Lay (as the personal representative of the Estate of the late Albert Lay) v Employers Mutual Ltd and Anor (No. 2) [2004] NSWDDT 26

Reported Decision (2004) 1 DDCR 414

Dust Diseases Tribunal of New South Wales

CITATION : Lay (as the personal representative of the Estate of the late Albert Lay) v Employers Mutual Ltd and Anor (No. 2) [2004] NSWDDT 26 Audrey Lay PARTIES : Employers Mutual Limited Amaca Pty Ltd MATTER NUMBER(S) : 517 of 2002 JUDGMENT OF: Duck J at 1 CATCHWORDS: :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 16/03/04 DATE OF JUDGMENT: 03/16/2004

FOR PLAINTIFF: Mr M J Joseph, SC and Mr M Cahill instructed by Taylor and Scott. LEGAL REPRESENTATIVES: FOR FIRST DEFENDANT: Mr C R Hoeben, SC instructed by Leigh Virtue and Associates. FOR SECOND DEFENDANT: Mr G Watson, SC and Mr T Ower instructed by Phillips Fox

JUDGMENT:

1. This matter commenced yesterday. The plaintiff is the widow and legal personal representative of the late Albert Lay. The first defendant is Employers Mutual Ltd, an insurance company who has been served pursuant to the Law Reform (Miscellaneous Provisions) Act 1946 s 6, it having been previously the insurer of a company York & Kerr Pty Ltd which, it is pleaded, was liquidated on 5 August 1975 and deregistered. The second defendant is Amaca Pty Ltd formerly known as James Hardie & Coy Pty Ltd. 2. The first defendant has submitted that for legal reasons it should be dismissed from the proceedings. It is that matter which has been argued and it is to that matter that I wish to now direct my attention. For the purpose of the argument it has been assumed that the matters pleaded may be accepted as fact. 3. To flesh them out a little it may be indicated that the case was opened in this way. The plaintiff was employed by York & Kerr Pty Ltd between 1960 and November 1967 as a truck driver. The case to be made for his estate is that it was his job to drive trucks carting raw asbestos from the wharves to James Hardie's premises at Camellia. He developed lung cancer. In opening learned counsel said that Mr Lay had developed bilateral carcinoma of the lung, a matter which is not admitted by the second defendant. The deceased man was also a smoker. He was diagnosed with lung cancer in May 2002. He died in February 2004. 4. The essence of the approach adopted by learned counsel for the first defendant, the insurer of York & Kerr Pty Ltd is that because of the decision of the Court of Appeal in Orica Ltd & Anor v CGU Insurance Ltd 2003 NSWCA 331 ("Orica") the policy of insurance which was admittedly on foot in November 1967 does not respond to the plaintiff's claim. It is submitted that the insurer cannot be called to pay pursuant to the policy and hence it seeks to be dismissed from the proceedings. 5. The approach of the insurer has been that the existence of the policy is not disputed. It has not been disputed for the purpose of the present argument that the plaintiff's exposure ceased in November 1967. It is not disputed that the policy was in the statutory form required by the Workers Compensation Act 1926. It is also conceded that the form of the policy was the same as that considered in Orica. S 18(6)(B) was inserted in the Workers Compensation Act by the Workers Compensation (Dust Diseases) Amendment Act 1967 no. 98 which came into force on 28 February 1968. The insurer concedes that the section had retrospective effect in relation to policies then on foot. For the purpose of this argument it has been accepted that s 18(6)(B) would apply to the policy in force between Employers Mutual Ltd and York & Kerr Pty Ltd as at November 1967. 6. The wording of the section might usefully be set out here. (6)(B) For the purpose of any policy of insurance or indemnity obtained by an employer after the commencement of Pt 3 of the Workers Compensation (Dust Diseases) Amendment Act 1967 or obtained by him before and being maintained in force after such commencement, the liability of the employer, independently of this Act, for an injury, being an occupational disease, to a worker shall be deemed to have arisen when the worker was last employed by the employer in an employment to the nature of which the disease was due. In this paragraph 'occupational disease' means a disease which is of such a nature as to be contracted by a gradual process and includes the condition known as boilermakers deafness, or any deafness of the like origin, and total or partial loss of sight which is of gradual onset. 7. There is a convenient discussion in the second edition of the New South Wales Workers Compensation by Mills commencing at p 358 and going through to p 360 about the introduction of the section. At p 359 the author discusses the decision in State Coal Mines Control Authority v Government Insurance Office (1964) 65 SR (NSW) 258: This last decision left a hiatus in the legislation: where the injury is a disease of gradual onset, the date of the injury is notionally fixed at the date when the incapacity occurs (sub-s 7(5)), but often, by the time the incapacity develops, the man is no longer employed by the employer who is liable to pay the compensation. In the last of the cases just mentioned, the employer had been insured with one office at the time of the termination of the man's employment, and with another office when the incapacity developed; the employer could not recover from the first office because the injury had not occurred during the period covered by that policy, nor could recovery be had from the second office, because the man was not employed by the employer during the period of that policy. The employer was left without any indemnity in respect of that liability. It was put to the Court that the intention of the statute was to require the employer to insure against all liability which the statute might impose on him, and the prescribed policy form should not be construed in a way that would leave him without such indemnity, but to no avail: the language used in the policy must determine the extent of the insurers liability to the employer. 8. I omit certain sentences not presently relevant. The author goes on: The position revealed in the State Coal Mines case, and the possible extension of that principle, has now been remedied by the insertion of sub-s (6A) in 1966; the gradual onset cases in sub-ss 7(4) and (4A) and 16(1A) are, for the purpose of fixing the employer's right to indemnity, deemed to be injuries which occurred immediately before the cessation of the man's employment with that employer. The "deeming" device has made the injury (and hence the liability) contemporaneous with the employment, but only for the purpose of fixing liability on an insurer. Two years later sub-s (6B) was enacted in order to deal with the analogous situation in respect of the employer's common law liability. 9. I omit a sentence. The author goes on: However, if he is able to recover damages against one employer with whom he has been employed over a long period, the employer in turn may have had several insurers in succession over that period, and the question will then arise as to which insurer is liable to indemnify him in respect of the damages for which he has become liable, and as to how much. The effect of sub-s (6B) is that he is entitled to recover from the insurer who held him indemnified at the time when he last employed the worker in the relevant employment. The subsection seems to involve no more than this. 10. If s 18(6B) remained in force and operated in respect of the statutory policy in this case then its effect would be that York & Kerr's liability for insurance purposes would be deemed to have arisen as at November 1967, the date of Mr Lay's last exposure. In that circumstance the policy would respond. The problem, it is submitted, which arises is that s 18(6B) has no application because it was repealed by s 281 of the Workers Compensation Act 1987. That section is very short. It is in the following terms: S 281 Each Act specified in sch 5 is to the extent indicated repealed. 11. Sch 5 then lists a page and a half of workers compensation and related Acts commencing with the 1916 Act including the 1926 Act and various amending Acts through to and including the Workers Compensation Amendment Act 1986. The whole of those Acts has been expressed to be repealed. There are other Acts mentioned in the schedule various parts of which have been repealed. It is submitted the effect of that section is to effect the repeal of s 18(6B). There are transitional provisions set out in sch 6 of the 1987 Act: none of them appears to have any application to s 18(6B) or the matters it dealt with. Sch 6 is many pages long and deals with a great number of matters but not this one. In respect of that submission learned counsel points to the decision of Rico Pty Ltd v Road Traffic Authority 1992 28 NSWLR 679 at 681 (e to f) 686 (a to b). 12. The submission is developed in the following way: as time passed after the introduction of the 1987 Act it became appreciated that there had been a gap in the legislative effect of the new Act. Representations led to, it is submitted, the introduction of s 151AB of the Workers Compensation Act which was inserted pursuant to the Workers Compensation Amendment Act 1991. That section came into force on 21 June 1991. There have been subsequent amendments. It is submitted that the section should be read in its present form. 13. The submission then goes on to deal with consideration of s 151AB but in light of the way in which the matter was argued I do not think it is necessary for the moment to go to those things. It is more convenient, I think, to go to the submissions made on behalf of the plaintiff and indeed by the second defendant about the repeal or otherwise of s 18(6B). 14. The plaintiff points out that proceedings are taken against the insurer pursuant to the Law Reform (Miscellaneous Provisions) Act 1946. As presently advised I do not see that that makes any particular difference to the topic under consideration. There is a discussion about that Act and its application in the judgment of Gummow and McHugh JJ in Bailey v NSW Medical Defence Union Ltd (1995) 184 CLR 399 commencing at 440. 15. The plaintiff's first substantial submission is to the effect that the provisions of s 18(6B) were incorporated into the policy when the section came into effect. It is said that this position was achieved because of the words of the statutory policy. At the bottom of the main body of the form of policy set out in Professor Mill's book (second edition) p 633 immediately above the heading "Conditions" the following appears: Provided lastly that this policy shall be subject to the Act and the rules and regulations made thereunder all of which shall be deemed to be incorporated in and form part of the policy. 16. The submission is to the effect that because of those words s 18(6B) becomes part of the policy and even if it be accepted that the section itself was repealed nonetheless the words themselves remain as part of the policy and continue to have effect. The response to that proposition made by Mr Hoeben SC was that that is simply not correct. I hasten to say that all courtesies were observed but the submission was blunt. He submitted, firstly, that there is simply as a matter of fact no addition to the statutory policy. Its form is prescribed and it is the document that must be construed. Further, if any authority were needed in support of that one might usefully go immediately to par 11 of the judgment of Spigelman CJ in Orica. The paragraph commences as follows: Notwithstanding the origins of the policy in a mandatory statutory form the policy must be construed as a contract. That is the legal character of the relationship which the parliament adopted. The approach to construction is reasonably well established. 17. Then the Chief Justice itemised six matters which might assist in the construction of the policy. It seems to me in light of those matters that the plaintiff's submission is not correct and ought not be accepted. 18. The next submission was to this effect: that the adoption of s 18(6B) created a contingent right in the employer in the event that he subsequently received a claim against him. Arguments of that type were deployed, it seems to me, in Ogden Industries Pty Ltd v Lucas (1969) 118 CLR 32. That report is of the Privy Council proceedings hearing the matter on appeal from the High Court of Australia. It was a Victorian death claim. The deceased suffered a coronary occlusion and myocardial infarction on 18 February 1965; the Act was amended to increase benefits on 30 June 1965. He died on 7 July 1965. The Privy Council was at pains to point out at the rights, such as they were, accrued on the death of the deceased man; contingent rights did not build up but rather when he died the rights of the widow and those dependent upon him were to be ascertained. 19. Further, it is clear from Orica that whatever else might be said to have arisen, liability to make payment on the policy did not arise, that is prior to 30 June 1987. One might ask then, indeed I did ask, what contingent rights did arise. Mr Joseph SC referred to the discussion of the concept of rights undertaken in particular by Mahoney JA in Walton and Others v Baffsky (1975) 2 NSWLR 565. At 576 the learned judge wrote that the nature of the advantages which, for present purposes are to be categorised as a right, has not been authoritatively determined, at least in terms of a single formula of words. The Court was concerned with money lending legislation and the repeal of a provision which provided a borrower with a defence if the lender had no licence. His Honour then went through a series of cases dealing with the question and without setting all of them out it seems to me that none of them provides particular guidance which supports the proposition advanced by the plaintiff. One of the cases referred to in argument yesterday is referred to in that judgment at 577 namely, Free Lanka Insurance Co Ltd v Ranasinghe (1964) AC 541 at p 552. The short summary of Mahoney JA was in these terms (at 577D): But as was pointed out in Free Lanka Insurance Co Ltd v Ranasinghe a right may exist for this purpose even though it is necessary that steps be taken by way of litigation or otherwise to give effect to it in the statutory context in which it is conferred. 20. In answer to the question to counsel what rights accrued in the present case one light hearted submission made was the right to get full value for the premium paid. Whatever may be said about that it does not, so it seems to me, call on the insurance policy to respond in the circumstances of this case. 21. The relevance of the consideration of rights in this way is related to another submission advanced by the plaintiff which was to the effect that the Interpretation Act 1987 and in particular section 30 thereof has effect so that if a right can be identified the repeal of the Workers Compensation Act would not affect any such right which had been acquired or accrued relevantly prior to the repeal. 22. S 30 is as follows: Effect of amendment or repeal of Acts and statutory rules (1) The amendment or repeal of an Act or statutory rule does not: (a) revive anything not in force or existing at the time at which the amendment or repeal takes effect, or (b) affect the previous operation of the Act or statutory rule or anything duly suffered, done or commenced under the Act or statutory rule, or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule, or (d) affect any penalty incurred in respect of any offence arising under the Act or statutory rule, or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability or penalty, and any such penalty may be imposed and enforced, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, as if the Act or statutory rule had not been amended or repealed. (2) Without limiting the effect of subsection (1), the amendment or repeal of an Act or statutory rule does not affect: (a) the proof of any past act or thing, or (b) any right, privilege, obligation or liability saved by the operation of the Act or statutory rule, or (c) any amendment or validation made by the Act or statutory rule, or (d) the operation of any savings or transitional provision contained in the Act or statutory rule. (3) This section applies to the amendment or repeal of an Act or statutory rule in addition to, and without limiting the effect of, any provision of the Act or statutory rule by which the amendment or repeal is effected. (4) In this section, a reference to the amendment or repeal of an Act or statutory rule includes: (a) a reference to the expiration of the Act or statutory rule, (b) a reference to an amendment or repeal of the Act or statutory rule effected by implication, (c) a reference to the abrogation, limitation or extension of the effect of the Act or statutory rule, and (d) a reference to: (i)the exclusion from the application of the Act or statutory rule, or (ii)the inclusion within the application of the Act or statutory rule, of any person, subject-matter or circumstance. 23. Further, in relation to that matter a number of cases were quoted said to be support for the proposition at common law that you need a clear intention demonstrated by parliament to eliminate, by the repeal of legislation, rights which may have accrued pursuant to the legislation. The principle contended for by the plaintiff was never in dispute in these proceedings and it may be accepted that it is correct. But I remain at a loss to know what right is said to have accrued prior to the repeal of s 18(6B). 24. Further, in response to that submission it was contended that the way in which the repeal was effected, that is by s 281 and 282 of the Workers Compensation Act 1987 and the introduction of a totally new scheme meant that the repeal was effected in a definitive way and that parliament had expressly and clearly stated its intention of making a fresh start, that is with the 1987 Act. I believe that to be the case. 25. Submissions were made about the nature of the Act, that is workers compensation legislation being remedial in character and having as an underlying rationale the goal of always having insurance behind an employer. In broad terms that may be so but the submission, it seems to me, echoes what was said in the State Coal Mines Authority v GIO case and the Court, as I previously indicated, said that the proper approach was to construe the policy before you, which is what I must do. 26. It was further submitted that parliament must be taken to have intended to have acted justly to all parties. One may accept the truth of that submission but the task remains to construe the policy of insurance relevantly before the Court. 27. I had earlier deferred discussion of s 151AB. It is convenient now to come back to that matter. In its present form the section provides as follows: S151 AB1. If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker the following provisions have effect for the purpose of identifying from among a number of insurers under policies of insurance obtained by the employer for different periods which insurer or insurers is liable to indemnify the employer for the full amount of the damages or which is liable to pay the full amount of damages to the worker (without any right to a contribution from those other insurers): (a) Any liability of that employer that arose before the relevant commencement is taken to have arisen when the worker was last employed before that commencement by that employer in an employment to the nature of which the disease was due. (b) Any liability of that employer that arose after the relevant commencement is taken to have arisen when the worker was last employed after that commencement by that employer in an employment to the nature of which the disease was due. 28. I think it fair to say that no great reliance was placed on s 151AB by the plaintiff in the present proceedings, however, the matter was the subject of submissions. Firstly, there is no scope, it is submitted, for the application of the section because we are not concerned with a circumstance in which there are a number of insurers with policies obtained by the employer for different periods. For that reason it would seem that the section has no application. 29. Secondly, having regard to the Orica decision no liability can be said to have arisen before the commencement of the 1987 Act. If s 151AB is to have application at all it can only be pursuant to subparagraph (b) of s 151AB(1). But by its terms that section does not apply because the worker was not then in an employment to the nature of which his disease was due. I conclude that s 151AB has no application. 30. I should add for completeness that there are other subsections in the section dealing with different circumstances which might arise; they were not referred to in submissions and I do not think there is any need to go to the detail of them. 31. Further, in respect of those submissions relating to s 151AB one might have regard to pars 41, 42 and 43 of Spigelman CJ's judgment in Orica which seem to me to support the submission advanced by the insurer. 32. Finally in respect of submissions that related to the Acts Interpretation Act a submission was made that a policy holder does not have a right unless the contract of insurance is activated, that is responds to a circumstance contemplated by the policy. This can only happen it is submitted if a claim is made. If it had been made prior to the abolition of s 18(6B) then that section would have had application. No claim had in fact been made under the policy. No liability had come into existence prior to 30 June 1987. Hence it is submitted the repeal removed no rights at all. I think the substance of the submission is really saying in another way what has already been said, but as far as it goes I think it is correct. 33. I find that the policy does not respond to the circumstances disclosed in the pleadings in the case. I invite learned counsel to prepare short minutes of order to give effect to that finding. Mr M J Joseph, SC and Mr M Cahill instructed by Taylor and Scott appeared for the plaintiff Mr C R Hoeben, SC instructed by Leigh Virtue and Associates appeared for the first defendant Mr G Watson, SC and Mr T Ower instructed by Phillips Fox appeared for the second defendant