Palace v RCR O'Donnell Griffin Pty Ltd (in liq)
[2021] QCA 137
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- Palace v RCR O'Donnell Griffin Pty Ltd (in liq)[2021] QCA 137
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Palace v RCR O'Donnell Griffin Pty Ltd (in liq)[2021] QCA 137
Palace v RCR O'Donnell Griffin Pty Ltd (in liq)[2021] QCA 137
SUPREME COURT OF QUEENSLAND
CITATION: | Palace v RCR O'Donnell Griffin Pty Ltd (in liq) [2021] QCA 137 |
PARTIES: | JOHN PALACE |
FILE NO/S: | Appeal No 13633 of 2020 |
DIVISION: | Court of Appeal |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | Supreme Court at Brisbane – [2020] QSC 354 (Martin J) |
DELIVERED ON: | 25 June 2021 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 June 2021 |
JUDGES: | Sofronoff P and Morrison and Bond JJA |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JOINDER OF CAUSES OF ACTION AND OF PARTIES – PARTIES – GENERALLY – where the appellant sustained injuries in the course of his employment in 2018 while working on a solar farm project – where the respondent was the designer and operator of the subject solar farm and entered into a subcontract with the appellant’s employer – where the subcontract contemplated a degree of shared responsibility between the respondent and the appellant’s employer for the safety of employees such as the appellant – where the appellant mistakenly served a company related to the respondent before being informed that the respondent was the proper respondent to the appellant’s personal injuries claim – where the primary judge refused to grant the appellant leave to add the respondent to the proceedings under the Personal Injuries Proceedings Act 2002 (Qld) – whether the primary judge erred in refusing the grant of leave on the basis that the appellant had not demonstrated that there was a serious question to be tried, that there was a degree of complexity of the legal and factual issues involved in the grant of leave and that the damages which the appellant may recover was greater than the deductible under the insurance policy CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – PROCEEDINGS BY OR AGAINST THE COMPANY – LEAVE TO PROCEED – GENERALLY – where the respondent was placed into voluntary liquidation – whether the appellant should be granted leave to proceed under s 500(2) of the Corporations Act 2001 (Cth) against the respondent – where the primary judge refused to grant leave for the reasons given in respect of the grant leave under the Personal Injuries Proceedings Act 2002 (Qld) Corporations Act 2001 (Cth), s 500 La Trobe Wholesale Finance Pty Ltd v KCRAM Pty Ltd (in liq) (No 1) [2012] FCA 1388, cited |
COUNSEL: | D L K Atkinson QC, with D Cormack, for the appellant |
SOLICITORS: | Hall Payne Lawyers for the appellant |
THE COURT:
Introduction
- [1]Prior to February 2018, the respondent had entered into a head contract with Sun Metals Corporation Pty Ltd for the performance of certain works at the Sun Metals Solar Farm Project site (Sun Metals site) in Townsville, Queensland. The head contract was not in evidence, but the respondent’s counsel had asserted at the hearing below that the respondent was the designer and operator of the solar farm.
- [2]On about 8 February 2018, the respondent entered into a subcontract with a labour hire company called Mass Solutions WA Pty Ltd (Mass Solutions),[1] pursuant to which Mass Solutions agreed to provide the respondent with skilled, qualified and experienced personnel for the performance, execution and completion of various electrical works forming part of the head contract works, as instructed by the respondent and on a Schedule of Daywork Labour Rates basis.
- [3]The subcontract arguably contemplated a degree of shared responsibility as between the respondent and Mass Solutions for the safety of Mass Solutions’ employees.
- [4]On the one hand, Mass Solutions promised the respondent that it would take all steps necessary to protect people and would ensure that its systems of work were safe and without risk to its employees or other persons. And, further, Mass Solutions agreed to indemnify the respondent against claims by any person in respect of personal injury.
- [5]But, on the other hand, in carrying out the subcontract works, Mass Solutions was obliged to comply with all directions given by the respondent. And, amongst other things, Mass Solutions was obliged to perform its part of the works in accordance with the safety requirements described in the respondent’s Workplace Health & Safety Management Plan and Construction Environmental Management Plan. Finally, and significantly, under the indemnity clause, Mass Solutions’ liability to indemnify the respondent against personal injuries claims was to be “reduced proportionally to the extent that the act or omission of [the respondent] contributed to the loss, damage, death or injury.”
- [6]The appellant was a qualified electrician employed by Mass Solutions and was identified as one of the personnel to be provided to the respondent under the subcontract. Pursuant to the terms of the subcontract, Mass Solutions placed the appellant with the respondent at the Sun Metals site. The respondent had control of the appellant’s work on site.
- [7]The appellant was injured at the Sun Metals site in the course of his employment on 13 February 2018.
- [8]In the following months, the appellant advanced a claim for workers’ compensation to WorkCover Queensland (WorkCover), which was Mass Solutions’ workers’ compensation insurer. WorkCover accepted the claim and made statutory payments to the appellant on behalf of Mass Solutions.
- [9]On 12 March 2019, the appellant retained solicitors to advise in relation to his statutory workers’ compensation claim and to investigate a potential common law claim for injuries sustained in the subject incident. In November 2019, and after his solicitors had obtained expert advice on the subject incident and a report on potential liability, the appellant commenced taking appropriate procedural steps pursuant to the Personal Injuries Proceedings Act 2002 (Qld) (PIPA).
- [10]Relevant documents were served on Mass Solutions and on WorkCover, but not on the respondent. That was because the appellant mistakenly served a company which was related to the respondent, thinking that it was the company which occupied the position which the respondent actually held. Ultimately, in January 2020, WorkCover’s solicitors informed the appellant’s solicitors that the respondent was the proper respondent to the appellant’s PIPA claim and WorkCover itself served a contribution notice on the respondent.
- [11]In January 2020, the appellant’s solicitors found that the respondent was placed into voluntary liquidation on 26 March 2019 and proceeded to serve PIPA claim notices on the respondent’s liquidators. Correspondence ensued between the appellant’s solicitors, the liquidator’s solicitors, and, eventually, solicitors for the respondent’s insurers. Amongst other things, the solicitors for the respondent’s insurers suggested that: the appellant needed leave to proceed against a company in liquidation; the respondent was insured for the appellant’s claim but that this was subject to a $100,000 deductible; and obstacles to obtaining leave included that the appellant could not demonstrate sufficient prospects of success of his claim against the respondent, and in particular, could not show prospects that the claim would exceed the deductible amount.
- [12]By an originating application filed 21 October 2020 and listed in the applications list, the appellant sought leave to proceed against the respondent pursuant to s 500(2) of the Corporations Act 2001 (Cth) for a claim for personal injuries said to have been sustained on 13 February 2018.
- [13]The primary judge dismissed the application and required the appellant to pay the respondent’s costs. By this appeal, the appellant sought to reverse that outcome. For the following reasons, the appellant should succeed.
The way in which the appellant suffered injury
- [14]The appellant swore to the truth of the facts set out under this heading in a statutory declaration made by him pursuant to the provisions of the Oaths Act 1867 (Qld) on 31 January 2020. The statutory declaration was in the form of a Notice of Claim Part 1 which the appellant caused to be served on the respondent in February 2020 in the course of procedural steps taken by him pursuant to PIPA. A copy of the statutory declaration was exhibited to an affidavit by the appellant’s solicitor.
- [15]The appellant was injured in the course of his employment whilst undertaking an electrical wiring task at the Sun Metals site on 13 February 2018. The actual ambient conditions at the time of the incident on the day achieved a temperature of 34.5°C with a relative humidity of 41 per cent. The appellant was working under a solar panel in a squatted position when he began to feel very lightheaded and could not move as he felt he had no physical strength. His speech became slow and impaired.
- [16]One of the members of his work group approached him to see how he was. Upon noticing his condition, they proceeded to provide first aid which involved unbuttoning his shirt and drenching him with water from their containers. After approximately 10 minutes, first aiders arrived. A cold wet cloth was placed on his head and chest to try and cool him down further. He was able to sit up after 10 minutes but was unable to stand and after a further 5 to 10 minutes could only stand with assistance.
- [17]The appellant was placed in an air-conditioned Hi-lux type vehicle and driven back to the crib room. He required assistance to get out of the vehicle and had no strength to stand. At that point, a decision was made to return him back to the main site building and he again required assistance to be placed back into the vehicle. He was not secured with a seat belt on this occasion.
- [18]During this period, his conscious state began to deteriorate, and he was struggling to speak. On the trip back an unrelated detour was made to see someone (unknown to him). During the trip back the appellant began to feel nauseous and asked that the car be stopped as he thought he would vomit. After the vehicle stopped, he opened the side passenger door but was unable to physically control himself and fell out of the vehicle. He recalled that his left hand was still wrapped around the seat belt and his right foot was still in the footwell of the front passenger seat.
- [19]The two people attending him then attempted to put him back into the car at which time he believed he was dropped two to three times. After being secured in the vehicle, he was driven directly to Townsville Hospital. The appellant did not know the names of the co-workers who assisted him.
- [20]As a result of falling from the vehicle and the subsequent attempts to assist him back into the vehicle, the appellant sustained the following injuries:
- (a)right ankle soft tissue injury with bruising;
- (b)left wrist soft tissue injury;
- (c)right knee soft tissue injury with a small tear; and
- (d)left knee soft tissue injury with bruising.
- (a)
Attribution of responsibility to the respondent
- [21]The Notice of Claim Part 1 referred to at [14] also set out the reasons for why the appellant believed that the respondent caused the incident in which he was injured.
- [22]He contended that the respondent was responsible for the design and construction of the Sun Metals site. Before this Court, his counsel contended that in this role, the respondent had control over the appellant and the way in which he was to perform his duties. Arguable support for this contention and for the idea that the respondent assumed at least some responsibility for Workplace Health & Safety at the Sun Metals site was to be found in the concession that the respondent could be described as the designer and operator of the solar farm and in the terms of the subcontract itself, as described at [2] to [5] above.
- [23]Further evidentiary support for that contention can be found in an email sent on the day of the appellant’s injury apparently to Mass Solutions attaching the author’s site notes on “your employee [the appellant]”. The circumstances in which the email was sent and the signature block to the email provided adequate evidentiary support for an inference that the author and the other staff, referred to by position description, occupied health and safety roles for the respondent at the Sun Metals site, especially in light of the absence of any attempt by the respondent to adduce any evidence to the contrary. Amongst other things, the signing block described the author of the email as “SHEQ Manager” and the attached site notes revealed that following a call which described the appellant as having dehydration symptoms, the appellant was “sent to the hospital, with both the senior HSE advisor and the Site Nurse” and that statements were subsequently taken by the “Senior HSE advisor and the Site Nurse.” It seems arguable that the acronym “HSE” was a reference to Health, Safety and Environment and that the acronym “SHEQ” was also a reference to a position referable to Safety and Health.
- [24]The appellant contended that the respondent owed him a duty of care to ensure that he was not subjected to a foreseeable risk of injury and, in particular, to properly manage his exposure to risks by:
- (a)identifying hazards;
- (b)assessing risks that may result because of the hazards;
- (c)deciding on appropriate control measures to prevent or minimise the level of risk;
- (d)implementing those control measures; and
- (e)monitoring and reviewing the effectiveness of the measures.
- (a)
- [25]He contended that the respondent breached the duty of care by:
- (a)failing to properly identify the risk of heat related illnesses in staff performing their duties;
- (b)failing to implement appropriate acclimatisation controls;
- (c)failing to provide any or any adequate risk assessment for the work task of installing solar panels;
- (d)failing to undertake any or any adequate basic thermal risk assessment of the work site when installing the solar panels;
- (e)failing to allow the worker appropriate time to acclimatise to the working conditions and temperatures experienced in Townsville;
- (f)failing to adequately rotate the tasks of the worker;
- (g)failing to appropriately train staff in first aid responses to heat related illnesses;
- (h)failing to implement any or any adequate emergency response;
- (i)failing to provide and supply cool aid packs with the first aid kits;
- (j)failing to instruct staff to restrain the worker with the utility vehicle seat belt;
- (k)failing to implement and maintain a safe system of work;
- (l)failing to provide and maintain a safe place of work;
- (m)exposing the worker to a risk of injury which could have been avoided by the exercise of reasonable care;
- (n)exposing the worker to a risk of damage or injury of which the employer knew or ought to have known;
- (o)requiring, permitting and/or inviting the worker to carry out his tasks when it knew or ought to have known of the unreasonable risks and dangers of injury inherent therein;
- (p)requiring, permitting and/or inviting the worker to carry out the tasks when it knew or ought to have known of the unreasonable risks and dangers of injury inherent in the means by which it was envisaged or ought to have been envisaged that the worker might carry out the tasks;
- (q)failing to adequately train and/or provide instruction to the worker; and
- (r)failing to adequately supervise the worker whilst undertaking the tasks.
- (a)
- [26]The appellant retained a Dr Di Corleto to investigate the subject incident and to provide a report addressing liability. A copy of Dr Di Corleto’s report was exhibited to an affidavit by the appellant’s solicitor. Dr Di Corleto held practical and academic qualifications in occupational health, and had specialist knowledge in health-related fields including heat stress exposures in the mining, refining and smelting industries. His evidence arguably supported the appellant’s contentions concerning duty, breach of duty and foreseeability.
- [27]Amongst other things Dr Di Corleto expressed the following opinions:
- (a)Given the available meteorological data, an assessment of thermal risk referable to the day of the incident suggested that the onset of a heat-induced illness was very likely.
- (b)A heat stress illness such as heat stroke is potentially fatal. Appropriate first aid response is essential. Standard practice for a suspected heat stroke incident is to immediately seek medical assistance.
- (c)Symptoms experienced by the appellant suggested a heat-related illness occurred, but initial first aid was not effectively applied. An individual suffering from potential heat stroke would become uncoordinated and potentially incoherent. They would be unable to take instructions and be on the verge of collapse. At this point, the individual should be restrained in place with a seat belt. This did not occur.
- (d)The preferable course of action would have been to have an ambulance do the transportation. Had an appropriate emergency response process been followed, the subsequent injury sustained by the appellant could have been averted.
- (e)The site emergency response did not follow a suitable set of interventions.
- (a)
Medical opinion as to the appellant’s injuries
- [28]A copy of a report dated 15 November 2019 from the appellant’s orthopaedic surgeon, Dr Shaw, was exhibited to an affidavit by the appellant’s solicitor.
- [29]Dr Shaw’s diagnosis was that the injuries sustained in the incident on 13 February 2018 were:
- (a)anterior right knee injury with medial meniscal tear;
- (b)anterior left knee injury;
- (c)left wrist sprain (settled); and
- (d)right ankle sprain (settled).
- (a)
- [30]Amongst other things, Dr Shaw answered questions asked of him in this way:
“Were the injuries of such a nature as to give rise to any permanent or temporary incapacity for employment? Please consider this question with regard to our client's occupation at the time, namely as an Electrician, and his capacity for work generally?
[The appellant] was off work for around 17 months as a consequence of the injuries. He had several unsuccessful attempts to return to work as an Alarm Installer and Construction Worker. Around three months ago, he commenced employment as an Electrical Fitter, fixing electric trains. This is lighter work and he is tolerating the duties although suffers discomfort at the end of 8-hour-shifts.
What limitations, if any, are there upon our client's capacity to work full-time in their current role as an Electrician or in any other relevant occupation. If the injury has resulted in any employment restrictions or has shortened our client 's working life, please advise.
[The appellant] is restricted to lighter work as an Electrician. He should not consider employment that involves regular climbing and descending stairs and ladders, or working down-low requiring squatting and kneeling. He should also avoid employment that involves heavy lifting. He will be at a disadvantage applying for future employment upon disclosure of his restrictions. Fortunately, he has gained lighter employment that is tolerable, repairing electric trains in Victoria.”
- [31]Dr Shaw summarised his conclusions in this way:
“• On 13 February 2018, [the appellant] suffered heat stroke at work outside Townsville. He did not have the strength to walk unaided, and dropped multiple times onto his knees and hands, sustaining injuries.
• The injuries have been identified as bilateral anterior knee injuries with right knee medial meniscal tear, and sprains to the left wrist and right ankle.
• Permanent impairment for the knee injuries has been assessed at 5% whole person impairment.
• [The appellant] is restricted to lighter work, limiting stairs, ladders, squatting and kneeling.
• [The appellant] enjoys detailing his vehicles but this is restricted by his anterior knee pain.”
Loss allegedly suffered because of the injuries
- [32]The appellant swore to the truth of the facts set out under this heading in a further statutory declaration made by him pursuant to the provisions of the Oaths Act 1867 on 18 August 2020. The statutory declaration was in the form of a Notice of Claim Part 2 which the appellant caused to be served on the respondent’s solicitors in August 2020 in the course of procedural steps taken by him pursuant to PIPA. Copies of the form and the attachment thereto were exhibited to affidavits by the appellant’s solicitor. The respondent, on appeal, did not seek to argue that the exhibited statutory declarations in the form of the PIPA Notices of Claim should have been regarded as inadmissible on an application of this nature. Rather, the respondent suggested (without demonstrating why) only that little weight should be given to them. In our view, there was no reason not to give weight to the statutory declarations.
- [33]The appellant swore that he:
- (a)suffers from ongoing pain, discomfort. instability and stiffness in the left and right knees which is exacerbated by using stairs, kneeling, or squatting;
- (b)has been restricted in his ability to participate in recreational and social activities such as sports and vintage cars;
- (c)has required and received medical treatment;
- (d)has lost income;
- (e)has had his capacity to earn income in the future diminished;
- (f)has lost superannuation entitlements;
- (g)will suffer a loss of superannuation entitlements in the future;
- (h)has incurred expenses in taking medication, attending upon medical and allied health professionals;
- (i)has sustained out of pocket and other special damages; and
- (j)has an ongoing need for medication, medical and allied health care, personal aids and other special needs and special damages in the future.
- (a)
- [34]So far as lost income was concerned, the appellant swore that he had lost income because of the incident and that (at least as at 18 August 2020) he was still losing income. He swore that because of the incident, he had been totally incapacitated for work between 13 February 2018 and 23 July 2019; between 7 August 2019 and 18 August 2019; between 7 January 2020 and about 29 February 2020; and between about 1 April 2020 to the date of the statutory declaration. All up, that covered a period of more than 102 weeks. During that period, he had received workers’ compensation payments from WorkCover totalling $130,360.61. In this regard, he elaborated that he had been unable to return to his pre-injury duties since the date of the incident due to the injuries sustained. He had performed alternative work with several employers, but had been restricted to performing lighter electrical work in these roles as a result of his injuries.
- [35]He swore that an attached “Schedule of Damages / Offer of Settlement” constituted a true and correct statement of the nature and extent of his economic loss so far as it could be assessed as at the date of the statutory declaration. The total amount claimed was $1,020,540.07 plus costs and outlays. For present purposes it suffices to identify what was sworn to in relation to the three largest components of that amount, namely general damages and past and future economic loss.
- [36]The amount claimed for general damages was $50,000.00. As to the method of calculation, the appellant swore to the accuracy of these details:
“The Claimant sustained the following injuries in the subject incident:
Right Knee
The Claimant sustained an injury to his right knee as a result of the incident. He continues to experience ongoing discomfort and instability in the knee that was exacerbated by using stairs, kneeling and driving. An MRI of the knee undertaken on 18 April 2018 indicated that he sustained an ‘undisplaced horizontal tear of the medial meniscus’. The Claimant's injury also caused him to undergo a right knee arthroscopy on 12 February 2019.
Left Knee
The Claimant sustained an injury to his left knee as a result of the incident. He continues to experience ongoing discomfort and instability in the knee that was exacerbated by using stairs, kneeling and driving. A PRP injection was performed on the left knee on 13 January 2019 as a result of the injury.
Left Wrist
The Claimant sustained an injury to his left wrist as a result of the incident.
Right Ankle
The Claimant sustained an injury to his right ankle as a result of the incident.
Heat Stroke
The Claimant suffered a heat-related illness diagnosed as heat stroke as a result of the incident.
He suffered from nausea, light-headedness, fatigue incoherent speak and an inability to move and required treatment at Townsville Hospital.
General damages are assessed in accordance with common law principles at $50,000.00”.
- [37]The amount claimed for past economic loss was $186,723.35. As to the method of calculation, the appellant swore to the accuracy of these details:
“1. The Claimant ceased work due to the injuries sustained, the subject of this claim on 13 February 2018.
- Following the incident, he was certified to be totally incapacitated for work.
- He has since obtained alternative short term employment with several employers between 23.7.2019 and March 2020.
- The Claimant has not been able to maintain his pre-injury capacity since the incident, due to injuries sustained.
- Past economic loss is therefore calculated by determining what the Claimant would have been able to earn (including allowance for average overtime, if applicable), but for injuries sustained, and deducting from that amount total earnings to date.
- Therefore, past economic loss is calculated as follows:
a. From examination of the casual agreement with Mass Recruitment, along with the Claimant’s historical net weekly earnings, the Claimant had a demonstrated earning capacity of approximately $1,800.00 net weekly wage at the date of the incident.
b. We note that this figure takes into account the overtime the Claimant would have earned in this position.
c. The Claimant would have earned, but for the accident (hereinafter referred to as ‘potential earnings’) $1,800.00 x 129 weeks (for the period 13 February 2018 to 5 August 2020) = $232,200.00.
d. Total actual earnings (clear of WorkCover benefits) from the date of the incident through to the present day is summarised as follows:
2018 Financial Year (from l3 February 2018 to 30 June 2018)
$0.00
2019 Financial Year (from l July 2018 to 30 June 2019)
$0.00
2020 Financial Year (from l July 2019 to 30 June 2020)
- The Claimant was employed by Myrtle Enterprises Pty Ltd t/a Epsilon Security for a period of two (2) weeks between 23 July 2019 and 6 August 2019 and earned $4,550.53 net.
- The Claimant was employed by Fetch Personnel Pty Ltd t/a Fetch Recruitment for a period of two (2) weeks between 19 August 2019 and 1 September 2019 and earned $2,087.00 net.
- The Claimant was employed by Protech Personnel (Vic) Pty Ltd for a period of 18 weeks between 7 October 2019 and 6 January 2020 and earned approximately $37,800.00 net.
- The Claimant was employed by Globe Labour Services Pty Ltd t/a Globe Group on or about March 2020 and earned approximately $1,039.12 net.
- The Claimant made a severance claim with Protect and received $410.00 net on 4 March 2020.
- The Claimant made an early release claim with his superannuation fund, CBUS, and received approximately $10,000.00 on or about May 2020.
2021 Financial Year (from 1 Julv 2020)
$0.00
Total Actual Earnings clear of WorkCover and Centrelink Benefits = $55,886.65.
e. Therefore, past economic loss is calculated by deducting actual earnings summarised at (c) from above calculation of potential earnings.
f. Past economic loss is therefore calculated as follows:
• Potential Earnings - $232,200.00
• Less Actual Earnings - $45,476.65
• Total Past Economic loss - $186,723.35”.
- [38]The amount claimed for future economic loss was $599,400.00. As to the method of calculation, the appellant swore to the accuracy of these details:
“1. The Claimant ceased work due to the injuries sustained on 13 February 2018. The Claimant has not been able to return to his pre-injury capacity due to the injuries sustained in the subject incident.
- The Claimant attended upon Dr Mark Shaw for the purpose of independent medical examination and report on 15 November 2019. Dr Shaw opined that the Claimant:
‘should not consider employment that involves regular climbing and descending stairs and ladders, or working down-low requiring squatting and kneeling. He should also avoid employment that involves heavy lifting. He will be at a disadvantage applying for future employment upon disclosure of his restrictions. Fortunately, he has gained lighter employment that is tolerable, repairing electric trains in Victoria.’
- The Claimant has taken steps to mitigate his loss by sourcing employment with alternative employers. The Claimant has worked for approximately 27 weeks with alternative employers on short term contracts in a lighter capacity since the subject incident.
- The Claimant ceased employment in March 2020 and has been unable to source gainful employment since that time.
- The Claimant’s ongoing restrictions present a risk in obtaining and maintaining employment in any future employment. He will also likely have difficulties in persuading any prospective employers to employ him with his history of injury. Further, if the Claimant is successful in obtaining employment in the open labour market, he is particularly susceptible to termination if his work function is impaired by his injuries.
- The Claimant is motivated to return to work in a lighter role.
- But for the incident. the Claimant intended to continue working as an Electrician and could have expected to continue earning at least $1,800.00 net per week.
- Future economic loss is therefore calculated by reference to a continuing net weekly loss of earnings of $1,800.00. The Claimant is currently 47 years of age and has 20 years of his working life remaining (to age 67). The Claimant’s loss is calculated at $1,800.00 per week over 20 years, discounted on the 5% tables (Multiple 666). $1,800.00 x 666 = $1,198,800.00.
- Adopting the reasoning of McMeekin J in Martin v Andrews and Anor (2016) QSC 20, this gross figure of future economic loss is discounted by 50% to account for the Claimant’s residual earnings capacity and relevant contingencies = $599,400.00.”
Relevant legal principles
- [39]Section 500(2) of the Corporations Act relevantly provides as follows:
“After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.”
- [40]It was common ground before the primary judge and before this Court that an adequate summary of the proper approach to the discretion so conferred is that set out in QNI Resources Pty Ltd v Park (2016) 116 ACSR 321 per Bond J at 331–2 [45] to [51]:
“This and other cognate sections have been construed as conferring on the Court a supervisory jurisdiction. In deciding such applications the Court is concerned to protect companies in liquidation from being harassed by unnecessary litigation. The Court is also concerned to assist in the orderly administration of companies in liquidation by requiring claimants to adopt the ordinary procedure of lodging a proof of debt for their claims unless the claimants can demonstrate that there is some good reason why a departure from that procedure is justified in the case of the particular claims concerned. (See the discussion by Refshauge J in Commonwealth v Davis Samuel Pty Ltd (ACN 083 081 984) (No 5) (2008) 68 ACSR 336; 164 ACTR 1; [2008] ACTSC 124 (Davis Samuel) at [5]–[18].)
The Court has a discretion, which, whilst absolute, must nevertheless be exercised with judicial detachment and fairness: Davis Samuel at [19].
For present purposes, it suffices to make [four] points.
First, the applicants must show that the case they wish to progress has sufficient merit to warrant the grant of leave. What is required here was discussed by Refshauge J in Davis Samuel at [21]–[29]. The applicants do not have to demonstrate a prima facie case in the technical sense of the term. However they must demonstrate a serious question to be tried as to their entitlement to the relief they claim. They need not prove every element of the claim they wish to make out, but mere assertion, which is not supported by a solid foundation, will not be sufficient.
Second, the applicants should lodge a proof of debt and pursue their rights in this way, unless they can show some good reason to the contrary. Implications of this proposition include:
- (a)the Court will normally grant leave as of right where applicants seeks to recover their own property from the company because such claims cannot be accommodated within the proof of debt regime (Davis Samuel at [34] to [35]); and
- (b)there are many claims which can only be resolved by court proceedings, e.g. rectification, specific performance, injunction and rescission of a contract (Davis Samuel at [36]).
Third, although the relevant considerations cannot be exhaustively stated (per McPherson J in Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314 at 317; 7 ACLR 669 at 672, cited with approval in Davis Samuel at [20]), some guidance may be obtained from past cases. Some considerations are identified in Davis Samuel at [30] to [32] and in the cases there cited. They include:
- (a)the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved, and the stage to which the proceedings, if already commenced, may have progressed;
- (b)whether there will be any procedural or substantive prejudice to the creditors resulting from the proceedings;
- (c)whether the liquidator is likely to reject any proof of debt lodged by the applicant so that an appeal to the court will be necessary;
- (d)the fact that the applicant has claims against others raising substantially the same issues in which case there is a real question of the inconvenience of the applicant having to follow different procedures in respect of all its claims;
- (e)whether the existence of pretrial procedures, such as discovery and interrogatories, are likely to be required or beneficial;
- (f)the amount and seriousness of the claim together with the degree of complexity of the legal question involved; and
- (g)where there would be multiple proceedings were leave not granted, this would be a powerful factor favouring the grant of leave, thus, where one of a number of claims is permissible, leave may be granted for a weaker, associated claim.
Fourth, it is explicit on the face of the section that the Court may grant leave on terms. It is common, for example, that if leave is granted to proceed with a proceeding which seeks to recover damages from a company in liquidation, the grant of leave is subject to a condition that the applicant would not seek to enforce any judgment it obtained without first obtaining the leave of the Court.”
- [41]Obviously enough, not all those considerations will be engaged in every case where the discretion to grant leave is to be considered. As McPherson J noted in Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314 at 317, the question is largely one of choosing between alternative forms of procedure. Should the claimant be permitted to proceed by proceeding in court, or should he be required to submit his proof of debt and, if dissatisfied, appeal to a judge? In some circumstances that choice may be quite simple. It is common, for example, that the existence of an insurance policy indemnifying a company in liquidation against a damages claim would sufficiently justify the grant of leave, provided there is a substantial question to be tried in relation to the claim: see Oceanic Life Ltd v Insurance and Retirement Planning Services Pty Ltd (in liq) (1993) 11 ACSR 516 at 521; La Trobe Wholesale Finance Pty Ltd v KCRAM Pty Ltd (in liq) (No 1) [2012] FCA 1388 at [23].
Analysis
- [42]The primary judge correctly recognised the applicable legal principles, but refused leave because on his analysis:
- (a)the applicant had not demonstrated that there is a serious question to be tried in the sense that it had not been shown to any relevant degree that there was a claim against the respondent for the damage caused to the applicant’s knee and ankles;
- (b)the applicant had not demonstrated that the degree of complexity of the legal and factual issues involved favours the grant of leave; and
- (c)the damages which the applicant might recover on the basis of the claim that it had advanced so far was less than the deductible of the insurance policy.
- (a)
- [43]We respectfully conclude that the primary judge erred in relation to the first and third of those conclusions.
- [44]As to the first conclusion:
- (a)There was a detailed explanation of the circumstances of the occurrence of the injury in the exhibited statutory declaration by the appellant: see [14] to [20] above.
- (b)There was evidence which justified an arguable case of at least shared responsibility for health and safety of employees as between the respondent who arguably controlled the site and Mass Solutions who was the appellant’s employer: see [2] to [5] and [21] to [23] above.
- (c)Although there was no evidence naming the co-workers involved, there was evidence in the form of the email referred to at [23] above identifying them by position description, which when taken with the terms of the subcontract, provided an arguable connection with the respondent.
- (d)There was an articulation of duty, breach and foreseeability, arguably supported by expert opinion evidence: see [24] to [27] above.
- (e)In our view, this evidence together demonstrated that there was the relevant serious question concerning the responsibility of the respondent for the injuries to the appellant’s knees and ankles.
- (a)
- [45]As to the third conclusion:
- (a)There was a detailed explanation of the impact of the injury on the appellant in the exhibited statutory declaration by the appellant: see [32] to [38] above.
- (b)Support for the appellant’s contentions concerning the impact of his orthopaedic injuries was to be found in the medical opinion evidence: see [28] to [31] above.
- (c)Once regard was had to past and future economic loss caused by the injuries to the appellant’s knees and ankles, the damages which the appellant might recover on the basis of the claim greatly exceeded the deductible for the insurance policy.
- (a)
- [46]Error having been identified, it becomes a matter for this Court to exercise the discretion for itself.
- [47]The evidence to which reference has been made justifies the conclusion that the appellant’s damages claim against the respondent has sufficient merit to warrant a grant of leave. That is not to say that the appellant will succeed. No doubt there are many issues affecting liability and quantum which would need to be explored at trial, not least amongst which would be the question of apportionment as between Mass Solutions and the respondent, given the terms of the indemnity expressed in the subcontract. However, these issues would be matters better explored at a trial before a judge rather than by the proof of debt procedure.
- [48]The case in support of the grant of leave is supported by the existence of the insurance policy indemnifying the respondent against the alleged liability. Although the interests of the respondent’s creditors are engaged because of the existence of a deductible, those interests are sufficiently protected by the fact that the appellant accepts that any grant of leave should be subject to a condition that he would not seek to enforce any judgment he obtained without first obtaining the leave of the Court.
- [49]Leave to proceed should be given, subject to that condition.
- [50]It remains to note that at the hearing before the primary judge, the respondent argued that the PIPA notice given to it was given out of the time prescribed by s 9 of PIPA and that the appellant needed to obtain the Court’s leave pursuant to s 14 of PIPA in order to add the respondent as a respondent to its claim. The primary judge refused that leave. Before this Court, the respondent conceded that if, in relation to the application for leave to proceed pursuant to s 500(2) of the Corporations Act, this Court formed the view that the question of apportionment of any liability as between Mass Solutions and the respondent was a matter for trial, then leave should be granted pursuant to both s 14 of PIPA and s 500(2) of the Corporations Act. Accordingly, it is appropriate also to make an order granting leave pursuant to s 14 of PIPA.
Conclusion
- [51]It was conceded that costs of the appeal should follow the event.
- [52]A question arises as to the costs of the proceeding below. The appellant sought its costs of the application before the primary judge, but the respondent resisted such an order on the basis that the application always had to be made. It is notable that the originating application did not in fact seek a costs order against the respondent: it sought an order that “the costs of the Application be costs in the cause.”
- [53]In our view, that would be the appropriate order in this case but for one consideration. The appellant has not yet commenced a proceeding against the respondent. It seems that the parties must contemplate that the proceeding will shortly be commenced because the Court was advised that an agreement had been struck between the parties extending the applicable limitations period whilst the appeal proceeding was ongoing. The appropriate course is to order that the costs of the originating application be the parties’ costs in any proceeding commenced by the appellant against the respondent for the claim.
- [54]The orders of the Court should be:
- The appeal is allowed.
- The orders made on 30 November 2020 are set aside.
- Pursuant to s 14 of the Personal Injuries Proceedings Act 2002 (Qld), the appellant has leave to add the respondent to its claim.
- Pursuant to s 500(2) of the Corporations Act 2001 (Cth), the appellant has leave to proceed against the respondent for a claim for personal injuries sustained on 13 February 2018.
- The appellant must not, without leave of the Court, seek to enforce any judgment he may obtain against the respondent.
- The respondent must pay the appellant’s costs of the appeal.
- The parties’ costs of the originating application filed 21 October 2020 should be their respective costs in any proceeding commenced by the appellant against the respondent for a claim for personal injuries sustained on 13 February 2018.
Footnotes
[1] The form of subcontract in evidence named a company with a similar but not identical name as Mass Solutions. The respondent’s counsel advised the Court that it did not take any point concerning the different name. Accordingly, for present purposes, the subcontract should be regarded as the contract governing the relationship between the respondent and Mass Solutions and pursuant to which the appellant’s labour was provided to the respondent.