Worths Pty Ltd v O'dal
[2000] WASCA 120
•10 APRIL 2000
WORTHS PTY LTD -v- O'DAL [2000] WASCA 120
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASCA 120 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:16/2000 | 10 APRIL 2000 | |
| Coram: | TEMPLEMAN J WHEELER J | 10/04/00 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal declined and application dismissed | ||
| PDF Version |
| Parties: | WORTHS PTY LTD MARILYN JOY O'DAL |
Catchwords: | Civil procedure Western Australia Appeal from the decision of a Master not to grant an adjournment and to permit the applicant to commence proceedings against a corporation which is subject to Deeds of Arrangement Adjournment sought on the basis that respondent had not had sufficient opportunity to consider papers following their late service Whether Master should have considered the merits of the application in deciding upon entitlement to an adjournment Whether Master's discretion miscarried and miscarriage resulted in substantial injustice |
Legislation: | Corporations Law, s 444E(3) Workers Compensation and Rehabilitation Act 1981 Workers Compensation and Rehabilitation (Amendment) Act 1999, s 93E(3), s 93E(4) |
Case References: | Nil Gausten v Outokumpu Australia Pty Ltd (Deregistered), unreported; SCt of WA (Master Sanderson); Library No 980680; 23 November 1998 Katingal Pty Ltd & Ors v Amor & Ors (1999) 30 ACSR 545 Meehan v Stockmans Australian Cafe (Holdings) Pty Ltd (1997) 15 ACLC 62 Ogilvi-Grant v East (1983) 1 ACLC 742 Packer v La Villa Homes Pty Ltd, unreported; SCt of WA; Library No 7578; 6 April 1989 Pasdale Pty Ltd v Concrete Constructions Pty Ltd (1996) 14 ACLC 554 Roder Zelt-Und Hallenkonstruktionen GMBH v Rosedown Park Pty Ltd (1995) 13 ACLC 776 Sullivan v Department of Transport (1978) 1 ALD 383 Thomson v Mulgoa Irrigation Co Limited (1893) 4 BC (NSW) 33 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : WORTHS PTY LTD -v- O'DAL [2000] WASCA 120 CORAM : TEMPLEMAN J
- WHEELER J
- Applicant
AND
MARILYN JOY O'DAL
Respondent
Catchwords:
Civil procedure Western Australia - Appeal from the decision of a Master not to grant an adjournment and to permit the applicant to commence proceedings against a corporation which is subject to Deeds of Arrangement - Adjournment sought on the basis that respondent had not had sufficient opportunity to consider papers following their late service - Whether Master should have considered the merits of the application in deciding upon entitlement to an adjournment - Whether Master's discretion miscarried and miscarriage resulted in substantial injustice
(Page 2)
Legislation:
Corporations Law, s 444E(3)
Workers Compensation and Rehabilitation Act 1981
Workers Compensation and Rehabilitation (Amendment) Act 1999, s 93E(3), s 93E(4)
Result:
Leave to appeal declined and application dismissed
Representation:
Counsel:
Applicant : Ms H Sobotnik
Respondent : Mr T N Cullity
Solicitors:
Applicant : McAuliffe Schwikkard
Respondent : Trewin Norman & Co
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Gausten v Outokumpu Australia Pty Ltd (Deregistered), unreported; SCt of WA (Master Sanderson); Library No 980680; 23 November 1998
Katingal Pty Ltd & Ors v Amor & Ors (1999) 30 ACSR 545
Meehan v Stockmans Australian Cafe (Holdings) Pty Ltd (1997) 15 ACLC 62
Ogilvi-Grant v East (1983) 1 ACLC 742
Packer v La Villa Homes Pty Ltd, unreported; SCt of WA; Library No 7578; 6 April 1989
Pasdale Pty Ltd v Concrete Constructions Pty Ltd (1996) 14 ACLC 554
Roder Zelt-Und Hallenkonstruktionen GMBH v Rosedown Park Pty Ltd (1995) 13 ACLC 776
Sullivan v Department of Transport (1978) 1 ALD 383
Thomson v Mulgoa Irrigation Co Limited (1893) 4 BC (NSW) 33
(Page 3)
1 TEMPLEMAN J: This is an application for leave to appeal against a decision of Master Bredmeyer heard on 31 January this year. The application was made by Marilyn Joy O'Dal against Worths Pty Ltd who was an employer of hers some years ago. Mrs O'Dal's claim arose from the fact that she contended that she had suffered an injury while in the employment of Worths in 1994, in respect of which she wished to claim common law damages.
2 The application was made because in the meantime Worths Pty Ltd has been the subject of two deeds of company arrangement. It was therefore necessary for Mrs O'Dal to seek leave of the Court before commencing proceedings.
3 The application was brought pursuant to s 500(2) of the Corporations Law. That was an error. The application should have been brought pursuant to s 444E(3). Nothing turns on that for present purposes because the matter has been argued before us on the basis that the appropriate section was used.
4 The applicant's injury, as I have said, was sustained in 1994. The limitation period expired on 3 February 2000. The application for leave to proceed was filed on 24 January. There is some issue apparently as to whether it was served on 24 or 25 January but it was heard on 31 January, there being in the intervening period of seven or eight days, not only a weekend but the Australia Day holiday. It is contended that the application was a day short but no great argument has been addressed to that issue.
5 When the matter came on before the Master the respondent to the application, Worths Pty Ltd, was represented by counsel instructed by Worths' former insurer. The papers had been served on that insurer only, I think, on the Friday before the Monday on which the application was heard. That has been explained in affidavit evidence. It appears that the reason for the error in service was that the person principally dealing with the matter was away on holiday. The person left in charge did not have the same degree of knowledge as his colleague. That was the reason for the mistake.
6 I should say there is no transcript of the hearing before the Master, but notes of attendance were prepared by, I think, the present applicant's solicitor, and those notes have been settled by the Master. I therefore take the settled notes as being a true record of the hearing.
(Page 4)
7 When the matter came on, counsel for the then respondent, the insurer, told the Master that the insurer had not yet determined whether to grant a policy indemnity in respect of the then applicant's alleged claim. Counsel said that she had received notice of the application late on the Friday afternoon and had had insufficient time to consider the application. She pointed out that the respondent was under administration, that she had been unable to have any meaningful discussions with the administrator's office about the application and that on the way to court she had received copies of two deeds of company arrangement which she had not had an opportunity to read.
8 The Master then pointed out to the then applicant's solicitors that the application had been brought under the wrong section. That was then accepted. Counsel for the then respondent went on to say that there had been no decision of indemnity under the policy and that, if the policy indemnity was not granted, it was unlikely that there would be any insurer. Counsel said she was therefore appearing to protect the rights of both the respondent and the insurer.
9 Counsel said she had no idea what effect the claim would have on the administration of the company; and that the insurer in question had not been involved with the worker's compensation claim for many years. Counsel then gave an explanation for the papers being sent to the wrong insurer, and went on to submit that both the insurer and the respondent would suffer prejudice if an order was made without giving them an opportunity to investigate the claim and its effect on the administration.
10 She submitted that the respondent should be given an opportunity to put relevant material before the court, relating to the application. She went on to say that there was a possibility that the applicant might be barred from pursuing a claim against the respondent if she was a creditor bound by the terms of the deeds of company arrangement, and if that was the case then the proposed action would fail.
11 The Master then said that he would deny the application for an adjournment. He said that usually these types of application were made ex parte. Counsel for the then respondent sought to oppose the application and counsel for the applicant sought to make submissions about the merits of the applicant's claim by reference to the applicant's affidavit.
12 The Master then stopped counsel for the applicant saying that in applications of this kind, the merits of the claim would not be considered.
(Page 5)
- Counsel for the respondent then made further reference to the possibility that as a result of the construction of the deeds of company arrangement, the applicant might be barred from bringing an action against the respondent. Counsel submitted that if the applicant was a creditor bound by the terms of the deed, then there was a possibility that her claim would fail.
13 The Master went on to deal with that by saying that a defence of a technical nature could be raised in the substantive proceedings: or an application could be made to strike out the writ on that basis.
14 The Master then went on to make orders giving the applicant leave to commence proceedings and ordering that costs be in the cause. The Master noted that the limitation period was due to expire shortly but that an insurer stood behind the insured and that therefore the administration should not be affected. At that point the Master was reminded by counsel for the respondent that the decision whether or not to grant indemnity under the policy had not been made.
15 The Master went on to say that if there was a defence of a technical nature available to the insured such that the applicant was bound by the terms of the deed and was therefore barred from bringing proceedings, there were other avenues open to the respondent such as the filing of a conditional appearance and applying to strike out the writ.
16 It is from that decision that the application for leave to appeal is now sought. The principal contention in the submissions made by counsel for the present applicant is that the respondent, Mrs O'Dal, was at all material times a creditor of Worths and that her claim is indeed barred by the deed of company arrangement which came into effect on 1 August 1997.
17 It is submitted that because she did not, as she might have done, submit a proof of debt, it is now too late: that not having brought a claim, it is not open to her to do so. And the fact that she is a creditor who did not bring a claim and is therefore prevented from so doing means that the insured, Worths, can no longer bring a claim against the insurance company to indemnify it against Mrs O'Dal's claim.
18 We have been taken to various provisions of the deed of company arrangement which, on the face of it, support that submission. Against that, it is submitted by the present respondent that as a matter of law, although Mrs O'Dal thought she had a claim against the company, she did not in fact have any such claim or at least was not entitled to pursue it
(Page 6)
- because of the provisions of the Workers Compensation and Rehabilitation Act 1981.
19 It is said that as a result of those provisions and a later amendment, the Workers Compensation and Rehabilitation (Amendment) Act 1999, and in particular s 93E(3) and s 93E(4), Mrs O'Dal was not entitled to bring a claim unless it was determined that she had a significant disability, being not less than 16 per cent.
20 Those amendments came into force on 5 October 1999. The result is, it is submitted, that when the deeds of company arrangement were entered into (this being before 5 October 1999) Mrs O'Dal was not a creditor. The argument is that she is therefore not bound by the deeds of company arrangement: she is entitled to make her claim against the company under administration which in turn can seek an indemnity against its former insurer.
21 The notice of the claim was not given until 24 January, it is said, because Mrs O'Dal did not have in her possession a medical opinion to the effect that she was more than 16 per cent affected by a disability until she was reviewed in November 1999. Dr John Quintner then came to the conclusion that she did have a whole-of-body disability in excess of 16 per cent which would have entitled her to commence proceedings at common law pursuant to the then amended legislation. It appears that a subsequent insurer disagreed with that view with the result that the matter was referred to a medical assessment panel for assessment of the percentage disability.
22 That panel has not yet considered the matter. In the meantime, to protect Mrs O'Dal's position and to prevent her claim from becoming statute barred, the application was made to commence proceedings.
23 Returning to the Master's decision: the first thing, I think, to be said about it is that clearly there have now become apparent a number of matters which were not apparent to the Master because the relevant evidence was simply not available to him. Indeed, much of the material provided to the Court today has come from the bar table because not everything of relevance is included in the affidavits.
24 The Master had two discretions to exercise, first in determining whether there should be an adjournment and, secondly, in determining, if he was against that, as he was, whether to grant leave to the then applicant to commence proceedings.
(Page 7)
25 In relation to the question of an adjournment it is said that the Master erred in two respects. First, he said it was not necessary to go into the merits of the application. That, with respect to the Master, appears to an error. There is authority that in cases of this kind it is necessary for the Court to consider whether there is at least a serious question to be tried.
26 On the material available to the Master I do not think he could have considered the matter to the extent that we have been able to consider it today. But I accept the submission that the Master erred in stating that it was not necessary to go into the merits.
27 It is then said that the Master erred also in saying that these matters are normally dealt with on an ex parte basis. Whether or not that is so, I am unable to say. The Master would certainly have considerable experience in these matters and I would normally defer to his view on that topic. However, there appears to be no guidance to be obtained from the Rules. Counsel for the present applicant submits that the authorities show that these matters are in fact dealt with normally on an inter partes basis.
28 I think it is not necessary to decide that issue because in the present case the application was not made ex parte, it was made inter partes. That being so I think the Master should have considered it on the basis that if the respondent was to be heard it should have been given a reasonable opportunity to be heard, which in the circumstances it was not.
29 However, that was, of course, due in part to the error in the then respondent's officers in sending the papers to the wrong insurer. The Master was faced with a difficult situation because the limitation period was about to expire. Even if the matter had been adjourned for only a day or so, bearing in mind this was an application heard on 31 January and the limitation period expired on 3 February, I very much doubt whether it would have been possible to assemble sufficient evidence to enable the master to give the matter any further detailed consideration, even if he had time to consider the quite difficult arguments which I think arise from the relationship between the legislation and the construction of the deeds of company arrangement.
30 It seems to me, therefore, that although the Master's discretion may have miscarried, the result may well not have been any different. Again, it is not necessary to decide that question because we are now looking at the matter today in the light of a more substantial body of evidence and having had regard at least to some extent to the deeds of company arrangement and the workers' compensation legislation.
(Page 8)
31 As to that, it seems to me that the issues which now arise are extremely difficult. On the one hand there is the true construction of the deeds of company arrangement: and there is the effect on that of the workers' compensation legislation with the underlying question: was the present respondent, Mrs O'Dal, a creditor at the material time or was she not?
32 It seems to me to be inappropriate to attempt to answer that question without much more detailed investigation into these matters and without hearing much more detailed argument about the legislation than we have been concerned with today. The result, I think, is that if today we were considering the matter anew on the basis of the material now before us, for my part I would certainly give Mrs O'Dal leave to commence proceedings against the company. It seems to me that that would not close the door to the present applicant arguing these difficult questions in a proper manner and in a proper forum, which I think would be before the Master.
33 The principles to be considered and applied when considering whether leave should be given in respect of an interlocutory order are set out in par 63.0.23 of Seaman in which it is said that the purpose of the rule, that is, the rule which requires leave to be given for an interlocutory appeal to be maintained, is to reduce the number of appeals of this sort. In general it is said the Court must be satisfied that the decision below is attended with sufficient doubt to justify the grant of leave and that a substantial injustice would be done if it remained unreversed. Leave will more readily be granted if the order changes substantive rights. There is a broad discretion to grant or withhold leave. Whether substantial injustice will occur depends on all the circumstances of the case. There are no rigid or exhaustive criteria.
34 Applying those principles here, it seems to me that allowing for the fact that the Master may have erred in one respect in his earlier decision, the decision itself was correct, even though we are able to say that only with the benefit of hindsight. Furthermore, as I have already indicated, I do not think any substantial injustice would be done to the present applicant by leaving the decision unreversed. That is because, as I have said, these difficult matters can still be argued. If the present applicant is right, then the respondent's claim will be dismissed summarily, as it were, and the administration can proceed.
35 If the present respondent is right, then it seems to me that orders can be made which would limit her claim in substance to a claim against the
(Page 9)
- insurer, again without any prejudice to creditors who are bound by the deeds of company arrangement and whose debts either have been or are about to be paid out.
36 In all these circumstances, it seems to me that grounds have not been made out to grant leave to appeal and I would therefore for my own part decline to grant leave to appeal and dismiss the application.
37 WHEELER J: I too would not grant leave to appeal and I would dismiss the application for the reasons given by his Honour.
3
3