Background and the Parties' Arguments
72 Subsections (1), (2) and (7) of s 1337H of the Corps Act provide as follows:
1337H Transfer of proceedings by the Federal Court and State and Territory Supreme Courts
(1) This section applies to a proceeding (the relevant proceeding) in a court (the transferor court) if:
(a) the relevant proceeding is:
(i) a proceeding with respect to a civil matter arising under the Corporations legislation; or
(ii) a subsection 1337B(3) proceeding; and
(b) the transferor court is:
(i) the Federal court; or
(ii) a State or Territory Supreme Court.
(2) Subject to subsections (3), (4) and (5), if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:
(a) the relevant proceeding; or
(b) an application in the relevant proceeding;
to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.
…
(7) The fact that some references in this section to the interests of justice include the desirability of related proceedings being heard in the same jurisdiction does not of itself mean that other references to the interests of justice, in this section or elsewhere in this Act, do not include that matter.
73 By reason of the operation of s 1337A of the Corps Act, a similar power to order a transfer of proceedings from this Court to a State court found in s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (Cross-Vesting Act) is excluded. That exclusion applies even when the proceeding contains some claims brought under the Corps Act and others that are not (Re Westgate Wool Co Pty Ltd (In Liq) (2006) 206 FLR 190 at 194 [18] per Debelle J; and Re Rectron Electronics Pty Ltd [2013] NSWSC 610 at [28] per Black J).
74 Although Rushleigh invoked s 5 of the Cross-Vesting Act as well as s 1337H of the Corps Act when it filed its Interlocutory Application, by the time of the hearing before me it had abandoned all reliance upon the Cross-Vesting Act.
75 Section 1337L of the Corps Act sets out a number of specific matters to which the Court must have regard when considering whether to transfer a proceeding to a State court. That section is in the following terms:
1337L Further matters for a court to consider when deciding whether to transfer a proceeding
In deciding whether to transfer under section 1337H, 1337J or 1337K a proceeding or application, a court must have regard to:
(a) the principal place of business of any body corporate concerned in the proceeding or application; and
(b) the place or places where the events that are the subject of the proceeding or application took place; and
(c) the other courts that have jurisdiction to deal with the proceeding or application.
76 Rushleigh submitted that, when used in s 1337H(2) of the Corps Act, the expression "interests of justice" has a broad meaning. It submitted that relevant factors would include:
(a) The application of substantive law;
(b) Any forensic advantage or detriment conferred by procedural law;
(c) The reasons for the plaintiff's choice of forum;
(d) Any substantive connections with the forum;
(e) The balance of convenience to parties and witnesses; and
(f) Convenience to the court system.
77 The submissions which I have extracted at [76] above were supported by a number of references to authority in this and other courts. It is not necessary for me to refer to those authorities. While I can readily accept that the matters which I have listed at [76] above provide a useful set of potential considerations, each case must ultimately turn on its own facts. Further, in the present case, I do not see the s 1337L factors as being of great significance in resolving Rushleigh's transfer application.
78 In support of its application for an order transferring the present proceeding to the Supreme Court of NSW, Rushleigh made the following submissions.
79 The claims made by the plaintiffs in the Swiss Re proceeding (if successful), on their own, are likely to exhaust the amounts available under the D&O policy and the excess layers of insurance. A similar observation may be made in respect of the claims made by Rushleigh in this proceeding. In those circumstances, s 6 of the LRMPA is important.
80 Section 6 of the LRMPA relevantly provides:
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.
…
(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.
81 In Chubb, Emmett JA and Ball J held (in a joint judgment with which Bathurst CJ, Beazley P and Macfarlan JA agreed), in respect of a claims made insurance policy (such as the D&O policy in the present case), the statutory charge provided for in s 6 of the LRMPA does not attach to insurance monies that may be payable until liability is determined by a judgment or other award. At 127 [118], their Honours said:
… The charge comes into existence on the happening of an event giving rise to a liability to pay damages or compensation for which a claim may be made. The charge, however, only attaches to or descends on moneys that are or may become payable in respect of that liability to pay damages or compensation. There is nothing to which the charge can attach, or on to which it can descend, unless and until a liability to pay damages or compensation has been determined. The liability is not determined, so as to give rise to an entitlement to payment by the insurer, unless and until a determination has been made, by judgment, award or settlement, that the insured is liable.
(Emphasis in original)
82 The observations of Emmett JA and Ball J in Chubb have particular significance in the present case where there are two or more claims against the proceeds of the D&O policy. Rushleigh argued that the effect of Chubb is that, where one of the claims is determined first in time, some or all of the insurance monies may be paid out in satisfaction of that claim, potentially rendering nugatory any claims that have not yet been determined. In particular, at 128 [126]-[127], their Honours said:
Under the terms of the primary policy, an insured is entitled to be indemnified against any loss. Where the indemnity concerns an obligation to satisfy a judgment, award or settlement, the right to the indemnity arises at the time when the liability is established by that judgment, award or settlement: see Bradley v Eagle Star Insurance Co Ltd [1989] AC 957 at 966; [1989] 1 All ER 961 at 965; Distillers Co Biochemicals (Australia) Pty Ltd v Ajax Insurance Co Ltd (1974) 130 CLR 1 at 25-6; 2 ALR 321 at 340-1; [1974] HCA 3. At that time, the insured is entitled to sue on the indemnity and, subject to exhaustion of the maximum liability under the relevant contract of insurance, is entitled to recover the amount of the judgment, award or settlement. The fact that other claims have been, or may be brought, against the insured, or any other insured indemnified by the same contract of insurance, does not alter the first insured's right to indemnity in respect of the liability that has been determined.
If s 6 caught all moneys available at the time when the charge arises, and s 6(1) applied to a second claim, an insurer could not safely pay the first ascertained claim if the second claim might exceed the amount of the limit that would then remain, unless it could be satisfied that that first ascertained claim has priority under s 6(3). Again, on that approach, the effect of s 6 would be, by a side wind, to alter the rights of the contracting parties. The insurer would be entitled to refuse to pay a claim that it was obliged by the terms of the contract of insurance to pay, because it would run the risk of having to pay more than the maximum amount it contracted to pay.
(Emphasis in original)
83 Building on these propositions based upon Chubb, Rushleigh then submitted that, in the present case, there is a real risk that, if this proceeding is not transferred to the Supreme Court of NSW so that it can be determined at the same time as the Swiss Re proceeding, the claims made by Rushleigh on its own behalf and on behalf of group members in this proceeding will be rendered nugatory if the Swiss Re proceeding is determined first. Rushleigh submitted that an outcome such as that would be contrary to the interests of justice.
84 As a separate submission, Rushleigh submitted that the transfer of this proceeding to the Supreme Court of NSW would remove any doubt as to whether Rushleigh and the group members could assert a claim under s 6 of the LRMPA in this proceeding. Rushleigh submitted that there was doubt as to that matter based upon part of the reasons of the Court of Appeal (see, in particular, Chubb at 143-144 [202]-[204]).
85 It was submitted on behalf of Rushleigh that other judges of this Court have accepted the proposition that there is doubt as to whether s 6 of the LRMPA may be engaged in a proceeding in this Court (for example, see Amos v Tarrants Financial Consultants Pty Ltd [2013] FCA 1344 at [5]-[6] per Griffiths J). Justice Nicholas in Hopkins v AECOM Australia Pty Ltd (No 4) (2015) 328 ALR 1 (AECOM) took the opposite view. In that case, his Honour observed that the argument that s 6 could not be litigated in this Court overlooked the fact that s 79 of the Judiciary Act 1903 (Cth) would have the effect of picking up and applying s 6 of the LRMPA in a proceeding in the Federal Court.
86 Rushleigh accepted that the reasoning of Nicholas J in AECOM is compelling. However, it pressed the argument that, because there is still legitimate doubt as to whether or not the section can be engaged in a proceeding in this Court, the proceeding should be transferred to the Supreme Court of NSW.
87 As a separate submission, Rushleigh also submitted that another reason for transferring the proceeding is that it involves the true interpretation of a NSW statute.
88 It was also submitted on behalf of Rushleigh that considerations of case management and efficiency support the transfer of this proceeding to the Supreme Court of NSW. The idea behind this submission was that the hearing of this proceeding and the hearing of the Swiss Re proceeding could somehow be organised to take place at the same time or very close together with a view to avoiding the possibility that the proceeds of the D&O policy will be paid out to the party who succeeds first.
89 Next, Rushleigh submitted that the transfer would not occasion any prejudice to any of the defendant parties in this proceeding. Rushleigh emphasised that the proceeding had not progressed very far in this Court and little extra cost would be occasioned by the transfer.
90 As this proceeding would likely be heard in Sydney in any event, Rushleigh argued that the question of suitable venue was not a significant matter in the present case.
91 In a further Written Submission filed on 24 February 2016, Rushleigh developed its argument concerning the likely benefit to it and the group members in the event that this proceeding is transferred to the Supreme Court of NSW. In that Written Submission, it emphasised the fact that the events which gave rise to the loss claimed in this proceeding took place prior to the occurrence of the events the subject of the Swiss Re proceeding. Because of this circumstance, so the argument ran, in the event that judgment were given in this proceeding and in the Swiss Re proceeding at the same time, Rushleigh and the group members would gain priority over the whole of the proceeds of the D&O policy by reason of the operation of s 6(3) of the LRMPA.
92 As noted at [12] above, the only defendant who opposed the transfer application was Mr Hutchinson.
93 Senior Counsel who appeared for Mr Hutchinson made the following submissions:
(a) In order to justify a transfer of this proceeding to the Supreme Court of NSW, Rushleigh must demonstrate that it is in the interests of justice that the transfer order be made. It has failed to demonstrate that proposition. The expression "the interests of justice" is not synonymous with the interests of a party (BHP Billiton Ltd v Schultz (2004) 221 CLR 400). Nor is the selection (or change) of jurisdiction to be made in order to achieve the application of any law for a party including for that matter s 6 of the LRMPA (Opes Prime Stockbroking Ltd (In Liq) (Scheme Administrators Appointed) v Stevens [2014] NSWSC 659).
(b) A fundamental underlying premise in the discretionary considerations relied upon by Rushleigh in its transfer application is the notion that the Supreme Court will be able and willing to hear and determine the Swiss Re proceeding and this proceeding at the same time in order to provide to Rushleigh the advantages which a concurrent determination would provide to it by reason of the operation of s 6(3) of the LRMPA. This submission requires this Court to speculate as to the way in which the Supreme Court would organise its cases, an exercise which this Court should not undertake.
(c) The reasons advanced by Rushleigh in support of the order for transfer do not justify the making of that order. At present, there is no judgment in favour of Rushleigh against any of the defendants. Indeed, there may never be such a judgment. Further, there is no proceeding presently on foot between Rushleigh and the insurers. Rushleigh has consciously and studiously avoided commencing such a proceeding in this Court. In addition, in order for it to prosecute a claim against those insurers, it would first need to obtain leave pursuant to s 6(4) of the LRMPA. It has not even sought leave at this stage. The outcome of any future application for leave under s 6(4) of the LRMPA is a matter of speculation. The outcome of the Swiss Re proceeding is a matter of pure speculation as matters presently stand.
(d) There are few overlapping issues of substance between the Swiss Re proceeding and this proceeding.
(e) The reasoning of the Court of Appeal in Chubb is probably unsound. The reasoning of Nicholas J in AECOM should be preferred and followed.
(f) Mr Hutchinson does not wish to be embroiled in the Swiss Re proceeding in the Supreme Court. He is currently not a party to that proceeding and is a complete stranger to the subject matter of that proceeding. Indeed, the present proceeding raises issues which are somewhat narrower in compass when compared with those raised in the Swiss Re proceeding.