Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Hannover Life Re of Australasia Ltd v Dargan [2012] NSWCA 185
• Hearing dates: 18 June 2012
• Decision date: 20 June 2012
• Before: Barrett JA

Decision

Notice of motion filed by the appellants on 11 June 2012 dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: PROCEDURE - Court of Appeal - notice of contention filed by respondent - appellants seek order striking out notice of contention - whether single Judge of Appeal may make such order (doubted) - respondent in any event entitled to rely on any ground subject to considerations of fairness - no relevant unfairness shown - application dismissed
• Legislation Cited: Supreme Court Act 1970, s 46(2); Uniform Civil Procedure Rules 2005, rules 13.4(1), 51.40(1)
• Cases Cited: Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1; Dargan v United Super Pty Ltd [2011] NSWSC 1316; David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416; Ebb v Fast Fix Steel Fixing Pty Ltd [2007] NSWCA 236; HIA Insurance Services Pty Ltd v Kostas [2008] NSWCA 297; Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204; NRMA Insurance Ltd v B & B Shipping and Marine Salvage Co Pty Ltd (1947) 47 SR (NSW) 273; O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310; Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418; Waller and Son Ltd v Thomas [1921] 1 KB 541 at 548; Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491
• Texts Cited: Practice Note SC CA 1
• Category: Interlocutory applications
• Parties: Hannover Life Re of Australasia Ltd - First AppellantUnited Super Pty Ltd - Second Appellant; John Arthur Dargan - Respondent
• Representation: R A Cavanagh SC - Appellants; B W Rayment QC/M J Gollan - Respondent; TurksLegal - Appellants; Firth - The Compensation Lawyers - Respondent
• File Number(s): 2010/00259186

Decision under appeal

• Citation: Dargan v United Super Pty Ltd [2011] NSWSC 1316
• Date of Decision: 2011-11-01 00:00:00
• Before: Gzell J
• File Number(s): 2010/259186

Judgment

1 Pursuant to leave granted on 13 March 2012 (Young JA and Meagher JA), the appellants appeal from a decision of Gzell J concerning liability consequent upon total and permanent disablement of the respondent: Dargan v United Super Pty Ltd [2011] NSWSC 1316.

2 The second appellant was the trustee of a superannuation fund of which the respondent was a member. The first appellant was the insurer under a group life policy associated with the superannuation fund. The appellants were unsuccessful at trial in resisting the respondent's claim to be entitled to payment of a benefit on account of total and permanent disablement following injury to his back.

3 The question before me concerns a notice of contention filed by the respondent on 21 May 2012. The notice of contention indicates that, upon the appeal, the respondent will seek to uphold the decision of Gzell J on the basis of a point of construction of the relevant insurance policy that was not argued at first instance.

4 The appellants say that the notice of contention should be struck out. By notice of motion filed on 11 June 2012, they seek an order to that effect.

5 The crucial words relevant to the meaning of "total and permanent disablement" and "regular remuneration work" in the policy are "work for which the insured person is reasonably fitted by education, training or experience".

6 The primary judge held that, in the particular circumstances, the relevant question was whether the respondent's past education, training or experience made him reasonably capable of working as a taxi driver. The question was answered in the negative because, before sustaining the injury, the respondent had not been a taxi driver and had not undertaken the training course that is a necessary qualification for taxi driving. At the time of the trial, the respondent was working as a part-time taxi driver.

7 The respondent contends that the primary judge's decision was correct for the reasons his Honour gave; but also that part-time employment as a taxi driver, being part-time only, did not, in any event, satisfy the relevant concept of "regular remuneration work". It is in respect of that additional ground for upholding the primary judge's conclusion that the respondent wishes to rely on the matter the subject of the notice of contention.

8 The appellants say that the respondent should not be permitted to take this course. They point out that the trial was conducted on the footing, expressly accepted on both sides, that there was a single issue requiring determination, that is, whether the work of a taxi driver, being work that the respondent was performing at the time of the trial, was work for which he was reasonably fitted by education, training or experience as at the relevant date. The distinction between full-time work and part-time work - a distinction brought to the fore by the notice of contention - was, the appellants say, simply not part of the case the parties agreed to submit for the court's determination at trial.

9 The question whether fitness only for part-time work is sufficient for definitions of the relevant kind has been referred to in a number of decided cases. These were reviewed in Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWSCA 204 where this Court held that, on the particular policy wording then before it, the relevant concept of remunerative work was not subject to any qualification paying attention to the nature of the work as either full-time or part-time.

10 The point the respondent wishes to agitate through the notice of contention is, in effect, that the relevant concept is one of full-time work only, that being a view that had commended itself to a number of judges at first instance before the Manglicmot case was decided.

11 The appellants have not identified any provision of the rules of court as a clear basis for their application that the notice of contention be struck out. Rule 51.40(1) of the Uniform Civil Procedure Rules 2005 requires that a respondent who wishes to contend that the decision below should be affirmed on grounds other than those relied on by the court below, but does not seek a discharge or variation of any part of the orders of the court below, file and serve on each interested party notice of that contention stating briefly, but specifically, the grounds relied on. The notice of contention is thus, in a loose sense, a medium by which the case to be made by the respondent is defined.

12 It was accepted by Bell JA (as her Honour then was) in HIA Insurance Services Pty Ltd v Kostas [2008] NSWCA 297 at [14] - admittedly on the basis of a concession by counsel - that rule 13.4(1) of the Uniform Civil Procedure Rules (which allows summary dismissal of "proceedings" or "any claim for relief in the proceedings") permits striking out a notice of contention; and that the power to make such an order may be exercised by a single Judge of Appeal (presumably under s 46(2) of the Supreme Court Act 1970). That decision proceeded on the basis that, if the notice of contention is struck out, the respondent no longer has the ability to seek to uphold the first instance decision on the ground stated in the notice.

13 If the power suggested by HIA Insurance Services Pty Ltd v Kostas is in truth available, it is open to me to strike out the notice of contention provided that I am satisfied that the course of argument to be advanced pursuant to it is frivolous or vexatious, or involves no reasonable ground or entails an abuse of process.

14 Consistently with principles concerning summary judgment and summary dismissal - which might provide some form of analogy - a judge invited to strike out a notice of contention on this basis would do so only if clearly persuaded that the foreshadowed argument was virtually doomed to fail or if it would be plainly unjust in the circumstances for the respondent to be allowed to rely on it.

15 The appellants focus mainly on the second possibility. They say that the respondent, having committed himself at trial to a delineation of the single issue that paid no attention to the distinction between full-time and part-time work, should not now be allowed to rely on a matter that he was perfectly content not to raise at first instance. They refer to the general principle that parties ought to be bound by the way they conduct their proceedings, and therefore not allowed to raise new matters on appeal: see, for example, Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1; Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491; Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418; O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310.

16 As to what might be, in a sense, the subsidiary (although related) question whether the point sought to be agitated is virtually doomed to fail, the appellants point to the decision in Manglicmot and the general principle that this Court will not depart from its own previous decision unless it has a strong conviction that the previous decision is wrong.

17 The respondent emphasises that the primary judge was bound by this Court's decision in Manglicmot so that the respondent, as plaintiff, was compelled, as a practical matter, to adopt a stance that precluded reliance at first instance on the full-time versus part-time distinction made irrelevant by that decision. It is that circumstance that caused counsel for the respondent, as plaintiff, to say, "We don't agitate a case contrary to Manglicmot". At that level, the respondent did not see himself as having any choice. But now that he has been brought into the Court of Appeal, he says, it is open to him to defend the first instance decision on any basis properly maintainable in the Court of Appeal, including a basis that invites the Court to review and not follow its own earlier decision.

18 If the respondent will in truth invite the Court to depart from its earlier decision, there will be, according to Ebb v Fast Fix Steel Fixing Pty Ltd [2007] NSWCA 236 and other cases there mentioned, a need for leave to argue in that way: see also Practice Note SC CA 1 para 38. There will also be, as the respondent has already recognised, a question whether a bench of five Judges of Appeal should hear the appeal. These, however, are matters that are not currently before me; nor is it at all obvious that they are matters on which a single Judge of Appeal is able to rule.

19 The appellants refer to the fact that the question of any intended reliance on the full-time versus part-time distinction was raised by the Court at the hearing of the application for leave to appeal; and that Mr Rayment QC, senior counsel for the respondent, gave a quite non-committal answer that appears in the following transcript extract:

"Your Honours asked a question about full and part-time. There is a definition -

YOUNG JA: Is that an issue in the appeal or not?

RAYMENT: It isn't on the application before your Honours. We would need to decide whether we wish to raise that matter by way of notice of contention and I haven't taken that decision.

YOUNG JA: I understand."

20 The "application before your Honours" to which Mr Rayment referred was, of course, the appellants' application for leave to appeal and, as Mr Rayment pointed out in submissions on this present application, his primary aim at that earlier point was to resist a grant of leave to appeal. It was consistent with that, he says, that he should have, first, accepted that the appeal, as formulated by the appellants in advancing their leave application, did not raise the full-time versus part-time distinction and, second, reserved his client's position on whether there would be a move to make that matter part of the appeal if, notwithstanding his opposition (and as in due course happened), leave to appeal was granted and there was in fact to be an appeal.

21 It is also relevant to refer to a condition attached to the grant of leave to appeal. The condition is that the appellants "not disturb the order for costs below and pay the costs of the appeal in any event". That being so, the appellants now argue, it would be unfair to them to allow any expansion of the scope of the appeal having the potential to increase the costs for which they are to be liable regardless of the outcome on appeal.

22 I am not persuaded that I should make the order the respondent seeks. In the first place, I am doubtful whether, even allowing for what was said in HIA Insurance Services Pty Ltd v Kostas, a single Judge of Appeal has power to make such an order. Even if there is power, I do not think that the power should be exercised as a matter of discretion in this case.

23 While an appellant ordinarily cannot raise on appeal matters that were not agitated below, a respondent - who is made party to the appeal whether he or she likes it or not - is not so limited: David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416. Subject to the procedural requirement of notice of contention (as a means of avoiding surprise), the respondent is entitled to seek to uphold the decision below on "any good legal ground appearing upon the evidence, although he did not present it in the Court below". These are the words of Jordan CJ in NRMA Insurance Ltd v B & B Shipping and Marine Salvage Co Pty Ltd (1947) 47 SR (NSW) 273 at 282.

24 This formulation makes it clear that the evidential base established at trial is alone available. Points of law and points of construction not argued below are therefore particularly suited to being raised by a respondent on appeal.

25 The entitlement of a respondent to which Jordan CJ referred may be denied by considerations of fairness applying in a particular case. Active assent to a confining of the case at first instance will not generally represent such a consideration, although a barrier may arise if, in the court below, the respondent positively conceded a particular position on the law and declined an opportunity to argue it. What I have just said comes from the judgment of Lush J in Waller and Son Ltd v Thomas [1921] 1 KB 541 at 548.

26 In this case, the respondent accepted in the court below that he could not seek to make a case contrary to Manglicmot. In the face of binding authority in the form of a decision of this Court, he had no choice but to do so. But given that the Court of Appeal is not bound by its own earlier decision and might conceivably be persuaded to depart from it, the same constraint will not apply on appeal, so that, in the absence of some binding authority of the High Court, the concession or acceptance at first instance does not represent a consideration of fairness denying or curtailing the freedom to which Jordan CJ referred.

27 It is beside the point that Mr Rayment gave a non-committal answer when asked, during the leave to appeal hearing, about his client's position regarding full-time versus part-time work. There was no reason why the respondent should have been required to adopt any firm position about a notice of contention when he did not yet know whether there would be an appeal.

28 That leaves the matter of the condition concerning costs attached to the grant of leave to appeal. The question of the costs of the appeal will be a matter for the discretion of the Court that determines the appeal. The condition means no more than that the appellants, in pursuing the appeal, must accept that, all things being equal, they will pay the costs, come what may. But it will obviously be open to the Court hearing the appeal, when considering how to exercise its discretion as to costs, to vary or waive the condition for good reason shown and, for that purpose, to have regard to any changes in circumstances since the condition was imposed.

29 The notice of motion filed by the appellants on 11 June 2012 will be dismissed with costs.

30 The appellants were content for that notice of motion to be heard and determined by a single Judge of Appeal. It need scarcely be said, however, that that determination does not detract in any way from the role of the Court constituted to hear the appeal or from such need as there may be for the matters referred to at paragraph [18] above to be addressed.

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Decision last updated: 20 June 2012