Wood v Tots Professional Services Pty Ltd
[2008] QDC 241
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- Unreported Judgment
- Wood v Tots Professional Services Pty Ltd[2008] QDC 241
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Wood v Tots Professional Services Pty Ltd[2008] QDC 241
Wood v Tots Professional Services Pty Ltd[2008] QDC 241
DISTRICT COURT OF QUEENSLAND
CITATION: | Wood & Anor v Tots Professional Services P/L & Anor [2008] QDC 241 |
PARTIES: | WALTER IRVINE WOOD (Applicant/First Plaintiff) and ADCRAY PTY LTD ACN 010 861 677 (Applicant/Second Plaintiff) v TOTS PROFESSIONAL SERVICES PTY LTD ACN 010 445 557 now known as PIVOTAL HOLDINGS PTY LTD ACN 010 445 557 (Defendant) and GIO GENERAL LTD ABN 22 002 861 583 (Respondent) |
FILE NO/S: | BD2000 of 2003 |
DIVISION: | Civil |
PROCEEDING: | Application to add a defendant and to amend the claim and statement of claim |
ORIGINATING COURT: | District Court of Queensland |
DELIVERED ON: | 26September 2008 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 21 April 2008 |
JUDGE: | Andrews SC DCJ |
ORDER: | Order that GIO General Ltd ABN 22 002 861 583 be included as a second defendant in the proceeding; leave to the plaintiffs to amend the claim and statement of claim generally in accordance with the draft at pages 113 to 121 of Exhibit “JAN-1” to the Affidavit of John Alexander Nagle filed herein on 2 April 2008. |
CATCHWORDS: | JOINDER OF PARTIES – JOINDER BY PLAINTIFF OF DEFENDANT’S LIABILITY INSURER Uniform Civil Procedure Rules 1999- r69 (1) (b) (ii). Bradburn v Great Western Railway Co (1874) LR 10 Ex 1. Cooper v Dexter & Ors [2003] QDC 031- referred to. Dey v Victorian Railways Commissioners (1949) 78 CLR 62- referred to. General Steel industries Inc. v Commissioner for railways NSW (1964) 112 CLR 125 applied. Kestrel Coal P/L v Longwall Roof Supports Ltd [2003] QSC 187 - referred to. Penrith City Council v Government Insurance Office of NSW (1991) 24 NSWLR 564. Royston v McCallum [2006] QSC 193 - followed. Tyco Australia P/L v Optus Network P/L [2004] NSW CA 333- cited. Universal Music Australia Pty Ltd v Cooper [2004] FCA 78 (1964) 112 CLR 125 - followed. |
COUNSEL: | Charles Wilson for the applicants Holyoak for the respondent |
SOLICITORS: | John Nagel & Co for the applicants Moray & Agnew Solicitors for the defendant Barry & Nilsson for the respondent |
- [1]One of the plaintiffs in this proceeding seeks to join its insurer GIO General Ltd (“GIO”) as a second defendant. Though the two plaintiffs are named as applicants the application is in reality brought by the corporate plaintiff. GIO opposes the application. The current defendant will abide the order of the court. Before setting out the issues the corporate plaintiff wishes to litigate at trial with GIO I will set out the issues for trial between the plaintiffs and the current defendant.
Proceeding between the newsagent, its director, and the landlord
- [2]The two plaintiffs are an incorporated newsagent and its director Mr Wood. The newsagent operated from a shop in a shopping complex and the defendant was its landlord. The newsagent and Mr Wood allege that Mr Wood was injured at the shopping complex when an industrial bin rolled free and struck him. They allege that the landlord breached duties to each of them. They allege that Mr Wood sustained personal injuries which caused him loss and that the newsagent lost the benefit of Mr Wood’s services which caused it loss. They each claimed damages from the landlord.
- [3]The landlord denied that it breached any duty to the plaintiffs and alleged negligence by Mr Wood and that any damage was caused or contributed to by the negligence of Mr Wood.
- [4]When the newsagent occupied the shop it agreed by deed with the landlord to indemnify the landlord against certain liabilities. The deed relevantly provided:
“6.1 Tenant Indemnity
The tenant is liable for and indemnifies the Landlord against liability arising from, and any costs incurred by the Landlord in connection with:
6.1.1 Damage, loss, injury or death caused or contributed to by the act, negligence or default of the Tenant or the Tenant’s Employees and Agents …”
- [5]The newsagent also agreed with the landlord that the newsagent would maintain “In the name of the Tenant and the Landlord…for their respective rights and interests … Public Liability Insurance …”[1].
- [6]
“GIO will also provide the following Additional Benefits in this Policy Section.
…
2. Lessor’s Indemnity
GIO will indemnify, in like manner to you, any lessor of premises tenanted by the Insured, as defined in Definition 4(a) of this Policy Section, where the lease of those premises requires the lessor to be indemnified for Personal Injury … which occurs as a result of any negligence on your part.[4]”
In argument, the parties referred to this part of the policy as the “additional benefits” clause. I will maintain that description.
- [7]In the same section of the policy in which the additional benefits clause appears, there appeared an exclusion. So far as is relevant it provides:
“1. Contractual Liability
Other than as provided in…Additional Benefits…2, this Policy Section does not insure any liability assumed by you under any contract or agreement except to the extent that liability would have applied in the absence of that contract or agreement.[5]”
- [8]
- (a)Mr Wood is described by the words “Tenant’s Employees and Agents” in clause 6.1.1 of the deed;
- (b)A lease of the shop existed and incorporated clauses 6.1 and 6.1.1 of the deed;
- (c)The landlord is a “lessor of premises tenanted by the Insured” within the meaning of those words in the additional benefits clause of the policy;
- (d)The lease by clauses 6.1 and 6.1.1 has the effect of requiring the landlord “to be indemnified for Personal Injury…which occurs as a result of any negligence on your part” within the meaning of those words in the additional benefits clause of the policy.
The effect of these concessions is that the conditions for the application of the additional benefits clause are arguably satisfied. GIO argues that, despite this, on the proper construction of the words “in like manner to you” GIO is not obliged to indemnify the landlord in this case.
- [9]The landlord, by counterclaim, effectively alleged that pursuant to clause 6.1 of the deed between the landlord and the newsagent, the newsagent agreed to indemnify the landlord against liability in relation to injury such as Mr Wood’s injury from the industrial bin. The landlord alleges that the newsagent is required to fully indemnify the landlord in relation to the claims of the newsagent and Mr Wood and seeks a declaration to that effect.
- [10]As well, the landlord counterclaims that the newsagent has breached its agreement to maintain in the name of the landlord a policy of public liability insurance and claims damages (I infer against the newsagent) to the extent of the landlord’s liability for the claims of the newsagent and Mr Wood.
The proposed proceeding against GIO
- [11]The newsagent applies to join GIO pursuant to the Uniform Civil Procedure Rules 1999 (“UCPR”) r 69(1)(b)(ii). It provides, so far as is relevant:
“69 Including, substituting or removing party
- (1)The court may at any stage of a proceeding order that—
…
- (b)any of the following persons be included as a party—
- (i)…
- (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 connected with the proceeding.”
- [12]The injury to Mr Wood occurred during the currency of the policy. After his injury, the landlord demanded from GIO that GIO indemnify it against the plaintiffs’ claims against the landlord. GIO declined to do so on 25 November 2003. The landlord has not instituted proceedings against GIO. It is the newsagent which seeks to compel GIO to indemnify the landlord. It is neither pleaded nor submitted by the plaintiffs that the landlord would be unable to satisfy a judgment for the plaintiffs against the landlord. The newsagent is not concerned about the landlord’s capacity to satisfy a judgment for the plaintiffs against the landlord. The newsagent has a different purpose for seeking to compel GIO to indemnify the landlord.
- [13]The newsagent proposes, if GIO is joined as a defendant, to plead generally in accordance with the following paragraphs. The paragraph numbering confusingly repeats “21” and “22”. I will set out only those parts of the proposed amended statement of claim which seem relevant to the application. I substantiate words in square brackets for clarity:
“21 By reason of the provisions of the Extension[7] … [GIO] became and is liable to indemnify [the landlord] with respect to its civil liability for loss or damage:
- (a)which [the newsagent and Mr Wood] sustained as a consequence of the accident …; and
- (b)which occurred as a result of any negligence on the part of [the newsagent].
22 … [the landlord] made a claim (the “Claim”) in writing on [GIO] for indemnity under the Extension …
23 [GIO] has wrongfully denied its liability to indemnify [the landlord] with respect to the Claim …
24 … the conduct of [GIO] at paragraph 23 hereof constituted a breach of contract.
25 By reason of [GIO’s] said breach of contract, [the newsagent] has sustained loss and damage in any sum for which it is adjudged liable to [the landlord] pursuant to cl 6.1 of the Deed.
…
21. AND the [newsagent] claims as against the defendants:
- (a)an order declaring that by virtue of the provisions of the Policy, [GIO] is liable and obliged to indemnify [the landlord] against its civil liability for the Plaintiffs’ claims … to the extent that such loss or damage occurred as a result of negligence on the part of [the newsagent] (the “Obligation”);
- (b)an order that [GIO] specifically perform the Obligation by payment of the amount of any judgment;
22. AND the [newsagent] claims as against [GIO]:
- (a)damages in lieu of specific performance;
- (b)…”
- [14]The damages which the newsagent claims at paragraph 22 of the proposed statement of claim were explained in argument thus[8]:
“The damages claimed are the damages which [the newsagent] and Mr Wood would sustain in the event that GIO breaches its promise to indemnify [the landlord] under [the additional benefits clause of the policy]…They would be the amount by which any verdict in favour of Mr Wood or [the landlord] is reduced on the application of clause 6 of the deed…if…Mr Wood was guilty of contributory negligence…and…[the landlord] by its servants and agents also was negligent…clause 6.1 would be activated…[and] would engage…the additional benefits [clause of the policy] and…GIO would be required to indemnify [the landlord] against the liability to Wood and [the newsagent] and that would produce the result that [the landlord] has suffered no loss and damage as a consequence of the negligence on the part of [the newsagent] or Wood within…clause 6 [of the deed]. The result flowing from all of that…is that any verdict in favour of Mr Wood and [the newsagent] stands to be unreduced on account of the application [of] clause 6.1…the damages referred to at paragraph 22 of the [proposed] amended statement of claim are different in kind from the damages claimed by Mr Wood and [the newsagent] against [the landlord] as a consequence of Mr Wood’s accident. Those…are fairly characterised as damages for personal injury…the damages claimed by [the newsagent] at paragraph 22 of the [proposed] amended statement of claim…are consequent upon GIO’s breach of the additional benefits [clause]…”
The plaintiffs submitted that the following particulars of the newsagent’s damages would be included in the proposed statement of claim:
“Particulars of the damages at paragraph 22(a) are any amount by which the sum otherwise recoverable by the plaintiffs against the [landlord] are reduced by reason of the application of clause 6.1 of the deed.”[9]
I inserted or substituted the words in square brackets for clarity.
- [15]Because a joinder application requires the exercise of a discretion, the merits of the case proposed to be advanced after joinder are a relevant consideration.[10] It has been held in this court that it is sufficient for a plaintiff to plead a good cause of action against the proposed defendant though it is not necessary to show that the plaintiff has a good cause of action or even a prima facie case.[11] In the Federal Court of Australia a threshold test in relation to an application for joinder of a party has been held to be[12] that stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW)[13] where it was observed:
“…the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject…It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action – if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal – is clearly demonstrated. The test to be applied has been variously expressed; “so obviously untenable that it cannot possible succeed”; “manifestly groundless”; “so manifestly faulty that it does not admit of argument”; “discloses a case which the Court is satisfied cannot succeed”; “under no possibility can there be a good cause of action”; “be manifest that to allow them” (the pleadings) “to stand would involve useless expense”…although I can agree with Latham CJ…when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings[14], in my opinion, great care must be exercised to ensure that under the guise of achieving expeditious finality, a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal.”
- [16]GIO objects to joinder on the basis that the proposed case against it is “untenable”, “deficient” and “wrong”. When confronted with such a submission the principles referred to in General Steel are a helpful threshold test when considering whether to allow an application to include a party pursuant to UCPR r. 69(b). As Barwick CJ noted in General Steel, the question of whether the court has received the necessary assistance from the parties can arise when assessing whether to summarily terminate an action. The case before me is analogous as I must consider whether to reject the application for joinder. A problem with the assessment of the plaintiffs’ case for joinder was nicely identified by the plaintiffs’ counsel who observed:
“Outlines of argument as delivered by the applicants [and]…GIO are largely ships in the night. The issues haven’t really crystallised…there being no pleadings [exchanged by the plaintiffs and GIO].”
I inserted the words in square brackets for clarity.
- [17]Counsel for the plaintiffs and counsel for GIO did not as helpfully engage with one another’s submissions as they may have if GIO had applied for summary judgment after filing a defence drawn in accordance with UCPR r 150(4). GIO’s submissions did not address the plaintiffs’ extensive submissions on Interchase[15] and estoppel. The written submissions of the parties failed to touch upon GIO’s orally made argument against joinder relying upon Royston v McCallum[16].
- [18]The relevant part of the decision in Royston can be summarised. In essence, Royston decided that where P sues D1 for damages for personal injury and D1 satisfies P’s claim by paying it and D1 then claims the equivalent amount from D2 as damages for breach of contract between D1 and D2, the claim by D1 against D2 is for damages for economic loss and not for damages for personal injury and if D2 has insurance against liability for personal injury the insurance does not protect D2 for D1’s claim for economic loss.
- [19]GIO relied upon Royston to submit that the landlord’s counterclaim brought pursuant to clause 6.1 of the deed against the newsagent for an indemnity[17] is a claim for economic loss and not a claim for damages for personal injury. I accept the correctness of this submission. GIO submitted that any arguable obligation of GIO to indemnify the landlord is limited to an obligation to indemnify the landlord for liability for Personal Injury[18]. I accept the correctness of this submission. GIO submits that once it is accepted that the landlord’s counterclaim is a claim for economic loss and not for personal injury it follows that GIO has not offered insurance against such loss. I accept the correctness of this submission. Before considering whether these findings are sufficient to justify refusing the joinder application, I should set out the limited basis upon which the plaintiffs seek to have GIO indemnify the landlord.
- [20]By the statement of claim, Mr Wood claims from the landlord damages for personal injury and the newsagent claims from the landlord damages for the loss of Mr Wood’s services. Mr Wood’s claim for damages for personal injury is arguably a claim for damages for Personal Injury[19] within the meaning of the policy and arguably entitles the landlord to seek from GIO an indemnity against Mr Wood’s claim pursuant to the additional benefits clause of the policy. Though GIO denied its obligation to indemnify the landlord in 2003 and 2004, GIO did not make submissions on whether Mr Wood’s claim for damages for personal injury against the landlord entitles the landlord to claim an indemnity from GIO. GIO did not make submissions on whether the newsagent’s claim for damages for loss of Mr Wood’s services was a claim for damages for “Personal Injury” within the meaning of those words in the policy nor on whether the landlord was entitled to seek from GIO an indemnity in respect of that claim. In these circumstances, I treat the arguments for the purposes of this joinder application as passing the threshold test referred to above[20].
- [21]The newsagent’s interest in joining GIO is confined to seeking to compel GIO to indemnify the landlord for that amount of the landlord’s liability to the newsagent and to Mr Wood for which the landlord counterclaims against the newsagent an indemnity pursuant to clause 6.1 of the deed. But the newsagent is not seeking indemnity for itself against the landlord’s claim for economic loss. The newsagent seeks indemnity for the landlord against the newsagent’s and Mr Wood’s claims which are arguably for Personal Injury within the meaning of the policy.
- [22]With respect to GIO’s submission that its only arguable obligation is to indemnify for liability for personal injury and not for economic loss, it seems to be at least arguable that:
- (a)A liability of the newsagent to indemnify the landlord pursuant to clause 6.1 of the deed is not a liability by way of damages for Personal Injury within the meaning of the policy and GIO is not liable to indemnify the newsagent in respect of it;
- (b)A liability of the landlord to pay damages to Mr Wood is a liability to pay damages for Personal Injury[21] and GIO is liable to indemnify the landlord in respect of that liability.
- [23]I understand one component of the plaintiffs’ submission[22] to be that if GIO indemnifies the landlord for the landlord’s liability to pay damages to Mr Wood for his personal injuries the quantum of the newsagent’s liability pursuant to clause 6.1 of the deed to indemnify the landlord will reduce. Implied in the submission is a further submission that this is an occasion where monies payable by GIO pursuant to the insurance policy are to be taken into account in assessing the damages payable by the newsagent to the landlord distinguishing cases such as Bradburn v Great Western Railway Co[23] . GIO made no submissions on the issue of whether its indemnification of the landlord would reduce the quantum of the landlord’s quantum claim against the plaintiffs or one of them. In this circumstance, I will accept for the purposes of a joinder application that it is sufficiently arguable to satisfy the threshold test[24].
- [24]If GIO’s indemnification of the landlord would not reduce the quantum of the landlord’s counterclaim against the plaintiffs or one of them but was simply a matter relevant only as between a solvent landlord and GIO I accept GIO’s submission that there would be no point in a joinder.
- [25]GIO submitted that the declaration sought by the plaintiffs has no utility because it does not directly affect any property, legal right or obligation of the plaintiffs and also that it cannot effectively determine GIO’s rights and duties because it cannot prevent GIO from litigating about them again. I accept that if these two submissions are correct it would be relevant to an assessment of whether, on an application pursuant to UCPR r 69(1)(b)(ii) a person’s presence before the court would be desirable, just and convenient to enable the court to adjudicate effectuately and completely on all matters in dispute connected with the proceeding. The plaintiffs submit that the declaration sought does directly affect a legal right of the newsagent on the basis that the newsagent is a party to the policy and the newsagent is entitled under the general law to enforce it. I accept that this is arguably so. By enforcing the policy it seems to me that the newsagent, arguably, may reduce or extinguish the amount it may be liable to pay to the landlord in satisfying the landlord’s claim for an indemnity pursuant to clause 6.1.1 of the deed.
- [26]If the joinder of GIO has the effect of reducing the damages for which the landlord can counterclaim against the newsagent, then it would be desirable, just and convenient for GIO to be joined to allow the court to adjudicate effectuately on the counterclaim brought by the landlord against the newsagent.
- [27]It is unnecessary to rule on the plaintiffs’ submission that Interchase was incorrectly decided. In circumstances where I do not have the benefit of submissions on this point from parties other than the plaintiff I will not rule on these submissions or on whether to prevent an abuse of process GIO would be estopped from litigating again with the landlord the matters raised by the declaration the plaintiff seeks.
- [28]GIO had a further submission that the plaintiffs’ proposed claim is, in effect, a claim that GIO indemnify the plaintiffs against the landlord’s counterclaim for an indemnity pursuant to clause 6.1 of the deed. As part of the submission, GIO relies upon the specific exclusion in the policy[25] which excludes the obligation of GIO to indemnify an insured for any liability assumed by the insured under “any contract or agreement” including the contract or agreement contained in clause 6.1 of the deed. G10 had another submission which I regard as related. It was that the words “in like manner to you” in the additional benefits clause shows an intent that the landlord was to be indemnified for claims for Personal Injury but not for claims pursuant to contract. These submissions misstate the precise nature of the plaintiffs’ proposed claim. It is not a claim that GIO indemnify the plaintiffs against their liability to the landlord upon the counterclaim. It is a claim that GIO indemnify the landlord against claims for Personal Injuries and by so doing the result will reduce the quantum of the loss which the landlord will suffer and arguably will reduce or extinguish the quantum which the landlord can seek by way of indemnity from the newsagent pursuant to clause 6.1 of the deed.
- [29]GIO submitted that a limitation period of six years commenced at the date when Mr Woods was injured on 30 December 2000. It submitted that it is too late to bring a claim against GIO. The submission has as its premise that the newsagent in bringing a claim against GIO is seeking an indemnity for the newsagent’s liability to the landlord. That premise is a false one. Building on that premise, the submission has another premise that the plaintiffs are urging an interpretation of the policy that it includes a promise by GIO to indemnify the newsagent against liability to the landlord by reason of any negligence by the newsagent. That is a false premise. I accept the submission of the plaintiffs that if there is a relevant cause of action against GIO it accrued at the time of the alleged breach by GIO when it refused a request for indemnity. The request for indemnity was made by the landlord in November 2003 and refused by GIO in the same month. The landlord’s cause of action accrued no earlier than November 2003[26]. The limitation period has not been reached.
- [30]I allow the plaintiffs’ application and pursuant to UCPR r 69(1)(b)(ii), I order that GIO General Ltd ABN 22 002 861 583 be joined as second defendant in the proceeding and pursuant to UCPR r 377(1)(c) I give leave to the plaintiffs to amend the claim and statement of claim generally in accordance with the draft at pages 113 to 121 of Exhibit “JAN-1” to the Affidavit of John Alexander Nagel filed herein on 2 April 2008.
Footnotes
[1] The deed clause 3.4.2.1
[2] Personal Injury was defined in the relevant part of the policy to mean:
(a) bodily injury, death, sickness, disease, disability or mental injury;
(b) wrongful detention;
(c) libel, slander or defamation, other than libel, slander or defamation involving advertising, broadcasting, telecasting, publishing or publicity activities.
[3] See policy, page 36
[4] See policy, page 37
[5] See policy, page 39
[6] GIO accepts only for the purposes of the joinder application that the plaintiffs’ case is sufficiently arguable to allow the plaintiff to plead these matters
[7] The additional benefits clause of the policy which appears at [6] herein.
[8] Transcript pages 45 and 46
[9] Transcript p. 48
[10] Kestrel Coal P/L v Longwall Roof Supports Ltd [2003] QSC 187 at [16] per Muir J as His Honour then was
[11] Cooper v Dexter & Ors [2003] QDC 031 at [26] per McGill SC DCJ
[12] Universal Music Australia Pty Ltd v Cooper [2004] FCA 78 at [7] per Tamberlin J
[13] (1964) 112 CLR 125 at 128-129
[14] Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at p. 84
[15] Interchase Corporation Limited (in liq) v FAI General Insurance [2000] 2 QdR 301
[16] [2006] QSC 193, a decision of Chesterman J
[17] Against the claims for damages of the newsagent for loss of Mr Wood’s services and of Mr Wood for personal injuries sustained by him.
[18] Within the meaning of those words in the policy. The definition is set out at footnote 2 above.
[19] Defined at footnote 2
[20] See [16] herein
[21] Within the meaning of those words in the policy
[22] At [14] herein
[23] (1874) LR 10 Ex 1 cited in Tyco Australia P/L v Optus Network P/L [2004] NSW CA333 at [188] per Handley JA
[24] See [16] herein
[25] Set out at [7] herein
[26] Penrith City Council v Government Insurance Office of NSW (1991) 24 NSWLR 564 at 568G per Giles J