DISTRICT COURT OF QUEENSLAND

1. [1]
   The plaintiff Heather Reed applies to join Allianz Australia Insurance Limited and Mick Noonan & Associates as defendants pursuant to r. 69 of the Uniform Civil Procedure Rules.  The application is made after the expiration of the limitation period, and is opposed by Allianz. Mick Noonan & Associates, an insurance broker, was served but did not appear at the hearing of the application.

Background

2. [2]
   The plaintiff’s claim filed on 17 December 2003 alleges that she suffered injuries on 25 March 2002 at premises known as Chadwick Chambers situated at 91 Currie Street, Nambour. The first defendant Gumeta Pty Ltd was then the owner of the building. The plaintiff was assisting the second defendant Scott Morrow to move an industrial refrigerator down a set of stairs in the building. It appears that Mr Morrow had agreed to take over a bakery business in the building from the second and third third parties, the Beverleys, and their company, and an unsigned copy of an agreement said to have been made in early March is annexed to Mr Morrow’s affidavit filed in support of the plaintiff’s application on 2 June 2005.

3. [3]
   In her original claim, the plaintiff sued only Gumeta as owner of the premises. Gumeta then joined Mr Morrow, Mr & Mrs Beverley and their company as third parties on the basis that the Beverley company held a lease over the bakery business in the building, assigned to it by Gumeta as Lessor, and Mr & Mrs Beverley had guaranteed the performance of the terms of the lease by their company. Mr Morrow was joined on the basis of his agreement with the Beverleys to take over the bakery business from them, and because he was actually present at the premises when the plaintiff was injured.

4. [4]
   Initially, when Mr Morrow was joined as the first third party, he was represented by solicitors Phillips Fox who had been appointed by Allianz to file a defence on his behalf. The defence to the third party claim was filed on 21 June 2004. Allianz then reviewed its underwriting records, and it is asserted in an affidavit of Nicholas Robson filed on 26 August 2004 that “cover for the first third party (Mr Morrow) had been declined” according to those records. This affidavit was filed in support of an application by Phillips Fox on 26 August 2004 for leave to withdraw as Mr Morrow’s solicitors. The solicitors were given leave to withdraw on 17 September 2004. On 1 March 2005 (that is just prior to the expiration of the limitation period), the plaintiff applied to join Mr Morrow as a defendant in the proceedings. Mr Morrow consented to the joinder as did the solicitors for Gumeta and the order was made by the Registrar by consent on 17 March 2005.

5. [5]
   In an affidavit in support of that application, Mr Schultz who acts for the plaintiff, stated: “…it is my view that the plaintiff has a viable cause of action against (Mr Morrow)…”

6. [6]
   I infer that the present application is made now (and not at the time of the application to join Mr Morrow made in March 2005), because Mr Schultz has now become aware of assertions by both Mr Morrow, and the solicitor who acts for the Beverley interests which suggest that as at the date of the fall, Mr Morrow did hold a cover note issued by insurance broker Noonan on behalf of Allianz.

7. [7]
   In support of the present application, Mr Schultz swore a short affidavit to which was annexed an affidavit of solicitor Brendan Whelan (who represents the Beverleys) sworn on 19 January 2005, and an affidavit by Mr Morrow sworn on 23 May 2005.

8. [8]
   Mr Morrow was not required for cross-examination. He swears:

“4. In approximately early March 2002 I entered into an agreement to purchase from Bill Beverley Pty Ltd a business known as “Krusty Bitz” which was a bakery being operated at 95 Currie Street, Nambour. Exhibited and marked “SM1” is a copy of the unsigned agreement between myself and Bill Beverley Pty Ltd.

5. At the time that I purchased the business, I had discussions with Mr Bill Beverley who was a director of the vendor, Bill Beverley Pty Ltd. Mr Beverley told me that he required that I take out my own public liability insurance before I was to take over the business from 16 March 2002.
6. Mr Beverley suggested that I arrange a cover note through his broker who handled the current insurance for the business. Mr Beverley informed me that he had arranged insurance himself through his broker, Mick Noonan of Mick Noonan & Associates of Adelaide.
7. As a result of this I telephoned Mr Noonan and spoke with him with respect to the insurance and I arranged to take out a cover note.
8. Mr Bill Beverley had informed me that he was not prepared to allow me to take over the business until he saw a certificate of insurance. I received a document from Mick Noonan & Associates after I had taken out the cover note with respect to the business. I showed this document to Mr Bill Beverley before I took over the business on 16 March 2002. I no longer have a copy of that document and, despite conducting extensive searches, it still has not been found.
9. When I did not continue with the business and I have moved, I lost, misplaced or discarded a number of documents which related to the Krusty Bitz business. Exhibited and marked with the letters “SM2” is a copy of a certificate of currency of insurance that had been held by Bill Beverley Pty Ltd prior to me purchasing the business. This shows that the Broker was Mr Mick Noonan.
10. I would like to join both Allianz Australia Insurance Limited and Mick Noonan & Associates to this action as parties. I believe that I held insurance at the time that the Plaintiff suffered her accident and that this had been arranged by way of a cover note through Mick Noonan & Associates. If a cover note was in fact obtained, then I believe that Allianz Australia Insurance Limited should be obliged to indemnify me with respect to this claim.”

9. [9]
   Mr Whelan swears that on 18 January 2005 he spoke with Mr Noonan:

“3. I was duly informed by Mr Michael Noonan in such telephone conversation that Mr Noonan spoke via telephone to Mr Morrow in or about March 2002 regarding the insurance cover for the Bakery business at Nambour, Queensland.

4. Mr Noonan also stated to me on 18 January 2005 that in respect of his conversation with Mr Morrow in or about March 2002, at the conclusion of the conversation he stated that he telephoned his Business Development Manager at Allianz Australia Insurance Limited, Mr Michael Rapisarda to discuss the insurance policy.
5. I was also further informed by Mr Noonan that he was given verbal authorisation by Mr Michael Rapisarda of Allianz Australia Limited, to issue a cover note for and to the benefit of Mr Morrow for the risks associated with the Bakery business at Nambour.
6. I am duly informed and do verily believe that Mr Noonan forwarded approval forms to Mr Morrow of signing. These forms were returned to Mr Noonan after Mr Morrow had signed such documentation in or about March 2002.
7. I am also duly informed by Mr Noonan and verily believe to be the truth that a cover note was issued to Mr Morrow and the signed insurance forms were delivered by Mr Noonan to Mr Rapisarda at Allianz for processing.”

10. [10]
    Allianz has filed two affidavits in support of its opposition to the application. Mr Pratt was the business development manager for Allianz in March 2002. He confirms that Noonan was a sole agent for Allianz at the relevant time appointed pursuant to an agency agreement. He says that Noonan was not authorised by Allianz to enter into cover notes (known as interim insurance contracts). He does not recall now having any conversations with Noonan. He says that because of policy decisions within the company at that time, any decision to issue a cover note for commercial insurance would have to be referred to someone more senior. Mr Rapisarda has also sworn an affidavit. He still works for Allianz. He knows Noonan. He sets out the procedure in place in 2002 for issuing cover notes. If a risk was accepted, a quote would be generated by the computer system, and sent to the agent and a copy retained in the company’s cover note database on the intra net. He denies any contact with Noonan by telephone, and says that in March 2002 he was not the business development manager. He has conducted extensive searches and has:

“been unable to locate any records which would indicate that a cover note or policy was entered into …”

11. [11]
    The records confirm that a policy was issued to the former business “Krusty Bitz” through Noonan for the period 22 May 2001 – 22 May 2002; which was cancelled on 23 February 2002, and a refund forwarded to Krusty Bitz through Noonan on or about 27 May 2002.

12. [12]
    Neither of these gentlemen were required for cross-examination. Mr de Plater who appeared for the plaintiff read the affidavit of solicitor Robson to which I have earlier referred, but in his written and oral submission he did not rely upon the apparent inconsistency between Allianz’s position now i.e. there was no cover note issued to Mr Morrow, and, in August 2004 when the solicitor retained by them was instructed that a cover note for Mr Morrow had been declined.

The arguments of the parties

13. [13]
    Rules 69 of the Uniform Civil Procedure Rules (relevantly) states:

“(1) The court may at any stage of a proceeding order that …

(b) any of the following persons be included as a party –

(i) a person whose presence before the court is necessary to enable the court to adjudicate effectually and completely on all matters in dispute in the proceeding;

(ii) a person whose presence before the court would be desirable, just and convenient to enable the court to adjudicate effectually and completely on all matters in dispute in the proceeding.”

14. [14]
    Mr de Plater relies upon r. 69(1)(b)(ii). Mr de Jersey, for Allianz, primarily relied upon the majority judgment of McPherson JA and Byrne J in Interchase Corporation Limited (in liq) v FAI General Insurance Company Limited [2000] 2 Qd R 301. Mr de Plater seeks to distinguish Interchase on the basis of the change in applicable rules; he goes further and submits that Interchase would have been decided differently on the present rule. Mr de Jersey also submits that the application should fail because the plaintiff has not set out the basis on which she says Allianz should be joined e.g. there is no draft statement of claim; and that, in any event, the application should fail because there is no evidence that there was an interim contract of insurance in place on the date of the accident in favour of Mr Morrow. I think this later submission should not be accepted because this court is in no position to decide the factual dispute about the existence of cover without having seen and heard the various witnesses, none of whom were required for cross-examination. The plaintiff’s material, at best, raises an inference that a cover note was issued, but in the face of the Allianz evidence, this court cannot draw any factual inferences, at this stage.

15. [15]
    I think there is substance in the first limb of Mr de Jersey’s argument, in the sense that if I was inclined to accede to the plaintiff’s application, before doing so I would permit the plaintiff more time to file and serve a draft amended statement of claim on both proposed defendants, so that they, and the court, can know the nature of the relief sought. Mr de Jersey fairly conceded that Allianz should know the factual basis on which it is alleged they should be joined, but I think he’s right when he says that, at this stage, his client (and the broker) do not know the nature of relief sought. Is the plaintiff seeking some sort of declaratory relief against Allianz and the broker? Is it seeking to include the broker on the basis of some alleged breach of duty of care? If I favoured the plaintiff’s application, I would not conclude that her failure to provide a draft proposed statement of claim would defeat this application, however, because of the ultimate conclusion I have reached, it is not necessary for me to grant the plaintiff this further indulgence.

16. [16]
    If the plaintiff succeeds on the first limb of its argument, the court must consider r. 69(2), and I will come to the competing arguments later in my reasons.

17. [17]
    At the time of the original Interchase application the relevant rule was O 3 r. 11(2) of the Supreme Court Rules which provided relevantly:

“(2) The court or a Judge may, at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court or Judge be just order … that the names of any persons who ought to have been joined, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added, either as plaintiffs or defendants” (my emphasis).

18. [18]
    In that case, Interchase had commenced proceedings against a valuer and its employee alleging negligence in the valuation of certain commercial premises. The valuer and the employee had a professional liability indemnity policy with FAI. FAI refused to indemnify the valuers. Interchase then sought to join FAI, on the basis of a claim for a declaration that FAI was liable to indemnify the valuers for any liability to Interchase. At first instance, Williams J (as his Honour then was) permitted the joinder. His Honour’s order was overturned on appeal by McPherson JA and Byrne J (with Davies JA dissenting).

19. [19]
    Mr de Jersey submits that the ratio for the decision of the majority is found in the judgment of Byrne J at 317:

“Interchase’s object in joining FAI is to obtain a declaration concerning FAI’s obligations to parties other than Interchase. What utility could attend such an adjudication?  Interchase is not a party to the policy. The policy was procured for the protection of the insured, not for claimants against them like Interchase. Although Colliers and Tidbold may sue on the policy, Interchase has no entitlement under the general law or statute to enforce it. Of course, like every prospective judgment credit, or, Interchase has a commercial interest in the capacity of judgment debtors to satisfy a money judgment. But the declaration sought – relief that relates exclusively to FAI’s liability to Colliers and Tidbold – could not directly affect any property, legal right or obligation of Interchase. Nor could it effectively determine FAI’s rights or duties. A judicial determination of the issues pertaining to Interchase’s claim for declaratory relief cannot shut out FAI from litigating about them again, as, for example, should Interchase’s damages claims succeed, in proceedings instigated by the liquidator or by Tidbold’s trustee claiming indemnity. The order for joinder does proceed on a contrary assumption: viz. that a question as to the rights and duties of insurer and insured is concluded by a judgment on such issues between Interchase and one or other of the insured. This, however, is not the law.”

20. [20]
    In reaching its conclusions, the court specifically did not follow the decision of the South Australian Full Court in J.N. Taylor Holdings Ltd (in liq) v Bond (1993) 59 SASR 432, where the court ordered the joinder of an insurer as an additional defendant. An action for monetary compensation had been brought against directors of a company who were insured under a claims made policy against loss by reason of any wrongful act committed as directors. Byrne J seems to have disagreed with the leading judgment of King CJ in that case, essentially by reference to the principles of res judicate, and how these principles would apply in the facts of Interchase where a person not a party to the insurance contract was seeking a binding declaration as to its effect. It does appear from a reading of the case that the relevant rule was more expansive than the rule operating at the time of Interchase. McPherson JA appears to have agreed with Byrne J’s analysis (see p 301 paragraph 18); however his Honour said that the more “expansive” rules applicable in South Australia may help to explain the decision in that case. The relevant South Australian rule (as extracted from the judgment of King CJ) provides:

“27.05 The court may … join any person to the proceedings as a party … if:

(e) that person ought to be joined as a party, or whose presence before the court is necessary; to ensure all matters in dispute in the proceeding may be effectually determined and adjudicated upon;” (my emphasis)

21. [21]
    In relation to the comparison between the now repealed O 3 r. 11(2) and r. 69(1)(b)(ii), Mr de Plater argues that the omission of the words “all the questions involved in the cause or matter”, and replacement with the words “all matters in dispute connected with the proceeding” (even more expansive that the South Australian rule at the time of the J.N. Taylor decision), would make it likely that Interchase would be decided differently under r. 69(1)(b)(ii). The expansion of the bases for joinder from O 3 r. 11 to r. 69(1)(b) was “immediately apparent” to Hommes J in Macquarie Bank Limited v Fu-Shin Lin & Ors (2001) QSC 341 (at paragraph 12). The point of distinction now made by Mr de Plater was made by McPherson JA himself in MAM Mortgages Ltd (in liq) & Anor v Cameron Bros & Ors [2002] QCA 330 where (at paragraph 27) his Honour said:

“In Interchase v FAI [2000] 2 Qd R 301, 312, 316, it was said both by Byrne J and by me that convenience alone cannot justify joinder; but Rule 69(1)(b)(ii) is now worded differently from the provisions of O 3, r 11 that were considered there. It is sufficient now if it is desirable, just and convenient to enable the court to adjudicate on all matters that are in dispute not only in the proceedings but connected with it.”

22. [22]
    I am satisfied that the issue of indemnity is a matter in dispute “connected with the proceeding” and that the presence of Allianz would be desirable, just and convenient.

Rule 69(2)

23. [23]
    Rule 69(2) provides:

“(2)  … the Court must not include … a party … unless one of the following applies …”

24. [24]
    The Rule then sets out a number of matters, only one of which need apply, if the plaintiff is to succeed on its application.

25. [25]
    It is perhaps significant that r. 69(2)(g), which provided for the joinder of a party, if the court considers it “just”, was omitted from the rule in 2004.

26. [26]
    Mr de Plater relies only on the following provisions in r. 69(2):

“(a) The new party is a necessary party to the proceeding because:

…

4. (iv)
   the court considers it doubtful the proceeding was started in or against the name of the right person as a party …

5. (e)
   The new party is sued jointly with the defendant … and is not also liable severally with the defendant … and failure to include the new party may make the claim unenforceable.

5. (f)
   For any other reason …

4. (ii)
   relief sought in the proceeding before the end of the limitation period cannot be granted;

unless the new party is included or substituted as a party.”

27. [27]
    Neither Counsel was able to refer me to any decided case (at first instance or on appeal) on any of these provisions. The learned editors of Civil Procedure in Queensland refer only to cases relevant to the now repealed r. 69(2)(g) such as Limpus v State of Qld & Ors [2003] QCA 563 and the cases referred to in that decision.

28. [28]
    In my opinion, by giving the provisions relied upon their plain meaning, the plaintiff is unable to bring its application within any, and therefore the application must fail. (a)(iv) clearly has no application, as there is no reason to doubt that the plaintiff’s proceeding was started against the right person, in the sense that the parties she now seeks to join are or may be the correct parties. I think the plaintiff’s reliance on 2(e) and (f)(ii) fails for essentially the same reason. Mr de Plater (correctly in my view) argues that “enforceable” in (2)(e) does not mean “incapable of being satisfied”. In other words, he does not submit that the ability or otherwise of the plaintiff to obtain satisfaction of any judgement she may gain against the present defendants, is irrelevant to a consideration of whether or not the present claim i.e. against the first and second defendants may be unenforceable. It will make no difference at all to the question of enforceability of the claim whether or not Allianz and/or the broker are now joined as parties. I construe “claim” as meaning the claim without the addition of the new parties, and not as Mr de Plater submitted the proposed “claim” against Allianz or the broker. For similar reasons, I construe the reference to “relief” in (f)(ii) as relating to the relief sought in the claim prior to the expiration of the limitation period.

29. [29]
    Rule 69(2) is expressed in mandatory terms. Unless the plaintiff can bring her application within any of the circumstances set out in the sub-rule, the court “must not” include a party after the end of the limitation period.

30. [30]
    It follows that the plaintiff’s application must be dismissed. I order the plaintiff to pay the costs of Allianz of the application.