Crisp v Crooks Michelle Peacock Stewart Pty Ltd [1998] QSC 149 [1999] 2 Qd R 573

IN THE SUPREME COURT OF QUEENSLAND Writ No. 1545 of 1994 [Crisp v Crooks Michelle Peacock Stewart P/L & Ors] BETWEEN: DERRICK ARTHUR CRISP Plaintiff AND: CROOKS MICHELLE PEACOCK STEWART PTY LTD (ACN 000 912 630) AND WILLIAMS BROS. ENGINEERING PTY LIMITED (ACN 000 789 426) TRADING AS WILLIAMS BROS. - CMPS JOINT VENTURE First Defendant AND: CHEVRON NIUGINI PTY LIMITED Second Defendant AND: WB-CMPS PNG PTY LIMITED Third Defendant AND: WORKCOVER QUEENSLAND First Third Party AND: HIH CASUALTY & GENERAL INSURANCE LIMITED (ACN 008 492 291) Second Third Party JUDGMENT - DERRINGTON J Delivered: 24 July 1998 CATCHWORDS: CIVIL PROCEDURE: Case Appraisal - O.99 r.30 Rules of the Supreme Court - meaning of the term “dispute” - whether, in the event that a party to a case appraisal is dissatisfied with a case appraiser’s decision and elects to go to trial, all parties to the case appraisal are obliged to go to trial - O.90 r.6 Rules of the Supreme Court - extension of time within which to elect to go to trial Supreme Court Act (Qld) 1995 Section 2 Judicature Act (Qld) 1876 Section 4(3) -- 1 of 11 -- Counsel: Mr S Williams QC for the plaintiff Mr G A Thompson for the first and third defendants Mr D Moore (solicitor) for the second defendant Mr P B de Plater for the first third party Mr P D Tucker (articled clerk) for the second third party Solicitors: Eardley Motteram for the plaintiff Corrs Chambers Westgarth for the first and third defendants Gadens Lawyers for the second defendant Pender & Whitehouse for the first third party Allen Allen & Hemsley for the second third party Hearing date: 7 July 1998 -- 2 of 11 -- IN THE SUPREME COURT OF QUEENSLAND Writ No. 1545 of 1994 [Crisp v Crooks Michelle Peacock Stewart P/L & Ors] BETWEEN: DERRICK ARTHUR CRISP Plaintiff AND: CROOKS MICHELLE PEACOCK STEWART PTY LTD (ACN 000 912 630) AND WILLIAMS BROS. ENGINEERING PTY LIMITED (ACN 000 789 426) TRADING AS WILLIAMS BROS. - CMPS JOINT VENTURE First Defendant AND: CHEVRON NIUGINI PTY LIMITED Second Defendant AND: WB-CMPS PNG PTY LIMITED Third Defendant AND: WORKCOVER QUEENSLAND First Third Party AND: HIH CASUALTY & GENERAL INSURANCE LIMITED (ACN 008 492 291) Second Third Party JUDGMENT - DERRINGTON J Judgment delivered 24 July 1998 In this action the plaintiff claims damages for personal injuries alleged to have been caused by the negligence of some or all of the defendants. The first defendant has joined its insurer as the first third party because it has denied liability to provide indemnity. The matter was sent to case appraisal. It seems to have been accepted by all that it was to be applied to the dispute between the first defendant and the first third party as well as to the dispute between the plaintiff and the defendants. The validity of this course has not been -- 3 of 11 -- 2 challenged, though the Rules of Court governing that procedure do not specifically refer to the appraisal of two disputes in the same proceedings. The practicality of such a course is the best recommendation for such a construction of the Rules. The decision in the case appraisal having been given, the first third party made the necessary election under the Rules to have the dispute to which it was a party go to trial and so the appraiser’s decision did not operate against it. The first defendant then had little or no time to consider whether it should elect to send its dispute with the plaintiff to trial, and this unfortunate state of affairs was compounded by its being misinformed as to the date of the appraiser’s decision, which led it reasonably to believe that the first third party’s election was out of time and that its own time for election had expired. Consequently it refrained from making its election which, if made, would have retained the benefits of the third party procedure. The simple issue in this application is whether the election of the first third party had the effect of sending the whole of the action to trial, or whether the appraiser’s decision as to the dispute between the plaintiff and the defendants remained intact. The plaintiff and second defendant support the survival of the appraiser’s decision so far as it affects the parties to the original action, while the first and third defendants oppose that result. The other parties to the action are indifferent. The complication associated with the application of case appraisal to the whole of an action that includes third party proceedings appears to have escaped the attention of those drafting the rules for it is not specifically addressed. However, it is possible to derive sufficient indication of their intention to resolve the matter despite some ambiguity in the way in which it was done. The relevant rules of Order 99 are as follows– “21 (1) A referring order for a case appraisal must– -- 4 of 11 -- 3 (a) appoint as case appraiser– (i) a specified case appraiser; or (ii) a case appraiser to be selected by the parties; and (b) include enough information about pleadings, statements of issues or other documents to inform the case appraiser of the dispute and the present stage of the proceeding between the parties; and . . . 22 (2) However the case appraiser– (a) may only give a decision that could have been given in the dispute if it had been decided by the court; and . . . 26 (2) However, a case appraiser may, at any stage of a case appraisal proceeding, decline to proceed further with the proceeding. . . . 27 (1) In a referred dispute, a case appraiser has the same power to award costs in the dispute the Supreme Court would have had if it had heard and decided the dispute. (2) A case appraiser’s decision under rule 26(1) must include a decision on costs in the dispute. 28 A case appraiser’s decision is final, unless an election to go to trial is made under rule 30. . . . 29 (2) If the case appraiser makes a decision about the dispute or any issue in the dispute, the case appraiser must– (a) place the written decision in a sealed container, for example, an envelope; and . . . 30 (1) A party who is dissatisfied with a case appraiser’s decision may elect to have the dispute go to trial in the ordinary way by filing an election in form 522 with the registrar. (2) The election must be filed within 28 days after the case appraiser’s certificate is filed in registry. (3) If an election is filed– (a) the case appraiser’s decision cases to have effect other than as provided by rule 31; and -- 5 of 11 -- 4 (b) the dispute must be decided in the Supreme Court as if it had never been referred to the case appraiser. 31 (1) In this rule– “challenger” means a party who filed an election under rule 30. (2) If the Supreme Court’s decision in the dispute is not more favourable overall to a challenger than the case appraiser’s decision in the dispute was to the challenger, the costs of the action and the case appraisal must be awarded against the challenger. . . .” [emphasis mine] The consistent reference throughout these rules to the term “dispute” in significant parts of the context establish it as the chosen mode of identification of the subject matter of any order for this procedure, and consequently it is the dispute between the parties to which all references are addressed. The difficulty here arises from the distinction of the dispute between the plaintiff and the defendants from that between the first defendant and the first third party. The validity of that distinction is fortified by the terms of s.4(3) of the Judicature Act 1876 which is the source of the third party procedure. The plaintiff has no dispute with the first third party and the combining of the proceedings for convenience does not alter this. Its purpose is to avoid duplication of proceedings which has the benefit of saving of costs and of avoiding any conflicting findings of fact in separate trials that could lead to injustice. This does not affect the distinction between the disputes. For example, evidence that may be admissible in one may not be admissible in the other, even in respect of a common issue. The position is the same where an action involving a number of parties involves various remedies some of which may be distinct from others in that they are independent of them and are claimed only against some and not others of the defendants. The first and third defendants argue that the result of hearing the two disputes together -- 6 of 11 -- 5 in the one case appraisal is that there is one appraisal and one decision; and that an election by any party under r.30(1) “who is dissatisfied with (the) case appraiser’s decision” has the effect of requiring a trial in respect of the entire subject matter of the decision. This argument assumes that because the decision that was given covers both disputes, it follows that there was only one decision within the meaning of that Rule. This is erroneous. In this context there must technically be two such decisions, each of which related to its own respective dispute. It is not the form but the substance that counts. In any case even the form must have revealed two decisions as to their respective disputes, and it makes no difference that they were encapsulated in one document. This view is fortified by the Rule, which, after referring to the decision, provides that the dissatisfied party “may elect to have the dispute go to trial in the ordinary way” [emphasis mine]. The identification of the decision with its dispute predicates that plurality of the latter attracts a distinct decision for each. If it were otherwise, unhappy and unintended consequences would follow. As it is suggested in the present case, in such circumstances the election of one party to the reference, having an interest limited to one dispute, could defeat the entire appraisal; and this would be the result even where the dissatisfaction related only to a matter totally separate from any common issues and even though all parties, including the electing party, may have wished the resolution of the other dispute to stand. For example if in the present case the first third party had denied liability by reason of some alleged breach of a condition of the policy, and its joinder as a third party was justified in order to have any finding of the first defendant’s liability to the plaintiff established as part of the former’s claim against it, the alleged breach of condition would be entirely separate from all other issues. If then the insurer were satisfied with the decision of the appraiser as to the first -- 7 of 11 -- 6 defendant’s liability to the plaintiff but dissatisfied with the decision relating to the issue of breach of a condition, on the first defendant’s contention as to the effect of the Rules, the insurer’s election to send the issue of the alleged breach of the policy to trial would mean that the decision as to the first defendant’s liability to the plaintiff would also be sent to trial, even if this were contrary to the wishes of all parties including the insurer itself. This impractical consequence was plainly not intended. That it would be avoided by the construction that recognises distinct decisions as to distinct disputes supports such a construction. Since here there were two distinct decisions related to the respective disputes, then the election in respect of the third party proceedings will not interfere with the decision in relation to the primary action. Of course, the insured is well advised to take the precaution of electing to go to trial on the primary action also but this would be obviated by the insurer’s formal acceptance of the findings and consequences of the appraiser’s decision in that respect. That decision may of itself well be sufficient for the insured’s proof against the insurer of the former’s liability to the plaintiff, but that possibility has been disregarded in the above discussion in order to avoid unnecessary complexity. That the two disputes were referred to case appraisal together does not mean that there was only one appraisal and decision or, more importantly, that it was an appraisal and decision in respect of one dispute. Consequently, the reference in the order for case appraisal to “all issues”, which included the issues involving third parties, is equivocal. So too is the fact that the appraisal was conducted as one proceeding and attracted the submission of one case appraisal certificate. Its reference to one decision is technically erroneous, but this is of no significance.. The first and third defendants’ argument refers to s.2 of the Supreme Court Act which defines “party” to mean “a party to a dispute”. That is precisely the point. Each dispute has its parties. Each dispute between the respective groups of parties was quite disparate, although there -- 8 of 11 -- 7 may have been some common issue or issues. Section 2 also defines “dispute” to include a dispute in a proceeding and as “something else about which the parties are in dispute that may be dealt with in a mediation at the same time as an ADR dispute”. In this context, the reference to “the parties” means the parties to that dispute, and the point of this extension of the definition is to permit the mediation to extend beyond the specific dispute to which it is addressed, but only as to other disputes between the same parties. Its terms do not extend to other disputes between a party to the mediation and other persons who are not parties. The integrity of the limits imposed by the implied requirement that the parties should be parties to the same dispute in order to come within that description remains. The first and third defendants argue that the objects of the third party procedure would be frustrated if their argument were not correct, but that is not so. That procedure itself does not always produce the desired results, but its benefits in other cases justify its existence. Further, the limitation of the appraiser’s decision to one dispute only in respect of each arm of the case would not enlarge the action nor cause additional expense to the parties: it would simply mean that some saving of expense had not been achieved, that is, the combined hearing of both disputes. The position is no different from that where in a trial the plaintiff and defendant resolve their differences and leave the third party claim to a determination by the court. The most significant argument supporting the notion of a single dispute is that which appears in the present case. If there are separate decisions of the appraiser in respect of the respective disputes, then a last-minute election by one party in one dispute could prejudice the other party to their dispute because the latter might then be deprived of the opportunity of electing to send the other dispute to trial in order to ensure that the common issue be determined at one time and remain consistent. The possibility of such an unhappy consequence alone does not justify a construction of the rules different from that to which the other factors so strongly -- 9 of 11 -- 8 point. In any case, its force is largely mitigated by the remedies that are available to avoid such consequences. In a suitable case where justice so demands, the court has the power pursuant to O.90 r.6 to enlarge time for the filing by the disadvantaged party of an election pursuant to O.99 r.30. That is indeed the position in the present case. The first defendant is forensically disadvantaged by the lateness of the first third party’s election, and this was compounded by the appraiser’s error in misinforming the first third party of the date of the decision. The latter’s advisers reasonably believed that the first third party’s election was out of time and that any attempt to follow it up with a similar election in respect of the other dispute would also be out of time. This unfortunate position was acknowledged by all parties consequently and no argument was advanced against an extension of time in this case. Such relief would meet the first defendant’s concerns. At the same time its availability deprives its last argument of much of its persuasive force. This explanation of the application of the Rules answers directly or impliedly the arguments advanced on behalf of the first and third defendants. They cannot succeed. For the above reasons, the plaintiff’s application for judgment against the defendants in accordance with the case appraiser’s decision should be adjourned since the time for filing the first defendant’s election to take that dispute to trial should be suitably extended to permit that to be done. However, this would not be necessary if the insurer were to agree to be bound by the appraiser’s decision in respect of the dispute between the plaintiff and the defendants. The order should be so framed that the extension is conditional upon the insurer’s continued withholding admission of those facts. If that admission is forthcoming, then the plaintiff should not be put to trial and the first defendant will not be disadvantaged by that. -- 10 of 11 -- 9 ORDERS Unless within seven days the first third party agrees to be bound by the determination of all facts and findings of the case appraiser in the dispute between the plaintiff and the defendants referred to in the affidavits filed herein the time for the first defendant’s filing and service of an election to go to trial under O.99 r.30 pursuant to the said case appraiser’s findings and certificate filed in this Court on 14 April 1998 shall be and is hereby extended for a period of fourteen days from the date of the making of this order. IT IS FURTHER ORDERED that the plaintiff’s application for judgment pursuant to the said case appraisal and for directions in respect of the trial of the third party proceedings herein be adjourned to a date to be fixed on two days’ notice in writing by any party to the others. AND THAT the issue as to costs of and incidental to these applications be adjourned to a date to be fixed. -- 11 of 11 --