Martin John Green in his Capacity as Liquidator of Arimco Mining Pty Limited (in liquidation) v CGU Insurance Limited & Ors

Martin John Green in his Capacity as Liquidator of Arimco Mining Pty Limited (in liquidation) v CGU Insurance Limited & Ors - [2005] NSWSC 254 - NSWSC 2004 case summary — Zoe

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50177/04 MARTIN JOHN GREEN IN HIS CAPACITY AS LIQUIDATOR OF ARIMCO MINING PTY LIMITED (IN LIQUIDATION) v CGU INSURANCE LIMITED AND ORS JUDGMENT 1 This is an application by the plaintiff, Martin John Green (Mr Green), in his capacity as Liquidator of Arimco Mining Pty Ltd (In Liquidation) (Arimco) pursuant to section 6 (4) of the Law Reform (Miscellaneous Provisions) Act 1946 (the Act) for leave to proceed against CGU Insurance Limited (CGU) in its capacity as insurer of the third to sixth defendants, the surviving directors of Arimco. CGU is presently the first defendant in its capacity as the insurer of the late Phillip Arthur Pearce, who was also a director of Arimco, the administrator of whose deceased estate is the second defendant. CGU has been joined in that capacity pursuant to s 51 of the Insurance Contracts Act 1984 (Cth) (the ICA). 2 The proceedings were commenced by Summons filed on 9 December 2004 seeking, inter alia, the following order: An order under section 588M of the Corporations Act 2001 (Cth) that the defendants (and in the case of the first defendant, also under section 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW)) pay to the plaintiff the sum of $25,601,635.06. 3 Arimco, which engaged in gold and copper mining, was a wholly owned subsidiary of Australian Resources Limited (in liquidation) (ARL). There were common directors of ARL and Arimco and it alleged that the management of ARL, Arimco and a number of dormant subsidiaries was merged so as to operate as a single entity. It is alleged that between 1 January 1999 and 14 March 1999 Arimco traded and incurred debts whilst insolvent. It is also alleged that on, or shortly after 1 January 1999, Arimco became insolvent within the meaning of s 59A of the Corporations Act. On 14 March 1999 Mr Green was appointed the voluntary administrator of Arimco. On 7 May 1999 the creditors of Arimco resolved in accordance with s 439C of the Corporations Act to wind up Arimco and Mr Green became the liquidator of Arimco. On 14 November 2004 the Court appointed Mr Green as liquidator when orders were made for the winding up of Arimco. 4 It is alleged that during the period 1 January 1999 to 14 March 1999, each of the director defendants failed to prevent Arimco from incurring debts of $25,601,635.06 ($25.6m) at a time when each was aware that Arimco was insolvent, or that it would become insolvent by incurring each debt which comprised the debt of $25.6m. There is an alternative claim that a reasonable person in the respective positions of the directors would have been aware that grounds for suspecting insolvency existed. It is alleged that each of the directors breached s558G of the Corporations Act and that the plaintiff is entitled to recover from them under s558M the debt of $25.6m. The liquidator has made demand for that payment from each of the defendants on 1 December 2004. The debt remains unpaid. 5 It is alleged as against CGU, that under insurance policy 02 DO 0265146 and styled "CGU Professional Risks Insurance" (the Policy) CGU agreed to pay on behalf of the "Directors & Officers" any loss for which the directors and officers may not be indemnified by ARL, being the loss from the claims made against them in these proceedings. The Policy was for the period of insurance 31 December 1998 to 31 December 1999. 6 It is alleged that the Policy constitutes a contract of insurance for the purposes of the ICA and that the directors notified CGU during the indemnity period of the facts, situation and circumstances that might give rise to a claim under the Policy. It is alleged that the Policy responds to the claims made in the proceedings and that CGU has denied indemnity. 7 The plaintiff received advice in late 2004 that the limitation period within which he was required to commence the proceedings against the directors might expire, on one view, possibly as soon as 31 December 2004, being six years after the creditors of Arimco first began to suffer loss by reason of the alleged insolvent trading of Arimco on 1 January 1999. The plaintiff also received advice that the better view of the law was that having now commenced the proceedings against the directors, time now stopped running under the relevant limitation period against CGU, as the insurer of the directors. 8 The plaintiff's solicitors sought an undertaking from the solicitors for CGU that they would not take the point if the application for leave could be heard in the new law term in February 2005. As that undertaking was not forthcoming the plaintiff made urgent application in the last week of the law term on 14 December 2004. Mr R G Forster SC appeared for the plaintiff and Ms C Needham SC appeared for CGU. Mr C Kinitis appeared for the directors. 9 On 14 December 2004, after full argument, the plaintiff sought an adjournment to put on some evidence relating to the directors incapacity to pay a judgment debt of $25.6m. I allowed that adjournment and made the following order: Without prejudice to either parties' claims made in this application I grant conditional leave to the plaintiff to commence proceedings against the first defendant CGU, in its capacity as the insurer of the second, third, fourth, fifth and sixth defendants conditional upon any revocation of such leave should the first defendant be successful, such revocation to date from today.

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10 I directed the plaintiff to file any further evidence upon which he sought to rely by 24 January 2005 and listed the matter, part-heard, before me on 9 February 2005. The parties joined in an application for the vacation of that date and the matter was finally concluded at a hearing on 21 March 2005. The Act 11 Section 6 of the Act provides relevantly: 6. Amount of liability to be charge on insurance moneys payable against that liability (1) If any person (hereinafter in this Part referred to as the insured) has, whether before or after the commencement of this Act, entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability. (2) If, on the happening of the event giving rise to any claim for damages or compensation as aforesaid, the insured (being a corporation) is being wound up, or if any subsequent winding-up of the insured (being a corporation) is deemed to have commenced not later than the happening of that event, the provisions of subsection (1) shall apply notwithstanding the winding-up. (3) Every charge created by this section shall have priority over all other charges affecting the said insurance moneys, and where the same insurance moneys are subject to two or more charges by virtue of this Part those charges shall have priority between themselves in the order of the dates of the events out of which the liability arose, or, if such charges arise out of events happening on the same date, they shall rank equally between themselves. (4) Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action and of the judgment given therein the parties shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured: Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken. (5) Such an action may be brought although judgment has been already recovered against the insured for damages or compensation in respect of the same matter. (6) Any payment made by the insurer under the contract of insurance without actual notice of the existence of any such charge shall to the extent of that payment be a valid discharge to the insurer, notwithstanding anything in this Part contained. (7) No insurer shall be liable under this Part for any greater sum than that fixed by the contract of insurance between the insurer and the insured. 12 In Tzaidas v Child (2004) 208 ALR 651 Giles JA said: [17] The purpose of the leave requirement has been described in various ways; for present purposes, it is sufficient that it was intended to protect insurers from unwarranted direct actions by claimants upon their insureds. The prohibition is a gloss upon the leave requirement. … [18] For the prohibition to apply the court must be satisfied of two things: first, entitlement to disclaim liability, and second, taking necessary proceedings. Satisfaction as to taking necessary proceedings can not be passed over. The application for leave pursuant to s 6(4) can not amount to taking necessary proceedings, since the necessary proceedings must be something outside the application. CGU submitted that proceedings were necessary only if the insurer's entitlement to disclaim liability was not obvious. I do not think that is right. The proceedings are those 'necessary to establish ' the insurer's entitlement to disclaim liability (emphasis added). "Establish" means what it says. The Court does not decide, additionally to its satisfaction that the insurer is entitled to disclaim liability, whether or not the entitlement is obvious, and even if it did that would not establish the entitlement to disclaim liability. So long as the insurer's entitlement to disclaim liability is in issue, other proceedings are necessary to establish it. 13 In Bailey v New South Wales Medical Defence Union Limited (1995) 184 CLR 399 at 448, McHugh and Gummow JJ said of s 6(4): This provision is not directing the court that leave be denied only in a case where it is satisfied both of entitlement to disclaim liability and that necessary steps have been taken to establish entitlement to do so. Leave may be refused in other cases but must be refused in these cases. 14 A decision as to whether or not leave should be granted is ultimately discretionary. However, there are two predominant considerations in the exercise of that discretion, firstly, whether the plaintiff has shown an arguable case against CGU, and secondly whether there are sufficient reasons for the plaintiff to bring the action against CGU: Schipp v Cameron (1995) 8 ANZ Insurance Cases 61-256 per Young J. In Schipp v Cameron Young J said at 75, 869: There are situations where a plaintiff has lost a leave application because the case was completely unarguable … but such cases are exceptional. Ordinarily, where the plaintiff shows that her case is arguable, then, if there is no other factor involved, leave will be granted. 15 Similarly in Tzaidas v Child, Santow JA said at [140]: "As the trial judge correctly stated, all that was required was an arguable case against the hospital. This is a relatively modest hurdle."

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The Proposal 16 The proposal form is entitled "Directors & Officers Liability and Corporate Reimbursement Insurance Proposal Form". It includes questions seeking information both in relation to the Corporation and in relation to the directors. In this latter regard the questions posed include: 17. If an insurance similar to that now proposed had been, or were now, in effect would any claim which had been made, or which is now pending against any person proposed for insurance, have fallen within the scope of such insurance? 18. Is any person proposed for insurance aware, after enquiry, of any circumstances or incident which he/she believes might give rise to any future claim that would fall within the scope of such insurance? 17 The Proposal form also delineates between corporate reimbursement and directors/officers in respect of any deductibility in relation to the limit of liability (Q.25). There is also reference to indemnity to be provided to directors & officers in respect of optional extensions for outside directorship's cover. The Declaration was signed by the managing director on 10 December 1998 and by the third defendant on 11 December 1998 under the heading "Director". The Declaration was in the following terms: I hereby declare that: · the statements set forth herein are true and that we have not suppressed or mis-stated any facts. · enquiry has been made of all directors and senior staff. · should any of the information given by us alter between the date of this proposal and the inception date of the insurance to which this proposal relates, we will give immediate notice thereof. · we agree this proposal, together with any other information supplied by us, shall form the basis of any contract of insurance effected therefrom. · we acknowledge receipt of the "Important Notice" which was attached to this proposal. We have read and understood the contents of that notice. · we acknowledge signing of the form does not oblige the Directors & Officers of the Corporation or Commercial Union Professional Risks to enter into a contract of insurance. 18 The evidence discloses that the director defendants each paid $40.25 to Arimco towards the payment of the total premium of $490 (plus $33.40 stamp duty) for the Insuring Agreement (D&O). The Policy 19 The Schedule to the Policy records as Item 1: "The Corporation: Australian Resources Limited". Item 3 records that the "Class of Business" is "Directors & Officers and Corporate Reimbursement". The period of insurance is stated to be from 31 December 1998 to 4.00pm on 31 December 1999 with a limit of aggregate liability of $30m. Item 6, "Deductibles" records as follows: 6(1) Insuring Agreement A (D&O) is NIL for each Director and Officer. 6(2) Insuring Agreement B (Corporate Reimbursement) is NIL. 20 Item 7 contains the Premium Details being $490 + $33.40 for stamp duty in respect of the "Insuring Agreement A (D&O)", and $48,510 and $3,307.51 for "Insuring Agreement B (CR) making a total amount payable of $52,340.91. 21 The Policy also includes the following: In consideration of the payment of the premiums listed in Item 7 of the schedule the Insurer will provide the indemnities set out in the Policy in accordance with the terms and conditions expressed.

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2.5 Insured vs Insured Cover The Insurer will pay on behalf of the Directors and Officers any claim brought by: … (5) any court appointed liquidator receiver, receiver and manager, official manager, administrator or trustee administering a compromise or scheme of arrangement of the Corporation. Where a conflict arises between this extension and Exclusion 3.4 ( Insured vs Insured) of this Policy, the provisions of this extension shall prevail. … 2.8 Continuity of Cover Notwithstanding Exclusion 3.2 ( Prior Claims & Circumstances) , where: (1) a Director or Officer first became aware of a fact, situation or circumstance as described in Condition 4.11 ( Notification of Claims Circumstances ) prior to the Period of Insurance; and (2) the Director or Officer did not notify the Insurer of such fact, situation or circumstance prior to the Period of Insurance, then provided always that: (a) there has been no fraudulent non-disclosure or fraudulent misrepresentation by the Director or Officer in respect of such fact, situation or circumstance; and (b) the Insurer and/or its predecessor Pacific Indemnity Underwriting Agency Pty Ltd or Commercial Union Professional Risks Insurance, a Division of Commercial Union Assurance Company of Australia Limited, has continuously been the insurer for this type of insurance from the time when the Directors or Officers first became aware of such fact, situation or circumstance until the time during the Period of Insurance when the Director or Officer notified a Claim which was first made during the Period of Insurance against the Director or Officer and arose out of such fact, situation or circumstance; (c) a Claim relating to such fact, situation or circumstance has not previously been notified to the Insurer or its predecessor Pacific Indemnity Underwriting Agency Pty Ltd or Commercial Union Professional Risks Insurance, a Division of Commercial Union Assurance Company of Australia Limited, the Insurer will accept notification during the Period of Insurance of such fact, situation or circumstance, or of a Claim which is first made against a Director or Officer during the Period of Insurance and arises from such fact, situation or circumstance. The indemnity provided by this extension shall be subject to the terms and conditions of this Policy, save that the applicable limit of aggregate liability will be that which applied under the earlier policy at the date when the Director or Officer first became aware of such fact, situation or circumstance, except that the applicable limit of aggregate liability will not exceed that of this Policy at the date when the facts, situations or circumstances were first notified to the Insurer. …

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For the sake of determining cover under this Policy: (1) the written proposal shall be construed to be a separate application for cover by each of the Directors or Officers and no statement or representation in or with respect to the proposal by a Director or Officer shall be imputed to any other Director or Officer. (2) this Policy shall, subject to General Condition 4.9 ( Non-Accumulation) , be construed to be a separate policy between the Insurer and each Director or Officer and no breach of any term or condition of this Policy or other misconduct by any Director or Officer shall be imputed to any other Director or Officer. (3) No fact or knowledge possessed by one Director or Officer shall be imputed to any other Director or Officer. … 4.4 Claims Co-operation The Directors and Officers shall use due diligence and do and concur in doing all things reasonably practicable to avoid or diminish any Loss hereunder, and shall immediately give all such information and assistance to the Insurer as it may reasonably require to enable it to investigate and to defend the Claim and/or to enable the insurer to determine its liability under this Policy. The Insurer may, on request from the Directors and Officers for indemnity under this Policy, take whatever action that it considers appropriate to protect the Directors' and Officers' position in respect of the Claim and such action by the insurer shall not be regarded as in any way prejudicing its position under this Policy and no admission to the Directors' and Officers' entitlement to indemnity under this Policy shall be implied. … 4.11 Notification of Claims Circumstances If during the Period of Insurance, the Directors or Officers become aware of any fact, situation or circumstance that might give rise to a Claim under this Policy and elect during the Indemnity Period to give notice in writing to the Insurer of such fact, situation or circumstance then any Claim which may subsequently arise out of such fact, situation or circumstance shall be deemed for the purpose of this Policy to be a Claim made during the Indemnity Period. 4.12 Confidentiality Neither the Directors and Officers nor the Corporation shall disclose in the annual report of the Corporation the nature of the liabilities covered by this Policy nor the premium specified in the Policy, unless required by law. … 4.19 Cancellation The Directors and Officers and the Corporation may jointly cancel this policy at any time by giving written notice to the Insurer and the Insurer will pay the Corporation the pro-rata refund of the premium, for the unexpired Period of Insurance less fifteen percent (15%) of the pro-rata refund of premium due to be returned. The Insurer may cancel this Policy in accordance with the Insurance Contracts Act 1984, whereupon the Insurer will pay the Corporation a pro-rata refund of the premium for the unexpired Period of Insurance. …

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22 Section 51 of the ICA and section 6 of the Act apply to claims against the "insured" and "a person who has entered into a contract of insurance" respectively. CGU argued that leave should not be granted because the defendant directors are neither the "insured", nor persons who have "entered into a contract of insurance". In this regard CGU relied upon the fact that the Proposal form was not signed by all the directors, and the fact that ARL is listed as the Corporation in item 1 of the Schedule. Reliance was also placed upon the terms of the Declaration at the end of the Proposal which, it was claimed, indicates that the directors were not intended to be parties to the contract of insurance. 23 CGU submitted that the directors are not parties to the contract of insurance but are named beneficiaries whose liability is insured under the contract of insurance. That is the only basis upon which it was submitted that there was no arguable case against CGU. Therefore the questions for consideration on the issues raised by the parties to the Motion are whether the directors are parties to the contract of insurance and, if they are, whether leave should be refused on the ground that the plaintiff has failed to prove that the defendants are not viable defendants: Kinzett v McCourt (1999) 46 NSWLR 32. Parties to Contract 24 The submission put by CGU that the directors are not parties to the contract of insurance but are named beneficiaries is the same claim as made by the former directors of Compass Airlines in Carden & Ors v CE Heath Casualty & General Insurance Ltd & Ors; Grey & Ors v CE Heath Casualty & General Insurance Ltd & Ors (1992) 7 ANZ Ins Cas 61-147; CE Heath Casualty & General Insurance Ltd v Grey & Ors (1993) 32 NSWLR 25. In that case the insurer disclaimed liability on the basis that the directors were parties in their own right to the contract of insurance, and were bound by alleged material non-disclosures on the proposal form. In that case the directors argued that they had a right of direct recourse against the insurer pursuant to s 48 of the ICA and that as mere insureds of the Trident kind (Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107), they were not bound by any non-disclosures committed by the company as the insured. 25 Rogers CJ at Comm D's finding that the directors were not the insureds (Carden & Ors v CE Heath Casualty & General Insurance Ltd & Ors; Grey & Ors v CE Heath Casualty & General Insurance Ltd & Ors (1992) 7 ANZ Ins Cas 61-147) was overturned on appeal: CE Heath Casualty & General Insurance Ltd v Grey & Ors (1993) 32 NSWLR 25. The policy in that case was generally of the same nature as the Policy in this case, involving both "Directors and Officers Liability" and "Corporate Reimbursement". However in that case, and not in this, there was a definition of "insured". Rogers CJ at Comm D referred critically to the breadth of the definition and to the group said to be parties as "an amorphous shifting population". On appeal Mahoney JA accepted that the terms were not "as precise as would be a document drafted by conveyancing counsel" but concluded that "the intention of the policy in this regard was that the insured persons should be directors and officers at the time when the policy was effected" (at 34). 26 Other matters of significance considered by Mahoney JA to support the finding that the directors were parties to the contract of insurance included: (1) the extent of the directors' knowledge that insurance was being effected for their benefit; (2) the extent of the directors' involvement in carrying out the arrangements under the package proposal; (3) the commercial context of the insurance package; and (4) the obligations under the Policy. 27 In the present case, the evidence establishes that the directors had knowledge that insurance was being effected and that it was for their benefit. That is established by the evidence of payment of the proportion of the premium and the statement in the Declaration in the Proposal that "enquiry has been made of all directors". Numerous personal obligations upon the directors are to be found in the Policy including claims co-operation at cl 4.4, notification at cl 4.11 and confidentiality at cl 4.12. 28 I do not agree with CGU's suggested interpretation of that part of the Declaration in which the undersigned directors acknowledged that signing the proposal form "does not oblige the Directors & Officers of the Corporation or Commercial Union Professional Risks to enter into a contract of insurance". CGU submitted that this part of the declaration demonstrates that the directors were not intended to be parties to the contract of insurance. It seems to me to suggest the opposite. It is a recognition that although it is intended that the directors will enter into a contract of insurance with the named company, the signatures on the form do not oblige either the directors or the company to enter into the contract at the time at which acceptance of the offer is required. It leaves open the option of non-acceptance at the relevant time, but once accepted the contract is intended to be with the directors and officers. 29 The commercial context, and the context generally, also supports a finding that the directors are parties to the contract of insurance. There are two contracts or agreements in this Policy, entered into in consideration of the payment of two premiums. That is recognised by the first paragraph in the Policy document stating that the Insurer would provide the indemnities set out in the policy in consideration of the payment of the premiums.

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30 The first contract of insurance or agreement is as named in Section 1 of the Policy, " Insuring Agreement A". The second is " Insuring Agreement B". The first is " Directors and Officers Liability" and the second is "Corporate Reimbursement". The commercial context is that the Directors and Officers under Agreement A and the Corporation under Agreement B are entitled to indemnity for any "Loss" suffered by reason of any "Wrongful Act" committed by a Director. It is not only the Corporation but also the Directors who are specifically, and it seems to me intentionally, the subject of separate agreements in the Policy. The use of two separate Agreements favours the construction that it is not merely the Corporation that is the party to the contract of insurance. It seems to me that there are two Agreements, two contracts of insurance. 31 One difference in the Policy in the present case to that in the Compass litigation is that there is no definition of "insured" as there was in the Compass policy. The only mention of the "insured" is in the heading of clause 2.5, "Insured vs Insured Cover". Notwithstanding that paragraph 4.8 of the Policy provides that the paragraph headings "are included for the purpose of reference only and do not form part of this Policy for interpretation purposes", the terms of that clause also support a finding that it was intended that each director is an "insured", or more aptly to this application, "a party to the contract of insurance". Although the heading to the paragraph is unable to be utilised as forming part of the Policy for the purpose of interpreting the Policy, there is no prohibition on its use in deciding whether a contract has been formed between the insurer and the directors: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [164]-[165]. That heading taken with all the other matters referred to above tends to support a finding of the formation of a contract of insurance with the directors. 32 Although the definition of "Directors and/or Officers" in the Policy in the present case includes the words "was or who now is or may hereafter become a director", I am of the view that those words do not defeat the intention of the parties, that the directors at the time the Policy was effected were intended to be the parties to the contract of insurance. It seems to me that the effect of the definition is that although a director who is appointed after the date of the inception of the Policy is not a party to Agreement A, the Corporation is able to claim indemnity for the Wrongful Act of that director first made against that director during the Period of Insurance. 33 I am satisfied that the defendant directors are parties to the contract of insurance within the meaning of that expression in s 6 of the Act and are the "insured" within the meaning of that expression in s 51 of the ICA. 34 The were submissions made by CGU in relation to whether s 6 or s 51 extend to beneficiaries of a contract of insurance, with reliance on Aspioti v Leigh & Ors [2003] NSWSC 1224 and Ripper v Gatenby (2002) 10 Tas R 435, to submit that they do not, however having regard to my findings above I do not need to consider these submissions further. Viable defendant 35 The evidence in relation to the financial circumstances of the defendants and their capacity to satisfy a judgment of $25.6 million was criticised by CGU for lack of specificity, lack of independent valuation (kerbside or otherwise), and general unreliability. The evidence was provided in part in so-called "Statements of Assets and Liabilities" of some of the defendants, forwarded by their solicitors to the solicitor for the plaintiff. Other evidence was by way of property search. This evidence was gathered in the period of adjournment between 14 December 2004 and late January 2005 and was served on CGU in late January 2005. There was no criticism of this evidence notified to the plaintiff at the time of the joint application to vacate the 9 February hearing date. Indeed it was only ten working days prior to the final hearing date that any criticism was notified. There was evidence of the extra cost and delay that would be occasioned by gathering further evidence in a more precise form, taking into consideration that these defendants are not required to assist the plaintiff. The evidence will be considered in the light of the deficiencies. 36 The Administrator of the Estate of the late Phillip Arthur Pearce, the second defendant, advised through her solicitor that there were not sufficient funds to satisfy the claim of $25.6 million. The Inventory of Property indicates assets of less than $1 million. The Statement of Assets and Liabilities of the third defendant records net assets of $1,505,373. The Statement includes estimates of a half-share in a property in Woollahra at $700,000, an apartment in Woollahra at $350,000 and two apartments in Bondi at $250,000 each. The solicitor for the plaintiff gave evidence of property searches conducted in relation to the fourth defendant that disclosed two unencumbered properties in his home State South Australia shared with his wife. Those searches revealed an apparent land value of those properties totalling $1.1 million. The Statement of Assets and Liabilities of the fifth defendant records net assets of $165,223. This Statement also includes "estimates" that are untested. The solicitors for the sixth defendant advised the plaintiff's solicitors that the only asset of the sixth defendant is a half share in a property with an estimated value of $1 million. 37 CGU did not call any evidence on this aspect of the matter. The plaintiff recognised that the evidence on this aspect of the application is less than optimal, however it was submitted that even if one were to double or treble the "estimates" there would still be no viable defendant. I agree. I am satisfied that the plaintiff has proved that it is more probable than not that there is no viable defendant. 38 I am satisfied that I should grant leave to proceed against CGU as the insurer of the director/defendants. Such leave is to date from 14 December 2004 when conditional leave was granted. Order 39 I make the orders in paragraphs 3, 3A and 4 of the Notice of Motion filed in Court on 14 December 2004 with such leave to date from 14 December 2004. If the parties are unable to agree on a costs order they are to restore the matter to the List for argument, such restoration to occur no later than 29 April 2005.

At a glance

Court

Decision date

Before

Source

Judgment (32 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (8)

Cited By (4)