HER HONOUR: On 29 May 2012, the plaintiff in these proceedings fell from an elevated work platform as a result of which he claims to have suffered serious injuries. By these proceedings, he seeks damages in respect of those alleged injuries.
The proceedings were commenced by statement of claim filed on 27 August 2014 against Coastwide Site Services Pty Ltd, the company for which it was alleged the plaintiff was working on the relevant day. In May 2015, the principal contractor, Leighton Contractors Pty Ltd, was joined as second defendant. In March 2016, the plaintiff joined Hauv's Rigging Pty Limited, an employee of which was alleged to have been supervising the plaintiff at the time of the accident.
On 24 March 2016, Leighton filed a cross-claim against Hauv's. In May 2016, a consent judgment between the plaintiff and Leighton was filed providing, among other things, for a verdict in favour of Leighton. Hauv's subsequently sought to have the consent judgment set aside and, on a later date, filed a cross-claim against Leighton. That is the third cross-claim in the proceedings.
Hauv's application to have the consent judgment set aside was determined by Garling J on 12 October 2017. His Honour determined that the judgment should be set aside and sought to obviate any prejudice to Leighton by the imposition of a regime contemplating that Hauv's would be required to provide security for Leighton's costs of the third cross-claim. It transpired, however, that during the period between when the application was heard and when it was determined, Hauv's had been deregistered on its own application.
That development was discovered after Leighton wrote to Hauv's on 8 November 2017 seeking implementation of the regime for security for costs contemplated in the orders of Garling J. The following day, 9 November 2017, Hauv's insurers' lawyers wrote to all parties informing them of the fact that Hauv's had become deregistered (without the knowledge of the lawyers or the insurers). The letter sought to protect the insurers' position by putting the parties on notice of their interest in the proceedings.
In those unusual circumstances, two notices of motion are before the Court today. The first is an application by the plaintiff filed on 9 January 2018 seeking leave to proceed against the insurers under either s 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) or, alternatively, pursuant to r 6.19 of the Uniform Civil Procedure Rules 2005 (NSW). The second is an application by Leighton naming ASIC as the respondent and seeking an order pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) reinstating Hauv's as a company. The insurers consent to be joined but oppose the reinstatement of the deregistered company.
It is clear enough that a basis is established for reinstating Hauv's to the register. The evidence before the Court includes a copy of the application for voluntary deregistration lodged by Hauv's Rigging Pty Limited on 27 June 2017. The copy in evidence is a copy of a document which was evidently lodged electronically. Assuming it was in fact signed by the sole director of Hauv's, Mr Simon Hauville (as represented on the electronic copy of the document), it contained a representation by him which was plainly incorrect. The form required a declaration that the company was not a party to any legal proceedings. As at the date on which the completed form was filed, 27 June 2017, Garling J was reserved on Hauv's application to set aside the consent judgment between the plaintiff and Leighton. It follows that not only was Hauv's a party to legal proceedings on that date (namely these proceedings) but the Court was reserved on an application brought on Hauv's motion.
The more difficult question, however, is whether there is any utility in reinstating Hauv's to the register now, as sought by Leighton. Following careful submissions and sensible discussion between the parties represented today, Leighton has indicated that it would consent to the deferral of the determination of its motion in the following circumstances. While such an application ought ordinarily be determined promptly, I am satisfied that it is appropriate to accede to that course, for the following reasons.
It has been indicated in correspondence between the parties that the insurers consent to be joined to the proceedings on the following terms:
1. that the insurers be granted leave to file an amended third cross-claim (effectively substituting the insurers for Hauv's);
2. that the insurers agree to provide security to Leighton for the costs of the third cross-claim by way of an undertaking to pay any adverse costs order. That offer is made in circumstances where it is contended and not disputed that the underwriters are Lloyd's syndicates, whose solvency is not in issue; and
3. that Leighton's motion seeking reinstatement of the company be dismissed.
But for one recent development, it might readily have been concluded that the conditions proposed would have addressed Leighton's concerns and obviated the need to have Hauv's reinstated to the company register. Leighton initially expressed a concern, upon learning of the deregistration, that its effect was to deprive Leighton of the benefit of the security for costs contemplated in the orders of Garling J and further that it would lose the opportunity to have the third cross-claim dismissed for want of due dispatch.
The question of security is addressed in the offer proposed by the insurers. The question of the continuation of the cross-claim and any issue of its being dismissed for want of due dispatch, without pre-empting any final determination, would seem to me to be addressed by the chronology I have recited, which reveals that, for the entire period of the existence of the cross-claim initially brought at the suit of Hauv's, there has been little occasion for any procedural step to be taken. For most of that period, the judgment on the application to set aside the consent judgment was reserved.
In any event, the development which may change the complexion of those issues is that the insurers have recently foreshadowed the possibility that indemnity under Hauv's insurance policy might be denied.
In those circumstances (as I understand the position, with the agreement of all parties), it has been proposed on behalf of the insurers that the Court might today grant leave to the plaintiff to join the insurers pursuant to s 5 of the Civil Liability (Third Party Claims Against Insurers) Act, direct the insurers to file a defence within 28 days and bring the matter back immediately after the 28-day period so that, if indemnity has been denied, the Court could then consider making the order reinstating Hauv's to the register.
In the event that indemnity is denied, there would seem to be real utility in making that order. Conversely, if indemnity is not denied, on the strength of the submissions I have heard today, I have difficulty seeing any utility in reinstating the deregistered company. Indeed, there is a real risk that to make the order would be contrary to the overriding purpose stated in s 56 of the Civil Procedure Act 2005 (NSW), since there might be a divided camp, as it were, between insured and insurer, potentially raising the need for separate representation of those parties and unnecessary complication of the legal issues raised by the third cross-claim.
As to the application to join the insurers, it may be noted, first, that the insurers do not oppose the order sought. Section 4 of the Civil Liability (Third Party Claims Against Insurers) Act provides:
"4 Claimant may recover from insurer in certain circumstances
(1) If an insured person has an insured liability to a person (the claimant), the claimant may, subject to this Act, recover the amount of the insured liability from the insurer in proceedings before a court.
(2) The amount of the insured liability is the amount of indemnity (if any) payable pursuant to the terms of the contract of insurance in respect of the insured person's liability to the claimant.
(3) In proceedings brought by a claimant against an insurer under this section, the insurer stands in the place of the insured person as if the proceedings were proceedings to recover damages, compensation or costs from the insured person. Accordingly (but subject to this Act), the parties have the same rights and liabilities, and the court has the same powers, as if the proceedings were proceedings brought against the insured person.
(4) This section does not entitle a claimant to recover any amount from a re-insurer under a contract or arrangement for re-insurance."
Section 5 of the Act provides that "proceedings may not be brought or continued against an insurer under s 4 except by leave of the Court".
Subsection 5(4) provides that leave must be refused "if the insurer can establish that it is entitled to disclaim liability under the contract of insurance or under any Act or law". However, Mr Lloyd, who appears for the insurers, does not say that the insurers can, at this point of the proceedings, establish that entitlement; rather, that is an issue yet to be determined by the insurer and one which has not yet been formally communicated one way or the other to the parties. In those circumstances, Mr Lloyd does not oppose leave being under s 5 today. In my view, it is appropriate to make the order sought by the plaintiff, reserving Leighton's right to seek the order sought by it after it is known whether indemnity is denied.
I make the following orders:
1. I grant leave to the plaintiff to join Tokio Marine Kiln Syndicates and QBE Underwriting Limited as defendants in the proceedings pursuant to s 5 of the Civil Liability (Third Party Claims Against Insurers) Act.
2. I grant leave to the plaintiff to file a third further amended statement of claim joining those parties within 14 days.
3. I direct Tokio Marine Kiln and QBE Underwriting Limited to file a defence within 28 days.
4. I stand the proceedings over to 5 June 2018 before me at 9.30.
5. The costs of the plaintiff's motion be costs in the cause, and I can deal with the costs of Leighton's motion on day 40.
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Decision last updated: 07 May 2018