McAndrew v CMC Cairns Pty Ltd
[2007] QSC 111
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- Unreported Judgment
- McAndrew v CMC Cairns Pty Ltd[2007] QSC 111
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McAndrew v CMC Cairns Pty Ltd[2007] QSC 111
McAndrew v CMC Cairns Pty Ltd[2007] QSC 111
SUPREME COURT OF QUEENSLAND
PARTIES: | JAMES ALEXANDER GEORGE McANDREW (respondent/plaintiff) CMC CAIRNS PTY LTD (ACN 010 861 579) (respondent/first defendant) JASON DALEY (respondent/second defendant) VERO INSURANCE LIMITED (ACN 005 297 807) (applicant/first third party) ZURICH AUSTRALIAN INSURANCE (ACN 000 296 640) |
FILE NO: | |
Trial Division | |
PROCEEDING: | Application |
DELIVERED ON: | 17 May 2007 |
DELIVERED AT: | Supreme Court, Cairns |
HEARING DATE: | 11 May 2007 |
JUDGE: | Wilson J |
ORDER: | On the application filed on 29 March 2007, orders – (1)(a)that the third parties have leave to – (i)defend the plaintiff’s claims against the defendants; and (ii)cross-examine the plaintiff, the defendants and their witnesses at the trial of these proceedings; (b)that the evidence in the proceeding between the plaintiff and the defendants be evidence in the proceeding between the first defendant and the third parties; (c)that the third parties be bound by the judgment given by the Court in the proceeding between the plaintiff and the defendants; (2)that the first third party have leave to issue a fourth party notice to the second third party to determine any question of double insurance as between the first and second third parties in respect of their liability (if any) to indemnify the first defendant in respect of the plaintiff's claim; (3)that the application be adjourned to 18 May 2007 for hearing of the application in paragraph 3 thereof; (4)that the costs of the hearing on 11 May 2007 be reserved to the hearing on 18 May 2007 or other earlier order. |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – PARTIES – THIRD PARTY AND SIMILAR PROCEEDINGS – the plaintiff was a subcontractor of the second defendant, who was in turn a subcontractor of the first defendant – the plaintiff claims damages against the first and second defendants for personal injury incurred in the course of his employment – the first third party was the first defendant’s insurer – the second third party was the second defendant’s insurer – the second defendant’s insurance contract contained a “Cover for Others” provision, which extended cover to his principal – the first third party seeks leave to issue fourth party proceedings against the second third party pursuant to r 192 and r 194 of the Uniform Civil Procedure Rules 1999 (Qld) – whether such leave should be granted Uniform Civil Procedure Rules 1999 (Qld) r 192, r 194 Interchase Corporation Limited (in liq) v FAI General Insurance Company Limited [1998] QCA 180; [2000] 2 Qd R 301, considered Morrell v Mercantile Mutual Insurance (Australia) Ltd & ors (1999) 21 WAR 451, considered |
COUNSEL: | D McMeekin SC and R Whiteford for the applicant first third party M Jonsson for the respondent second third party J Baulch SC for the respondent first defendant No appearance for the respondent second defendant H A Mellick (solicitor) for the respondent plaintiff |
SOLICITORS: | Quinlan Miller & Treston for the applicant first third party Gadens Lawyers for the respondent second third party Williams Graham Carman for the respondent first defendant No appearance for the respondent second defendant Mellick Smith and Associates for the respondent plaintiff |
[1] Wilson J: This is an application by the first third party (“Vero”) for leave to issue a fourth party notice against the second third party (“Zurich”) claiming contribution on the basis of double insurance, and for other interlocutory orders.
The context
[2] On or about 17 May 2000 the plaintiff was working on a construction site at Port Douglas when he fell and sustained serious spinal injuries. He is now a quadriplegic.
[3] The first defendant was the principal contractor on the site, and the second defendant was its plastering sub-contractor. The plaintiff was a sub-contract plasterer to the second defendant.
[4] The plaintiff sued the first defendant and the second defendant. Both were served. The first defendant is actively defending the claim, but the second defendant has not filed a notice of intention to defend.
[5] The first defendant has filed a notice claiming contribution under s 6 of the Law Reform Act 1995 (Qld) from the second defendant.
[6] The first defendant held a policy of insurance with Vero. Vero denied liability to indemnify the first defendant, and the first defendant joined it (Vero) as first third party.
[7] The second defendant held a policy of insurance with Zurich. Zurich denied liability to indemnify the second defendant. The second defendant has not taken issue with Zurich.
[8] The policy issued by Zurich to the second defendant included a “Cover for Others” provision, by which cover was extended to –
“any principal but only for the principals liability that arises out of the work performed by [the second defendant] for that principal”.[1]
Vero contends that Zurich is liable to indemnify the first defendant pursuant to that provision, and hence that this is a case of double insurance. Zurich denies that this is so and contends –
(a) that on the proper construction of the policy, the first defendant’s liability to the plaintiff is not “liability arising out of work performed by the Second defendant for the First Defendant”; and
(b) that the first defendant breached an express or implied term of the policy that any person insured hereunder must take all reasonable care to comply with any law, by-law, ordinance or regulation that concerns the safety of persons.[2]
UCPR r 192
[9] Rule 192 of the Uniform Civil Procedure Rules 1999 (Qld) deals with circumstances in which a defendant may join someone as a third party. The present application is one in which Vero, already a third party, wishes to join Zurich as a fourth party. Accordingly the rule must be read mutatis mutandis. Doing so, its text becomes as follows –
“192 Reason for third fourth party procedure
A defendant third party may file a third fourth party notice if the defendant third party wants to—
(a) claim against a person who is not already a party to the proceeding a contribution or indemnity; or
(b) claim against a person who is not already a party to the proceeding relief—
(i) relating to or connected with the original subject matter of the proceeding; and
(ii) substantially the same as some relief claimed by the plaintiff defendant; or
(c) require a question or issue relating to or connected with the original subject matter of the proceeding to be decided not only as between the plaintiff defendant and the defendant third party but also as between either of them and a person not already a party to the proceeding.”
Submissions
[10] Counsel for Vero sought to persuade the Court that the proposed fourth party proceeding is within paragraph (c) of r 192. Nevertheless, I think this is a case where the proposed proceeding is within paragraph (a), as it is a claim for contribution against Zurich which is not already a party to the third party proceeding between the first defendant and Vero.
[11] Counsel for Zurich submitted that –
(a) Vero is a stranger to any contract of insurance between the second defendant and Zurich.
(b) Unless and until Vero accepts liability under its policy of insurance with the first defendant, so as to enliven a right to intervene and conduct proceedings in the name of the first defendant, Vero –
(i) has no standing to intermeddle in questions going to the enforceability or otherwise of any contract of insurance between the second defendant and Zurich;
(ii) has no proper interest or standing in its own name and right to pursue or intermeddle in any claim to enforce whatever statutory entitlement might arise in favour of a person “specified or referred to in [any such] contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends”, within the meaning of s 48 of the Insurance Contracts Act 1984 (Cth);
(c) has no proper interest or standing in its own name and right to pursue or intermeddle in any general law claim that might be available to the first defendant of the kind recognised in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd.[3]
[12] Counsel for Vero referred me to the decision of the Court of Appeal in Interchase Corporation Limited (in liq) v FAI General Insurance Company Limited[4] and that of the Western Australian Full Court in Morrell v Mercantile Mutual Insurance (Australia) Ltd & ors[5] as cases involving claims against insurers by strangers to the contract of insurance. With respect I did not find these authorities helpful.
[13] In Interchase the plaintiff commenced an action for damages against certain valuers. It sought to join an insurer of the valuers contending that the insurer was liable to indemnify the valuers. The application was made pursuant to O 3 r 11 of the Supreme Court Rules (a predecessor of r 69 of the UCPR.) The majority (McPherson JA and Byrne J) took the view that as there was no controversy between the valuers and insurer, their rights inter se would not be determined in the action and joinder would serve no useful purpose – convenience alone could not justify the joinder of an additional defendant under O 3 r 11. Davies JA (the dissentient) considered that the insurer was a person “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” (O 3 r 11). In His Honour’s opinion the joinder would not be lacking in utility simply because a proceeding between the plaintiff and the insurer could not lead to a determination of the insurer’s liability to the valuers binding on those parties. It would be of practical effect because it would give rise to an Anshun[6] estoppel.
[14] In Morrell the plaintiff Mrs Morrell was injured in a parasailing accident. At trial, the defendants Gibbs and Paraglide Pty Ltd were held liable to her for damages to be assessed, and the insurer was held liable to indemnify those defendants in respect of the plaintiff’s claim and costs. The insurer appealed, and the plaintiff sought an order that she be joined as a respondent to the appeal. On appeal Malcolm CJ (with whom the other members of the court agreed) recognised that the judgment the plaintiff had obtained against the defendants was of no commercial value unless the insurer were liable to indemnify them. The Full Court had to consider O 18 r 6(2) of the Rules of the Supreme Court 1971 (WA), which was similar to the provision considered in Interchase. After an exhaustive review of the authorities, Malcolm CJ dismissed the application.
[15] The present case it quite different from Interchase and Morrell. What is sought to be raised here is a claim for contribution between insurers based on alleged double insurance. If Vero were to succeed on that claim, there would be a binding judgment as between Vero and Zurich.
[16] It is not to the point that Vero’s liability to indemnify the first defendant has not yet been determined. With a view to having related matters heard at the same time, third party proceedings are commonly instituted on the basis that the defendant alleges that if it is liable to the plaintiff, then it is entitled to indemnity or contribution from the third party. Indeed, that it is how the third party proceeding between the first defendant and Vero has been mounted in the present case. And claims for contribution based on double insurance are commonly brought on the basis that the first insurer alleges if it is liable to indemnify the insured (which it denies), then it is entitled to contribution from the second insurer. The proposed fourth party proceeding is of that character. The rationale of the third party procedure is to allow such claims to be determined at the same time as the insured’s claim, so avoiding a multiplicity of proceedings. Therefore I do not consider that the matters raised in the submissions of counsel for Zurich should defeat the present application.
Leave to file fourth party notice
[17] I am satisfied that this is a case in which the procedure in UCPR r 192 may be invoked, and there is no discretionary reason not to allow it to be done. Leave to do so, which is required under r 194, is granted.
[18] Vero has prepared a draft statement of claim against Zurich.[7] Paragraphs 4-6 relate to apportionment of liability between the defendants and the prayer for relief includes a declaration as to the apportionment of liability between the defendants. I do not think there is any legitimate basis for including this in the fourth party proceeding, as the basis of the claim of double insurance is the allegation that Zurich is liable to indemnify the first defendant under the “Cover for Others” provision in the policy.
Orders
[19] The application filed on 29 March 2007 sought a number of orders, not all of which were pursued and one of which was, by consent, adjourned. Of those pursued, the only one really in contest was that relating to the issue of the fourth party notice, which I have determined in Vero’s favour. Accordingly, the following orders should be made:
On the application filed on 29 March 2007, orders –
(1) (a) that the third parties have leave to –
(i) defend the plaintiff’s claims against the defendants; and
(ii) cross-examine the plaintiff, the defendants and their witnesses at the trial of these proceedings;
(b) that the evidence in the proceeding between the plaintiff and the defendants be evidence in the proceeding between the first defendant and the third parties;
(c) that the third parties be bound by the judgment given by the Court in the proceeding between the plaintiff and the defendants;
(2) that the first third party have leave to issue a fourth party notice to the second third party to determine any question of double insurance as between the first and second third parties in respect of their liability (if any) to indemnify the first defendant in respect of the plaintiff's claim;
(3) that the application be adjourned to 18 May 2007 for hearing of the application in paragraph 3 thereof;
(4) that the costs of the hearing on 11 May 2007 be reserved to the hearing on 18 May 2007 or other earlier order.
Footnotes
[1] Affidavit of Rachael Elizabeth Ryan Miller, filed 29 March 2007, Exhibit REM2.
[2] Defence of the Fourth Party to the First Defendant’s Statement of Claim (court file document 10), [3], [4].
[3] (1988) 165 CLR 107.
[4] [2000] 2 Qd R 301.
[5] (1999) 21 WAR 451.
[6] Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
[7] Affidavit of Rachael Elizabeth Ryan Miller, filed 29 March 2007, Exhibit REM3.