Zurich Australian Workers' Compensation Limited v Nrma Insurance Limited [1995] ACTSC 94 (25 August 1995)

SUPREME COURT OF THE ACT

ZURICH AUSTRALIAN WORKERS' COMPENSATION LIMITED v. NRMA INSURANCE LIMITED
No. SC 402 of 1995
Number of pages - 11
Practice and Procedure - Insurance - Evidence

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER A HOGAN

CATCHWORDS

Practice and Procedure - Summary Judgment - Claim for equitable relief - Need to specify form of judgment or order sought.
Supreme Court Rules O.15 r 1

Insurance - Double insurance - Claim for contribution - Injured worker - Claim against employer - Worker's compensation insurer settles claim - Incident involved motor vehicle - Claim against third party insurer - Material facts - Whether injury arose out of use of motor vehicle.
GIO v QBE Insurance Ltd (1985) 2 NSWLR 543

Albion Insurance Co Ltd v GIO [1969] HCA 55; (1960) 121 CLR 342
Commercial and General Insurance Co Ltd v GIO [1973] HCA 51; (1973) 129 CLR 374
GIO v Green and Lloyd Pty Ltd [1966] HCA 6; (1965) 114 CLR 437

Evidence - Hearsay - Interlocutory proceedings - Information and belief -

Source of information - "Asserted fact" - Need to identify.

Evidence Act 1975 (Cth) ss.59, 75
Supreme Court Rules O.15 r1(1A), O.40 r3(2)
Savings and International Bank v GASCO BV (1984) 1 All ER 296, at 305
Standard Discount Co v La Grange (1877) 3 CPD 67

HEARING

CANBERRA, 3 July 1995
25:8:1995

Counsel for the Plaintiff/Applicant: Mr B. Hull

Instructing Solicitors: Wood Fussell Solicitors

Counsel for the Defendant/Respondent: Ms J. Goltschalk

Instructing Solicitors: Abbott Tout Harper Blain

ORDER

THE COURT ORDERS THAT:
1. The application for summary judgment be dimissed.

2. The applicant pay the respondent's costs.

DECISION

MASTER A HOGAN This is an application for liberty to enter summary judgment pursuant to O.15 r.1.

2. The Writ was issued on 22 June 1995. It was endorsed with a Statement of Claim in the following terms:

"1. At all material times the Plaintiff and the Defendant were each
an incorporated company capable of suing and being sued in its
respective corporate name.
2. On or about 23 April 1986 Walter Edward Monck ("Monck" was
employed by AGL (Canberra) Limited ("AGL") and was, in the course of
that employment, required to unload an upright oven weighing between
50 and 60 kilograms ("the incident") from a Holden Rodeo Truck ("the
Truck") owned by AGL and being registered in the Australian Capital
Territory number YOP-018.
3. At all material times the plaintiff was the Workers Compensation
Insurer of AGL and had issued a workers compensation policy to AGL
pursuant to the Workers Compensation Act 1951.
4. At all material times the Defendant was the Third Party Motor
Vehicle
Insurer of AGL with respect to the truck and had issued a
third-party
policy to AGL pursuant to the Motor Traffic Act 1936.
5. Monck commenced action No.1277 of 1987 in the Supreme Court of
the Australian Capital Territory ("the action") claiming, inter
alia, damages from AGL arising out of injuries he allegedly
sustained in the incident.
6. The Plaintiff, by way of subrogation under the workers
compensation
policy issued to AGL, represented AGL in the action.
7. The action came on for hearing before the Supreme Court on 13
September 1994 and after the Plaintiff commenced his evidence in
chief was settled for the sum of $140,000.00 inclusive of costs but
clear of compensation payments made by the Plaintiff in the sum of
$5,938.92 ("the settlement sum"). The Plaintiff has paid the
settlement sum to Monck.
8. The liability of AGL to Monck in respect of the injuries
sustained by Monck in the incident was caused by or arose out of the
use of the truck within the meaning of the Motor Traffic Act 1936
and AGL is entitled to
indemnity from the Defendant for that liability under the
third-party policy.
AND the Plaintiff claims:
1. Contribution from the Defendant towards the settlement sum paid
by the Plaintiff to Monck in proceedings No. SC 1277 of 1987 and in
such sum as the Court deems just.
2. Interest on such sum at such rates and from such date as the
court deems just.
3. Costs."

3. There is no evidence of the date on which the Writ and Statement of Claim were served on the defendant.

4. On 3 July the plaintiff issued a Notice of Motion seeking an order "That the plaintiff be at liberty to enter interlocutory judgment."

5. That Notice of Motion and an affidavit in support were served on the defendant on 3 July 1995.

6. At that stage, if the application was to succeed at all, it was as an application to sign judgment in default of an appearance, under O.14. There was, however, no affidavit of service filed pursuant to O.14 r.2.

7. That difficulty became academic, however, as the defendant filed an appearance on 7 July 1995.

8. The application was treated by both parties at the hearing as an application for summary judgment, and no point was raised about the form of the order sought in the Notice of Motion.

9. The form of the Notice of Motion does raise some difficulty for me, nevertheless.

10. O.15 r.1 authorises the Court to grant to a plaintiff "liberty to enter judgment for such remedy or relief as upon the Statement of Claim the plaintiff is entitled to."

11. Where the claim is for debt, or for damages to be assessed, there is usually no difficulty involved by asking in the Notice of Motion for liberty to enter judgment for the plaintiff for the quantified debt or for damages to be assessed.

12. Where, as in this case, what is sought is an order for equitable relief, care should be exercised to specify with precision the order that is sought.

13. What the Notice of Motion in this case seeks is an order "That the plaintiff be at liberty to enter interlocutory judgment."

14. I am not at all sure of what the effect would be is I were simply to make an order in those exact terms. What then would be the form of the judgment that would be entered pursuant to my order? The simple phrase "interlocutory judgment" is relatively meaningless without context. It is a description of a type of judgment, difficult to define as the myriad of cases demonstrate, and not a precise form of judgment in itself.

15. The relief sought in the Statement of Claim is "Contribution from the defendant towards the settlement sum paid by the plaintiff to Monck in proceedings No. SC 1277 of 1987 and in such sum as the Court deems just."

16. There may well be cases in which an insurer claiming contribution has such a clear entitlement to it that the procedure of an application for summary judgment is appropriate.

17. GIO v QBE Insurance Ltd (1985) 2 NSWLR 543 is an example of the type of case where the procedure might be used, although it was not availed of in that case, no doubt because of the arguable state of the law discussed in it. But at least there was no doubt about the form of the relief to which the plaintiff was entitled, if any.

18. There, a worker had been injured as the result of the negligent driving of a motor vehicle by a fellow employee in the course of their employment.

19. The plaintiff was the authorised insurer under the Motor Vehicles (Third Party Insurance) Act 1942, while the defendant was the workers compensation insurer. The claim was for contribution to the extent of one half of the consent judgment and costs that the plaintiff had paid to the injured worker.

20. In Albion Insurance Co. Ltd. v GIO [1969] HCA 55; (1969) 121 CLR 342 the plaintiff was the workers compensation insurer and the defendant the third party insurer. In the simple factual situation of that case also the entitlement was to contribution as to one half of the amount paid for damages to the injured worker and costs.

21. In Commercial and General Insurance Co. Ltd. v GIO [1973] HCA 51; (1973) 129 CLR 374 the claim was made by the workers compensation insurer against the third party insurer for a complete indemnity as an alternative to contribution. It was held (at 381) that the right to contribution between co-insurers can never amount to a complete indemnity but must always be confined to a rateable contribution.

22. In all of those cases the claim by the injured worker was in respect of only one accident. Despite the simple directness of the Statement of Claim, this case is unfortunately more complex.

23. In support of the application the plaintiff relied upon two affidavits by a solicitor employed in the office of the Canberra agents of the plaintiff's solicitor.

24. In the second of those affidavits the only assertion now relevant is the statement, "I believe that there is no Defence by the Defendant to this action."

25. In the other the deponent states:

"On the basis of information contained in the file in relation to
this matter I believe the allegations contained in each of the
paragraphs pleaded in the Statement of Claim herein."

The affidavit also annexed copies of correspondence between the firm which employed the deponent and the defendant. Included in that correspondence is a copy of the Statement of Claim in the action between Monck and AGL.

26. That Statement of Claim alleged the employment of Monck by AGL. It then set out the facts giving rise to the claim as follows:

"4. In or about the month of April 1986 the plaintiff in the course
of his employment was required to unload an upright oven weighing
between 50 and 60 kilograms from an utility with no assistance when
he suffered an injury to his lower spine.
5. Knowing of the said injury the defendant notwithstanding required
the plaintiff to perform lifting work whereby on 16 June 1986 the
plaintiff whilst carrying a heater in its container suffered an
aggravation of the injury to his lower spine."

27. Damage and negligence were then alleged.

28. The particulars of negligence were as follows:

"(a) Failing to take any or any adequate precautions for the safety
of the plaintiff whilst he was engaged in the said work.
(b) Exposing the plaintiff to a risk of damage or injury of which it
knew or ought to have known.
(c) Failing to provide and maintain a safe and proper system of
work.
(d) Failing to provide and maintain safe and adequate plant.
(e) Employing an unsafe system of work.
(f) Requiring the plaintiff to lift an excessive weight.
(g) Failing to provide the plaintiff with any or any sufficient
assistance either manual or mechanical in the carrying out of his
employment duties.
(h) Failing to warn the plaintiff of the risk of injury occasioned
by lifting a heavy weight.
(i) Failing to educate the plaintiff in safe methods of lifting.
(j) Failing to provide any or any adequate supervision of the
plaintiff's employment duties.
(k) Causing or permitting the plaintiff to lift an upright oven
without any assistance in the month of April 1986.
(l) Requiring the plaintiff to engage in the lifting of heavy
weights following the injury to his back in April 1986."

It is clear that a motor vehicle was involved in the incident alleged to have occurred in April 1986 in paragraph 4 of the Statement of Claim. It is not so clear that one was involved in the incident alleged in paragraph 5 to have occurred on 16 June 1986. Those particulars make no reference to any relevant use of a vehicle in any causal sense.

29. The connection of the injuries with motor vehicles is contained in a letter to the defendant dated 24 August 1994, as follows:

"Both incidents involved the Plaintiff unloading stock from a motor
vehicle in the course of his employment as a salesman with AGL.
We are advised that the vehicle involved in the first incident on 24
April 1986 was a Toyota Utility which was registered in the Act. We
have not yet ascertained the registration number of the vehicle but
understand that the NRMA was the third party insurer. The Plaintiff
claims that he transported a stove on the rear of the utility and
injured his back as he unloaded the stove from the utility.
The vehicle involved in the second accident on 16 June 1986 was ACT
registered number YQD 133, in relation to which we understand you
are the third party insurer. The Plaintiff claims again that he
injured his back as he lowered a heater which he had unloaded from
the rear set of the vehicle."

After some correspondence the defendant admitted that it was the authorised third party insurer of the vehicle involved in the first accident, and did not dispute that it insured the vehicle concerned in the second.

30. In a letter dated 22 February 1995 the defendant wrote:

"We would envisage being able to agree to some contribution.
However, we note that the Statement of Claim alleges two incidents
occasioning injury to the plaintiff, one of which did not involve a
motor vehicle."

At the hearing of this application counsel for the plaintiff expressly disclaimed any submission that the second accident arose out of the use of a motor vehicle, because at the time of the injury the plaintiff's activity "had passed the unloading stage and was in the transport stage."

31. He claimed however that in the way the case had been opened and conducted by counsel for Monck the first incident was the major cause of the plaintiff's disabilities.

32. Counsel for the defendant did not tender any evidence. She relied on what she alleged was a defect in the plaintiff's affidavit in support, namely that the deponent was not a person who could swear positively to the facts, because even if a direction were made under O.15 r.1(1A) that the application might be supported by an affidavit containing statements of information and belief with the sources and grounds thereof, the deponent's only source of information was the file to which he referred, and what it contained must of necessity itself be hearsay.

33. Counsel relied upon a passage in the decision of Peter Gibson J in Savings and International Bank v GASCO BV (1984) 1 All ER 296, at 305. The deponent of the relevant affidavit in that case, a Mr Weiss, had deposed to his belief as being founded upon extensive reports made by inspectors appointed under the Companies Act to investigate the affairs of a company. Those reports contained expressions of opinion, which opinions must have been formed upon the basis of other material not contained in the inspectors' reports. The decision of Peter Gibson J must be understood in the light of the submissions made to him in the context of that case.

34. Those submissions are set out at 304-305, as follows:

"Counsel for SIB submits that RSC Ord 41, r5(2) permits the adducing
by the deponent of the opinions of others, whether or not they are
experts, provided they are identified. He further submits that
hearsay, whether firsthand or more remote, is admissible, provided
that the immediate supplier of the hearsay to the deponent is
identified. Thus in the present case, he submits, it is sufficient
that Mr Weiss has identified the inspectors as the source of the
information to him, whether that information consists of opinion or
hearsay and whether or not the original source of the hearsay
statement is identified. He says that all such material is
admissible, though it is for the judge hearing the motion to decide
whether any and if so what weight should be attached to that
material."

What His Honour held, at 305-306, is as follows:

"Neither counsel has been able to cite any authority which
elucidates the scope of what is or is not permitted by Ord 41,
r 5(2). It is obvious from r 5(2) itself that it operates as an
exception from the primary rule of evidence stated expressly in Ord
41 r5(1) that a person may only give evidence as to 'facts', which
he 'is able of his own knowledge to prove'. Rule 5(2), by including
statements of information or belief, plainly allows the adduction of
hearsay. It also allows a statement of belief, that is to say an
opinion; but in its context that belief must be that of the
deponent, and such statements will have no probative value unless
the sources and grounds of the information and belief are revealed.
To my mind the purpose of r 5(2) is to enable a deponent to put
before the court in interlocutory proceedings, frequently
in circumstances of great urgency, facts which he is not able
of his own knowledge to prove but which, the deponent is informed
and believes, can be proved by means which the deponent
identifies by specifying the sources and grounds of his
information and belief. What r 5(2) allows the deponent to
state that he has obtained from another must, in my judgment,
be limited to what is admissible as evidence. Take, for
example, a case where there are unsuccessful without
prejudice discussions to settle an action, in the course of
which a statement is made by a party which is highly relevant
to an issue in interlocutory proceedings. I apprehend that
the court would strike out from an affidavit made by another
party who heard the statement any reference to such statement
having been made, as it would not be admissible as evidence
and so would be irrelevant. So too, in my judgment, a statement
in an affidavit referring to other forms of inadmissible
evidence should be treated as irrelevant. That would include
statements of opinion not being within any recognised exception
to the general principle to which I have referred.
Further I find it impossible to accept counsel for SIB's submission
that it is sufficient in order to comply with r 5(2) that the
deponent should identify only the source to him of his information
even though it is clear that that source was not the original
source. Thus if the deponent was informed of a fact by A, whom
the deponent knows not to have firsthand knowledge of the fact
but who had obtained the information from B, I cannot believe that
it is sufficient for the deponent to identify A as the source of
the information. That, to my mind, would largely defeat the
requirement that the sources and grounds should be stated and
would make it only too easy to introduce prejudicial material
without revealing the original source of hearsay information by
the expedient of procuring as the deponent a person who
received information second hand. By having to reveal such
original source and not merely the immediate source, the
deponent affords a proper opportunity to another party to
challenge and counter such evidence, as well as enabling the
court to assess the weight to be attributed to such evidence. Even
in a period in which the court's practice on interlocutory
motions is governed by the rule laid down in American Cyanamid
Co v Ethicon Ltd [1975] UKHL 1; (1975) 1 All ER 504, (1975) AC 396 and
accordingly the court avoids determination of the facts at that
stage, it is still common experience that many cases do not
progress beyond and are decided by the outcome of an interlocutory
motion.
In my judgment the court ought not to allow in affidavits to be used
in interlocutory proceedings material which cannot be proved because
it is mere opinion or is otherwise inadmissible. This is the more
important in cases like the present when the material sought to be
adduced will never be adjudicated on at the trial, because, as is
common ground, it is not relevant to the issues at the trial.

I do not take that case to be deciding that the immediate source of a deponent's belief must itself consist of evidence immediately admissible if tendered. To take the example given by His Honour, where the deponent was informed of a fact by A, whom he knows not to have firsthand knowledge of the fact, but who had obtained the information from B, it is not sufficient to identify A alone as the source of the information. But it might well be sufficient if what is deposed to identifies B as the original source, even though the information came to the deponent through the intermediary A.

35. These considerations would be the same whether the legislation that is being considered is O.15 r1(1A), O.40 r3(2), or s.75 of the Evidence Act 1995 (Cth). That section provides that in an interlocutory proceeding the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.

36. These are interlocutory proceedings. The order granting leave, which is sought in this application, is not final. The judgment which is formally entered up pursuant to the leave granted may be final. See Standard Discount Co v La Grange (1877) 3CPD 67.

37. There is a difference between the provisions of s. 75 on the one hand, and O.15 r1(1A) and O.40 r3(2) on the other, in that the rules require, whereas the section does not, that the deponent swear to a belief in the asserted fact. That requirement was satisfied by the solicitor's affidavit in support of the application, so that the result of that difference does not need to be considered in this case.

38. However, is it necessarily true that what was contained in "the file" was hearsay?

39. When considering any question relating to the doctrine of hearsay it is necessary as a first step to identify with precision the facts that are in issue, to proving or disproving which the so called hearsay evidence is said to be relevant.

40. In applying the idiosyncratic and somewhat artificial language of the Evidence Act 1995 to any particular case, it is necessary first to identify the "asserted fact" referred to in s.59(2), before applying the rule set out in s.59(1), that "Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that the person intended to assert by the representation."

41. The plaintiff applicant does not seek on this application leave to sign judgment for a particular amount, or for a specified portion of the money that it has paid to Monck. It is common ground that there must be a trial of the issues (a) whether the amount that the plaintiff paid to Monck was reasonable and (b) how much of that payment was attributable to the first accident. If the plaintiff were attempting to prove facts relevant to those issues by asserting reliance upon "the file", then the objection by counsel for the defendant would be well founded.

42. But all that the plaintiff seeks in this application is the foreclosure of the question whether there is an entitlement to contribution, leaving the question of its extent to be argued about at the trial.

43. The facts that are relevant to that question, it seems to me, are

1. That Monck made a claim for damages from AGL;
2. That the plaintiff insured AGL against its liability to meet
that claim;
3. That the defendant also insured AGL against that identical
liability;
4. That the plaintiff paid money in settlement of Monck's claim.

44. If each insurer is liable under its policy to indemnify the insured in whole or in part against the happening which has given rise to the insured's loss or liability, then there is double insurance, and the insurer which has paid out the loss or liability is entitled to contribution. See Albion Insurance Co Ltd v GIO [1969] HCA 55; (1960) 121 CLR 342, esp. at 346 and 352.

45. The first fact is demonstrated by the Statement of Claim in Monck's case, which is in evidence.

46. I have no doubt that an inspection of the file of the plaintiff's solicitor relating to that claim would afford ample evidence, in admissible form, that the plaintiff insured AGL against its liability to Monck, and that it paid money to Monck in settlement of that claim.

47. The correspondence annexed to the affidavit contains a clear admission by the defendant that it was, at the relevant time, the third party insurer of the vehicle involved in the incident in April 1986.

48. I would therefore not be prepared to uphold the objection to the admissibility of the evidence. What counsel for the defendant also put in issue, however, is whether, even on the plaintiff's evidence on this application, that third party policy insured AGL against its liability to pay damages to Monck arising out of that incident. That is because, as she said, there are no facts upon which a court could decide, on a summary judgment application, that the incident was one in which the plaintiff suffered injury which arose out of the use of the motor vehicle.

49. Some further specification of the nature of Monck's claim is provided by the transcript of the proceedings before Miles CJ, when his case was opened by his counsel. The case was settled before he gave evidence of the actual incident on 23 April 1986. The transcript was admitted in evidence in these proceedings by consent.

50. Counsel described how the plaintiff drove the truck, which had been loaded with a stove and other articles, to premises at Derrima Road. There he decided that he would attempt to unload the stove, unaided.

51. Mr Williams QC described the two incidents as follows:

"... He was conscious of his appointment at 9.45 at Farrer and then
by himself he attempted to unload the stove. He did that by walking
the stove by himself to the back tray of the truck. He put his arms
around - standing on the ground and facing the stove which was still
on the truck he put his arms around the stove as if - the best way I
could describe it, your Honour, as if in a bear hug and lifted the
stove off the truck.
As he was lifting and turning with the stove in a bear hug to put it
on the ground he felt what he describes as either an explosion or a
knife going into the lower part of his back before he even got the
stove onto the ground. The extreme pain lasted for probably about
10 seconds and then slowly eased off. The medical evidence that we
will call in relation to that incident suggests that the plaintiff
at that time significantly damaged his lower back. Nonetheless, he
suffered from no obvious problems with it for six weeks continuing
to do the same sort of work he was doing as a sales rep until 16
June when - your Honour will note I am going a bit faster - he was
attempting to remove a heater which weighed about 17 kilos. This is
the second incident we sue on, your Honour.
The heater, which weighed about 17 kilos which was situated in the
back of a sedan. He was directed to take this heater to a
particular place. The heater was in a box weighing about - a box
the diameter - with measurements of about 2 and a half feet - I am
sorry to give this to you in feet, your Honour, it is all I have got
- 2 and a half feet by 2 feet by 15 inches, weighing about 17 kilos.
Not - a marginal in terms of danger lift and manoeuvre. In doing
that he suffered further pain to the same area in his back as he had
six weeks earlier. Now, we sue on both incidents, your Honour. I
would have to concede that the second incident is probably marginal
in terms of establishing negligence but from the plaintiff's point
of view our case medically is that the plaintiff was severely and
permanently damaged by the first lift in April of 1986 with the
stove that weighed probably - the evidence will establish about
70 kilos."

That description of the incidents that were the foundation of Mr Monck's claim seems to me to raise squarely for decision the issue whether his injuries arose out of the use of the motor vehicle.

52. The principles governing that issue were discussed by the High Court in GIO v Green and Lloyd Pty Ltd [1966] HCA 6; (1965) 114 CLR 437. On the particular facts in that case the Court had little difficulty in upholding the decision that the use of a vehicle was involved. However, Barwick CJ commented, at 442-443:

"But I have a good deal of difficulty in expressing as a matter of
law with any degree of satisfaction and certainty the area which is
covered by the expression 'caused by or arising out of the use of
the motor vehicle', as used in the Act and the policy. The phrase
'arising out of' is not here found in the same collocation as it is
in workers' compensation legislation, where it is in juxtaposition
to a temporal expression. In that sphere the words 'arising out of'
clearly point to a causal relationship. The words 'arising out of'
in s.10 of the Act and in the indemnity clause of the policy are not
merely, if at all, explicative of the words 'caused by'; they are
really used in contrast to them; and in the total expression are
extensive in their import. Bearing in mind the general purpose of
the Act I think the expression 'arising out of' must be taken to
require a less proximate relationship of the injury to the relevant
use of the vehicle than is required to satisfy the words 'caused
by'. It may be that an association of the injury with the use of
the vehicle while it cannot be said that that use was causally
related to the injury may yet be enough to satisfy the expression
'arise out of' as used in the Act and in the policy.

53. On the other hand, injuries received away from the vehicle but in the course of bringing goods or things to it to be loaded upon it ought not, if no more appears, to be regarded as having arisen out of the use of the motor vehicle. To say that the operation of loading and unloading a transport vehicle is part of its use is to state the matter too widely. The general observation of Jacobs J. in Vaux v Law Union and Rock Insurance Co Ltd (1960) 78 WN (NSW) 588 is not, in my respectful opinion, expressed as a general proposition, supportable. but in saying so much I cast no doubt on the propriety of the conclusion in fact to which his Honour came in that case."
As Windeyer J stated at 448, "In my opinion the decision of the learned trial judge was right. The question for him was ultimately one of fact, to be resolved on the facts of the case before him. Comparison with the facts of other cases can be of little help."

54. In my opinion there is a substantial issue of fact to be tried, which goes not simply to the extent of the right to contribution, but to its very existence.

55. That finding relieves me of the burden of deciding what precise order I should make if I thought that the plaintiff had made out its case for summary judgment. A declaration can not be made on an application for summary judgment itself.

56. Had my decision been otherwise I would also have had to give earnest consideration to the exercise of discretion. The facts going to the extent of contribution are so entangled with those going to its existence that there seems to me to be little utility in making an order for summary judgment in any event.

57. However, in the light of the view that I take about the issue of entitlement, I dismiss the application. I order the applicant to pay the respondent's costs.