QBE Insurance (Australia) Limited ACN 003 191 035 v Trad Thornton & Ors

Judgment 1On 7 May 2005, aircraft WH-TFU crashed on final approach to Lockhart River Airport in Queensland killing the two pilots and thirteen passengers who were onboard. One of those passengers was Constable Urquhart. This judgment concerns an application by the plaintiff, QBE, for an anti-suit injunction and ancillary relief restraining Mr Urquhart, the personal representative of Constable Urquhart, from pursuing proceedings in Illinois (the Illinois insurance proceedings ) seeking an order that QBE indemnify the two pilots, Mr Hotchin and Mr Down, under an insurance policy it issued in respect of the aircraft. How proceedings came to be brought under the policy on behalf of the pilots in Illinois and how Mr Urquhart became a plaintiff in those proceedings requires some explanation. 2In 2007, Mr Wisner, a lawyer based in Illinois, commenced liability proceedings on behalf of the personal representatives of the pilots and passengers other than Mr Urquhart against a number of named defendants, including the manufacturer of the aircraft instruments and other equipment. The proceedings were commenced in Illinois in order to avoid the limitations on liability arising from various international conventions which have been ratified by Australia and which have become part of the law of Australia as a result of the passing of the Civil Aviation (Carriers' Liability) Act 1959 (Cth). 3The defendants in the Illinois proceedings counter-claimed against the deceased pilots alleging that they were negligent. Mr Wisner, on behalf of the pilots, then commenced the Illinois insurance proceedings against QBE seeking an indemnity under the policy in respect of the claims against them. That claim is brought under general condition C(11), which relevantly provides: Sections 2 and 3 of this Policy extend to indemnify jointly and severally with the Insured any pilot approved in accordance with the terms of this Policy provided such pilot observes and fulfils the conditions and is subject to the exclusions of the Policy. ... 4On 23 June 2011, Bergin CJ in Eq granted interlocutory anti-suit injunctions against the personal representatives of the pilots preventing them from taking further steps in the Illinois insurance proceedings, other than for the purposes of dismissing those proceedings. Her Honour did so because of the close connection the claim for indemnity had with Australia and the very limited connection it had with Illinois. Bergin CJ in Eq went on to determine the question of QBE's liability to indemnify the personal representatives of the pilots. In a judgment handed down on 10 November 2011, her Honour made orders to the effect that the pilots were not entitled to the benefit of the QBE policy because they had not complied with one of the conditions set out in section 4(B) of the policy. That section provides: It is necessary that the Insured observes and fulfils the following Conditions before the Company has any liability to make any payment under this Policy. One of those conditions is the following: The Insured shall comply with all Statutory Requirements which affect the safety or maintenance or operation of the Aircraft ... "Statutory Requirements" is defined in cl 4D(12) of the policy to include: All legislation and delegated legislation (including applicable legislation and delegated legislation of another country) and orders, rules, directions, notices, approvals, certificates and licences issued by a competent authority. 5In addition, her Honour granted prohibitory and mandatory injunctions requiring termination of the claims by the personal representatives of the pilots in the Illinois insurance proceedings and a declaration that QBE is not liable under the policy in respect of any liability arising from the accident involving aircraft VH-TFU on 7 May 2005. 6In the meantime, in the Illinois insurance proceedings a number of the personal representatives of the passengers (not including Mr Urquhart) applied to be joined in those proceedings apparently on the basis that they had an interest in the outcome of them. QBE then commenced these proceedings and was successful in obtaining orders from Gzell J on 11 October 2011 and 14 October 2011, the effect of which was to restrain each of the personal representatives (other than Mr Urquhart) from taking any step in the Illinois insurance proceedings. 7In the meantime, on 12 October 2011, Mr Urquhart sought and obtained an order to intervene in the Illinois insurance proceedings and himself obtained an anti-suit injunction from the Illinois court. It was for that reason that the orders made by Gzell J on 14 October 2011 did not restrain Mr Urquhart from taking any step in the Illinois insurance proceedings, although those orders did restrain Mr Urquhart from taking any action without leave of this court from alleging contempt or breach of any order against QBE in the Illinois insurance proceedings by reason of any step taken by QBE in these proceedings. The anti-suit injunction obtained by Mr Urquhart was subsequently dissolved by the Illinois court on 2 December 2011. 8By notice of motion filed on 20 February 2012, QBE sought the following orders against Mr Urquhart: