Warren Lyons v Paul Finnan and ors [2004] NSWSC 814

New South Wales Supreme Court

CITATION : Warren Lyons v Paul Finnan and ors [2004] NSWSC 814 HEARING DATE(S) : 5 August 2004 JUDGMENT DATE : 15 November 2004

JUDGMENT OF : Dunford J DECISION : Judgment and order for costs in favour of insurer

CATCHWORDS : Procedure - Costs - motor accidents legislation - plaintiff alleges insurer liable to idemnify defendant - insurer denies liability - insurer joined as party to proceedings - insurer not liable - whether entitled to costs LEGISLATION CITED : Motor Accidents Act 1988 ss 3 (injury), 43, 44, 47A, 50A Supreme Court Rules Pt 40 PARTIES : Warren Lyons v Paul Finnan and ors FILE NUMBER(S) : SC 20400/02 COUNSEL : J P Gormly SC / E Beilby - Plaintiff G J Bellew - Fourth Defendant SOLICITORS : Slater & Gordon, Solicitors - Plaintiff Moray & Agnew, Solicitors - Fourth Defendant

- 8 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

DUNFORD J

MONDAY 15 NOVEMBER 2004

20400/02 WARREN LYONS v PAUL FINNAN & ORS

JUDGMENT 1 HIS HONOUR: The substance of these proceedings were settled on 13 August last, the second day of the hearing, by agreement between the plaintiff on the one hand and the first, second and third defendants on the other, embodied in Terms of Settlement filed in court that day. The fourth defendant, GIO General Limited (GIO) was not a party to the Terms of Settlement and the plaintiff seeks no further relief against it, but the fourth defendant seeks a verdict in its favour against the plaintiff and also an order for costs including indemnity costs. 2 The proceedings brought by the plaintiff arose out of injuries he sustained on 14 September 1999. On that day, the plaintiff had attended the premises of the second defendant, TVSN Limited in the course of his employment with the Australian Postal Corporation, for the purposes of delivering and collecting mail. Upon his arrival at those premises the third defendant, Shaun Brown was in the process of loading his truck with a quantity of steel beams. The loading process was being undertaken with the assistance of a forklift which was being driven by the first defendant, Paul Finnan who was an employee of TVSN. 3 The plaintiff alleged that in the course of the loading process, the first defendant lost control of a load of beams which were being lowered on to the third defendant's truck with the use of the forklift. This caused the beams to fall off the truck in the plaintiff's direction. As a consequence of either being struck by the steel beams, or as a consequence of attempting to avoid being struck, the plaintiff suffered injury. 4 There was no dispute that the truck operated by the third defendant, onto which the beams were being loaded, was insured with GIO under a Compulsory Third Party insurance policy. 5 On March 2000, the plaintiff's former solicitors served a Claim Form on GIO pursuant to s 43 of the Motor Accidents Act 1988 (the Act) and subsequently, the plaintiff's later solicitors served documents on it pursuant to s 50A of the Act. 6 The plaintiff's Statement of Claim was filed on 13 September 2002 and made no express reference to the Act, but the plaintiff's DCM document filed the same day contained the following paragraph: 1.4 Defendant's insurer To the best of the plaintiff's knowledge, the third defendant had a policy of insurance with GIO Insurance Limited under the Motor Accidents Act 1988. The plaintiff is not aware of the insurer of the first and second defendants. 7 On 12 December 2002, the plaintiff's solicitors served a copy of the Statement of Claim directly on GIO. On the same day they forwarded a copy of the Statement of Claim to the third defendant under cover of a letter which stated (inter alia): "You should inform GIO, the CTP insurer of the truck that you were driving at the time of the accident, of the claim and forward the relevant documents to them." 8 In response, the solicitors for GIO wrote to the plaintiff's solicitors on 30 January 2003 in the following terms: "We confirm that Mr Brown has been advised that the injuries suffered by the plaintiff do not come within the definition of injury covered by the CTP Policy of insurance taken out by him with GIO General Limited. Therefore GIO General Limited has denied liability in respect of the accident the subject of the above claim. We confirm that it is the intention of GIO General Limited to file an application pursuant to s 47A applying to the Court to be joined as a party to the proceedings." 9 On 13 March 2003, on application of GIO and with the consent of the plaintiff (and also with the consent of the first, second and third defendants), an order was made joining GIO as a party to the proceedings. That order was made pursuant to s 47A of the Act which provides as follows: "An insurer may apply to the court to be joined as a party to legal proceedings brought against a defendant who is insured under a third party policy with the insurer in order to argue that in the circumstances of the case it has no obligation under the policy to indemnity the defendant." 10 An Amended Statement of Claim was later filed by the plaintiff, naming the fourth defendant as a party. Paragraph 5 of that Amended Statement of Claim was in the following terms: "At all material times the fourth defendant was the licensed CTP insurer of the third defendant's vehicle." 11 On 19 May 2004, the solicitors for GIO made an offer of settlement to the plaintiff. The Terms upon which that original offer was made were subsequently amended, but were ultimately rejected by the solicitors for the plaintiff in a letter of 14 July. On the same date, which was a little over 2 weeks prior to the hearing date, the plaintiff's solicitors wrote to the solicitors for GIO in the following terms: "The Statement of Claim is pleaded such that it covers the negligence of the various defendants either within the motor accident legislative scheme (should it apply) as well as in common law negligence for the acts or omissions in negligence of the respective parties, in so far as they do not fall within the motor accidents legislative scheme. It will be the contention of the plaintiff at the hearing of the action that the accident was not one which fell (in respect of any of the defendants) under the Motor Accidents Act 1988 ." 12 The solicitors for GIO responded in the following terms: "We note your concession that the Statement of Claim is drafted in such a way that it covers the negligence of the various defendants at common law and also under the Motor Accidents legislative scheme, should it apply. In these circumstances we have seen no other option but to advise our client to be joined to the proceedings pursuant to s 47A of the Motor Accidents Act in order to protect their interests." 13 The CTP policy issued under the Act only covered the third defendant in respect of an "injury" as defined in s 3(1) of the Act as follows: