Palace v RCR O'Donnell Griffin Pty Ltd (in liq)
[2020] QSC 354
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- Unreported Judgment
- Palace v RCR O'Donnell Griffin Pty Ltd (in liq)[2020] QSC 354
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Palace v RCR O'Donnell Griffin Pty Ltd (in liq)[2020] QSC 354
Palace v RCR O'Donnell Griffin Pty Ltd (in liq)[2020] QSC 354
SUPREME COURT OF QUEENSLAND
CITATION: | Palace v RCR O'Donnell Griffin Pty Ltd (in liq) [2020] QSC 354 |
PARTIES: | JOHN PALACE (applicant) v RCR O'DONNELL GRIFFIN PTY LTD (in liquidation) (respondent) |
FILE NO: | BS No 11217 of 2020 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 30 November 2020 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 5 November 2020 |
JUDGE: | Martin J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PROCEDURAL ASPECTS OF EVIDENCE – AFFIDAVITS – where the applicant sought leave to file and read the further affidavit of Cale Fryer – where the affidavit exhibits medical records and documents – where the respondent objected on the basis that the application was one seeking final relief and the affidavit is “entirely hearsay” – where an affidavit for use in an application for relief other than final relief may contain statements based on information and belief if the statement-maker sets out the sources of the information and grounds for the belief – whether the application is for “final relief” and whether the applicant should be granted leave to file and read the further affidavit of Cale Fryer PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JOINDER OF CAUSES OF ACTION AND OF PARTIES – PARTIES – GENERALLY – where the applicant alleges to have sustained injuries at work in 2018 – where the time prescribed for giving notice expired in November 2018 – where the applicant erroneously served another company with a notice of claim for damages under the Workers Compensation and Rehabilitation Act 2003 in November 2019 – where the applicant later discovered that the respondent was the proper entity and served notices in January and February 2020 – where the applicant requires either the respondent’s consent or the court’s leave to add the respondent to the proceedings under the Personal Injuries Proceeding Act 2002 (“PIPA”) – where the respondent does not agree to being added to the proceeding – whether the applicant should be granted leave to proceed under PIPA CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – PROCEEDINGS BY OR AGAINST THE COMPANY – LEAVE TO PROCEED – GENERALLY – where the respondent is in voluntary liquidation – whether the applicant should be granted leave to proceed against the respondent under s 500(2) of the Corporations Act 2001 Corporations Act 2001, s 500 Motor Accident Insurance Act 1994 Personal Injuries Proceeding Act 2002, s 14 Rules of the Supreme Court, O 41 r 3(1)Uniform Civil Procedure Rules 1999, s 430 Bridgeport Pty Ltd v Yelyruss Pty Ltd (in liq) [2011] QSC 237, applied Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, applied Doran Constructions Pty Ltd v Beresfield Aluminium Pty Ltd [1999] NSWSC 499, cited Ex parte Britt [1987] 1 Qd R 221, applied Gallagher v Boylan [2013] 1 Qd R 204, applied Interpacific Resorts (Australia) Pty Ltd v Austar Entertainment Pty Ltd [2005] 2 Qd R 23, applied La Trobe Wholesale Finance Pty Ltd v KCRAM Pty Ltd (in liq)(No 1) [2012] FCA 1388, cited Oceanic Life v Insurance and Retirement Services Pty Ltd (in liq) (1993) 11 ACSR 516, cited Winters v Doyle [2006] 2 Qd R 285, cited |
COUNSEL: | DM Cormack for the applicant PW Hackett for the respondent |
SOLICITORS: | Hall Payne for the applicant Meridian Lawyers for the respondent |
- [1]The applicant seeks leave under s 500(2) of the Corporations Act 2001 (Cth) (“Corporations Act”) to proceed against the respondent for a claim for personal injuries alleged to have been sustained on 13 February 2018. For reasons which will become apparent, the applicant also needs leave under s 14 of the Personal Injuries Proceeding Act 2002 (“PIPA”) to join the respondent for the purposes of that Act.
Preliminary point – the admissibility of a “hearsay affidavit”
- [2]When this matter came on for hearing, Mr Cormack read his material. It included two affidavits by Cale Fryer of his instructing solicitors. The longer of those affidavits contains a significant amount of hearsay, particularly with respect to what Mr Fryer says he was told by the applicant about the circumstances of the injury said to have occurred. No objection was taken to Mr Cormack reading that affidavit.
- [3]Mr Cormack also sought leave to file and read a further affidavit of Mr Fryer. Mr Hackett objected to that on the basis that this was “an application brought by originating application seeking final relief and the affidavit is entirely hearsay, exhibiting documents from other people.” That is an accurate description of the affidavit. It exhibits documents from the Townsville Hospital, WorkCover Queensland and a medico-legal report from Dr Mark Shaw, an orthopaedic surgeon. After some argument, I told the parties that I would hear the application and decide the issue of admissibility together with the principal relief sought.
- [4]Although it was not identified, I expect that Mr Hackett relied on r 430 of the Uniform Civil Procedure Rules 1999. Rule 430(2) provides that an affidavit “for use in an application because of default or otherwise for relief, other than final relief, may contain statements based on information and belief if the person making it states the sources of the information and the grounds for the belief.”
- [5]The predecessor rule in the Rules of the Supreme Court was O 41 r 3(1). It relevantly provided:
“Affidavits shall be confined to facts to which the deponent is able to depose of his or her own knowledge, except in the cases specially provided for by these rules, and except in the case of affidavits used on interlocutory motions or applications, in which statements as to the belief of the deponent, giving the sources of the deponent’s information and the grounds of his or her belief, may be admitted.”
- [6]In Ex parte Britt,[1] the applicant was seeking an order extending the time within which to make a claim against the Nominal Defendant. The Nominal Defendant objected to the reception of an affidavit in which the bulk of evidence relating to liability was deposed to by way of information and belief by an investigator. McPherson J had to determine whether the application was final rather than interlocutory. His Honour considered a number of decisions of the High Court of Australia and concluded:
“Those cases were, it is true, all decisions that raised the question whether a particular decision was final, or merely interlocutory, for the purpose of prosecuting an appeal against it as of right. The present instance is different because the order sought has not yet been made or refused. Nevertheless in Hall v. Nominal Defendant it is clear, at least from the reasoning of Windeyer J. …, that the question is to be determined independently of the outcome of the application. Any other conclusion would be impracticable. It would be impossible, until the result of the application was known to say whether the application was final or interlocutory, and therefore impossible to decide whether or not hearsay evidence was admissible for the purpose of that determination.”[2] (citation omitted)
- [7]His Honour concluded that the test was:
“… whether the decision of the application will finally dispose of the rights of the parties, not merely as to the subject-matter of the particular application in question but also as to the ultimate dispute between the parties, irrespective of whether it is already the subject of litigation, and independently of whether the outcome of the application may, in a practical sense, spell an end to all prospect of initiating such litigation.”[3]
- [8]McPherson J held that the application would not finally dispose of the rights of the parties. The plaintiff’s failure to give the appropriate notice would stand as a defence should the Nominal Defendant raise it.
- [9]In Gallagher v Boylan,[4] Fraser JA, after considering the decision in Ex parte Britt contrasted the former rule which applied to the circumstances with r 430(2) and said:
“[15] … I would state the applicable test as being that hearsay evidence is not made admissible by r 430 if the grant of the relief claimed in the application would finally dispose of the rights of the parties as to the ultimate dispute between the parties, rather than merely as to the subject matter of the application itself.”
- [10]In that case, the application was construed as seeking “final relief” because the proposed orders sought were to dismiss the appeal and give judgment in favour of the appellant. If that were to occur, it would resolve the ultimate dispute as to the parties’ rights.
- [11]The ultimate issue between the parties in this case is whether or not the respondent was liable for the injuries suffered by the applicant. Whether leave is granted or not, that will not dispose of that issue. If leave is not granted, then the issue can be agitated in another way with the liquidator in the ordinary course of dealing with the respondent’s creditors.
- [12]I will give leave to the applicant to file and read the further affidavit of Cale Fryer.
The applicant’s claim
- [13]The applicant alleges that he was injured at work on 13 February 2018. He was working at a solar farm in North Queensland and claims that he suffered heatstroke and further injuries when he was being treated and transported by “co-workers”.
- [14]The applicant was employed by Mass Solutions WA Pty Ltd. It was a “labour hire” employer who placed the applicant with the respondent. In those circumstances an entity in the position of the respondent is commonly known as the “host employer”.
- [15]For reasons which were not explained, the applicant apparently believed that another company was the host employer and a notice of claim for damages under the Workers Compensation and Rehabilitation Act 2003 was served on the other company and on WorkCover Queensland.
- [16]The applicant discovered that the respondent was the proper entity and notices were served in January and February this year. That was outside the time limit provided for in PIPA.
- [17]The evidence which the applicant relies upon is contained in the hearsay affidavits of Mr Fryer who relates, with little detail, the events said to have occurred on 13 February 2018.
- [18]The only detailed account of what is alleged to have occurred is contained in the report of Dr Mark Shaw, an orthopaedic surgeon, who examined the applicant on 15 November 2019. He summarises the information given to him by the applicant in this way:
“At the time of the injury, he was employed as an electrician at Sun Metal Solar Facility outside Townsville. It was his first shift. He was working in hot temperatures and developed heat stroke. He developed difficulty sitting, standing and walking, and required physical assistance by co-workers. He was transported to Townsville Hospital but became nauseated during transit. The car was stopped and he opened the door and leant out to vomit. He fell out of the car, landing on his hands and knees. He did not have the strength to stand and his seatbelt had not been applied. His co-workers tried to get him back into the car. He was dropped on his knees several times before he was seated and continued transit to Townsville Hospital.
…
As a result of falling out of the car, and subsequent falls during the assisted attempts to get back into the car, Mr Palace sustained the following injuries:
a. Anterior right knee injury with medial meniscal tear;
b. Anterior left knee injury;
c. Left wrist sprain; and
d. Right ankle sprain.”
- [19]The Townsville Hospital records show a diagnosis of “heatstroke”. He was discharged the same day and the recommendation was for “judicious fluid intake for future work shifts”. There is no material to support a claim that the heatstroke suffered by the applicant had any effect on him beyond a few days after the incident.
- [20]The applicant’s solicitors have prepared a document entitled “Heads of Damage/Offer of Settlement”. In it there is a reference to the injuries allegedly suffered – they comprise injuries to his right knee, left knee and right ankle. There is also a reference to heatstroke. The balance of the document relates solely to the injuries received to his knees and ankle. Apart from a reference to heatstroke in the claim for general damages there is no claim for any continuing or past loss for heatstroke.
- [21]The evidence concerning the cause of the damage to the applicant’s knees and ankle is very vague. Mr Fryer confines his evidence to the statement: “The Applicant instructs further injuries were sustained when being treated and transported by co-workers.”
- [22]There is no evidence about:
- (a)the identity of the “co-workers”,
- (b)the identity of the employer of the “co-workers”, or
- (c)the identity of the person or persons who arranged for the transportation of the applicant to the hospital.
- (a)
- [23]There is little evidence about the manner in which the applicant fell and how he suffered the injuries to his knees and ankle.
Section 14 – PIPA – joining a respondent
- [24]Section 9 of PIPA provides that a notice of claim must be given within a specified period. In this case the time prescribed for the giving of such a notice expired on 13 November 2018. The applicant purported to give a notice to the respondent on 25 November 2019.
- [25]Section 14(1) of PIPA provides that a claimant may add someone as a respondent by giving notice within a particular time. Section 14(2) provides:
“(2) If the time prescribed under subsection (1) for adding a respondent has ended, the claimant may add someone else as a respondent only with the person’s agreement and the agreement of the parties or with the court’s leave.”
- [26]The respondent does not agree to it being added and so the applicant needs the leave of the court.
- [27]The factors which should be taken into account on an application for leave were discussed by Fryberg J in Interpacific Resorts (Australia) Pty Ltd v Austar Entertainment Pty Ltd[5] and Bridgeport Pty Ltd v Yelyruss Pty Ltd (in liq).[6] In both cases his Honour considered s 16(2) of PIPA but that section is relevantly indistinguishable from s 14(2).
- [28]In Bridgeport, his Honour said that attention should focus on: “prejudice, explanation for delay, the merits of the case at a reasonably superficial level, and finally the utility of the course proposed.”[7]
Prejudice
- [29]The respondent relies on a number of matters to demonstrate that it will be prejudiced if leave is granted:
- (a)The respondent has no record of the incident involving the applicant.
- (b)The delay in notifying the respondent was about 15 months.
- (c)The applicant’s material is deficient in that it does not identify the “co-workers” and, thus, the respondent cannot make enquiries about the status of those co-workers.
- (a)
Delay in notification
- [30]There was a delay in notifying the respondent of about 15 months. There is no explanation for this delay.
- [31]Mr Fryer deposes to the applicant having instructed him that “to his knowledge” the worksite was under the control of RCR Tomlinson Ltd. It appears that no steps were taken to confirm that and notices were given to that company. It was not until January 2020 that Mr Fryer was told by the solicitors acting for WorkCover that the correct PIPA respondent might have been RCR O'Donnell Griffith.
- [32]In the context of PIPA, this is a substantial delay but one which might be overcome in appropriate circumstances.
- [33]The respondent submits that the delay puts it in a position similar to that of the defendant in Brisbane South Regional Health Authority v Taylor[8] where McHugh J identified four reasons for the enactment of limitation periods:[9]
- (a)as time goes by, relevant evidence is likely to be lost,
- (b)it can be oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed,
- (c)people should be able to arrange their affairs and use the resources on the basis that claims can no longer be made, and
- (d)insurers, and similar institutions, have a significant interest in knowing that they have no liability beyond a definite point.
- (a)
- [34]That list of factors is also relevant to the consideration of delay where leave is necessary to continue or commence proceedings.
- [35]The respondent also relies upon the remarks of Keane JA in Winters v Doyle.[10] That case concerned an application made, pursuant to s 57(2)(b) of the Motor Accident Insurance Act 1994 (“the MAI Act”), for an extension of time within which to commence proceedings for damages against the respondents as a result of personal injuries suffered by the plaintiff in a motor vehicle accident. That provision is sufficiently similar to s 14 of PIPA for that decision to provide guidance in this case.
- [36]In considering the principles which should be applied, Keane JA said:[11]
“It can be seen that each member of this Court in Morrison-Gardiner v. Car Choice Pty Ltd identified, as a consideration of central relevance to the proper exercise of the discretion conferred by s. 57(2)(b) of the MAI Act, the relationship between the delay which has occasioned the need to seek relief from the operation of the statutory time bar and the plaintiff's attempts to comply with the requirements of the MAI Act. A plaintiff will usually be able to show good reason for the favourable exercise of the discretion conferred by s. 57(2)(b) only if he or she can show that the delay which occurred was occasioned by a ‘conscientious effort to comply’ with the MAI Act.” (emphasis added)
- [37]The error in identifying the appropriate respondent was brought about by the misunderstanding of the applicant as to who was the relevantly responsible entity. On the material before me, no effort was made to confirm those instructions. In circumstances where there was a host employer that should have been one of the first steps taken. The applicant has not shown that the delay was occasioned by a conscientious effort to comply with PIPA, rather, the delay was occasioned by an omission to make fundamental enquiries.
Merits of the claim
- [38]The material relied upon by the applicant does not go far enough. It does not demonstrate, even at a reasonably superficial level, that the injuries caused to the applicant’s knee and ankles can be sheeted home to the respondent.
- [39]I am, for the purposes of this application, content to proceed on the basis that the heatstroke suffered by the applicant was caused by the breach of duty of the respondent in not providing a safe work environment. But, there is nothing to link the respondent to the injuries caused when he was transported to hospital. The issues of foreseeability and remoteness are not dealt with by the applicant. In cases of this nature, an applicant is well advised to provide a draft statement of claim which illuminates the basis upon which it is said that the respondent is liable. That has not occurred in this case and no argument was directed towards that by the applicant.
- [40]While there is medical evidence about the extent of the injury to the applicant, all that there is with respect to the connection between the respondent and those injuries is a view expressed by Mr Fryer that there were reasonable prospects of success in a claim for personal injury. In providing that view, Mr Fryer did not identify the factors upon which he reached that conclusion.
The utility of granting leave
- [41]The insurance held by the respondent which, it appears, would respond to a properly formulated claim of this nature, is subject to a deductible of $100,000. If the applicant’s claim against the respondent can only be proved with respect to the heatstroke injury then there is no prospect that the deductible would be exceeded by any award of damages. In those circumstances, there would be no point in granting leave and the applicant should pursue his claim by way of a proof of debt.
Section 500 – Corporations Act
- [42]The respondent is in voluntary liquidation. The liquidator was appointed on 26 March 2019 pursuant to s 439C(c) of the Corporations Act.
- [43]The relevant part of s 500 provides:
“(2) 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.”
- [44]Given my decision above, it is strictly unnecessary to consider this part of the application. And it is unnecessary to consider whether s 500 applies to the pre-trial procedures prescribed by PIPA. But, given the arguments which were advanced, I will deal with it briefly.
- [45]The factors which should be taken into account have been conveniently summarised by Bond J in QNI Resources Pty Ltd & Ors v Queensland Nickel Pty Ltd (in liq)[12]:
“[45] [Section 500] 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 of Australia v Davis Samuel Pty Ltd (No 5) (2008) 68 ACSR 336; 164 ACTR 1; [2008] ACTSC 124 (Davis Samuel) at [5]–[18].)
[46] The Court has a discretion, which, whilst absolute, must nevertheless be exercised with judicial detachment and fairness: Davis Samuel at [19].
[47] For present purposes, it suffices to make four points.
[48] 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.
[49] 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]–[35]); and
- (b)there are many claims which can only be resolved by court proceedings, eg rectification, specific performance, injunction and rescission of a contract (Davis Samuel at [36]).
[50] 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.
[51] 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.”
- [46]In addition to the matters listed immediately above, there is the fact that the respondent is insured. As Zeeman J said in Oceanic Life v Insurance and Retirement Services Pty Ltd (in liq):[13]
“It has been common to grant leave for the commencement or continuance of proceedings for damages against a company which is in the course of being wound up in circumstances where the company is insured against its liability to pay those damages and the costs of defending the proceedings …”[14]
- [47]For the reasons I have given with respect to the application for leave under PIPA, the following conclusions apply to this application:
- (a)the applicant has not demonstrated that there is a serious question to be tried in the sense that it has not been shown to any relevant degree that there is a claim against the respondent for the damage caused to the applicant’s knee and ankles,
- (b)the applicant has 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 has advanced so far is less than the deductible of the insurance policy.
- (a)
- [48]The applicant has not demonstrated that leave should be granted to proceed under s 500(2) even had leave been granted under PIPA.
- [49]The application is dismissed.
Footnotes
[1] [1987] 1 Qd R 221.
[2] [1987] 1 Qd R 221 at 224.
[3] [1987] 1 Qd R 221 at 226.
[4] [2013] 1 Qd R 204.
[5] [2005] 2 Qd R 23.
[6] [2011] QSC 237.
[7]Bridgeport Pty Ltd v Yelyruss Pty Ltd (in liq) [2011] QSC 237.
[8] (1996) 186 CLR 541.
[9]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 552.
[10] [2006] 2 Qd R 285.
[11]Winters v Doyle [2006] 2 Qd R 285 at 292-293 [24].
[12] (2016) 116 ACSR 321.
[13] (1993) 11 ACSR 516.
[14] (1993) 11 ACSR 516 at 521. See also Doran Constructions Pty Ltd v Beresfield Aluminium Pty Ltd [1999] NSWSC 499; La Trobe Wholesale Finance Pty Ltd v KCRAM Pty Ltd (in liq) (No 1) [2012] FCA 1388.