FCA 718

re Multiplex Constructions Pty Ltd (1999) 1 Qd R 287

Salisbury v Farley Constructions Pty Ltd & Workers Compensation Board of Queensland (2000) QDC 51

Tyler v Custom Credit Corporation Limited (2000) QCA 178

COUNSEL:

Dr G J Cross for the applicant plaintiff 
Mr R Perry for the respondent third defendant
Mr B L P Hoare for the respondent fourth defendant

SOLICITORS:

Hoolihan’s Lawyers for the plaintiff
Minter Ellison for the third defendant  
Hopgood Ganim for the fourth defendant

1. In this action the plaintiff claims damages for injuries allegedly suffered on 30 July 1996 at a building site called “Crown Towers” at Surfers Paradise.  He alleges he attended the site in the course of his employment as a carpet and vinyl layer with the first defendant and, while unloading rolls of vinyl, one fell on him causing injury.  He has sued the second defendant as the developer of the site and the third defendant as the builder.  The fourth defendant, WorkCover Queensland, is not named in his action but filed a defence in it on 22 May 2001.

1. This application is for leave to take a step after a delay of more than two years, under UCPR r 389(2) which provides:

(2)  If no step has been taken in a proceeding for two years from the time the last step was taken, a new step may not be taken without the order of the court, which may be made either with or without notice.

1. The application also seeks a ruling under UCPR r 483 which provides:

(1) The court may make an order for the decision by the court of a question separately from another question, whether before, at, or after the trial or continuation of the trial of the proceeding.

As appeared from the submissions of Dr Cross for the applicant plaintiff what was sought was the separate determination, instanter, of the question whether at the time of the accident the plaintiff was a “worker” as that term was defined in the Workers Compensation Act 1990.

1. There was no appearance for the first defendant which, I was told, is in liquidation nor for the second defendant in respect of which, I was also told, some agreement has been reached involving discontinuance of the plaintiff’s claim. Mr Perry of counsel appeared for the third defendant and opposed the application for leave to proceed, but did not wish to be heard in respect of the r 483 question. Mr Hoare of counsel appeared for the fourth defendant and, initially, signified his client did not oppose the grant of leave but did object to the separate determination of the “worker” question and argued that, even if that question was something which could properly be determined separately under r 483, the determination itself ought to be adjourned to enable his client more time to prepare.

1. It is not in contention that after he suffered an injury on 30 July 1996 the plaintiff sought workers compensation benefits from the fourth defendant’s predecessor, the Workers Compensation Board of Queensland.  The Board did not contend that he was not a ‘worker’ under the legislation which applied at the time, the Workers Compensation Act 1990 (“the Act”).  Compensation was paid and the applicant proceeded with steps to bring a common law action, which was commenced in the court by a Plaint filed on 29 July 1998.

1. Thereafter, the matter had a chequered history.  Solicitors on the Gold Coast, Messrs Gall Standfield Smith, filed an entry of appearance and defence for the first defendant denying the claimant was a “worker”.  They were replaced by Messrs Primrose Couper Cronin Rudkin in June 2000 and they, too, advised the plaintiff’s solicitors that WorkCover would not indemnify the alleged employer, the first defendant.  In August 2000 Messrs Minter Ellison also advised that the public liability insurers for the first defendant, for whom they acted, similarly refused indemnity to the first defendant.

1. Later, Messrs Primrose Couper Cronin Rudkin withdrew as solicitors for the employer but sought to join WorkCover as a fourth defendant and, indeed, filed a defence for it in that capacity on 22 May 2001.  The first defendant was placed into liquidation as at 14 May 2001.

1. Dr Cross provided me with a chronology which was not disputed by any other party.  Relevantly, it showed that the last court document filed in the action had been WorkCover ‘s defence of 22 May 2001.  Between that date and 28 May 2003 correspondence passed between the legal practitioners and, in particular, between the plaintiff’s solicitors and Minter Ellison concerning discontinuance of the proceedings against the first defendant; but no step, in the sense of the filing or service of a document in the proceedings was undertaken until 28 May 2003 when the applicant’s solicitors delivered a list of documents and supplementary statement of loss and damage to solicitors then acting for the third and fourth defendants.

1. On 11 June 2003 new solicitors were appointed for WorkCover and they wrote informing the plaintiff’s solicitors of their belief that the last step in the action had been the filing of the fourth defendant’s defence on 22 May 2001 and leave to proceed was necessary.

1. This application was filed on 30 June 2003 but not, apparently, served or brought to the attention of the representatives of the third and fourth defendants until much later, and not served until 5 August.  The liquidators of the first defendant were only served on 7 August.

Leave to Proceed

1. I accept that the relevant delay period for the purposes of r 389 is 22 May 2001 to 28 May 2003. Dr Cross contended that in that period the plaintiff’s solicitors had been taking steps to advance the matter through correspondence and the like, and that the judgment of Holmes J in Raabe v Brisbane North Regional Health Authority (2000) QLC 257 established that something less than an actual step in the proceedings themselves (ie, the filing of a document in court) would satisfy r 389. In that decision Holmes J said at para [9]:

There is a good deal of authority in relation to Order 90 rule (9) of the rules of the Supreme Court, which was the predecessor to rule 389.  That rule referred to the circumstance that “No proceeding has been taken” rather than, as in rule 389, that “No step has been taken in a proceeding”.  While the substitution of the expression “step…in a proceeding” for “proceeding” suggests that something less formal may suffice, it also conveys a necessary quality of constituting an advance in the action.  It remains, therefore, apposite to say, as did McPherson SPJ (as he then was) in Citicorp Australia Limited v Metropolitan Public Abattoir Board (1992) 1 Qd R 592 at 594, that: “the act or activity must have the characteristic of carrying the cause or action forward”.

1. She went on to determine, however, that the mere delivery of a list of documents, said in the letter which accompanied it to be a draft, would not constitute a step in the action. 

1. Correspondence tendered by Mr Perry for the third defendant shows that from and after 10 May 2001 its solicitors were pressing the plaintiff’s lawyers to take a step.  No satisfactory response was ever received and, just within the two-year period (on 14 May 2003) the third defendant’s solicitors sent a letter under r 444 which the plaintiff in submissions before me seized upon as, itself, constituting a step.  I do not see how that can be correct.  Letters of that kind do not themselves carry an action forward but, rather, signify the possibility something will be done, and no more.  To categorise them as steps would have the effect, as Mr Perry submitted, of dissuading a defendant from doing anything to advance an action itself.  I am not persuaded any step, using the word in the sense intended by the rule, was taken in the relevant period.

1. Once that conclusion is reached it is necessary to consider, then, those factors to be weighed when the discretion under 389(2) is considered, listed out by Atkinson J (with whom the other members of the Court of Appeal agreed) in Tyler v Custom Credit Corporation Limited (2000) QCA 178. While the action has not been advanced with alacrity the chronology shows that save for one nine-month period within the relevant two years the plaintiff’s solicitors were tolerably active, and engaged in correspondence directed towards clarifying the issues and determining the proper parties against whom the plaintiff should proceed. There is no suggestion the plaintiff was personally responsible for any of the delay.

1. While it was argued, for the third defendant, that no explanation for the delay has been advanced the chronology itself shows what occurred.  There was no suggestion of prejudice to any party until part way through the hearing itself when the third defendant asserted (and subsequently filed an affidavit confirming) that on 17 June 2001 an insurer who, with others, formed a “raft” with others in underwriting a policy insuring the third defendant in the relevant period, went into liquidation on 17 June 2001.  The affidavit also concedes, however, that the third defendant is otherwise entitled to indemnity under another policy although that policy has a “deductible” of $20,000.  By inference, the policy issued in part by the defunct insurer did not.  The prejudicial event occurred, however, very early in the relevant period and it was not contended the matter could or should have come to trial by that time, so it is hardly material.

1. Having considered the various factors listed by Atkinson J and in light of the history of the matter discussed above and, in particular, the fact the action has not been allowed to lie dormant (save for one nine month period when little seems to have occurred) I am satisfied the discretion ought to be exercised in the plaintiff’s favour and I will give such leave as is necessary.

Determination of a Separate Issue

1. The predecessor to r 483 was RSC Order 39 r 12. In re Multiplex Constructions Pty Ltd (1999) 1 Qd R 287 the Court of Appeal held that it was desirable that, whenever possible and convenient, judges should decide questions summarily even if the question would not resolve the whole dispute. Davies JA and Lee J said at 288:

There are often questions in a dispute the decision of which, whilst it may not necessarily resolve the whole dispute, may nevertheless lead to its resolution, in a way which results in considerable savings in time and cost, often for reasons which are neither strictly legal nor logical. 

1. In Reading Australia Pty Ltd v Australian Mutual Providence Society (1991) FCA 718 Branson J suggested that the factors which would tend to support the making of an order under the similar Federal Court Rule would include any contribution to the saving of time and cost by substantially narrowing the issues for trial, or even leading to the disposal of the action; or, contributing to the settlement of litigation[1].  At the same time her Honour warned against over-ambitious attempts at resolving questions or issues prematurely.  These factors were taken into account by Jones J in Cairns City Council v Xontan Pty Ltd, unreported (Supreme Court, Cairns, 12/99 10 September 1999) who said, at para [15]:

   [1]   CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 607

The ultimate question to be determined on an application such as this is whether the making of the order is “just and convenient” and this must take into account the nature of the judicial process.  At Bass v Permanent Trustee the court further said:

“Judicial power involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process.  And that requires that the parties be given an opportunity to present their evidence and to challenge the evidence that he gives them.  It is contrary to the judicial process and no part of the judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence of the case.”

1. Resolution of the question whether the plaintiff was a “worker” is readily categorised as something which would resolve an important issue in this case, and improve the prospects of compromise.  It will probably determine the important question whether the fourth defendant is obliged to indemnify the first (and whether the plaintiff may in fact have a cause of action against the fourth defendant directly).  It would plainly be beneficial to the plaintiff who, if he succeeded, would avoid the risk of going to trial and obtaining a judgment against a company in liquidation, with no insurance.  The position of the fourth defendant will be clear.  This is a case in which the use of the rule has, then, obvious advantages.

1. I am comforted in this conclusion by the fact that, as the judgment of Shanahan DCJ in Salisbury v Farley Constructions Pty Ltd & Workers Compensation Board of Queensland (2000) QDC 51 shows, at an earlier point in that action his Honour Judge Boyce QC, DCJ had ordered that a not dissimilar issue be determined, separately and before trial, between an employer and a third party.

1. Dr Cross submitted, however, that I could determine the matter immediately.  His first contention was that the fourth defendant is now estopped from denying the plaintiff was a worker because his claim for workers compensation, after the incident, was accepted and compensation was paid.  Dr Cross quite properly referred me, however, to the judgment in Salisbury (supra) in which Shanahan DCJ held that the mere payment of weekly compensation payments or medical expenses to a worker could not create an expectation that the insurer would also meet any liability in relation to damages under the same policy of insurance[2].  That case was distinguished by Brabazon QC, DCJ in Foster v Skilled Communication Services Pty Ltd and WorkCover Queensland (2002) QDC 213 but the decision is, I am told, under appeal. Ultimately, Dr Cross did not press the point.

   [2]   supra, at para [70]

1. He did submit, however, that WorkCover was unable to avoid a determination that the plaintiff was a “worker” under the legislation which applied at the time of the subject incident, the Workers Compensation Act 1990 because s 8(5) deemed him to be one:

(5)  A person who works under a contract, or at piece-work rates, for labour only or substantially for labour only, including one who supplies tools of trade designed for use by hand, is a worker for the purposes of this Act employed by the person for whom the labour is provided.

In an affidavit filed in support of this application the plaintiff said that in the course of his work for the defendant laying carpet and vinyl he had his own hand tools but supplied no other equipment. 

1. S 9(d) of the Act excludes persons who supply and use their own motor vehicles (being commercial motor vehicles fitted with commercial type bodies) but, although the plaintiff’s tax return shows he claimed motor vehicle expenses he swore that he did not use a vehicle of that kind.  He was not required for cross-examination but Mr Hoare, for WorkCover, submitted the plaintiff had failed to make complete disclosure, as yet, of all documents that might relate to the question whether he was a worker or a contractor and said he would require more time to prepare for the determination of the separate question if that was to occur. 

1. An affidavit from WorkCover’s solicitor Mr Shannon showed he had attempted before the hearing on 12 August to contact both a former director and an employee of the first defendant who provided a statement to WorkCover’s investigators.  The employee was interviewed some five years ago, and neither witness could be located in the time between service of this application, and the hearing.  Mr Hoare submitted these persons might have evidence relevant to the nature of the plaintiff’s work, tools and use of vehicles and more time was needed on his side to pursue them.  In light of the delays in the action this was not surprising, nor amenable to criticism.

1. It was also contended for the plaintiff that it was unnecessary for him to seek an order restoring its corporate status under s 601AH2 of the Corporations Law because, under s 601AG the plaintiff might recover directly from the insurer of a deregistered company.  This may be an appropriate course[3] but only if WorkCover is found liable to indemnify.  In itself, the legislation supports the plaintiff’s argument for a preliminary determination of the issue.

   [3]   Pagnon v WorkCover Queensland (2000) QCA 421, at para [17]

1. At the same time the absence of the liquidators, who were not served until 7 August and whose failure to appear was not explained, is a matter which also inhibits the determination of the issue now.  It is not improbable the liquidators would have an interest in being heard on the matter and, perhaps, have documents relevant to it.

1. For these reasons I think the question whether the plaintiff was at the time material to the action a “worker” as that term was defined in the Workers Compensation Act 1990, in the employ of the first defendant, ought to be determined separately, and that further directions should be given about all steps necessary to ensure that issue can be heard and determined expeditiously.  The parties have liberty to apply on seven days’ notice in writing to the other parties and ought now, I think, turn their minds to appropriate directions and, if possible, agree them.  When that has been done the matter can be listed before me by arrangements with the List Clerk, or my Associate.

1. I will hear submissions about costs.

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