Watson v Hannover Life Re of Australasia Limited

HIS HONOUR: The Plaintiff, Shaun Roy Watson, was working as a qualified boilermaker/welder on 14 September 2013, when he was injured, in the course of his employment with Allmen Engineering Projects Pty Limited ("the Employer"). He had commenced working with the Employer in about mid-October 2012.

United Super Pty Limited, the Second Defendant (“the Trustee”) is the trustee of the Construction and Building Union's Superannuation Fund (“the CBUS Fund”) constituted by a Trust Deed, relevantly dated 12 December 2012 (“the Trust Deed”), which provided for certain benefits to members of the CBUS Fund, including, in certain events, a total and permanent disablement benefit. It exercises its trustee functions pursuant to the Trust Deed, as amended from time to time.

Hannover Life Re of Australasia Ltd, the first Defendant (“the Insurer”) is an insurer, which entered into a Group Life Insurance Policy, bearing Policy number 4163, (“the Policy”), with a commencement date of 1 April 2002, which was varied with effect from 1 December 2011, with the Trustee, pursuant to which, in return for the Trustee agreeing to make certain payments to the Insurer, the Insurer agreed to insure members of the CBUS Fund against, amongst other things, total and permanent disablement.

The Trustee was the legal owner of the Policy and held the Policy for the benefit of members of the CBUS Fund.

The Plaintiff became a member of the CBUS Fund on 1 July 2013. He claimed that he ceased work as a consequence of the injuries suffered at work on 14 September 2013, when a 1.5 tonne steel beam landed on his left foot, crushing it. On presentation to the Nepean hospital, it was recorded that there was “a partial amputation of the left lateral foot with exposed tendons and bones and multiple comminuted fractures of the 3rd, 4th and 5th metatarsal bones, a gross displacement of the 5th metatarsal, with the metatarsal shaft displaced laterally, inferiorly and proximally”.

The Plaintiff asserted that as a result of the injuries and disabilities sustained by him, he has been unemployed since the date of the incident. It is not disputed that he remained continuously unemployed for a three month period until 14 December 2013. He claimed that, since then, he has been disabled, and that after that three month period, he qualified as being “totally and permanently disabled” within the provisions of the Policy from 14 September 2013.

On 16 February 2016, the Plaintiff brought these proceedings, commenced by Statement of Claim, against both the Insurer and the Trustee. In summary, he challenged the Insurer’s decision to reject his claim asserting it was “void”; he sought a declaration that he “is totally and permanently disabled within the meaning of the Group Policy”; he sought an order for the Insurer to pay the total and permanent disablement benefit in accordance with his entitlements under the Policy; he sought a declaration that he “is totally and permanently disabled within the meaning of the Trust Deed”; and he sought an order directing the Trustee to pay the total and permanent disablement benefit to him; he also sought an order for interest and for costs.

Whilst he asserted that the Insurer owed a duty to the Plaintiff “to consider and determine the Claim in good faith”, a duty “to act reasonably in considering and determining the claim, including a duty to make a decision that was reasonable in all of the circumstances”, and a duty “to inform itself of the relevant facts prior to making a decision on the claim” and that “the [Insurer’s] denial of the claim was in breach of [its] duties to the Plaintiff, the Statement of Claim did not descend to any particularity of the reasons why there was a breach of each of the duties that he alleged.

There was no allegation of any duty owed to the Plaintiff by the Trustee or any breach of duty by the Trustee. There was no inkling of any substantive ground for the complaint against the Trustee.

The Insurer, in its verified Defence, filed on 23 May 2016, denied that the Plaintiff was entitled to any relief. The bases of the denial for relief were not articulated. Rather, there was simply a response to each of the factual allegations made by the Plaintiff in the Statement of Claim.

The Trustee, in its verified Defence, filed on 12 May 2016, also denied that the Plaintiff was entitled to any relief. The bases of the denial for relief were not articulated. Again, there was simply a response to each of the factual allegations made by the Plaintiff in the Statement of Claim and an allegation that “in answer to the whole of the Statement of Claim, the second Defendant says that the Statement of Claim does not contain any cause of action against it”.

There was no dispute, however, that, if the Plaintiff was totally and permanently disabled, he is entitled to $104,000 (“the Benefit”) under the Policy.

It was also not in issue that the Plaintiff had standing to sue the Insurer even though it was a Group Life Policy.

Prior to the hearing, the Court directed that an Outline of Submissions be provided and served. In a document entitled “Outline of the Defendants’ Opening Submissions” dated 6 June 2018, Ms B K Nolan of counsel, who appeared for both the Defendants, in summary, submitted that:

The Plaintiff did not provide to the Court, or serve, any written submissions.

At the time of the commencement of the proceedings, and it would seem from about May 2014, the Plaintiff was legally represented by a firm of solicitors identified as “Law Partners Compensation Lawyers Pty Ltd”. It is that firm of solicitors that is identified in the Statement of Claim.

On 18 December 2017, the proceedings were listed for hearing before me today, with an estimated duration of 3 days, by Registrar L Walton. The Court’s record of proceedings, which forms part of the Court file, reveals that when it was listed, Mr M Saunders, who is described, elsewhere, as a “Senior Solicitor – Superannuation Claims”, at the firm, appeared for the Plaintiff. The Court also made the usual orders for hearing.

On the Court file, there are a number of different Notices of Intention to File Notice of Ceasing to Act, the most recent of which was filed 5 March 2018, by the Plaintiff’s solicitors. There is also a Notice of Ceasing to Act, filed 5 April 2018, in which the solicitor (Mr S Butcher) states that the firm has “ceased to act as the legal representative of …the Plaintiff in these proceedings”. It is noted in that document that “A notice of intention to file and serve this notice was filed on 5 March 2018 and served on [the Plaintiff] on 8 March 2018”. The Plaintiff’s “residential or business address …last known to me” was then identified.

Uniform Civil Procedure Rules 2005 (NSW), rule 7.29 relevantly provides:

As the Notice of Ceasing to Act stated that a notice of intention had been served, it was unnecessary for the Plaintiff’s solicitors to seek leave to file a notice of ceasing to act. Furthermore, the notice was served more than 28 days before the trial.

The causes for the termination of the retainer by the Plaintiff’s solicitors are not known. Two usual causes are the client's failure to provide funds for costs and disbursements and where the client prevents the solicitor from properly carrying out the duties required by the retainer. In the circumstances of this case, it does not matter. It is not a case in which the Plaintiff’s former solicitors have left it to the very last minute to leave the Plaintiff, being the client, in a situation where he may be forced to seek an adjournment or otherwise defend the proceedings on his own.

As will also be read, the Plaintiff has been encouraged by the Defendants’ solicitor, to resurrect his professional relationship with his former solicitors but it appears that he has chosen not to do so.

On 28 March 2018, I requested my Associate to forward an email stating that the matter was listed for a pre-trial directions hearing at 9:30 a.m. on 10 May 2018. A copy of the email was sent to the solicitors then on the record.

On 16 April 2018, my Associate received an email from Mr Saunders confirming that a Notice of Ceasing to Act was “recently filed and served by post” on the Plaintiff. It went on to state that “[o]ur covering letter to Mr Watson (attached) also advised of the Directions date before his Honour… on 10 May 2018. (In fact, the covering letter, which is also on the Court file, confirmed the hearing dates as well.)

There is evidence that on 27 April 2018, the Plaintiff was served with a letter dated 19 April 2018 from the solicitors for the Defendants, and with a copy of my Associate’s email dated 28 March 2018, as well as a draft Court Book, which was said to include the documents relevant to the proceedings. The documents were served by Mr J Khoury by leaving them with a servicing Officer at the Silverwater Correctional Complex at Silverwater.

By letter dated 1 May 2018, sent to the Plaintiff, the solicitors for the Defendants required the Plaintiff, as well as three medical experts upon whose reports reliance was likely to be placed by him, to be available for cross-examination.

On 10 May 2018, there was no appearance, by, or on behalf of, the Plaintiff and Ms Nolan appeared for the Defendants. The matter was adjourned until 16 May 2018.

On 16 May 2018, once again, there was no appearance, by, or on behalf of, the Plaintiff. Ms Nolan, again, appeared for the Defendants. Counsel sought, and was granted, leave to file in Court, an affidavit sworn 16 May 2018, of Mr M Iacuzzi, in which there was a reference to correspondence passing between his firm and the Metropolitan Remand Reception Centre of the Silverwater Correctional Complex. In some of that correspondence, the Plaintiff was referred to as “the inmate”.

Mr Iacuzzi’s affidavit also referred to a conversation between himself and Mrs Cheryl Watson, the Plaintiff’s mother. She told Mr Iacuzzi certain things.

By letter dated 18 May 2018, from the solicitors for the Defendants, personally served by Mr M N Smith, a Licensed Commercial Agent, on 22 May 2018, the Plaintiff was informed that he was required to attend at the hearing on 12, 13 and 14 June 2018, and in the event that he did not, “the Court may deal with the proceedings in your absence”. He was also informed that the Court was sitting in the Hospital Road complex, and a copy of a map of its position was provided.

On 4 June 2018, the Court received written notification from Ms Nolan stating that the solicitors acting for the Defendants had made contact with the Plaintiff and that he “wishes the matter to proceed next week”. (She had requested her instructing solicitors to provide a copy of her correspondence to the Plaintiff.)

The Court has not received any email, or other, correspondence directly from the Plaintiff. So far as is known, the Plaintiff remains unrepresented.

The matter was, first, called shortly after 10:00 a.m. today. There was no appearance, by, or on behalf of, the Plaintiff.

At the commencement of the hearing, counsel sought, and was granted, leave to file in Court another affidavit of Mr Iacuzzi, this one having been sworn on 7 June 2018. In that affidavit, Mr Iacuzzi referred to a number of the matters referred to above. He added that he had spoken with the Plaintiff on 1 June 2018 and again on 4 June 2018. His affidavit, relevantly, was in the following terms:

Despite the Plaintiff having stated that he would contact Mr Saunders, Mr Iacuzzi was informed by Mr Saunders, on 4 June 2018, that the Plaintiff had not made contact with him following the filing of the Notice of Ceasing to Act.

Counsel also then sought, and was granted, leave to file in Court various affidavits of service of documents referred to in Mr Iacuzzi’s affidavit.

In case the Plaintiff had been delayed, or was having difficulty finding the Court, the matter remained in the List until 11:00 a.m., when it was again called outside the Court. There was no appearance by, or on behalf of the Plaintiff, on this occasion also.

During the adjournment, I requested my Associate to enquire whether any correspondence had been received in the Supreme Court Registry from the Plaintiff. The email response from the Registry was that nothing had been received from the Plaintiff or in relation to the matter.

In all the circumstances, I am satisfied that the Plaintiff has been made aware of the hearing date; of his need to appear; and in the event that he did not do so, the possibility that the Court may deal with the matter in his absence.

There being no appearance when the matter was called, not once, but twice outside the Court, counsel for the Defendants sought an order that the Plaintiff’s claim be dismissed.

UCPR rule 29.7 applies when a trial is called on. If any party is absent, the Court may proceed with the trial generally, or so far as concerning any claim for relief in the proceedings, or may adjourn the trial. There has been no application by the Defendants to proceed with the trial or to adjourn it.

UCPR rule 29.7(4) provides that, if, in relation to any proceedings, the Defendant appears, but the Plaintiff does not appear, the Court may dismiss the proceedings. It is upon this sub-rule that the Defendants rely in making the application that counsel has made.

A party is relevantly absent only if he, she, or it, had knowledge, or notice, of the hearing date, and is neither present, nor represented, when the matter is due to be heard. In NSW Trustee and Guardian as executor of the Will of Michael Robert Walsh (Dec'd) v Gregory (2012) 18 BPR 35,153; [2012] NSWSC 681, I wrote, at [18] - [22]:

More recently, in Lezaja v Hannover Life Re of Australasia Ltd (No 2) [2016] NSWSC 167 (a case in which a Plaintiff had failed to appear at the hearing), after referring to some of the passages quoted above, I added, at [37], and at [40]:

The Plaintiff was legally represented when the matter was listed for hearing. There is no suggestion that he was not informed of the date of hearing. Indeed, he appears to have been informed of the hearing dates more than once since then. Furthermore, the most recent correspondence with him demonstrates that he was aware that the hearing was imminent.

The Plaintiff has been given the right to be heard at the hearing, but he has chosen not to take advantage of it, and he has not communicated any explanation for his non-appearance to the Court, or, it appears, to the legal representatives of the Defendants.

Whilst it cannot be said that there is an immediate urgency with the case being heard, in the sense that it needs to be determined today, the proceedings have been on foot for over two years. The Defendants have appeared throughout and have, no doubt, incurred legal costs.

I have considered whether the Court should adjourn the proceedings to give the Plaintiff a further opportunity to appear. However, it seems to me that there would be no utility in doing so, in the absence of an explanation why he has not appeared today. There is no reason to believe that he would be more likely to appear on the next occasion than on this occasion.

In my view, there is no ground upon which it would be appropriate for the Court to adjourn the hearing, of its own motion.

Finally, at 11:37 a.m., prior to making the following orders, the matter was again called. There was no appearance by, or on behalf of, the Plaintiff. In all the circumstances, I am satisfied that it is proper to dismiss the proceedings. There seems to be no reason why the Plaintiff should not pay the Defendants’ costs of the proceedings.

Accordingly, the Court: