Roads and Traffic Authority of New South Wales v Barrie Toepfer Earthmoving and Land Management Pty Ltd (No 8)

His Honour: On 28 August 2014, I delivered judgment in Roads and Traffic Authority of New South Wales v Barrie Toepfer Earthmoving and Land Management Pty Ltd (No 7) [2014] NSWSC 1188. The orders made included the following:

Orders were also made for referral to a referee.

On 12 November 2014, the plaintiff filed a notice of motion, the purpose of which was enunciated in the affidavit of Jonathon Davis, the plaintiff’s solicitor, in the following paragraphs:

By agreement between the cross-defendants (CGU Insurance Ltd, Vero Insurance Ltd and NTI LTD) collectively referred to as “the insurers” and the plaintiff, this notice of motion has been dealt with by way of written submissions which the parties did not wish to orally address.

On 15 April 2003, Gregory Luck (the second defendant), was driving a prime mover that was towing a low loader on which was an excavator in a southerly direction over the Hexham bridge. The excavator arm struck the bridge causing extensive damage. Barrie Toepfer Earthmoving and Land Management Pty Ltd (the first defendant) was the owner of the prime mover and low loader.

The plaintiff commenced proceedings claiming that the first defendant and Mr Luck were jointly liable for the repairs to the bridge as a debt. The second defendant was not served with the statement of claim and the plaintiff did not pursue its claim against him.

There was an insurance policy in force at the time of the accident. By an amended cross-claim, the first defendant claimed that the insurers had wrongly denied that they were liable to indemnify the first defendant under the terms of the policy.

During the hearing, the plaintiff was represented by Mr Glissan QC and Mr Manion. The first defendant was not legally represented, however, Barrie Toepfer, a director of the company was granted leave to appear on its behalf. Mr Deakin QC and Mr Stockley represented the insurers.

With the agreement of the parties, the proceedings were conducted on the understanding that I would determine the issues of liability and damage caused to the bridge by the accident. Questions as to the quantum of damages are to be referred to a referee under r 20.14 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’).

The plaintiff had filed a notice of motion on 5 July 2012 seeking “an order granting leave pursuant to s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (‘LRMPA’) for the Plaintiff to proceed directly against the First, Second and Third Cross-Defendants in its claim for damages.”

The hearing of the plaintiff’s claim commenced on 23 July 2012. The s 6(4) application was discussed by both counsel before me prior to the plaintiff’s opening and suggestions were made as to how the application might be resolved. The following exchange took place between myself and Mr Glissan (T6 46-50; T7 1-7, 23/07/12):

On the third day of the hearing, Mr Deakin said (T76 39-47, 25/07/12):

The s 6(4) application did not re-emerge until the fortieth day of the hearing. At the end of his oral closing address which had occupied three days, Mr Glissan said (T1651 10-29, 11/12/13):

In respect of this submission, Mr Deakin said (T1732 10-16, 12/12/13):

There was no reference to the s 6(4) application in either parties written submissions as to the hearing.

The plaintiff seeks orders under Rule 36.17 UCPR or alternatively Rules 36.15 or 36.16 in respect of the plaintiff’s application to join the insurers as a defendant which was not determined during the hearing or as part of the judgment.

The plaintiff contended that the court proposed that orders in respect of the s 6 application should be made at the same time as the court’s determination on liability, that is what the plaintiff ultimately agreed to and submitted should occur during its final submissions.

Whilst Mr Deakin made a statement earlier in the hearing (T76-77) which might suggest that the court was not required to determine the application, the plaintiff submitted that statement must be viewed in the context of the court’s own suggestions about how the s 6 application would be dealt with.

There was no statement, the plaintiff contended, on its behalf to the effect that the plaintiff was abandoning the application or would not require the court to determine the application in accordance with the court’s own suggestion as to how it be dealt with.

The plaintiff submitted “as the parties agreed that the application for leave to join the insurers would be determined at the same time as the substantive issue then the orders made on the application must necessarily follow the court’s determination of the substantive issue” (PWS 13).

The best way of dealing with the application would be for the court to find there was an arguable case that the insurers would be liable to indemnify but ultimately conclude that they were not so liable. The plaintiff submitted that the court should have, as part of the final judgment granted leave to join the insurers, but then, entered a judgment in favour of the insurers, having regards to the court’s findings.

The insurers argued that the plaintiff’s motion filed on 12 November 2014 should be summarily dismissed as a verdict and judgment was entered in their favour, and the relief sought by the plaintiff is prohibited by the proviso to s 6(4) LRMPA. It was submitted that the inference the court should draw is that the plaintiff deliberately decided not to pursue the application at trial (probably to avoid any adverse costs orders against it) and having done so should not now be permitted to depart from that position. The agreement between the parties to that respect is accurately recorded on day three of the transcript (T76 40-45, 25/07/12).

The insurers contended that Rules 36.17, 36.15 or 36.16 UCPR did not have any application to the present case. Whatever Mr Glissan may have intended by the comments he made to the court at the close of his submissions, he did not seek to set aside or go behind the agreement recorded on day three. The court was reminded that issues at trial are not determined by matters raised in final addresses.

It was submitted that at its highest, the plaintiff’s motion depended upon an acceptance by the court of the assertion that some correction of the judgment was warranted as a result of inadvertence of the court in failing to deal with s 6. It was submitted that no such inadvertence occurred because:

Another submission was that contrary to the plaintiff’s contention, the final determination of any s 6 application was not “deferred.” Whatever the plaintiff may have “intended” was not conveyed to the court or the parties beyond what was recorded in the transcript and it is too late now for the plaintiff to belatedly attempt to invoke its earlier application.

The insurers argued that they have suffered irreparable prejudice in that they have been deprived of the opportunity to adduce evidence and place submissions before the court in opposition to any s 6 order.

The insurers contended that there was no utility in making any orders under the notice of motion when the plaintiff accepts that no order can be made because of the court’s clear findings on the insurance issue and the plaintiff’s position was adequately protected by the appeal filed by the first defendant that squarely raised the insurance issue.

The plaintiff’s motion of 12 November 2014 is founded upon an incorrect premise. There was no agreement between the parties that the application for leave to join the insurers would be determined at the same time as the substantive issues. Whilst I made some suggestions as to how the s 6(4) application might be dealt with, Mr Glissan and Mr Deakin were given the opportunity to discuss the matter: (see [11] above).

Mr Deakin’s announcement on the third day of the hearing (see [12] above): “we both have come to the view, and your Honour may be terribly disappointed to know this, but we have both come to the view that with Mr Toepfer here, we really don't need to trouble your Honour with section 6 any more” was said in Mr Glissan’s presence without objection. I accepted that Mr Deakin was accurately relating to the court the agreement between Senior Counsel, and the plaintiff had abandoned the s 6(4) application.

There was no attempt by the plaintiff to restore the application before the completion of the evidence in the trial. The re-emergence of the issue occurred at the end of Mr Glissan’s closing address which was almost 17 months after the agreement with Mr Deakin. It appears that Mr Glissan may have forgotten what had occurred on 25 July 2012.

In any event, it was procedurally unfair to the insurers to seek to resurrect the s 6(4) application in this way. As is pointed out in the insurer’s submissions, the affidavit in support of the application was never formally tendered or read, they had been deprived of the opportunity to adduce evidence and place submissions before the court in opposition to any s 6 orders. In Ashrafi Persian Trading Co Pty Ltd t/as Roslyn Gardens Motor Inn & Anor v Ashrafinia [2001] NSWCA 243; (2002) Aust Torts Reports 81-636 Heydon JA (with whom Mason P and Handley JA agreed) said at [43]:

In my view, it is procedurally unfair to the insurers to ask the court to consider the s 6(4) application by way of the present motion.

Part 36 r 36.17 UCPR does not apply as there was no “error arising from an accidental slip or omission” in the judgment as it was unnecessary to deal with the application that had been abandoned. Rule 36.15 UCPR has no relevance, as the judgment was not given “irregularly, illegally or against good faith”. Moreover, the time limitation expressed in r 36.16(3A) UCPR expired on 12 September 2014.

Section 6(4) of the LRMPA is as follows:

In the principal judgment, I found that the insurers were entitled to refuse indemnity to the first defendant: Roads and Traffic Authority of New South Wales v Barrie Toepfer Earthmoving and Land Management Pty Ltd (No 7) [2014] at [176]-[177].

The first defendant has appealed that part of the judgment, which relates to the insurers. The plaintiff’s desire to pursue an appeal in respect of the court’s findings on the insurance issue is protected by the first defendant’s appeal.

I do not propose to accede to the plaintiff’s request to deal with a s 6 application.

Accordingly, I make the following orders: