Van Veenendaal v The Colonial Mutual Life Assurance Society Limited
[2013] QDC 201
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- Unreported Judgment
- Van Veenendaal v The Colonial Mutual Life Assurance Society Limited[2013] QDC 201
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Van Veenendaal v The Colonial Mutual Life Assurance Society Limited[2013] QDC 201
Van Veenendaal v The Colonial Mutual Life Assurance Society Limited[2013] QDC 201
DISTRICT COURT OF QUEENSLAND
CITATION: | Van Veenendaal v The Colonial Mutual Life Assurance Society Limited [2013] QDC 201 |
PARTIES: | KERRI JOY VAN VEENENDAAL (plaintiff) v THE COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED (ACN 004 021 809) (defendant) |
FILE NO/S: | BD4712/11 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 6 September 2013 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 16 August 2013 and 2 September 2013 |
JUDGE: | Dorney QC, DCJ |
ORDER: |
|
CATCHWORDS: | Application in pending proceeding – withdrawal of admission in defence – whether genuine dispute – whether disqualifying prejudice (where possible time limit expired) Uniform Civil Procedure Rules 1999, r 188 Limitation of Actions Act 1974, s 38(1) Aon Risk Services Australia Limited v ANU (2009) 239 CLR 175 Gates v CML Assurance Society Ltd (1986) 160 CLR 1 Pinehurst Nominees Pty Ltd v Coeur de Lion Investments Pty Ltd [2012] QSC 314 Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455 |
COUNSEL: | K Holyoak for the applicant/defendant M Bingham for the respondent/plaintiff |
SOLICITORS: | McInnes Wilson for the applicant/defendant Maurice Blackburn for the respondent/plaintiff |
Introduction
- [1]The application, filed by the defendant insurer, seeks the Court’s leave, “if, and so far as is, necessary” under r 188 of the Uniform Civil Procedure Rules 1999 (“UCPR”) to withdraw an admission it made in its Defence filed 20 January 2012.
- [2]The issue arises because the defence admitted, concerning allegations in paragraph 5 of the plaintiff’s Statement of Claim, that Dominic Martin and, or alternatively, Martin Financial Advisors Pty Ltd (“MFA”) (both compendiously referred to as “Martin”) “was an Insurance Agent of the Defendant”. The concern, from the plaintiff’s point of view, is that if the defendant is permitted to “change” that “admission” it will be necessary for the plaintiff to take further action to join MFA in this proceeding and that, consequently, it will suffer material prejudice because the time limitation under the Limitation of Actions Act 1974 (“Limitation Act”) will be pleaded as a bar to an action for breach of contract.
“Leave to withdraw”
- [3]Expressed in literal terms, r 188 of the UCPR simply refers to withdrawing “an admission made in a pleading”; and that that is to be done “only with the court’s leave”.
- [4]Whether or not the allegation in the first place was ambiguous, or deficient as a plea to allege agency in a legal responsibility sense, does not appear to enter into any consideration under r 188. But, equally obviously, the nature of the original allegation which was relevantly admitted must play a role in determining whether the appropriate leave should be given.
- [5]Accordingly, I conclude that it is necessary for the defendant to seek leave to withdraw the present unqualified admission where what is sought to be substituted is a series of partly clarifying admissions and partly defensive allegations.
Relevant authority
- [6]A comprehensive recent consideration of the relevant provision was undertaken by Martin J in Pinehurst Nominees Pty Ltd v Coeur de Lion Investments Pty Ltd.[1] Martin J set out a distillation of the applicable principles on such an application (principally obtained from the judgment of de Jersey CJ in Ridolfi v Rigato Farms Pty Ltd [2]): at [35]. Important for present purposes are the following: issues of prejudice may fall for consideration; there is no principle that those admissions that are made may always be withdrawn “for the asking” subject to payment of costs; the discretion to grant leave is broad and unfettered; the UCPR cannot be approached on the basis that if important provisions are ignored, even if inadvertently, the court may be expected to act indulgently and rectify the omission; and parties do not have an inalienable right to a hearing of all issues on the merits. As Pinehurst Nominees goes on to examine: it is also necessary to determine whether there is a genuine dispute about the defendant’s liability; (subject, now, to considerations raised in Aon Risk Services Australia Limited v Australian National University[3]) the UCPR do not operate so as to prevent the trial of issues that are genuinely in dispute; and the reason why any genuine dispute was not made obvious in the original pleading must be particularised, cogently: at [36]-[39].
Genuine dispute?
- [7]The plaintiff contended, valiantly, that there could not be a genuine dispute, particularly because it was submitted that, whatever evidence was available to be led at trial, it was irrelevant to the question of whether the defendant ought to be permitted to deny that a particular document headed “Policy Summary – Income Care Range” was “given” by “Martin” as “agent” of the insurer defendant. The underlying problem with that submission is that it is equivocal about how the word “agent” is used in the relevant allegation of “giving” in the Statement of Claim. If it was given by a person who was personally, or representatively, authorised to issue a policy of insurance without reference to the principal, it must be different from being given by an agent whose acts have wider legal ramifications for his or its principal. Here, there should be no preclusion to contesting these matters of “fact” even though it is arguable that the document itself might otherwise imply a conclusion to the contrary.
- [8]Without canvassing the very many cases presented to the Court on this application concerning the description of a person as an “agent”, it is abundantly obvious that the term covers many and varied legal relationships, particularly in the field of insurance. Accordingly, if, as the defendant has contended in this case, an insurer wishes to raise a dispute about the nature of any agency relationship which might have existed between such a defendant insurer and either of the constituent parts of “Martin”, it should be allowed to do so if such a dispute is genuine. Here - as required by authority - it has advanced sworn evidence as to why the original “admission” was made, why there was no earlier attempt to seek this present leave, and what evidence is available to be led at a trial concerning the amended pleading.
- [9]As submitted by the defendant, the amendments proffered seek only “to explicitly make this distinction clear” about the position of “Martin” as a commercial or retail agent (i.e. a distributor on commission) and therefore an agent, rather, of the insured plaintiff for the purpose of concluding a contract of insurance with the insurer defendant.
- [10]It is also important in determining this issue of genuineness to understand something of the background.
- [11]The defendant asserts, and it is not put in issue by the plaintiff, that MFA was a holder of an Australian Financial Services License (“FSL”) at the material times under Chapter 7 of the Corporations Act 2001 (Commonwealth) and that Dominic Martin was an authorised representative of MFA, also under Chapter 7. There is evidence of a distributor agreement made 26 February 2004 between the insurer defendant and MFA, appointing the latter as the distributor of certain insurance products. Subject to the matters canvassed in [7] above, it is contended by the defendant, and supported by relevant sworn assertions, that neither MFA nor Martin was held out by the defendant, by any representations or conduct, to be its insurance agent save that MFA was, as noted, an appointed distributor of the defendant’s insurance products. Further, the defendant contends that Martin was, and acted only as, and was only represented as, an authorised representative of MFA. With respect to the Policy Summary document referred to above, the defendant seeks to deny, in the amended pleading on its part, the allegation that “Martin”, during the course of negotiation of the entry into of the relevant insurance policy, gave to the plaintiff that document on behalf of the defendant (despite its standard format referring to the defendant), on the grounds that it “believes those allegations to be untrue” on the basis then later set out in its “amended” pleading. Rather, it alleges it: was prepared by Dominic Martin himself and given by that person to the plaintiff; was dated some 4 days before it was received by the defendant; and was, with other documents, prepared for submission “to” the defendant by MFA, by Dominic Martin, “on behalf of the plaintiff”.
- [12]While the Statement of Claim alleges that the Policy Summary document was so given on or about 26 May 2006, the plaintiff had received and signed, on 23 May 2006, an earlier Statement of Advice of MFA prepared by Dominic Martin “as at 18 May 2006”. This stated, in the section entitled “Authority to Proceed”, that she accepted the recommendations contained in it and authorised their implementation, subject to noting that the “income protection” be lowered to $5,000.00 per month “as per client’s request”. That document disclosed that MFA was an Australian Financial Services Licensee and that both it and its representative, Dominic Martin, “may receive” commissions, fees and other benefits as a consequence of the advice provided and contained within the Statement of Advice. Dominic Martin, in the “new” pleading (discussed later), is not alleged to be anyone’s “insurance agent”.
- [13]From even that limited survey of relevant background material, I conclude that there is a genuine dispute in this proceeding concerning the relationship between the defendant and “Martin” in each of its constituent forms.
“Reasons” advanced by defendant
- [14]The explanation provided by the defendant for its original admission is contained in the several affidavits of Allison Clare Langford and Victoria Lesley Barber. The explanation, to some extent, waives legal professional privilege had by the defendant with its solicitors.
- [15]The important aspect of the explanation is that neither the solicitor, Langford, nor the relevant instructing person for the defendant, Nik Cerjanec, interpreted the pleading in the Statement of Claim about an “Insurance Agent” as including an allegation that the insured defendant had a legal responsibility for the conduct and knowledge of “Martin”; and that this interpretation was based upon an understanding that the allegation conveyed only the meaning of a retail or commercial agency.
- [16]On the material, including the email “instructions”, I conclude that a relevant and reasonable cogent explanation has been advanced by the defendant for seeking to withdraw its admission.
Prejudice (apart from any mere delay)?
- [17]It is accepted by the applicant/defendant that once a plaintiff has identified, and put sufficient facts before the court to establish, prejudice, it is then for a defendant to overcome that as part of its persuasive burden in convincing the court to exercise the relevant discretion in its favour. The plaintiff takes no issue with that. In the end, the prejudice that prevails is unfair prejudice.
- [18]When this matter first came on for hearing on 16 August 2013, I was concerned that the major plank of the plaintiff’s contention about prejudice was in no way clear to me. Consequently, I ordered that the plaintiff cause an affidavit to be filed with a draft pleading against a prospective defendant. By the affidavit of Paul David Watson filed 23 August 2013, the relevant draft was exhibited. The primary contention concerning prejudice potentially to be suffered by the plaintiff is that a cause of action against MFA “in contract” has been “now lost”, because of the six year timeframe under the Limitation Act. As particularised, the contractual claim, based upon “the retainer” resulting from the plaintiff instructing and retaining MFA as her financial and insurance advisor is alleged to be breached as set out in paragraph 26 of the draft Statement of Claim. In total, there are eight separate particularised aspects of the breach. For present purposes, it is sufficient to focus on paragraph 26(a). It states that the breach was a failure to “effect income protection insurance against total disability for $5,000.00 per month.”
- [19]When divining the reason for such failure, the basis of the breach is primarily set out in paragraphs 16 to 18 (inclusive). In summary terms, the Provisional Offer of Insurance signed by the plaintiff and handed to MFA’s “Authorised Representative” (Dominic Martin) was accompanied by an instruction to him to deliver it to the insurer “unless any decrease, by reason of (the insurer’s) concerns being allayed, could be effected in the increase of 100% in the premium”. It is then alleged that such was not delivered to the insurer in that form. It is thereafter alleged that Martin altered that document and delivered such altered document to the insurer, later informing the plaintiff that the insurer had been able to reduce the monthly premium after Martin had discussed “medical issues” with it. Importantly for present purposes, the policy issued by the insurer defendant did not, according to the pleading, reflect the terms of the retainer.
- [20]The defendant contends that, when the paragraphs just discussed, together with certain additional identified paragraphs, are examined, they are consistent only with an allegation of fraud or fraudulent concealment within the meaning of s 38(1) of the Limitation Act. As elaborated upon, the defendant submits further that the allegations are also consistent with lies and deceit. On those premises, the defendant submits that s 38(1)(b) of the Limitation Act also applies. Insofar as it is based upon the fraud of MFA, or its representative, it is submitted that it breaches s 38(1)(a) of the Limitation Act. This would mean, on either basis, that the period of limitation would not begin to run until the plaintiff discovered it or could, with reasonable diligence, have discovered it; and that, on the pleaded case, that was not until the benefits ceased by virtue of the operation of the “premium saver option” on about 8 February 2011.
- [21]In the alternative, with respect to the contract claim, the defendant submits that the plaintiff has not discharged the onus cast upon her to establish that any real risk of prejudice means that a fair trial cannot be held which would appropriately investigate the true issues which the defendant wishes to put in dispute.
- [22]The plaintiff’s response to those submissions by the defendant contends that the causes of action which are suggested by the defendant with respect to fraudulent concealment are explicable not only by reason of personal dishonesty or moral turpitude but also by “misunderstanding”, “error, confusion or forgetfulness”. Those potential explanations are advanced because the plaintiff submits that, in truth, the actual explanation by MFA is not yet known. Furthermore, the plaintiff argues that it is not clear when she might, with reasonable diligence, have discovered any potential fraud or fraudulent concealment – although one is slightly puzzled why that could not have been, at least in a preliminary way, touched upon by her in evidence here: see paragraph 29 of the “new” pleading against MFA suggesting early February 2011 as, seemingly, her first “knowledge” of the “true” events.
- [23]The onus on the applicant as part of its persuasive burden in overcoming suggested material prejudice is to satisfy the court that it is appropriate in all the circumstances to exercise the relevant discretion to give leave to withdraw the admission so that a fair trial could be held for all parties. With due respect to the plaintiff’s submissions, the identified aspects of the “new” pleading against MFA do not, in my view, inevitably support an explanation of innocent errors by MFA’s authorised representative. In particular, paragraph 15(b) contains the very simple obligation to deliver the relevant document unless a decrease in the premium could be effected “by reason” of the insurer’s identified concerns being allayed. The fact that the altered document included a “premium saver option” which had been excluded and excluded an “increasing claim option” which had been included speaks very softly, almost silently, of innocent misunderstanding, error, confusion or forgetfulness.
- [24]Accordingly, I accept the submission that it is reasonably unlikely, even if the cause of action in contract against MFA were to be, by a defence filed by MFA, alleged to be statute barred, that it would be. Further, alternative remedies available to the plaintiff are reasonably likely to be no less beneficial. It is clear from the draft pleading that there could be reliance upon misleading and deceptive conduct under the Australian Securities and Investments Commission Act 2001 (“ASIC Act”), as well as failures and breaches of retainer in reliance upon statutory remedies available under that Act. Additionally, there are provisions in the Corporations Act 2001 (as it stood at the time) which are open to be alleged to be breached. The defendant also identifies allegations that could support other civil remedies, both at common law (instancing negligence and deceit) and under additional provisions of the Corporations Act. The time limits for these have not been established by the plaintiff to be the subject of potential claims for limitation barring.
- [25]The plaintiff’s response to those additional, potential causes of action is that the defendant is asking the court to predict, with the associated risk of inconsistent rulings, what the result of any limitation defence in causes of action not yet pleaded will be. But a determination of unfairness, or not, arising from the potential effect of material prejudice must involve some consideration of a predictive nature, otherwise mere assertion will rule the day. Additionally, it is not a complete answer, as the plaintiff seems to contend, that, since a cause of action in contract is the primary, simplest and most advantageous cause of action that the plaintiff would have, if she could potentially lose it, that is sufficient alone to establish prejudice which cannot be overcome. It is at this stage that it is relevant to bring into consideration the background canvassed above. That background includes the fact the original Statement of Claim alleges no wrongful conduct on the part of “Martin” or any improper conduct for which the defendant is legally liable. The plaintiff, as advised by her legal advisers, always knew that there was an agency of some kind involved. As appears from the “new” pleading, it seems to have always been the case at the time of her original Statement of Claim that changes were made, exclusions were included and inclusions were excluded in what the plaintiff had, pre-contract, believed her policy to be. It was always likely that it may not simply be a matter of the insurer inevitably bearing the legal responsibility for all actions undertaken by MFA, or its authorised representative. In such circumstances, the prejudice that might occur is at least partly a product of the assumption that an equivocal pleading of “insurance agency” would necessarily overcome all problems of this kind.
- [26]But even if I were to be wrong about the relevance of the plaintiff’s role in what has occurred, I would still conclude that a fair trial can be held, particularly in circumstances where alternative remedies are reasonably likely to be no less beneficial if the cause of action in contract were to be barred. See, for example, the likelihood that the circumstances relevant to this “new” pleading would come within those canvassed in Gates v CML Assurance Society Ltd.[4]
- [27]A fallback argument of the plaintiff is that any exposure at all of the plaintiff to the risk that a cause of action in contract might not proceed by reason of MFA pleading a limitation defence means that the cost of having such a such an argument is itself a species of prejudice. But the answer to that must be that the Court, in fashioning the costs orders relevant to this application, could ensure that that could be addressed by an appropriate costs order (for instance, that any additional costs incurred in contesting such issues be part of the appropriate costs order to be made). I will hear the parties, when handing this decision down, as to that matter.
Undue delay?
- [28]Applying the principles enunciated in Aon, where, as here, the pleadings are still in a state of flux, mere delay itself is not a significant issue.
- [29]Nevertheless, the plaintiff has raised the factor that much correspondence was issued prior to the potential expiry date of six years (which would be applicable to a non-concealed breach of contract) and that no relevant response was received.
- [30]An examination of the correspondence prior to the end of August 2012 shows: that on 14 June 2012 the plaintiff’s solicitors were advised by the defendant’s solicitors that Martin’s file needed to be requested from him directly as it was not within the defendant’s “possession or power”; that the plaintiff’s solicitors knew in mid‑June 2012 that a Notice of Non Party Disclosure concerning Martin had been filed on 29 May 2012; that as at late June 2012, the plaintiff’s solicitors had sent a copy of the document entitled “Advisor Details” to the defendant’s solicitors (being that document completed by Dominic Martin which included a negative answer to a request for permission for the defendant to contact the plaintiff directly); and that on 29 August 2012 the plaintiff’s solicitors knew that the defendant’s solicitors had received instructions that they would seek leave to withdraw the admission that MFA was an agent of the defendant, and that they had enclosed a proposed Amended Defence. What can be determined from that correspondence? First, it is clear that by mid-June 2012 the plaintiff’s solicitors knew that any file concerning Dominic Martin needed to be obtained from that person himself. Further, the “curiosity” expressed in the plaintiff’s solicitor’s letter of 15 June 2012 contains an implicit concession that Martin may not be the defendant’s “agent”. Lastly, the further letter dated 27 June 2012 demonstrates that the plaintiff’s solicitors knew the detail of the document entitled “Advisor Details”. That is a document signed by the plaintiff on 23 May 2006. Such information does not demonstrate undue delay, even if it indicates that the defendant did not explicitly convey its intention to withdraw until any 6 year limitation period had reached its final hours, if not expired. And the claim itself was only filed on 22 November 2011.
No further undue delay?
- [31]In accordance with the principles in Aon, given the present state of this proceeding, I reject the contention that any further delay that will be inevitable is relevantly “undue”. It seems to me that, for the proper determination of the issues in question, following leave being given to the defendant to withdraw relevant admissions, should the plaintiff wish to join MFA and, or alternatively, Martin, then that could be dealt with by ordinary case management decision-making.
- [32]Hence, that is not a factor which should militate against the granting of leave in this case.
Summary
- [33]Given the present state of the proceeding, given that the parties have detailed the many issues which are still in dispute, and given that it is appropriate in the circumstances for the court to permit the parties to agitate all matters in dispute, I conclude that the relevant elements (which are necessary for a grant of leave to withdraw an admission) have been established by the applicant/defendant in this proceeding (for the reasons canvassed in detail above).
- [34]I will, thus, make an order to that effect, although it is not clear exactly in what terms that order should be couched (given the many consequences that flow from that leave). In handing down this decision, I intend to give leave to both parties to either agree or make submissions in writing as to the form of orders which should be made, including any orders as to costs which deal with potential costs to be thrown away by the plaintiff as a result of the leave being given to withdraw.