Sinead Ni Chonchuir v MMI General Insurance Ltd (now Alliance Australian Insurance Ltd) [2001] NTMC 22Work Health

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Sinead Ni Chonchuir v MMI General Insurance Ltd (now Alliance Australian Insurance Ltd) [2001] NTMC 22
Work Health

CITATION: Sinead Ni Chonchuir v MMI General Insurance Ltd (now

Alliance Australian Insurance Ltd) NTMC200122

PARTIES: SINEAD NI CHONCHUIR

v

MMI GENERAL INSURANCE LTD

(now ALLIANCE AUSTRALIA

INSURANCE LTD)

TITLE OF COURT: Local Court

JURISDICTION: Darwin

FILE NO (s): 9715555

#DATE 17:04:2001

DELIVERED ON: 17 April 2001

DELIVERED AT: Darwin

HEARING DATE (s): 28 September 2000

JUDMENT OF: Mr J Lowndes SM

CATCHWORDS:

Work Health

Cause of Action in relation to alleged agreement to pay Work Health entitlements - Breach of Contract - Estoppel- Breach of Duty of Good Faith - Misrepresentation - Trade Practices Act and Consumer Affairs and Fair Trading Act

Work Health Act, ss108(1) and 186A

Trade Practices Act, 1974 (Cth) s52

Consumer Affairs & Fair Trading Act 1990 (NT) s91

Ogilvie & Woolworths (unreported decision of the Work Health Court 6.12.94)

applied

Waltons Stores Ltd v Maher (1988) 164 CLR 387 applied

Gibson v The Parkes District Hospital (1991) 26 NSWLR 1

Gimson v Victorian Work cover

Authority & Anor (1975) 1 VR 2091 followed

ORDER: Plaintiff's Statement of Claim dismissed.

REPRESENTATION:

Counsel:

Plaintiff: Fred Davis

Defendant: Ben O'Loughlin

Solicitors:

Plaintiff: Davis Norman

Defendant: Cridlands

Judgment category classification: A

Judgment ID Number: NTMC200122

Number of Paragraphs: 172

IN THE LOCAL COURT

AT DARWIN IN THE NORTHERN

TERRITORY OF AUSTRALIA

No. 9715555

BETWEEN:

SINEAD NI CHONCHUIR

Plaintiff

and

MMI GENERAL INSURANCE LTD

(NOW ALLIANCE AUSTRALIA

INSURANCE LTD)

Defendant

REASONS FOR JUDMENT

(Delivered on 17 April 2001)

Mr J Lowndes SM:

THE AGREED STATEMENT OF FACTS

1. Part of Exhibit 1 was an agreed statement of facts. The agreed facts are as follows:

2. On 19 September 1994, the plaintiff made a claim for compensation ( the first claim) on her employer, the Ayers Rock Resort ( the employer).

3. At all material times the employer's relevant insurer was the defendant.

4. On 28 September 1994, the defendant on behalf of the employer and pursuant to Section 85 of the Work Health Act accepted liability for the first claim.

5. Between August 1994 and March 1995, the defendant for and on behalf of the employer, paid the plaintiff's benefits pursuant to the Work Health Act, including weekly compensation and medical, surgical and rehabilitation expenses.

6. On 16 May 1996, the plaintiff's solicitors wrote to the defendant ( the second claim) seeking payment for an asserted ongoing entitlement related to the first claim.

7. On 3 July 1996, the defendant's solicitors wrote to the plaintiff's solicitors in response to the second claim as set out in its letter of 16 May 1996.

8. On 2 August 1996, the plaintiff's solicitors replied to the defendant's solicitor's letter of 3 July, "....the plaintiff has instructed us to accept the amount offered...."

9. On 8 August 1996, the defendant's solicitors wrote further to the plaintiff's solicitors to the effect that payment would be made on the production of a departmental certificate.

10. On 28 August 1996, the plaintiff's solicitors forwarded by letter of this date, the certificate from the Department of Social Welfare to the defendant's solicitors.

11. On 29 August 1996, the defendant's solicitors wrote to the plaintiff's solicitors acknowledging receipt of the Department of Social Welfare certificate.

12. On 25 September 1996, the plaintiff's solicitors wrote to the defendant requesting that payment be forwarded in accordance with the agreement as soon as possible.

13. On 15 October, the plaintiff's solicitors wrote to the defendant's solicitors pointing out that they had not received payment or heard further at all from the defendant.

14. On 16 October 1996, the defendant's solicitors replied by fax to the effect that they had spoken to the Claims Manager in MMI who was apologetic and stating that: " Our client expects to have finalised their attention to your matter by the end of this week."

15. On 18 November 1996, the plaintiff's solicitors wrote again in terms of payment to the defendant's solicitors who in turn responded by letter of 26 November 1996.

16. On 9 December 1996, 10 December 1996 and 7 January 1997 the plaintiff's solicitors wrote to the defendant requesting payment and advising, in default of the payment, proceedings would issue.

17. The contents of the letters above at (1) - (14) are admitted save in so far as any conclusion of law therein is concerned.

18. There were no other relevant communications of any type between the parties at any material time and there was no communication between the parties after 15 above.

19. Neither party at any material time has issued any process related to the second claim pursuant to the Work Health Act in the Work Health Court of the Northern Territory.

20. No payment has been received by the plaintiff with respect to the second claim.

21. On 7 July 1997, the plaintiff issued her Statement of Claim against the defendant.

EXHIBIT 2

22. Exhibit 2 was a medical report from Dr J M Ellis addressed to Ms Tracey Norton concerning the plaintiff, and dated 21 March 1995. That report read as follows:

" This patient was seen 3.1.94. Her walking is easier, her sitting is easier. She is better than when she left hospital".

23. On Examination: There is much less tenderness over the coccyx. She was considered to be unfit for her usual occupation until 20.2.95. At about that date she reported by telephone that she was perfectly well, was able to do any work and had no further trouble in the region of her coccygectomy."

THE PLAINTIFF'S CAUSES OF ACTION

24. The plaintiff seeks to rely upon a variety of causes of action.

Breach of contract

25. The plaintiff alleges that the chain of correspondence referred to in the Agreed Statement of Facts constituted an agreement.

26. The plaintiff further alleges that the agreement contained the following implied conditions:

a. the parties would undertake all acts necessary so as to comply with the provisions of the Work Health Act as amended with respect to the agreement and

b. the parties would be bound by the agreement.

27. The plaintiff asserts that the defendant failed to comply with the conditions of the agreement in not acting in accordance with the Work Health Act and by refusing to consider itself bound to the agreement.

Promissory Estoppel

28. In the alternative, the plaintiff relies upon the doctrine of promissory estoppel.

29. The plaintiff relies upon the matters pleaded in support of the cause of action based on breach of contract and further asserts:

a. that she has accepted and relied upon the said agreement

b. that she has not, as a result of the agreement and her reliance on the agreement, issued any further claim against the defendant with respect to her outstanding Work Health entitlements.

c. that she has suffered loss and damage as a result of the defendant's breach of the agreement.

Breach of Duty of Good Faith

30. Again in the alternative, the plaintiff claims to be entitled to relief on account of breach of duty of good faith owed by the defendant to the plaintiff.

31. Relying upon the matters pleaded in respect of breach of contract, the plaintiff alleges that the defendant has acted in breach of its duty of good faith ( to the plaintiff) by:

a. failing to advise the plaintiff at or prior to the time of entering into the agreement that it did not intend to be bound by the agreement and/or

b. failing to advise the plaintiff at or prior to the time of entering into the agreement that it did not intend to act in accordance with the Work Health Act with respect to the agreement.

32. The plaintiff alleges that she has suffered loss and damage as a result of the defendant's breach of duty of good faith.

Misrepresentation

33. Further and in the alternative, the plaintiff claims that by virtue of the matters pleaded in relation to breach of contract, the defendant acted in breach of its duty to the plaintiff not to act so as to misrepresent what its intentions were in terms of the agreement.

34. The plaintiff relies upon the following particulars of misrepresentation:

a. failing to advise the plaintiff at the time of entering into the agreement that it did not intend to be bound by the agreement and/or

b. failing to advise the plaintiff at or prior to the time of entering into the agreement that it did not intend to act in accordance with the Work Health Act with respect to the agreement.

35. The plaintiff says that she has relied upon the matters set out in paragraphs (a) and (b) above and been induced thereby to enter into the agreement, and has accordingly suffered loss and damage as a result of the defendant's misrepresentation.

Trade Practices Act and Consumer Affairs and Fair Trading Act

36. Further and in the alternative, the plaintiff alleges that the defendant has acted in a false and misleading manner in breach of Section 52 of the Trade Practices Act and/or Section 91 of the Consumer Affairs and Fair Trading Act

37. In that regard the plaintiff says that the defendant was at all material times acting in trade and commerce and in not advising at or prior to the time of entering into the agreement that it did not intend to be bound by the agreement and/or intend to comply with the provisions of the Work Health Act, in terms of the agreement, the defendant contravened the sections of the legislation referred to above.

38. The plaintiff alleges that as a result of the defendant having acted in a false and misleading manner she has incurred loss and damage.

39. Arising out all five of the preceding causes of action the plaintiff seeks a variety of relief: damages for breach of contract, specific performance of the alleged agreement, equitable damages (promissory estoppel), damages for breach of duty of good faith, damages for misrepresentation, damages pursuant to Section 82 of the Trade Practices Act and/or Section 91 of the Consumer Affairs and Fair Trading Act, aggravated and/or exemplary damages together with interest and costs.

CONSIDERATION OF THE VARIOUS CAUSES OF ACTION

BREACH OF CONTRACT

40. Proof of the agreement alleged to have been entered into between the parties is crucial to the success of the plaintiff's primary cause of action. Accordingly, it is necessary to determine whether the evidence establishes an agreement between the parties.

41. The evidence upon which the plaintiff relies is contained in Exhibit 1 comprising all the correspondence referred to in the Agreed Statement of Facts.

42. Counsel for the plaintiff submitted that the correspondence between the solicitors for the plaintiff and the defendant of 16 May, 3 July, 2 August, 8 August, 28 August and 29 August 1996 establishes an agreement between the parties.

43. The defendant's counsel submits that the evidence does not disclose the existence of an agreement . He submits that " at most the correspondence can be described as negotiations towards a settlement which failed to create legal relations."[1]

44. Working from first principles, the essential elements of a contract are: (1) offer and acceptance; (2) consideration and (3) intention to create legal relations. Expressed very simply, the party who carries the burden of proving a contract must establish that an offer to contract was made by one party which offer was accepted by the other party. Again in simple terms, the element of consideration requires each party to have promised to do something on behalf of the other. The requirement of "consideration" has been described as " the price each is paying for the other's bargain, that is, entry into the contract."[2] The third component - intention to enter legal relations - requires that each of the parties intend at the time of entering into the contract to be legally bound by it, that is, "each contemplates that it should be enforceable in a court of law."[3]

45. In order to establish the existence of an agreement between the parties it is incumbent upon the plaintiff to prove the presence of each of the above contractual elements.

46. Beginning with the letter of 16 May 1996 from the plaintiff's solicitors to the defendant, that correspondence merely serves as a notification of the plaintiff's wish to apply for reimbursement of her medical expenses and loss of earnings pursuant to the provisions of the Work Health Act (NT). The letter also provided details of the accident, the nature of the plaintiff's disability and particulars relating to loss of earnings, medical expenses and associated expenses. The last two paragraphs of that letter read as follows:

"We would be obliged if you would give this matter your urgent consideration and revert to us any queries which you may have. We would be glad to answer any questions arising or provide you with any other vouchers or receipts which you consider necessary.

We look forward to hearing from you."

47. The contents of the letter of 16 May 1996 clearly do not go to the establishment of any of the essential elements of a contract.

48. Turning to the letter of 3 July 1996 from Mildrens (the solicitors for the defendant) to the plaintiff's solicitors, the second paragraph of that letter sets the general tenor of the correspondence:

"We have been instructed by our client to advise on their position in relation to this matter and any quantum that may apply."

49. The third and fourth paragraphs of the letter read as follows:

"At the outset, we advise our client instructs that it does not dispute the legitimacy of the claim lodged by your client nor does it dispute that the medical condition stems from your client's original accident at Ayers Rock on 21 August 1994.

However, the basis for your client's claim is not as straightforward and to that end, we have provided you with a fairly exhaustive review of the relevant sections of the Work Health Act of the Northern Territory, which govern this matter."

50. The letter then goes on to explain in substantial detail the plaintiff's entitlements from the defendant's perspective, having due regard to the provisions of the Work Health Act.

51. At the foot of page 5 of the letter, after providing a calculation of the plaintiff's entitlements in gross figures, the following two sentences appear:

"Our client will communicate with your client in that regard, prior to payment. Would you kindly advise your client of this issue".

52. At the top of page 6 of the letter the following sentence appears:

"In regard to the medical expenses tendered, we are instructed to advise you our client has no objection to refunding the amount claimed of 600 pounds."

53. In the next paragraph the writer disputes the claim for legal costs made on behalf of the plaintiff.

54. In the third last paragraph of the letter of 3 July 1996 the defendant's solicitors seek advice from the plaintiff's solicitors as to any earnings or benefits received by the plaintiff between 3 March 1995 and 8 January 1996.

55. The penultimate paragraph reads:

"Once this remaining matter is resolved, we shall advise our client to render payment in accordance with the formulae we have outlined above, subject to the above advice."

56. In the final paragraph the writer states:

"We look forward to your response."

57. Nothing in the letter of 3 July 1996 could properly be construed as amounting to an offer made by or on behalf of the defendant. As a matter of law, an offer is an act by which the offeror ( ie the person making the offer) confers on the offeree (ie the person to whom the offer is made) the ability to create a binding agreement between the two of them by performing a further act amounting to an acceptance of the offer. The offer must be accompanied by an intention on the part of the offeror to be legally bound. Usually such intention is to be inferred from the circumstances in which the offer is made: "the general approach of the common law is that an act amounts to an offer when it is made in such circumstances that it can reasonably be inferred that the person performing it was at that moment possessed of the intention to enter into a binding agreement upon it being accepted."[4] An offer "must be an act that leads the offeree reasonably to believe that a power to create a contract is conferred upon him."[5] It is essential that "the offer contain a promise of the performance on the part of the offeror of consideration, that is, the offeror in substance will be promising to do something for the offeree."[6] The offer must also "communicate expressly or by implication, the other material terms of the contract."[7] The statement alleged to be an offer must indicate a willingness by the offeror to be bound without further negotiation as to the terms of the proposed contract.[8] It is also a fundamental principle of contract law that the offer be communicated to the offeree, for without communication of the offer there can be no acceptance of the offer.

58. Where it is alleged that a letter or a chain of correspondence should be read as containing an offer, as is the case here, the correspondence as a whole must be closely examined, and it is not proper to treat a particular phrase or sentence as amounting to an offer if the correspondence as a whole evinces a contrary intention.[9] In that regard, it is important to distinguish an offer from the process of negotiation[10] and a mere invitation to treat[11]: neither amount to an offer. A mere willingness to commence negotiations does not amount to an offer.

59. The contents of the letter of 3 July 1996 do not bear the hallmarks of an offer. Having indicated that the defendant does not dispute the legitimacy of the plaintiff's claim nor dispute the plaintiff's medical condition stemming from the 1994 accident, the letter merely goes on to provide an analysis of the plaintiff's entitlements, as viewed from the defendant's perspective. The letter merely seeks to state the defendant's position regarding the matter, through its solicitors. The clear purpose of the letter is to inform the plaintiff's solicitors, being a firm in Ireland, of the provisions of the Work Health Act (NT) and their client's entitlements thereunder. Not unexpectedly, the Work Health Act (NT) would be a statute unfamiliar to the Irish solicitors. The letter bears all the hallmarks of settlement negotiations, or alternatively an invitation to treat.

60. The calculations set out on pages 4 and 5 of the letter are expressed in gross figures and do not necessarily represent the plaintiff's final entitlement. The figures are liable to adjustment on account of income tax. The amount to which the plaintiff is said to be entitled to remains unsettled. This also indicates that the parties were still engaged in the process of negotiating an agreement.

61. The statement at the top of page 6 of the correspondence to the effect that the defendant has no objection to refunding the amount of 600 pounds on account of medical expenses is nothing more than an admission of liability with respect to that item, and must be viewed in the overall context of the letter.

62. The second paragraph on page 6 is important, and indicative of the general tenor of the correspondence. The defendant disputes liability for legal costs incurred by the plaintiff, and seeks to make its position clear in that regard.

63. The next paragraph is also indicative of the general tenor of the letter. It seeks advice from the plaintiff's solicitors as to any payments or benefits received by the plaintiff which have the potential to affect the plaintiff's entitlement.

64. The letter as a whole, and in particular the penultimate paragraph, reveals that certain aspects of the plaintiff's claim remained to be resolved. The words "we shall advise our client to render payment in accordance with the formulae we have outlined above, subject to the above advice" are significant. The letter clearly shows that the parties were still involved in the process of negotiating an agreement, and those negotiations had not yet crystallised into an offer, in the contractual sense, which was capable of being accepted.

65. There are other legal aspects that militate against the letter of 3 July 1996 being treated as an offer. First, the letter does not evince an intention on the part of the defendant's solicitors (the alleged offeror) to be legally bound. No such intention can be reasonably inferred from the letter of 3 July. Furthermore, the letter was not in such terms as to lead the intended recipient of the letter to reasonably believe that the power to create a legally binding contract was being conferred upon the plaintiff. Secondly, the letter of 3 July 1996 does not contain a promise, on behalf of the defendant, to pay to the plaintiff a settled amount of money. Thirdly, the letter does not communicate other material terms that one would expect to form part of an offer. More than reference to "price" should be included in the offer.[12] As Greig and Davis point out, " In the case of a substantial or complex transaction, whether in terms of its value, or of the multiplicity of issues to be settled between the parties, agreement on the price would not readily be regarded as signifying the intention of the parties to be bound at this stage of the negotiations."[13]

66. The next letter in the chain of correspondence is the letter of 2 August 1996 from the plaintiff's solicitors to the defendant's solicitors. The second paragraph of that correspondence reads as follows:

"We have gone through your calculation and explanation of the applicable law with our client. She has instructed us to accept the amount offered in discharge of her claim. We understand that the compensation for loss of earnings will be subject to taxation."

67. The letter goes on to say:

"In the meantime would you please advise your client and let us know when payment is likely to be received.

As our client is now working in the UK can we ask you please to make payment in pounds sterling drawn on a London bank."

68. Although the plaintiff's solicitors are purporting to accept an offer made by the defendant's solicitors, it does not necessarily follow that the letter of 3 July 1996 amounted to an offer in the strict contractual sense.[14] As stated above, that correspondence did not amount to an offer. The contents and tenor of that letter were not such as to lead the recipient of the letter to reasonably believe that the defendant's solicitors were conferring upon the plaintiff's solicitors the power to create a legally binding contract. There was no offer capable of being accepted. In their letter of 2 August 1996 the plaintiff's solicitors were merely responding to the defendant's solicitors' settlement proposal. At the most the letter of 2 August communicated to the defendant's solicitors the plaintiff's preparedness to accept payment on the basis of the calculations made by the defendant's solicitors. The letter is best treated as an offer on the part of the plaintiff to have her claim settled in accordance with the proposal set out in the letter of 3 July 1996.[15]

69. The letter of 8 August 1996 takes the matter no further. It certainly does not evidence the formation of an agreement between the parties. That correspondence from the defendant's solicitors simply states that a copy of the plaintiff's solicitors' letter of 2 August has been passed on to the defendant. The letter of 13 August also seeks instructions from the defendant as to whether it wishes to be provided with a certificate from the Department of Social Security. The letter goes on to say:

"Alternatively, we have sought instructions whether our client is prepared to accept your assurance, in which case, we shall instruct that they should process your client's claim and make the necessary payment.

Our client's attention has been drawn to your request that payment should be made in pounds sterling, drawn on a London bank."

70. Those two paragraphs of the letter are merely indicative of the closing stages of settlement negotiations. But there is as yet no acceptance of the offer to settle contained in the plaintiff's solicitors' letter dated 2 August 1996.

71. The letter dated 28 August 1996 from the plaintiff's solicitors to the defendant's solicitors reads as follows:

"Thank you for your letter of the 8 of August 1996. In the meantime the enclosed certificate arrived from the Department of Social Security confirming that our client did not apply for or receive any social welfare benefit during the relevant period.

Please now advise your principals to proceed as agreed and we will await payment of the claim in due course."

72. The words "as agreed" in the last sentence do not necessarily establish the existence of a concluded agreement. It is the substance of the communications between the parties that matters. The letter of 28 August 1996 does no more than reflect the ongoing settlement negotiations between the parties.

73. The next letter in the chain of correspondence is the letter dated 29 August 1996 from the defendant's solicitors to the plaintiff's solicitors. The last two paragraphs of that letter read as follows:

"We wish to advise that this documentation (ie the attached certificate from Social Welfare Services) has been forwarded to our client with a request that they proceed to attend to the claim of your client as advised by ourselves.

We therefore anticipate that any future communication between our client and yourselves and your client will be directly from the MMI Insurance Company."

74. Once again this correspondence is indicative of the settlement process.

75. In their letter of 25 September 1996 addressed to MMI Insurance the plaintiff's solicitors stated:

" We understand from your solicitors that the claim is now agreed and we would be obliged if you would arrange to forward payment at your earliest convenience. As our client is now residing in the UK we would be obliged if you could forward payment in sterling, drawn on a London bank."

76. The plaintiff's solicitors' understanding that the claim is "now agreed" cannot stand up in light of the objective circumstances.

77. The letter dated 15 October 1996 from the plaintiff's solicitors to the defendant's solicitors amounts only to an inquiry into the progress of the plaintiff's claim.

78. In their letter of 16 October 1996 addressed to the plaintiff's solicitors the defendant's solicitors state:

"As requested, we advise that we have spoken to the claims manager at MMI and advised him of your concerns. We are instructed to extend our client's apologies for the delay and to advise that the matter is currently in hand and that our client expects to have finalised their attention to your matter by the end of this week.

We further advise that a copy of your facsimile letter and our response has been forwarded to our client with a request that they liaise directly with yourselves at their earliest possible convenience. If you feel that we can be of any further assistance, please do not hesitate to contact us."

79. This is not evidence of a concluded agreement between the parties. It merely affirms the ongoing settlement negotiations between the parties.

80. The letter dated 18 November 1996 from the plaintiff's solicitors to the defendant's solicitors reads as follows:

"Unfortunately we still have not heard from the claims manager at MMI and we would be obliged if you would contact him about this in case it has been overlooked. As we understand it the claim has been agreed and it only remains for payment to be made."

81. This correspondence takes the matter no further. The letter is self-serving in so far as it asserts the existence of an agreement, and all the surrounding circumstances do not support the existence of a concluded agreement between the parties.

82. The defendant's solicitors' letter to the plaintiff's solicitors of 26 November 1996 merely relates to the present position regarding resolution of the plaintiff's claim. It does not support the existence of an antecedent agreement.

83. The letter of 9 December 1996 from the plaintiff's solicitors to MMI Insurance is again self-serving and does not evidence the existence of an agreement between the parties.

84. The final letter in the chain of correspondence, namely the letter dated 7 January 1997 from the plaintiff's solicitors to MMI Insurance, is a letter of demand threatening legal action. That letter is not proof of an existing agreement between the parties.

85. Viewing the correspondence as a whole, it does not disclose the existence of a concluded agreement. The elements of offer and acceptance are missing. The essential element of consideration is also absent. Consideration is defined as "some benefit moving from the promisee to the promisor or some detriment incurred by the promisee, being in either case, the agreed price of the promisor's promise."[16] Although there is some discussion in the correspondence as to the plaintiff's monetary entitlements under the Work Health Act no clear promise on the part of the defendant to pay a fixed sum to the defendant is discernible in the correspondence. But even if a promise on part of the defendant to pay the defendant a fixed sum of money could be extracted from the chain of correspondence, there was no consideration for that promise. For example there is no reference, or inadequate reference, to the plaintiff releasing the defendant from future liability under the Work Health Act in consideration of monies paid by the defendant to the plaintiff. The sole reference to a discharge of liability - and a passing reference at that - is to be found in the letter of 2 August 1996 from the plaintiff's solicitors. No real discussion is entered into as to the proposed consideration for any promise on the part of the defendant. The requirement of consideration is not adequately dealt with in the communications between the parties. In all the circumstances, the correspondence between the parties fails to prove the presence of consideration. Finally, the series of letters passing between the parties fail to disclose, either expressly or by implication, an intention to create legal relations. First, without consideration there can be no intention to create legal relations. Secondly, the correspondence carries the distinctive flavour of settlement negotiations which did not crystallise into a concluded agreement.

86. The facts of this case also give rise to the issue of privity of contract under the law of agency. A contract made with a third party by an agent in the exercise of his authority is enforceable both by and against the principal. Thus an agent may make a contract for his principal which has the same consequences as if the principal had made it himself.

87. Solicitors and counsel have a general authority to effect a compromise in all matters connected with legal proceedings; and if they act within their apparent authority and the other party has no notice of any limitation on it, the client will be bound. However, in the present case the defendant's solicitors were merely engaging in settlement negotiations and it is clear from the tenor of the correspondence between the parties that that was the full extent of the solicitor's apparent authority. The plaintiff was on notice of the limitation placed on the apparent authority of the defendant's solicitors.

88. However, even if the communications between the parties could be viewed as having resulted in the formation of a contract, any such agreement providing for payment of work health benefits would be unenforceable by reason of the legislative scheme provided for under the Work Health Act (NT).

89. Section 108(1) of the Work Health Act provides as follows:

"Where an agreement is made -

(a) for the payment of an amount of compensation;

(b) for the variation of a weekly payment of compensation; or

(c) in respect of any other matter relating to compensation,

a memorandum of the agreement in the form prescribed by the Rules shall be sent, in the manner prescribed by the Rules, by the employer or worker to the Registrar."

90. Pursuant to subsection (3) the Court shall consider the memorandum and either direct the Registrar to not record the memorandum or record the memorandum on such terms as the Court thinks fit.

91. Pursuant to subsection (6) a "memorandum, on being recorded under subsection (5), is enforceable as if it were a determination of the Court."

92. As Mr Trigg SM observed in Ogilvie & Woolworths (unreported decision of the Work Health Court delivered 6 December 1994) "Section 108 is mandatory.... namely that any agreement which relates to any of the matters the subject of Section 108 (1) (a), (b) or (c) must be dealt with pursuant to the procedures laid down in Section 108 ( and not otherwise)."

93. In the same case Mr Trigg SM went on to say:

"In my view, because of the wording of Section 108(1) in any matter relating to:

(a) the payment of an amount of compensation;

(b) the variation of a weekly payment of compensation; or

(c) any other matter relating to compensation;

the Court has only two options, namely:

(1) where there is no agreement, to hear and determine the application in the ordinary way; and

(2) where there is an agreement ( or consent) to consider such agreement under Section 108 and give the appropriate directions."

94. Section 186A of the Work Health Act reads as follows:

(1) This Act applies notwithstanding anything to the contrary contained in any contract or agreement, whether entered into before or after the commencement of this section.

(2) A contract or agreement which purports to exclude or limit the application of this Act or to exclude or limit the rights or entitlements of a person under this Act is, to that extent null and void.

(3) A person who urges, prevails on, persuades or offers an inducement to another person to enter into a contract or agreement whereby that other person would, but for this section, consent or agree to the application of this Act being excluded or limited in respect of that other person, or to waive or limit that other person's rights, benefits or entitlements under the Act, is guilty of an offence.

Penalty: $5000."

95. Again in Ogilvie & Woolworths Mr Trigg SM said:

"In my view, only agreements which are approved under Section 108 of the Act are binding upon the parties and upon the Court."

The clear purpose behind the legislative scheme is to prevent the compromise of a worker's rights under the Act. (see Ogilvie & Woolworths)

The subject matter of the alleged agreement between the parties clearly relates to the payment of an amount of compensation. Being an agreement of that type, it is not binding upon the parties nor enforceable unless and until it has been approved by the Work Health Court.

The plaintiff seeks to overcome the restrictive provisions of the Work Health Act by relying on an alleged breach of the implied conditions of the alleged agreement.

The plaintiff points to the fundamental and far-reaching principle of "co-operative action" that underpins the law of contract: "a general duty of co-operation is implied in all contracts".[17] There is a line of authority that gives expression to the general duty to facilitate performance: " it is a general rule applicable to every contract that each party agrees, by implication, to do all things as are necessary on his part to enable the other party to have the benefit of the contract."[18]

96. However, there are limitations on this principle of mutual co-operation. The general duty to facilitate performance is confined to "acts by reference to the benefit of the contract"[19] and further restricted to what is "necessary for the realisation of the benefit."[20]

97. The general duty of co-operation includes the following sub duties: (1) a duty not to impair basis of a contract;[21] (2) a duty to comply with reasonable requests;[22] (3) a duty to act in accordance with contract objective;[23] (4) a duty to apply care and skill.[24]

98. Consonant with the principle of mutual co-operation, the plaintiff seeks to rely upon an implied term to the effect that the parties were to apply to the Work Health Court to give legal effect to the agreement struck between the parties. However, the process of implying terms into contracts is governed by some fundamental principles. First, the implied term sough to be introduced into the contract must be consistent with the contract as otherwise expressed. The courts "will not undertake the reconstruction of the contract in a manner beyond the reasonable contemplation of the parties".[25] Secondly, there is an overriding presumption in every contract that the parties do not intend to break the law: "where a contract can be performed in accordance with law or in breach of it, the presumption is against the latter, and in favour of the former, so that, for an executory contract to be declared void, it would be necessary to establish the existence of the necessary intent to perform the contract in breach of the law (see Hutchinson v Scott (1905) 3 CLR 359 at 368-369).[26]

99. In my view, a close and careful examination of the correspondence between the parties shows that the parties did not contemplate the agreement being approved by the Work Health Act. The defendant's solicitors painstakingly explained the operations of the Work Health Act to the plaintiff's Irish solicitors and yet made no reference to the approval provisions of the Work Health Act. The overall tenor of the closing stages of the correspondence indicates that the insurer was henceforth to deal with the plaintiff's solicitors (who, in all probability, would not have been aware of the legislative scheme for approval of agreements) and payment was to be made directly by the insurer to the plaintiff's solicitors. Implied terms give effect to the presumed intention of the parties. The process of implying a term into a contract involves not so much a matter of supplying an additional term but a matter of "more fully expressing the admitted intentions" of the parties.[27] Implied terms are terms which "must be read into the contract, because they represent a mere spelling out of the parties' admitted obligations".[28]

100. The chain of correspondence between the parties does not evince an "admitted intention" to apply to the Work Health Court to have the alleged agreement approved nor does it reveal an acknowledgment of the statutory obligations imposed on the parties by the Work Health Act. Neither party, in particular the plaintiff, took any steps towards having the agreement approved. At no time did the plaintiff seek the co-operation of the defendant namely, request the defendant to approach the Court for approval of the agreement. Quite to the contrary, the communications between the parties evince an intention to perform the alleged contract in breach of the Work Health Act.

101. However, even if an implied term, in the terms contended for by the plaintiff, could be read into the agreement, that would not assist the plaintiff because the legislative scheme established by the Work Health Act applies to all agreements, whether executed [29] or of an executory nature. An agreement between parties to apply to the Work Health Court to have an agreement to pay compensation approved is as unenforceable as an unapproved agreement to pay compensation. A party can only rely upon such contractual rights given to it under an agreement to pay compensation when the agreement has been approved by the Work Health Court. In the present case, a contractual right in the plaintiff to compel the defendant to submit the alleged agreement for approval by the Work Health Court cannot be enforced because the agreement (including a term that the parties will approach the Work Health Court for approval of the agreement) is unenforceable unless or until it has court approval.

102. The plaintiff seeks an order for specific performance in the following terms:

" The defendant within.... days pursuant to its subrogated rights, do all acts and take all steps, in the name of the insured, the Ayres Rock Resort, to seek the approval of the Work Health Court, in accordance with Section 108 of the Work Health Act, to the agreement entered into between the defendant and the plaintiff on......."

103. There is a legal impediment to the plaintiff obtaining such an order for a specific performance. Equity will not enforce an agreement which is not binding upon the parties and which is not enforceable. Assuming that there was, in the present case, an agreement between the parties containing an implied term that the parties were to approach the Court to seek approval of the agreement, such agreement is unenforceable by reason of Section 108 of the Work Health Act and therefore not susceptible to an order for specific performance.

104. As counsel for the defendant submits:

" Any attempt to provide specific performance would acknowledge that the agreement was enforceable which is contrary to Ogilvie v Woolworths. Only after approval under Section 108 could the court make any order, including specific performance, to enforce the agreement."[30]

105. There is a further bar to the plaintiff obtaining order an order for specific performance. To obtain specific performance, a party must prove that he or she has performed, or is ready, willing and able to perform his or her obligations under the contract. In the present case, the plaintiff has failed to discharge that burden of proof. It was always open to the plaintiff to initiate the process of getting the alleged agreement before the Work Health Court for approval pursuant to Section 108 of the Act. The plaintiff has taken no such steps. Nor has the plaintiff indicated, in any way whatsoever, her readiness, willingness and ability to comply with the alleged implied term ( of the agreement) that the parties would seek the Court's approval of the agreement reached between the parties. Therefore, even if he plaintiff were able to overcome the primary bar to an order for specific performance referred to above, the plaintiff has not shown her readiness, willingness and ability to perform her obligations under the alleged agreement.

ESTOPPEL

106. In the alternative to breach of contract, the plaintiff seeks relief by drawing upon the doctrine of promissory estoppel. It is noted, however, that counsel for the plaintiff, in his submissions, relied upon the general doctrine of estoppel which embraces four types of estoppel: estoppel in pais, estoppel by representation, promissory estoppel and equitable estoppel. Arguably, the pleadings preclude the plaintiff from relying upon species of estoppel, other than promissory estoppel. However, given the modern tendency towards unification of the doctrine of estoppel[31], I am prepared to determine the plaintiff's case by reference to all heads of estoppel.

ESTOPPEL IN PAIS

107. Estoppel in pais is founded on the principle that "the law should not permit an unjust departure by a party from an assumption of fact that the first party has caused another party to adopt or accept for the purpose of their legal relations."[32] There are a number of prerequisites for the operation of the doctrine: (1) the party relying upon the doctrine must show that he or she has acted or refrained from acting upon the assumed fact, and that he or she would incur a detriment if the first party were permitted to assert contrary rights inconsistent with the assumption of fact and (2) the party relying upon the doctrine must show that the first party played such a part in the adoption of the assumption by the other party that it would be unfair or unjust if the first party was left free to ignore it. Evans mentions the multifarious ways in which that critical part may be played:

"1. The assumption may form the conventional basis upon which the parties entered into contractual or mutual relations; that is, a bailee will be precluded from denying his bailor's title to the goods bailed.

2. The party estopped may have exercised rights against the other which would only exist if the assumption was correct; an insurer who had retained possession of the salvage was estopped from denying that the insurer had made a valid claim: Yorkshire Insurance v Craine (1922) 2 AC 541.

3. Knowing the mistake under which the other was labouring, one refrained from correcting the other when it was the first party's duty to do so. In Waltons Stores ( Interstate) Ltd v Maher (1986) 5 NSWLR 407, in the New South Wales Court of Appeal, which treated the case as one involving common law estoppel on the basis that the representation was one of existing fact ( that is, that a valid lease had come into existence), the appellant was held to be estopped from denying that a lease had been concluded when it knew that the respondents had proceeded with demolition and construction work on the site to be leased on the assumption that the lease had been finalised and failed to inform them that it had decided not to proceed with the lease.

4. The imprudence of the party said to be estopped, where care was required of that party, was a proximate cause of the other party adopting and acting upon the assumption.

5. One directly made representations upon which the other party founded the assumption."[33]

108. It would appear that it is not necessary for the representation leading to the assumption to be one of fact.[34]

109. In Grundt v Great Boulder Pty Gold Mines Ltd ( 1937) 59 CLR 641 Dixon J made no distinction between the operation of estoppel at law and estoppel in equity and apparently proceeded on the basis of the existence of a general doctrine of estoppel by conduct (or estoppel in pais) traversing both jurisdictions. Dixon J did not confine estoppel in pais to one arising from representations, or assumptions, as to existing facts.

110. In the Court of Appeal decision in Waltons v Maher Priestley J A listed the following considerations as being relevant to the application of the doctrine of estoppel in pais:

(a) Did the plaintiff adopt a mistaken assumption of fact which the defendant had caused them both to adopt or accept for the purpose of their legal relations?

(b) Would departure by the defendant from that assumption operate to the plaintiff's detriment?

(c) Did the defendant know of the mistake laboured under by the plaintiff?

(d) Did the defendant refrain from correcting the plaintiff when it was the defendant's duty to do so?[35]

ESTOPPEL BY REPRESENTATION

111. According to this common law doctrine which evolved during the first half of the nineteenth century in the Court of Chancery a person, who, by a representation of fact, led another to alter his or her position, is prevented from denying that the fact is other than as represented. The representations did not have to be supported by consideration and could be representations of fact or of intention and did not need to be made fraudulently.[36] The relief afforded by the doctrine of estoppel by representation usually required the representor to honour his or her representation.

PROMISSORY ESTOPPEL

112. The genesis of this doctrine is to be found in the decision of Lord Denning in Central London Property Trust Ltd v High Trees House Ltd ( 1947) 1 KB 130. The doctrine of promissory estoppel was sanctioned by the High Court in Legione v Hatley ( 1983) 152 CLR 406. As originally formulated the doctrine provided that "where parties to some subsisting legal relationship, which might arise from contract, statute or some fiduciary obligation, enter into some course of negotiation or other conduct whereby one gives the other an assurance that strict legal rights will not be enforced, and the other acts on that assurance, the first party will be estopped from reverting to the original position, at least not without adequate notice provided that such a resumption is still possible, where the second party has placed himself or herself in a position in which he or she will suffer material disadvantage should departure be allowed from the assurances given."[37] The doctrine of promissory estoppel, along with proprietary estoppel, has now been subsumed under the general doctrine of equitable estoppel.[38]

EQUITABLE ESTOPPEL

113. The general doctrine of equitable estoppel in Australia was established by the High Court in Waltons Stores ( Interstate) Ltd v Maher ( 1988) 164 CLR 387.

114. To establish equitable estoppel Brennan J said at 428-9 that the plaintiff must prove that:

a. He assumed a particular legal relationship existed, or would come to exist, between himself and the defendant;

b. The defendant induced the plaintiff to adopt that assumption or expectation;

c. The plaintiff acted or abstained from acting on the faith of the assumption or expectation;

d. The defendant knew of the plaintiff's action, or intended the plaintiff to act in such a way;

e. The plaintiff's action or inaction will cause him or her to suffer detriment if the assumption or expectation is not fulfilled;

f. The defendant has failed to act to avoid the detriment by fulfilling the expectation or otherwise.

115. Mason CJ and Wilson J viewed the doctrine of equitable estoppel as being based on relief against unconscionable conduct, rather than the honouring of representations: "equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has played such a part in the adoption of the assumption that it would be unconscionable of that other party to ignore the assumption."[39]

116. The doctrine of equitable estoppel has been further considered in a number of subsequent cases. [40]

117. Evans provides a useful summation of the elements of equitable estoppel based on the current state of authorities:

" (a) One party must adopt an assumption that a certain state of affairs exists or will come into existence; that state of affairs can be legal or factual, present or future. It is submitted that this assumption must be reasonably clear or certain. In Legione v Hatley ( 1983) 152 CLR 406 at 435-6, Mason and Deane JJ stated that it has long been recognised that a representation must be clear before it can found an estoppel in pais, and that the same principle must apply to promissory estoppel. However, that does not mean that all the terms of any proposed transaction must be set in concrete. In Austotel Pty Ltd v Franklin's Self Serve Stores Pty Ltd (1989) 16 NSWLR 582 at 604, Priestley JA noted the distinction between cases like Waltons v Maher where all the terms of the proposed contract had been agreed and cases like Plimmer v City of Wellington (1884) LR 9 App Cas 699 where, as he put it:

".... a plaintiff , despite being unable to point to some agreement which, although unenforceable, contains precise terms describing what he expected from the defendant, has nevertheless been held to be entitled to equitable relief which may be a proprietary kind."

(b) That party acts or refrains from acting on the faith of that assumption in such a way that he or she would suffer detriment if the assumption was denied.

(c) A second party, who possesses some legal rights which might act as a bar to the fulfilment of the assumption, has played a role in the adoption by the first of the relevant assumption, either actively, by encouraging the first party in adopting that belief, or passively, by acquiescing with knowledge in the first party's actions on the faith of the assumption.

(d) It is not essential that the second party be aware of its legal rights which run contrary to the assumption held by the first: Linter Group v Goldberg ( 1992) 7 ACSR 580 at 613.

(e) In all the circumstances it would be unconscionable for the second party to insist on his or her strict legal rights and to deny the assumption.

(f) If all those elements are satisfied an equity arises in favour of the first party which can be satisfied by the imposition of relief affording the minimum equity required to do justice to the first party in the circumstances, which may not mean giving effect to the assumption in its entirety."[41]

118. Waltons Stores represents a significant shift in thinking about the nature of the doctrine of estoppel. In that case the High Court appears to have held that the notion of estoppel by conduct can operate to create a liability in contract, or one akin to it, although there is no contract in the first place. The decision has far far-reaching implications. It stresses the need for parties engaged in pre-contractual negotiations to exercise great caution to avoid creating an estoppel situation through a representation or other conduct.

119. Waltons Stores has changed the conventional view about the effect of the doctrine of estoppel. The traditional view has been that the "estoppels" may only be used in a defensive manner, and not to create a new remedy. Hence the view that estoppel can only be used as a shield and not as a sword. Waltons case appears to have disturbed the traditional view by acknowledging in that case the creation of a contractual liability or something akin to it, notwithstanding no contract ever existed between the parties.

120. Equitable estoppel, especially in its promissory aspect, requires in principle the availability of a broad spectrum of remedies, including damages.[42] The only justifiable limit on the range of remedies is that which the justice of the case requires. [43] The remedy to be granted in a particular case will be that which is necessary to prevent detriment resulting from the unconscionable conduct of the other party.[44] The appropriate remedy is often described as the minimum equity to do justice to the plaintiff.[45]

121. In estoppel cases the remedy is directed at eliminating the detriment. This goal may or may not be achieved by enforcing a promise or making good a representation. As Brennan J said in Waltons Stores ( at 427):

" The object of the principle can be seen to be the avoidance of.....detriment and the satisfaction of the equity calls for the enforcement of a promise, only as a means of avoiding the detriment and only to the extent necessary to achieve that object. So regarded, equitable estoppel does not elevate non-contractual promises to the level of contractual promises and the doctrine of consideration is not blown away by a side -wind."

122. Viewed in this way, the doctrine of estoppel not merely focuses upon the enforcement of promises. The minimum equity to do justice may be achieved by an award of damages or an injunction or even the granting of a lien.

THE APPLICATION OF THE DOCTRINE OF ESTOPPEL TO THE FACTS OF THE CASE

123. In my opinion the doctrine of estoppel cannot afford the plaintiff a remedy in the present case.

124. In the first place, the evidence is not sufficient to establish the existence of a clear and unequivocal promise or a representation to pay workers compensation to the plaintiff, a promise or representation being the cornerstone of all the "estoppels".[46]

125. Secondly, the plaintiff has failed to establish a relevant detriment. As stated above the object of the doctrine of estoppel is the avoidance of detriment. The plaintiff had a right before August 1998 to pursue her claim in the Work Health Court. That right continued up until January 1999. It remains open to the Plaintiff to seek an extension of time pursuant to Section 182 of the Work Health Act. It would seem that on the available evidence the Plaintiff would have reasonable prospects of obtaining an extension of time within which to commence proceedings under the Work Heath Act. For reasons unknown, the plaintiff did not seek to pursue her work health claim when it became obvious that the negotiations with the insurer had broken down. Nor has the plaintiff taken steps to bring an application under Section 182 of the Work Health Act. In my opinion it cannot be said that the plaintiff has suffered a detriment as a result of the defendant's conduct (assuming that conduct was actionable). Any conceivable detriment could not arise until such time as the plaintiff has made an application for an extension of time within which to bring proceedings and the application has been refused. But at this point the plaintiff has made no such application to the Work Health Court. In this case there is no detriment that is required to be eliminated.

126. Thirdly, assuming that the preconditions for the operation of the doctrine of estoppel have been satisfied, it would not be appropriate for this Court to grant the plaintiff relief either in the form of damages, an order for specific performance or an injunction.

127. The doctrine of estoppel, in its modern form, creates a contractual liability, or something akin to it. Accordingly, there would appear to be no theoretical bar to a defendant raising and relying upon illegality in answer to a cause of action based on equitable estoppel.[47] On the facts of the present case the arrangement between the parties did not comply with provisions of the Work Health Act governing the approval of agreements to pay workers compensation. In my opinion, it would, in any event, be contrary to public policy to grant the plaintiff relief in the circumstances of this case.

128. It would be inappropriate for this Court to award damages to the plaintiff because to do so would usurp the jurisdiction of the Work Health Court. Awards of workers compensation and the enforcement of agreements to pay compensation are within the exclusive province of the Work Health Court.

129. For similar reasons, it would be inappropriate for the Local Court to grant the plaintiff equitable relief either by way of an order for specific performance or mandatory injunction.[48] Such relief remains in the exclusive domain of the Work Health Court.[49] As counsel for the defendant put it:

" Specific performance would also lead to fundamental jurisdictional problems. A plaintiff should not be permitted to apply to another court to enforce rights under the Work Health Act and which are only to be determined by the Work Health Court. This would mean that a party can go to the Local Court for orders that a party comply with provisions relating to various other jurisdictions eg Federal Court, MACA etc."

MISREPRESENTATION

130. Misrepresentation can vitiate contractual assent. A contract is voidable for misrepresentation if the representor has made a misrepresentation of fact which has induced the representee to enter into the contract.

131. The essential elements are (1) there must be a representation of fact; (2) the representation of fact must be false and (3) the representation of fact must have induced the representee to enter into the contract.

132. In my opinion, the evidence does not establish the elements of misrepresentation. The plaintiff asserts that the defendant's silence constituted a misrepresentation as it distorted the positive representation of the agreement being in place and /or of the agreed sum being paid. In my opinion the evidence does not support a finding that the defendant made a representation of fact in those terms. Nor am I satisfied that the defendant made a relevant representation of fact by positive conduct. More significantly, the evidence does not establish the existence of a contract, which is at the core of the type of relief being sought by the plaintiff. Accordingly the element of inducement (to enter into a contract) is absent.

133. Even if the evidence established the existence of an agreement between the parties, and all of the other preconditions for misrepresentation were satisfied, the plaintiff must surmount the hurdle that any agreement for the payment of workers compensation must comply with the provisions of the Work Health Act in order to be enforceable. In the present case the plaintiff has elected to affirm the agreement and sue for damages with respect to same rather than to rescind the agreement and issue further process under the Work Health Act.[50] Due to the unenforceability of a contract to pay compensation which lacks the approval of the Work Health Act, the plaintiff's action based on misrepresentation could not possibly succeed.

THE TRADE PRACTICES ACT AND CONSUMER AFFAIRS AND FAIR TRADING ACT

134. In the alternative the plaintiff seeks to rely upon a breach of Section 52 of the Trade Practices Act. That section provides:

" A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

135. In Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 348 Fox J said:

" Section 52 is a comprehensive provision of wide impact, which does not adopt the language of any common law cause of action. It does not purport to create liability at all; rather it establishes a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under general law. The possible width of its operation and the fact that it may overlap other sections of Div 1 of Pt V is recognised by subs 2. In my view effect should be given to the ordinary meaning of the words used. They should not be qualified or (if it be possible) expanded, by reference to established common law principles of liability. At the same time, known concepts, such as those concerning the torts of deceit and passing off and the analyses made of them over the years, may prove helpful in deciding a case under Section 52(1). It does not matter that a representation constituting `conduct' relates to a future event, or that what is said may not amount to a warranty. The view has not been taken that `conduct' necessarily involves a continuing course of conduct, or repeated events, or of conduct known to the public or a group of the public.

........Intention is not a necessary ingredient.......The tort is more objective, but it is not precisely correct to apply the concept of the hypothetical reasonable man. One looks to the audience, or the relevant part of it, and, eccentricities and absurdities aside, asks whether the conduct complained of was to them misleading or deceptive, but the question is not simply whether they (or he) were (or was) misled. Whether the conduct was misleading or deceptive is a matter for the court........Doubtless, the audience to be considered can be classified as `consumers'. Conduct will not mislead or deceive a person having a conscious awareness of the true facts or correct information."

136. The meaning of "misleading or deceptive conduct" was further explored by Lockhart J in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 at 93:

" Misleading or deceptive conduct generally consists of misrepresentations, whether express or by silence; but it is erroneous to approach Section 52 on the assumption that its application is confined exclusively to circumstances which constitute some form of representation. The section is expressed briefly, indeed tersely, in plain and simple words...... There is no need or warrant to search for other words to replace those used in the section itself. Dictionaries, one's own knowledge of the developing English language and ordinary experience are useful touchstones, but ultimately in each case it is necessary to examine the conduct, whether representational in character or not, and ask the question whether the impugned conduct of its nature constitutes misleading or deceptive conduct."

137. As to the ambit of Section 52 the High Court had this to say in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594:

" The section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it ( or those whose interest it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of course, bear a trading or commercial character."

138. The applicable principles concerning Section 52 of the Trade Practices Act were discussed in Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994 at 50,950:

" 1. For the conduct to be misleading or deceptive the conduct must convey in all circumstances of the case a misrepresentation........[51].

2. There will be no contravention unless error or misconception results from the conduct of the corporation and not from any other circumstances for which the corporation is not responsible.

3. Conduct will be likely to mislead or deceive if there is a `real or not remote chance or possibility' of misleading or deception regardless of whether it is more than 50%The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the court must determine for itself. Hence, evidence that persons in the relevant class have been misled will, although admissible, not be determinative. In some cases, however, such evidence will be very persuasive

4. Conduct of a corporation causing mere confusion or uncertainty in the minds of the public is not necessarily co-extensive with misleading or deceptive conduct .Since actual deception need not be shown the court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived.

5. Section 52 is not confined to conduct which is intended to mislead or deceive and a corporation which acts honestly and reasonably may nonetheless engage in conduct that is likely to mislead or deceive....."

139. Whether particular conduct is misleading or deceptive is always a question of fact. That question is resolved by having regard to the evidence as to the alleged conduct and all the surrounding circumstances. [52]

140. A number of authorities have dealt with the meaning of "misleading" and "deceptive". They are conveniently summarised in Miller's Annotated Trade Practices Act 21st ed at 341 -342:

" In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd ( 1982) 149 CLR 191 at 198...... Gibbs CJ said:

` The words of s 52 require the court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive. Those words are on any view tautologous. One meaning which the words `mislead' and `deceive' share in common is `to lead into error'. If the word `deceptive' in s52 stood alone, it would be a question whether it was used in a bad sense, with a connotation of craft or overreaching, but `misleading' carries no such flavour, and the use of that word appears to render `deceptive' redundant.'

141. In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd ( 1978) 140 CLR........ Stephen J said:

`In determining the meaning of `misleading or deceptive' in s52(1).... the law which has developed around the tort of passing off.... may not always provide a safe guide. However, the long experience of the courts in that field should not be disregarded; some principles which have been developed appear equally applicable to s52(1).... No doubt the meaning of the statutory prohibition which s52(1) enunciates must be gained from the terms of the subsection itself; but nothing in these terms suggests that a statement made which is literally true... may not at the same time be misleading and deceptive.'

142. In Re Credit Tribunal (SA); Ex parte GMAC (1977) 137 CLR 545 at 561 the Court said:

`Misleading' is a word which is capable of expressing various shades of meaning, sometimes signifying that which is subjectively misleading and at other times that which is objectively misleading. Its meaning therefore is apt to be influenced, indeed decisively influenced, by the context in which it is found. Here the setting in which s52(1) appears is shown by the headings `Part V - Consumer Protection' and `Division 1 - Unfair Practices'. In this context the prohibition contained in the subsection emerges as an important general prohibition against a corporation in the course of trade or commerce engaging in a form of conduct, a trade practice, which is unfair. The unexpressed assumption which underlies the prohibition is that the conduct so enjoined is not conduct which the corporation is required to engage by, or under the compulsion of, some other law enacted in the interests of consumers.'

143. In Calsil Ltd v TVW Enterprises Ltd (1984) ATPR 40-451, the Court considered, without deciding, whether s 52 comprehends conduct which induces in the mind of a person aware of that conduct a belief which is erroneous by inducing psychological processes in the mind of that person."

144. The provisions of Section 52 are not confined to the public at large but cover private negotiations between two parties.

145. There is clear authority to the effect that silence may constitute misleading or deceptive conduct where there is a duty to reveal relevant facts.[53]

146. In order to recover damages (Section 82 of the Trade Practices Act[54]) a plaintiff must prove that the loss or damage claimed to have been suffered was by conduct in breach of Section 52. This gives rise to the issue of causation.

147. In Wardley Australia v Western Australia (1992) 175 CLR 514 Mason CJ, Dawson, Guadron and McHugh JJ were of the view that the issue of causation should be resolved by taking up the common law practical or common sense concept of causation discussed by the High Court in March v Stamere (1991) 171 CLR 506, except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act.

148. In March v Stamere the High Court gave clear recognition to the role of policy in questions of causation. There is a discretion to be exercised by the Court under Section 82(1) of the Trade Practices Act in deciding whether a plaintiff is entitled to recover any of the loss or damage suffered.[55]

149. With respect to a breach of Section 52 a plaintiff bears the onus of proving (1) that the alleged representations were made (2) that the representations were misleading or deceptive, (3) that he or she relied on the representations and (4) that he or she has suffered loss or damage by conduct of the defendant which was in contravention of Section 52.

150. In my opinion, the plaintiff's action based on a breach of Section 52 of the Trade Practices Act cannot succeed. The evidence adduced in these proceedings does not establish that the defendant engaged in conduct which was misleading or deceptive or likely to mislead or deceive. The correspondence that passed between the parties was in the nature of settlement negotiations conducted by two firms of solicitors at arm's length. No relevant representations were made or alternatively any that may have been made were neither misleading nor deceptive in nature.

151. But even if the evidence established a breach of Section 52 the plaintiff would have to satisfy the requirement that there be a causal connection between the breach and the loss or damage for which the plaintiff seeks compensation. In my opinion any loss or damage that could be found to have been suffered by the plaintiff[56] is to be wholly attributed to the plaintiff's failure to pursue her claim under the Work Health Act, thereby breaking the chain of causation and barring relief under Section 82 (1) of the Trade Practices Act.

152. Although not specifically pleaded the plaintiff relies upon breaches of the Consumer Affairs and Fair Trading Act, giving rise to a claim for damages pursuant to Section 91 of the Act. In my opinion the evidence does not support a breach of Section 42 of the Consumer Affairs and Fair Trading Act[57] nor a breach of any other provision of the Act dealing with misleading deceptive or false conduct. For the reasons given in relation to the cause of action based on Section 82 of the Consumer Affairs and Fair Trading Act, the plaintiff's claim based on Section 91 of that Act must also fail.

DUTY OF GOOD FAITH

153. The plaintiff relies upon the authority of Gibson v The Parkes District Hospital (1991) 26 NSWLR 1 which is to the effect that a workers compensation insurer and an employer have a duty to act in good faith in the processing of a workers' compensation claim, and a breach of this duty attracts liability for damages in tort.

154. The facts of that case were that the plaintiff commenced an action for damages against Parkes Hospital. By her Statement of Claim she alleged that she was employed by the hospital. The plaintiff alleged that in the course of her employment she sustained an injury. Any liability of the hospital to the plaintiff in respect of her alleged injury was insured by the Government Insurance Office of NSW. The action was defended by both the employer and the insurer.

155. By way of her proposed amended Statement of Claim (the filing of which was subject to the leave of the Court) the plaintiff alleged that the employer and the insurer were each under a duty of care to the plaintiff (who was reliant upon them to do so) to (a) deal fairly and in good faith with the plaintiff in processing and paying her claim under the Workers Compensation Act in respect of her injury and (b) use reasonable care and competence to avoid unnecessary financial hardship or personal distress being caused to the plaintiff by reason of unjustifiable denial, or delay in paying her appropriate compensation under the Workers Compensation Act in respect of her injury. The amended Statement of Claim went on to allege that there was no reasonable basis for denying or delaying payment of the plaintiff's benefits under the Workers Compensation Act as both the employer and the insurer knew or ought to have known. In conclusion the amended Statement of Claim alleged that the both the employer and the insurer failed in their duty in determining and paying the said compensation and failed (1) to deal fairly and in good faith with the plaintiff in processing and paying her claim under the Workers Compensation Act and (2) to use reasonable care and competence to avoid unnecessary financial hardship and personal distress being caused to the plaintiff by reason of unjustifiable denial of or delay in paying her appropriate compensation under the Act.

156. The Master of the Supreme Court of NSW granted leave to the plaintiff to file the amended Statement of Claim. The defendants appealed against the granting of such leave.

157. The issue in Gibson v Parkes District Hospital was whether the law imposes upon an employer and its insurer such duties as alleged by the plaintiff.

158. It was submitted on behalf of the defendants that the plaintiff's cause of action was, in effect, a cause of action based upon the rights of the plaintiff under the Workers Compensation Act and under that Act the Workers Compensation Court had exclusive jurisdiction to deal with all matters of workers compensation. Dealing with this submission Badgery - Parker J said (at 14):

" ...it appears to me that there is no substance in the submission put to the master that the present claim was one entirely within the exclusive jurisdiction of the Compensation Court. The jurisdiction of the Compensation Court is conferred by Section 53G(1) of the Workers Compensation Act 1926 which is in the following terms:

` (1) Subject to Part 1V of the Compensation Court Act 1984, the Court shall have exclusive jurisdiction to examine into, hear and determine all matters and questions arising under this Act.'

It is jurisdiction to determine matters arising under this Act. It is not a jurisdiction in tort. The application before the Master was for leave to plead a cause of action in tort. The case sought to be made by the plaintiff does not raise any question under the Workers Compensation Act 1926, although the provisions of that Act and the obligations cast upon employers and insurers thereby may ultimately be relevant to the question whether a duty of care existed and if so whether it was breached.

The real substance of the issue before the Master and the real substance of the issue now before this Court is whether the tort sought to be alleged in the facts exists in the common law."

159. His Honour then proceeded to deal with the appeal by applying the principles applicable to applications for summary dismissal of an action upon the ground that the cause of action is unknown to the law. [58]

160. After reviewing a number of American authorities[59] pointing to the existence of a tort based on breach of a duty of good faith, his Honour went on to consider two Australian cases which, according to his Honour, adverted to the possible existence of the tort remedy.[60]

Dealing with the issue before him Badgery -Parker J stated ( at 25):

" There can be, in my view, no doubt that the relationship between an employer and its employee in relation to the latter's worker's compensation rights, and the relationship between the employer's workers compensation insurer and an injured employee are both relationships of proximity involving elements of inequality and dependence apt to call for the recognition not only of a duty of care but of a duty of good faith upon the employer and the insurer respectively. Furthermore. the situation is such that should employer and insurer in bad faith reject, underestimate or delay payment of a workers claim for compensation, he or she may suffer consequences which are beyond being relieved by the ultimate successful enforcement of his rights by way of a determination of the Compensation Court....."

At 29 -30 His Honour said:

" I do not find in the existence of detailed and comprehensive provisions for the enforcement of rights under the Workers Compensation Act 1926, and for the control of and disciplinary action against licensed insurers, any reason to conclude that the suggested cause of action in tort for breach of the duty of good faith must be denied. So far as concerns the provisions for enforcement of a claim for benefits under the Act, they deal with an entirely different subject, they compensate losses of a different kind. As to the provisions relating to the conduct of insurers, they are apt to preserve the public interest in the integrity and financial soundness of insurers and the interest of both the community and of individual workers that insurers give prompt and diligent attention to their responsibilities under the Act, and a breach of obligations of diligence, promptitude and good faith may well call into play the disciplinary provisions. But while the fear of such consequences may induce an insurer to act promptly and in good faith in respect of each individual worker's claim, the operation of those provisions offers little or no benefit to the worker who in fact suffers from a breach by the insurer of those obligations. Exhortation, reprimand, punishment, even de-licensing of the insurer provides to the individual worker no compensation for losses of the kind the subject of this action nor any guarantee that such losses will not occur. Nor, as it seems to me, does the existence of a power in the Compensation Court Act 1984 to award interest lead to a conclusion that a tortious remedy should not be recognised. No doubt in many cases no financial damage will be incurred by reason of the insurer's dealing in bad faith, over and above what can be compensated by an award of interest, but such an award would be quite inadequate to compensate for a loss of assets or for bankruptcy, and offers no compensation for distress etc."

161. After not being persuaded that there were policy considerations dictating that the suggested cause of action should not be recognised[61], his Honour went on to say ( 34):

" Having regard to the nature of the relationship between an employer and its insurer on the one hand and an injured worker on the other with the aspects of dependence and vulnerability to which I have referred, and the inadequacy of the statutory scheme to provide a remedy for the kind of damage going beyond the losses for the compensation of which the workers' compensation scheme is devised, I am of the opinion that it is just and reasonable to impose on a workers' compensation insurer and employer a duty to act in good faith in the processing of a worker's compensation claim breach of which should attract liability for damages in tort."

162. His Honour ends with the observation that the duty in question is a true tort duty, not a contractual duty and the existence of a contractual term is not a necessary foundation for it.[62]

163. In conclusion his Honour says ( at 36):

"I am of the opinion that the defendant has not shown that the plaintiff's case is so clearly untenable that if the amendment be allowed it would be liable to be struck out at this stage. I am of the opinion that the plaintiff should have leave to rely upon its proposed amended statement of claim thereby joining the Government Insurance Office of NSW as a second defendant in the proceedings".

164. A different view as to the existence of the tort remedy based on breach of duty to act in good faith was taken by McDonald J in Gimson v Victorian Workcover Authority and Anor (1995) 1 VR 209.

165. The facts in this case were that the plaintiff commenced proceedings for damages alleging that following his application for compensation under the Accident Compensation Act 1985 for an employment injury, he had suffered further injury from the very process of administration and investigation of the claim for compensation. The Statement of Claim alleged that each of the defendants owed him a duty to deal fairly and in good faith with him in processing and paying the claim. Each defendant denied it owed to the plaintiff the duty alleged and argued that the Statement of Claim did not disclose a cause of action. The Master of the Supreme Court dismissed the proceedings against each defendant. On appeal the plaintiff sought leave to amend the Statement of Claim to allege, inter alia, that the defendants owed the plaintiff a duty to take reasonable care to avoid doing anything associated with the claim that would be likely to cause injury to the plaintiff.

166. McDonald J held that in so far as the plaintiff's claim relied upon the allegation that the defendants owed him a duty to act in good faith it had no good foundation in law, and accordingly disclosed no cause of action. His Honour also held that the provisions of the Accident Compensation Act did not support the conclusion that there existed the requisite relationship of proximity to give rise to a duty on the part of the defendants to exercise reasonable care to avoid doing anything in processing the plaintiff's compensation claim that would be likely to injure him. Accordingly, the proposed amendment based on a duty to take reasonable care was disallowed on the grounds that it had no foundation in law.

167. McDonald J (at 219) noted the plaintiff's submission that the alleged duty to deal in good faith in processing the claim and to exercise reasonable care to avoid injury to the plaintiff were duties which arose at common law and/or by reason of the provisions of the Accident Compensation Act. His Honour observed that no provision of the Act specifically imposed either of such duties on the defendants.

168. Dealing with the common law aspect his Honour stated (at 220 - 223):

"In so far as it is contended that there exists at common law a duty to act fairly and in good faith to another in such circumstances as are relevant to the plaintiff's claim, the breach of which gives rise to an action in tort, there is no Australian or English authority which conclusively supports such a proposition. However, in Gibson v Parkes District Hospital (1991) 26 NSWLR 9 Badgery -Parker J refused to dismiss summarily a claim against a workers compensation insurer of the plaintiff's employer which was founded on the allegation that the insurer had breached a duty owed by it to act in good faith in processing a workers compensation claim. The scheme of workers compensation applicable in New South Wales and forming the background to that decision was a scheme which compulsorily required employers to insure against liability to pay compensation to injured workers. It was much the same type of scheme as existed in this State before the enactment of the Accident Compensation Act 1985. It was agreed on behalf of the plaintiff on these applications that, by analogy, the decision of Badgery-Parker J in Gibson was applicable to the circumstances of this case and provided reason why this court should not summarily strike out the plaintiff's claim for damages which was reliant upon a breach of a duty of good faith owed by the commission and its agent. In Gibson it was held that the plaintiff's case which was reliant upon the existence of a duty of good faith owed by to him by his employer's insurer could not be categorised as so clearly untenable to warrant the proceedings being struck out.

In Gibson Badgery -Parker J referred to and cited a number of American authorities and academic writings based on those decisions which supported the proposition that in every contract there was an implied covenant of good faith and fair dealing, the breach of which in some circumstances gave rise to an action for damages in tort. One such case was Travelers Insurance Co v Savio 706 P 2d. 1258 (1985) in which the Supreme Court of Colorado recognised an obligation of good faith in processing a workers compensation claim. Badgery- Parker J concluded that the case law of California was that an implied covenant of good faith formed part of every contract and where a special relationship existed between the parties breach of the term gave rise to liability in tort. Again, after referring to a number of authorities relevant to whether there existed a relationship as described by him, to be `so close and direct and involved such features as to make it just and reasonable to impose on the one a duty of care to the other', his Honour said at 25:

` The cases thus discussed dealt specifically with the imposition of a duty of care such as found a cause of action in negligence; but it seems to me that the same approach is proper when one has to consider whether in the circumstances of a particular case there is imposed on one party or the other party a duty of good faith, breach of which is actionable in tort.

There can be, in my view, no doubt that the relationship between an employer and its employee in relation to the latter's workers' compensation rights, and the relationship between the employer's workers' compensation insurer and the injured employee are both relationships of proximity involving elements of inequality and dependence apt to call for the recognition not only of a duty of care but of a duty of good faith upon the employer and the insurer respectively.'

Notwithstanding that his Honour found support for his conclusions in the existence of a relationship of proximity as may give rise to a duty of care, after referring to Hill v Chief Constable of West Yorkshire (1988) QB 60, Coshott v Woollahra Municipal Council (1988) 14 NSWLR 675 and Jones v Department of Employment (1989) QB.1 in which cases the courts denied the existence of a duty of care as existing respectively in the conduct of police investigations, on behalf of council planning officers who were alleged to have not properly and diligently processed a development application and on the part of an adjudication officer in the Department of Employment who had failed to determine correctly the plaintiff's entitlement to unemployment benefits, he distinguished those authorities on the grounds that they dealt with the question of a duty of care and a cause of action in negligence. His Honour drew attention to the fact that the plaintiff in the proceedings before him did not seek a remedy for negligence but rather for a breach of a duty of good faith which he suggested was `more akin to an allegation of misfeasance'.

Although making reference to a number of American authorities which supported the proposition that in every contract there was an implied covenant of good faith and fair dealing the breach of which may give rise to an action in tort.......Badgery - Parker j said at 35:

` In the light of those authorities it is not open to this Court to hold that a contract of insurance (except by virtue of the provisions of s 13 of the Insurance Contract Act 1984 (Cth), not here relevant) contains an implied term that the parties will deal fairly and in good faith. Nor is there in this jurisdiction any general principle by which a duty of good faith is implied in every contract.'

Notwithstanding that statement, with which I agree and which must, to my mind, affect the reliance that may be placed on the American authorities cited by his Honour and notwithstanding that his Honour distinguished Hill, Coshott and Jones for the reasons stated, he nevertheless at 35 stated:

` However, the American insistence that although the duty exists as a contractual term in every contract, the tort arises from the breach of that duty only in the presence of a special relationship supports, in my view, the proposition that the tort may arise where the nature of the relationship brought about by the contract, as distinct from the terms of the contract, is such as to impose a duty to act in good faith. On that basis, the duty is a true tort duty, not a contractual duty and the existence of a contractual term is not a necessary foundation for it.'

Although Gibson is authority which supports the proposition that a contractual relationship may give rise to such a relationship of proximity which imposes on one of the parties to the same a duty to act in good faith to the other which in some circumstances the breach of which may give rise to an action in tort, I am not persuaded by the decision of Badgery -Parker J to reach that conclusion. Further I am unable to conclude that, by analogy, the decision in Gibson is of assistance in determining whether in the circumstances of this case it may be soundly and properly argued that in the absence of any such contractual relationship nevertheless a duty of good faith may arise at common law and be borne by the commission and the second defendant in the circumstances of this case.

In determining whether, on this application, there is any or any sufficient basis in law to support the plaintiff's claim that the defendants owed to him in the circumstances of this case a duty of good faith, the breach of which gives rise to the commission of a tort where damages result, so as to permit the argument as to the existence of such duty to proceed to trial, it is appropriate and instructive to have regard to the decisions in Banque Keyser Ullmann SA at first instance and then on appeal. At first instance (1987) 2 WLR 1300.... Steyn J ... held that the plaintiff bank`s insurer was liable to it in negligence and for breach of the duty uberrimae fide for failing to disclose it the fraud of the plaintiff's agent. He held that the remedy for breach of the duty of utmost good faith was not confined to avoidance of the contract and return of the premium but could include a claim for damages where that was the only effective remedy. He held that in the circumstances the plaintiff was entitled to recover damages. On appeal (1990) 1 QB 665, the Court of Appeal allowed the appeal. It held that by failing to disclose the fraud of the agent the insurers were in breach of their duty of utmost faith owed to the bank. However the court held that the duty of full disclosure being neither contractual, tortious, fiduciary or statutory in character but founded on the jurisdiction originally exercised by the Court of Equity to prevent imposition, did not give rise to a claim in damages. The Court of Appeal further held that the insurers were not liable in negligence. The House of Lords ( 1991) 2 AC 249 confirmed the decision of the Court of Appeal holding that the insurers in the circumstances did not owe a duty of care to the bank. It held further that the loss suffered by the bank was not consequent upon the breach of the duty of disclosure even if the insurer were under such a duty. It is to be noted that Lord Templeton at 280, after stating that he found it unnecessary to consider whether the insurer was under a duty to disclose the misconduct of the agent by reason of the obligation of an insurer to deal with a proposal of insurance with utmost good faith, said:

` it may be helpful to observe that I agree with the Court of Appeal that a breach of the obligation does not sound in damages.'

Lord Jauncey ..at 281 also stated that he agreed with the Court of Appeal's rejection of the proposition that a breach of the duty of disclosure imposed upon a party to a contract uberrimae fide gave rise to a remedy in damages.

Although the views expressed by Lord Templeton and Lord Jauncey are clearly dictum the expression of such views and the judgment of the Court of Appeal does not demonstrate a natural progression or development of the common law to the point where there is recognised to exist a general duty of good faith arising from the sufficiency of a relationship of proximity between the parties, the breach of which would give rise to a claim in damages in tort.

Badgery -Parker J in Gibson was prepared to let the plaintiff's claim in that case progress to trial on the basis that there was a sufficient basis to contend that there exists at common law a general duty of good faith arising from the existence of a relationship of proximity, which relationship may found a general duty of care, the breach of which would give rise to a claim in damages for negligence.

In Jones v Department of Employment the court held that, in general, a government department or officer charged with the making of decisions relating to whether certain payments should be made out of public funds and which decision is subject to a statutory right of appeal owed no duty of care at common law to potential recipients of such payments and that misfeasance apart such potential recipients would be limited to a remedy in public law by way of judicial review or under the appellant procedure of the particular Act - see Glidewell LJ at 22 and Slade LJ at 25.

Again in Coshott v Woollahra Municipal Council (1988) 14 NSWLR 675 Wood J on an application to `strike out' the plaintiff's statement of claim held, when ordering that the statement of claim be struck out, that the council and chief town planner and planning officer did not owe to the plaintiff a common law duty to process a town planning application promptly and diligently. In reaching that conclusion not only did Wood J conclude that no such duty as alleged arose as an incident of a general duty of care in tort but further held that the provisions of the relevant planning Act were inconsistent with there being such general duty of care of the kind contended for by the plaintiff. As pointed out by his Honour that Act contemplated the possibility of development applications not being processed within the periods laid down and provided for that contingency by conferring a deemed refusal accompanied by a right of appeal, and further provided for the withdrawal of the appeal where a later determination was favourable to a party such as the plaintiff preserving that party's position as to costs.

Although these latter two cases are relevant to whether it is recognised at common law that there exists, in the circumstances existing, a general duty at common law, the breach of which may give rise to a claim in damages for negligence, they also support the conclusion, in my view, that the common law does not recognise that there may exist a relationship of proximity or other relationship akin to that existing between the plaintiff and defendants here that would give rise to the duty of one person to act in good faith in their relationship with another, the breach of which would give rise to an action for damages in tort.

If the common law does not in circumstances akin to the present recognise that there exists a general duty of care it would be strange that there has been dormant until now in such circumstances a duty of good faith, the breach of which would give rise to a remedy for damages in tort.

Further, within the particular circumstances of this case and having regard to the provisions of the Act as previously referred to, it is demonstrated that there is no room for there being imposed on the defendants the duty contended for, nor is there any need in the law to recognise the existence of such duty. As referred to, the Act itself provides an appeal procedure where a person may be affected by a decision of the commission or its agent with respect to that person's entitlement to compensation. Further, provision is made for the payment of interest on outstanding weekly payments where a decision to reject an application or reduce weekly payments is set aside on the review. Again by the Act, provision may be made for the payment of a penalty sum to be paid where there has been late payments of weekly payments and where the tribunal reaches the opinion that the commission is responsible for unreasonable delay. The tribunal has jurisdiction to direct that the amount in compensation payable be increased by an amount specified by the tribunal which increase must be paid by the commission to the person entitled to compensation.

Accordingly, the conclusion that I have reached is that the plaintiff's claim in so far as it is reliant upon the allegation that the defendants or one of them owed to the plaintiff a duty to deal fairly and in good faith with him in processing and paying his claim for compensation which duty is alleged to have been breached by one or both of them, has no good foundation in law and discloses no cause of action."

169. McDonald J went on to hold that the amendments sought to be made to plead that each defendant was under a duty to take reasonable care "to avoid doing anything in dealing with the claim that would be likely to injure the plaintiff" had no proper basis in law and therefore should not permitted as they disclosed no cause of action.[63]

170. In Re Zurich Australian Insurance Limited (1999) 2 Qd R 203 Chesterman J questioned the existence of the common law duty of good faith:

" Gibson v Parkes District Hospital (1991) 26 NSWLR 9 contains an extensive review of American authority. The case itself dealt with whether an employee not a party to a contract of insurance may have a right to damages for the insurer's breach of good faith in not processing his employer's claim for indemnity in respect of the employee's claim for worker's compensation. The ruling that the claim was not "so clearly untenable" that it should be struck out does not provide a real basis for confidence that the American concept will take root here."[64]

171. I have concluded, as a result of my review of the authorities, that there was not, as the plaintiff submits, a general duty, on the part of the defendant, to deal fairly and in good faith with the plaintiff in processing and paying her claim for compensation. As to the present state of the law, I prefer the view expressed in Gimson v Victorian Workcover Authority and Zurich Australian Insurance to that expressed in Gibson v Parkes District Hospital.

172. In so far as the plaintiff's claim is based on the breach of a duty to act in good faith the Statement of Claim discloses no cause of action.

Conclusion

As the plaintiff has failed in all causes of action, the Statement of Claim is dismissed.

I will hear the parties on the question of costs.


FOOTNOTES:

[1] See page 1 of the written submissions of counsel for the defendant. Further and detailed submissions as to the non -existence of a contract are to be found at pages 1-2 and 4 of the written submissions.

[2] See Peter Gillies "Concise Contract Law" Federation Press Sydney 1988 at p 7.

[3] Ibid.

[4] Ibid at 14. What a person's intention is in making a proposal is relevant to the question of whether it is capable of being accepted and therefore amounts to an offer. ( See Greig and Davis "The Law of Contract" Law Book Co 1987 at p 254).

[5] Greig and Davis op cit fn 4 at p 254.

[6] Gillies op cit fn 2 at p 12.

[7] Ibid. See Greig and Davis op cit at fn 4, at p 254 where the authors state: " The courts regard an offer as a proposal of terms that is capable of constituting a contract if accepted by the party to whom it is addressed: in the words of Corbin, op cit Vol 1 p 23 an offer `looks forward to an agreement' "

[8] See Lindgren Carter and Harland "Contract Law in Australia"Butterworths 1986 at p 17.

[9] Ibid.

[10] Note the submission made by the defendant's counsel that the material correspondence amounted only to settlement negotiations.

[11] An "invitation to treat" is a request to others to make offers or to engage in negotiations. ( See Lindgren Carter and Harland op cit fn 8 at p 18).

[12] Here ,of course, the amount of money that the defendant was prepared to pay to the defendant had not been finally fixed. The calculations were subject to deduction of income tax and other payments and benefits received by the plaintiff.

[13] See " The Law of Contract" at p 255

[14] See for example Dickinson v Dodds ( 1876) 2 CH D 463 and Wells v Birtchnell ( 1893) 19 VLR 473. These cases show that the use of words such as "agreement" "offer" and "acceptance" do not necessarily prove the existence of same.

[15] If one party has issued an invitation to treat, a reply to that invitation will at most be an offer which the other party may accept or reject at his option. ( See Lindgren Carter and Harland op cit fn 8 at p 18).

[16] See Lindgren Carter and Harland op cit fn at p 75.

[17] See Cheshire and Fifoot's Law of Contract, 6th ed Butterworths 1992 at p 207 para 431.

[18] See Cheshire and Fifoot op cit fn 17 at p 208 para 432 . See also Butt v McDonald (1896) 7 QLJ 68 at 70-71 ( Griffith CJ) adopted in Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (19790 144 CLR 597 at 607 ( Mason J), and in Hospital Products Ltd v United States Surgical Corporation ( 19840 55 ALR 417 at 485 ( Dawson J).

[19] Cheshire and Fifoot op cit fn 17 at p 208 para 432.

[20] Ibid.

[21] A party to a contract made on the footing of a continuance of a state of things may not do anything to destroy or diminish that situation. (See Ansett Transport Industries v Commonwealth (1977) 139 CLR 54 at 61 ( Barwick CJ)

[22] See Secured Income Real Estate (Aust) Pty Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 597.

[23] See Cheshire and Fifoot op cit fn 17 at p 209-210 para 432.

[24] See Australian Racing Drivers Club Ltd v Metcalf ( 1961) 106 CLR 177.

[25] See Gillies op cit fn 2 at 83.

[26] See Greig and Davis op cit fn 4 at 524.

[27] See Gillies op cit fn 2 at 83.

[28] Ibid.

[29] "Executed contracts" are contracts that are already on foot and have been executed as a final expression of obligation of obligation for the parties.

[30] At p 5 of Counsel's written submissions.

[31] See Evans " Outline of Equity and Trusts" 3rd ed Chapter 4 at 75-95.

[32] Ibid.

[33] Op cit fn 33 at 79-80.

[34] See Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 676 where Dixon J said:

" Belief in the correctness of the facts or state of affairs assumed is not always necessary. Parties may adopt as the conventional basis of a transaction between them an assumption which they know to be contrary to the actual state of affairs."

[35] See Evans op cit fn 31 at 80.

[36] Ibid.

[37] Ibid at 86.

[38] Ibid at 87

[39] Ibid at 88.

[40] See Foran v Wight ( 1989) 168 CLR 385; Commonwealth of Australia v Verwayen (1990) 170 CLR 394; Lorimer v State bank of NSW (CA (NSW) 5 July 1991, unreported; S & E Promotions Pty Ltd v Tobin Bros Pty Ltd (1994) 122 ALR 637 and W v G (SC(NSW) 2 February 1995, unreported)

[41] Op cit fn 33 at 94-95.

[42] See Waltons Stores ( Interstate) Ltd v Maher ( 1988) 164 CLR 387.

[43] This proposition was accepted by Brennan J in Waltons Stores (Interstate) Ltd v Maher.

[44] See Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 at 472.

[45] See Crabb v Arun District Court (1976) Ch 179 at 193-4; Waltons Stores at 404.

[46] See Cheshire and Fifoot's " Law of Contract" sixth Austalian edition at para 249 at 161:

" If the basis for an estoppel is a promise, then it must be clear and unambiguous. If there is any doubt on this score then it is very likely that a court will conclude that no promise was ever made. Accordingly, the courts have insisted on the statement being promissory in intent, such intention being judged objectively."

[47] The right to invoke illegality as a ground of relief cannot be released by agreement or lost by conduct raising an estoppel. ( See Cheshire and Fifoot's "Law of Contract" 7th edition para 18.6 at 677).

[48] In this case the plaintiff seeks an order for specific performance in the following terms: " The defendant within...... days, pursuant to its subrogated rights, do all acts and take all steps, in the name of its insured, the Ayers Rock Resort, to seek the approval of the Work Health Court, in accordance with Section 108 of the Work Health Act, to the agreement entered into between the Defendant and the Plaintiff on......." Presumably, in the alternative the Defendant seeks a similar injunction or order for specific performance based on the application of the doctrine of equitable estoppel.

[49] The Work Health Court is invested with equitable jurisdiction pursuant to Section 97 of the Work Health Act. The Court is invested with all the powers of a Local Court or a magistrate under the Local Court Act. The Local Court is invested with equitable jurisdiction.

[50] See Cheshire & Fifoot's Law of Contract at p 370: " The right to damages is independent of and additional to any right to rescind and the fact that the representee rescinds or affirms the contract makes no difference to the right to damages, except in so far as assessment may be different in either case."

In accordance with what was said in Ivanof v Phillip M Levy Pty Ltd (1971) VR 167 at 171 the plaintiff's right to damages, however, may be lost by an election by a party by act or conduct, at any time, whether express or imputed, not to affirm the agreement.

[51] See also Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177

[52] See Miller's Annotated Trade Practices Act 21 ed at 340.

[53] See Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 at 95.

[54] Section 82 provides:

" A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of loss or damage by action against that other person or against any person involved in the contravention.

[55] See Covell and Lupton " Principles of Remedies" para 14.7 at 256-257. The authors go on to say:

"This conclusion is reinforced by the wording in Section 82(1) which provides that a `person who suffers loss or damage... may recover the amount of the loss or damage.'"

[56] It is doubtful whether the plaintiff has, in the proper sense, suffered any real loss or damage.

[57] Section 42 deals with misleading or deceptive conduct generally.

[58] See General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129.

[59] These are dealt with at 17-20.

[60] See Protean (Holdings) Ltd (Receivers and Managers Appointed) v American Home Assurance Co (1986) 4 ANZ Insurance Cases 60-683 at 74- 051 and Settlement Wine Co PtyLtd v National and General Insurance Co Ltd ( 1990) 159 LSJS 84. These cases are reviewed by his Honour at 21-23.

[61] The policy arguments are discussed and ultimately rejected by his Honour at 33-34.

[62] At 35.

[63] See p 224.

[64] At 215.