Tara Burnie v Dr Leslie Blackstock

BACKGROUND

1. The primary proceedings relate to a breast augmentation procedure that the plaintiff underwent on 27 October 2016 which was performed by the defendant, Dr Leslie Blackstock. By way of Statement of Claim filed 26 July 2018, the plaintiff claims damages for loss and injury alleged to be caused by the negligence of the defendant prior to, during, and after the plaintiff's surgery.
2. The defendant held Practitioner Indemnity Insurance Policies with Avant that indemnified the defendant in respect of claims, or circumstances that may result in a claim, made and notified within the period of coverage. The first policy was issued for the period 1 July 2016 to 30 June 2017 ('the first policy'), and the second policy was issued for the period 1 July 2017 to 30 June 2018 ('the second policy'). On 18 April 2018, Avant issued a revised policy schedule for the second policy. The first policy was in place at the time of the plaintiff's procedure. The second policy was cancelled by Avant on 24 April 2018 due to the defendant's failure to pay the premium, and as such was current from 1 July 2017 to 24 April 2018.
3. The defendant has not filed a Defence and has never appeared before the court in relation to these proceedings.
4. The plaintiff filed a Notice of Motion seeking to join Avant as the second defendant on 17 October 2018, approximately six months after the policy was cancelled by Avant.
5. By way of letter dated 12 November 2018 (Exhibit G), and in response to the Notice of Motion of 17 October 2018, Avant notified the plaintiff's solicitor that the plaintiff's claim was not an insured liability, stating, inter alia, as follows: 'While the event giving rise to your client's claim appears to have occurred in 2016, Avant received no notification of your client's claim or the incident leading to the claim before Dr Blackstock's professional indemnity policy was cancelled on 24 April 2018. In these circumstances, section 4 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (the Act) cannot operate to assist your client as Dr Blackstock is not insured by Avant for claims made against him which has not (sic) been notified to Avant during the policy period and therefore your client's claim is not an insured liability under the Act.'
6. The right to recover from an insurer is contained in s 4 of the Third Party Act which reads as follows: '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.'
7. Section 5 of the Third Party Act, which reads as follows, provides that leave is required to commence or continue proceedings against an insurer: '5 Leave to proceed (1) Proceedings may not be brought, or continued, against an insurer under section 4 except by leave of the court in which the proceedings are to be, or have been, commenced. (2) An application for leave may be made before or after proceedings under section 4 have been commenced. (3) Subject to subsection (4), the court may grant or refuse the claimant's application for leave. (4) 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.'
8. The Third Party Act replaces the now repealed s 6 Law Reform (Miscellaneous Provisions) Act 1946 (NSW). As identified by Campbell J in Ritchie v Advanced Plumbing and Drains Pty Ltd [2019] NSWSC 1028 at [4], there are three 'well settled criteria' that the court should have regard to when exercising the discretion to grant leave: 'The repeal and replacement of s 6 of the 1946 Act was driven by Report 143 of the New South Wales Law Reform Commission, Third Party Claims on Insurance Money; review of s 6 of the Law Reform (Miscellaneous Provisions) 1946 of November 2016 ("NSWLRC report"). In Zaki v Better Building Constructions Pty Ltd [2017] NSWSC 1522, I said (at [27]): As paragraph [2.46] of Report 143 indicates, a grant of leave will be determined by reference to what the authors of the report refer to as "well settled criteria": that there is an arguable case of liability against the defendant; that there is an arguable case that the insurer's policy responds to that liability; and there is a real possibility that, if the plaintiff obtains judgment against the defendant, the defendant will not be able to meet it. Given the interlocutory nature of the leave application, it is appropriate that contestable issues as to the liability of the insured person, and the availability of cover under an insurer's policy, should be determined at the ultimate hearing. (My emphasis.) As the language of s 5(3) makes clear, even if a consideration of the "well-settled criteria" points in the direction of a grant of leave there remains a residual discretion to refuse leave in appropriate cases. The factors relevant to the exercise of the residual discretion need not be considered here. Sub-section 5(4) makes clear that leave must be refused if the insurer "can establish it is entitled to disclaim liability" under the policy, by statute or otherwise at law. It is implicit in s 5(4) that an insurer should be given that opportunity on the leave hearing if it seeks it.'
9. The real area of dispute between the parties relates to whether there is an arguable case that the policies held by the defendant respond to the plaintiff's claim. Avant's position is that there is no such arguable case, that it is entitled to disclaim liability under the insurance policies, and that as such, under s 5(4) of the Third Party Act, leave to join Avant as the second defendant must be refused by the Court. Avant also submits there is not a real possibility that if a judgment is obtained against Dr Blackstock, he would not be able to meet it.

ARGUABLE CASE OF LIABILITY AGAINST THE DEFENDANT

1. In order for leave to be granted under s 5 of the Third Party Act, it must be established that the plaintiff has an arguable case of liability against the defendant. I note that due to the interlocutory nature of the application, I am not required to undertake a full determination of the issue of liability, and that generally, the standard of arguability in such an application is low (Guild Insurance Ltd v Hepburn [2014] NSWCA 400 per Macfarlan JA at [40]).
2. The Statement of Claim filed 26 July 2018 alleges negligence on behalf of the defendant during, prior to and after the breast augmentation procedure he performed on the plaintiff, including: 1. A failure to provide proper assessment and information about the breast augmentation and final breast size; 2. A failure to treat the plaintiff competently during surgery; 3. A failure to avoid uneven scarring; 4. Performing surgery on the plaintiff when the defendant was not qualified to do so; 5. A failure to provide adequate pre-operative and post-operative treatment; 6. Causing the plaintiff to require further corrective surgery; 7. A failure to perform the surgery in a sterile environment; and 8. A failure to treat the plaintiff with due care and skill.
3. The Statement of Particulars alleges the following losses and damages resulted from the negligence of the defendant: 1. Uneven and unsightly scarring on breasts; 2. Psychiatric injury; 3. Depressed mood; 4. Stress; 5. Anxiety; 6. Frustration; 7. Anger; 8. Distrust of the medical profession generally; 9. Emotional dysregulation; 10. Loss of confidence and self-esteem; 11. Loss of concentration; 12. Loss of enjoyment in social and recreational activities.
4. The plaintiff claims past and future out-of-pocket expenses pertaining to her medical treatment in an amount to be later specified and $14,000.00 for further corrective surgery, namely an 'open capsulotomy and prosthesis type replacement'.
5. The plaintiff's allegations of negligence are supported by her Affidavit affirmed 29 January 2019 (Exhibit C) which contains serious factual allegations of the defendant's conduct, particularly during the plaintiff's operation.
6. Neither party made any substantial submissions relating to the arguability of the plaintiff's case and it was not submitted by Avant that the plaintiff did not have an arguable case against the defendant.
7. It is evident to me, prima facie, that the facts contained in the plaintiff's Affidavit (Exhibit C) taken at their highest are capable of supporting the allegations of negligence made against the defendant in the Statement of Claim. I have come to this conclusion without any determination of the plaintiff's credit as a witness, as she did not give evidence before me, her Affidavit was read, nor the weight to be afforded to her evidence which are issues that are to be determined at final hearing. I conclude that the plaintiff has an arguable case of liability against the defendant.

ARGUABLE CASE THAT THE INSURER'S POLICY RESPONDS TO THE DEFENDANT'S LIABILITY

1. Counsel for Avant submitted that Avant should not be joined as the second defendant to the Statement of Claim as Avant is entitled to disclaim liability under the contract of insurance, and, as required by s 5(4) of the Third Party Act, leave must be refused by this court. Avant submits that there is no arguable case that the policy of insurance held by the defendant responds so as to indemnify him for his potential liability to the plaintiff.
2. The basis of this submission is the wording of the first and second policies (including the revised schedule of the second policy) and their characterisation by Avant as 'claims made and notified' insurance policies. In a claims made and notified policy the insured party, in this case the defendant, is only indemnified for claims made against him during the policy period if, and only if, the insured party notifies Avant of the claim within the policy period. Both policies, including the revised second policy, define a claim (albeit using slightly differing terms) as a demand for compensation or damages in relation to healthcare provided by the insured party.
3. At this stage, I note relevantly, in FAI General Insurance Co Ltd v Australian Hospital Care Pty Limited [2001] HCA 38, McHugh, Gummow and Hayne JJ said as follows at [23]: '… labelling contracts of insurance as "claims made" or "claims made and notified policies", as distinct from "occurrence policies", may be convenient short forms of reference. These labels are, however, not a substitute for strict attention to the terms of the particular insurance contract in question and to the operation of the relevant statutory provisions in connection with that contract. If it is useful to apply a label to the contract in question in this matter it is evident, when regard is had to condition 3, that it would be inaccurate to describe it as a "claims made and notified policy". That would describe only one aspect of its operation. It would, perhaps, be more accurate to describe it as a "discovery policy", as the critical facts under the contract are the insured's discovery of the making of a claim on it or its discovery (its "becom[ing] aware") of an occurrence which may give rise to a claim. In the end, however, the application of labels to the contract may obscure more than it illuminates.'
4. The majority judgment in FAI (supra) dictates that courts should have regard to substance over form, and that the true character of a policy will be indicated by its real effect rather than its prescribed form. The plaintiff submits that the inclusion of the terms discussed below caused the policies to be in effect 'discovery policies' rather than 'claims made and notified policies' as labelled.
5. The first policy includes the following terms: 'Part A of the Policy operates on a 'claims made and notified basis'. This means that you need a current insurance policy to protect yourself against claims made by patients and other third parties at the time the claim is made rather than when the incident leading to the claim occurred. … This policy does not provide cover in relation to: … Claims against You, or facts that may result in Claims against You, notified to Us after the end of the Policy Period …'
6. In similar terms the second policy (as well its revised edition) states: 'This policy operates on a claims made and notified basis. It covers you for claims of compensation (including legal defence costs) made by patients and other third parties against you and which you notify to us within the policy period when the healthcare giving rise to the claim occurred after the retroactive date. … This policy does not provide cover in relation to: … Claims made against you, or facts that may result in claims against you, notified to us after the end of the policy period …'
7. Avant submits that whilst the defendant held professional indemnity insurance with Avant at the time of the plaintiff's breast augmentation surgery, and his insurance was current until 24 April 2018, Avant only received notice of the plaintiff's claim on 17 October 2018, when the plaintiff's Notice of Motion seeking to join the insurer was first filed. Avant's position, as outlined in its letter to the plaintiff's solicitor on 12 November 2018 (Exhibit G, see paragraph 7 above), is that 'Avant received no notification of [the plaintiff's] claim or the incident leading to the claim before Dr Blackstock's professional indemnity policy was cancelled on 24 April 2018', and as such, Dr Blackstock is not covered by the professional indemnity insurance.
8. It is accepted by both parties that the first and second policies issued by Avant to the defendant are contracts governed by the Insurance Contracts Act 1984 (Cth).
9. Part of the Avant Product Disclosure Statement ('PDS') that comprises part of the first policy includes a specific reference to s 40(3) of the Insurance Contracts Act 1984 (Cth) at page 9 (Exhibit 2 Annexure A page 10) as follows: 'Section 40(3) of the Insurance Contracts Act 1984 (Cth) provides that where You give notice to Us of facts that might give rise to a Claim as soon as was reasonably practicable after You become aware of those facts but before the Policy Period expires, You are covered for any Claim made against You arising from those facts even if it is not made against You until after the Policy Period has expired.
10. Section 40 of the Insurance Contracts Act 1984 (Cth) reads: '40 Certain contracts of liability insurance (1) This section applies in relation to a contract of liability insurance the effect of which is that the insurer's liability is excluded or limited by reason that notice of a claim against the insured in respect of a loss suffered by some other person is not given to the insurer before the expiration of the period of the insurance cover provided by the contract. (2) The insurer shall, before the contract is entered into: (a) clearly inform the insured in writing of the effect of subsection (3); and (b) if the contract does not provide insurance cover in relation to events that occurred before the contract was entered into, clearly inform the insured in writing that the contract does not provide such cover. Penalty: 300 penalty units. (3) Where the insured gave notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as was reasonably practicable after the insured became aware of those facts but before the insurance cover provided by the contract expired, the insurer is not relieved of liability under the contract in respect of the claim, when made, by reason only that it was made after the expiration of the period of the insurance cover provided by the contract.'
11. The effect of the reference to, and near verbatim inclusion of, s 40(3) would indicate that had the defendant notified Avant in writing when he became aware of the facts that might have given rise to the claim made by the plaintiff during the policy period, then, regardless of the time at which the plaintiff made the claim, the defendant would have been entitled to indemnity from Avant.
12. The second policy (including its revised April 2018 edition) contains the following terms: 'Continuous Cover If you, before the policy period, first become aware of facts or circumstances that might give rise to a claim or request for indemnity and you decide not to notify us of these facts or circumstances, then, notwithstanding clause 14.1, we will cover you where: we continued without interruption to be your professional indemnity insurer form the time you knew or ought to have known of the facts or circumstances that might give rise to a claim or request for indemnity to the date you actually notified us; had you decided to notify us when you first became aware of the facts or circumstances, you would have been covered under the policy in force at that time; and your decision not to notify us when you first became aware of the facts or circumstances was not fraudulent non-disclosure or fraudulent misrepresentation. Our liability to indemnify you is limited to the extent we would have been obliged to indemnify you under the terms and conditions of the policy in effect at the time you knew or ought to have known of the facts or circumstances that might give rise to a claim or request for indemnity. If we are obliged to indemnify you pursuant to this clause, we may reduce our liability to you by the amount of any prejudice we suffer as a result of your decision not to notify us at the time you knew or ought to have known of the facts or circumstances that might give rise to a claim or request for indemnity.' The first policy also contains near-identical terms.
13. The effect of these terms is that if the defendant became aware of facts and circumstances that may have given rise to the plaintiff's claim, and had at any time within the period of the first or second policies (and up to 24 April 2018) notified Avant of those facts and circumstances, he would have been entitled to indemnity, subject to the terms set out in paragraphs (a) to (c) and any reduction that Avant applied to the liability based on any prejudice it may have suffered.
14. Section 54 of the Insurance Contracts Act 1984 (Cth) reads as follows: '(1) Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into but not being an act in respect of which subsection (2) applies, the insurer may not refuse to pay the claim by reason only of that act but the insurer's liability in respect of the claim is reduced by the amount that fairly represents the extent to which the insurer's interests were prejudiced as a result of that act.

… (6) A reference in this section to an act includes a reference to: (a) an omission; and (b) an act or omission that has the effect of altering the state or condition of the subject-matter of the contract or of allowing the state or condition of that subject-matter to alter.' (My emphasis)

1. The effect of the first, second and second revised policies was that if the defendant was aware of facts and circumstances that may have given rise to the plaintiff's claim and he failed notify Avant of those facts and circumstances, the insurer might have refused (and has in fact refused) to provide the defendant with indemnity. Due to the defendant's omission to notify Avant within the policy periods, but for s 54(1) of the Insurance Contracts Act 1984 (Cth), the insurer might refuse indemnity for the absence of a claim within the period of cover. This is certainly one kind of claim envisioned by s 54 of the Insurance Contracts Act (Cth) and an issue similar to the kind considered by the High Court in FAI General Insurance Co Ltd v Australian Hospital Care Pty Limited [2001] HCA 38, in which McHugh, Gummow and Hayne JJ observed that s 54 'operates to prevent an insurer relying on certain acts or omissions to refuse to pay that particular claim' at [41].
2. This construction of the policy requires some evaluation of the defendant's awareness, which is of course complicated by the fact that he has not responded to the plaintiff's claim by way of filed Defence nor appearance in court. It is Avant's position that the plaintiff has not led evidence proving that the defendant was aware of facts and circumstances that may have given rise to the plaintiff's claim during the policy periods. In my view, the plaintiff has proffered some evidence that the defendant was or ought to have been aware of facts and circumstances that may have given rise to a claim on behalf of the plaintiff. In the Affidavit of Tara Burnie affirmed 29 January 2019 (Exhibit C), the plaintiff states as follows: '8. I wait (sic) for about 6 months until I contacted the surgery again. I could not bring myself to ring the surgery before this time which I believe was about April 2017. 9. When I rang up, I spoke to a lady on the phone. After I introduced myself she said: "How have you been? We were wondering as we have not heard from you." 10. I told her that I was not happy with the outcome of the procedure and ask (sic) if the breasts could be fixed.'
3. Additionally, annexed to her Affidavit is a seven page email sent from the defendant's surgery, Enhance Clinic, to the plaintiff's email address on 26 September 2017 requesting, among other things, the plaintiff to contact a number of New South Wales Government Departments and Ministers as well as media bodies to 'complain loudly and champion a campaign for justice for us wanting to help women and spread this message to your friends' after an article criticising the defendant and Enhance Clinic was published in the Daily Telegraph.
4. The plaintiff also refers to a letter sent to the defendant by her lawyers, Gerard Malouf and Partners, to which was annexed a subpoena for production of medical documents, including 'clinical notes, pathology results, radiological results and any other information you may have in relation to our client and any treatment provided'.
5. In Guild Insurance Ltd v Hepburn [2014] NSWCA 400 at [33], McFarlan JA stated as follows: 'There is no reason in principle why wrongdoers' knowledge of their wrongful acts cannot constitute awareness by them of circumstances that might give rise to claims against them, thus enlivening insurance policy notification provisions such as that to which I have referred in [22] above. It will frequently not do so, as in many cases it could not be inferred that insured who were (for example) negligent appreciated the fact of their negligence and the possibility of it giving rise to a claim against them. However in my view an inference is arguably available in the present case that Dr White was aware that her conduct might give rise to a claim. In particular, the "excruciating" pain which Ms Hepburn would have suffered as a result of procedures, including the extraction of a tooth, being undertaken without anaesthetic must have been obvious to Dr White and could thus constitute a basis for drawing that inference.'
6. I do not seek to make an evaluation of the probative nature of this evidence at this interlocutory stage of the proceedings. The plaintiff was not called to give evidence and she was not cross-examined. I note however that as the defendant has not filed a defence in this matter, at this stage, the allegations contained in the Statement of Claim and her Affidavits remains largely unchallenged. On the evidence tendered on the Notice of Motion, there is a complaint by the plaintiff to the defendant's clinic, an email from the defendant to the plaintiff indicating that he was at the very least aware of claims being made against him by patients, and a subpoena issued to the defendant relating to the plaintiff, all or one of which could indicate that the defendant may well have been aware of facts and circumstances that may have given rise to a claim being made on the plaintiff's behalf. It would seem unlikely that given the manner in which it is alleged that the surgery occurred, as in the plaintiff being sat up during the surgery, and asked by the defendant if she was happy with the implants, that the defendant did not know that this may give rise to a cause of action.
7. As identified by Campbell J in Ritchie v Advanced Plumbing and Drains Pty Ltd (supra) at [28]: '… where in truth the question [of whether there is an arguable case that the insurer's policy responds to the liability] is one of mixed fact and law, the existence of unresolved questions of fact will usually demonstrate the existence of an arguable case.'
8. As I have already stated, the plaintiff's submission that s 54 of the Insurance Contracts Act 1984 (Cth) prevents Avant from disclaiming liability under the contract(s) of insurance held by the defendant based on his omission (in this case a failure to notify Avant of facts and circumstances that may give rise to a claim) will require an evaluation of the defendant's actual or imputed knowledge. I am not satisfied that Avant is entitled to disclaim liability as there is a real possibility that if the defendant knew or ought to have known about the circumstances giving rise to the plaintiff's claim, Avant's policy of insurance would respond to that liability, albeit possibly in a reduced manner. This renders the decision no longer 'a pure question of law, such as a point of construction in the policy, which may be confidently decided without the benefit of contested fact' (Ritchie v Advanced Plumbing and Drains Pty Ltd (supra)) but has become a question of mixed fact and law, particularly the defendant's knowledge and the interaction of that knowledge with the contract of insurance and its governing legislation. I agree with Campbell J's assertion above that the existence of these unresolved questions of fact demonstrates the existence of an arguable case that the insurer's policy will respond to the defendant's liability.

REAL POSSIBILITY THAT THE DEFENDANT WILL NOT BE ABLE TO MEET THE PLAINTIFF'S JUDGMENT

1. Leave to join an insurer may be refused by the court if it is satisfied that the defendant is available to be sued and has assets to satisfy the claim, that is, there is a 'perfectly good common law defendant' available (Tzaidas v Child (2004) 61 NSWLR 18; [2004] NSWCA 252 at [50] per Giles JA citing Campbell v Mutual Life and Citizens Fire and General Insurance Co (NZ) Ltd (1971) NZLR 240 at 243). Conversely, leave will be granted by the court if there is doubt about the defendant's capacity to pay. These principles were reiterated in the Law Reform Commission Report 143, 'Third Party Claims on Insurance Money' at [2.49], which accompanied the introduction of the Third Party Act.
2. What constitutes a 'perfectly good common law defendant' was examined in Oswald v Bailey (1987) 11 NSWLR 715 at 725, where the court stated as follows: 'The primary ground upon which Yeldham J declined leave was his Honour's conclusion that there was a "perfectly good common law defendant available". He referred to the estate of the late Dr Bailey. On the basis of material placed before him, his Honour concluded that the estate had assets in excess of $230,000. However, what amounts to a "perfectly good common law defendant" must be considered in the light of the purpose of the section, drawing upon what Moffitt P said in National Mutual Fire. At the time of the proceedings before Yeldham J, there were at least six claims against the estate of the late Dr Bailey. There were the claims of the two appellants, three other claims for damages for alleged medical negligence and the claim of the executrix herself. The last-mentioned claim is made in respect of the former matrimonial home pursuant to the Family Law Act 1975 (Cth), s 79(8). The home has been valued at $150,000. Furnishings and jewellery have been valued at $45,000. The contingent liabilities for outstanding medical negligence claims would appear to total something of the order of $1,500,000. Disregarding the other claims against the estate, if Mrs Bailey's claim under the Family Law Act (Cth) succeeds in whole or part, the estate is likely to be left with trifling assets with which to meet the appellants' claims. Accordingly, his Honour erred in concluding that the existence of the estate, available to be sued, amounted relevantly to such a "perfectly good common law defendant" as to require or justify the refusal of the leave provided for in s 6(4).'
3. I accept that the plaintiff bears an evidentiary and persuasive onus on the application: Energize Fitness Pty Ltd v Vero Insurance Ltd [2012] NSWCA 213 at [53]. I further accept that the purpose of the Act such that it requires leave to be granted under s 5(4) is imposed to insulate insurers from exposure to untenable claims. Furthermore, I also accept that in exercising my discretion to grant leave to bring such a claim, I must be mindful of the legislative purpose: Murphy, McCarthy & Associates Pty Ltd v Zurich Australian Insurance Ltd [2018] NSWSC 627 per Hammerschlag J at [16].
4. My responsibility, I accept, requires me to "consider whether the [plaintiff] has shown there is an arguable case on the relevant matters without distraction by the General Steel test": Energize Fitness (supra).
5. In the Affidavit of Leslie Abboud dated 3 May 2019 (Exhibit E), Mr Abboud deposes to circumstances where, in investigating the plaintiff's claim, he has become aware that the defendant has had a judgment entered against him by his Honour Judge Levy in the amount of $204,607.00 plus costs (Turner v Blackstock [2019] NSWDC 102). There is nothing before me to indicate whether that judgement has been satisfied.
6. Annexed to the Affidavit of Tiffany Taleski dated 2 May 2019 (Exhibit D) is a company search of Blackstock Property Custodial Company No 2 Pty Ltd which records that the company is registered, and the defendant and his wife are directors thereof. Also annexed is a company search of Emu Plains Management Pty Ltd which is, again, a registered company with the defendant and his wife listed as directors.
7. The affidavit of Alexander Hairs dated 29 January 2019 (Exhibit 9) annexes an investigator's report (Annexure C), from Sharmans dated 30 June 2018. The results of the investigation reveal a complicated array of companies that the defendant is still involved in, the majority of which relate to cosmetic surgery. The defendant also appears to be involved in financial services and real estate. It reveals that the defendant's wife may own property in Queensland. The purchase prices of these properties is provided, however there is no information as to whether these properties are mortgaged, and if so, the extent to which they are encumbered.
8. The solicitor for the plaintiff has been unable to locate the defendant. His licence has been suspended and he is unable to conduct his practice as a medical practitioner. The solicitor for the plaintiff had contacted Stinchcombe & Hanley Legal on 29 May 2019 in relation to the previous judgment against the defendant which was entered by Judge Levy. On 2 May 2019 Mr Franjo Saric from Gerard Malouf & Partners spoke with Mr Stinchcombe, who had previously acted for the defendant, and he said words to the effect of: He is not well … He has had a breakdown. I have not seen him for some time, and I need to see him soon because we have received documentation from other solicitors regarding him. [Exhibit E]

CONCLUSION

1. I am not satisfied that Avant is entitled to disclaim liability under the contract of insurance with the defendant. Therefore, Avant has not discharged its onus of proving that it is entitled to disclaim liability under its contract of insurance or under any act or law as required by s 5(4) of the Third Party Act.
2. I am satisfied that there is an arguable case of liability against the defendant and an arguable case that Avant's policy will respond to that liability. There is a real possibility that if the plaintiff were to obtain judgment against the defendant, the defendant will not be able to satisfy that judgment. I will grant the plaintiff leave to join Avant as the second defendant in these proceedings.

ORDERS

1. I make the following orders: 1. I grant the plaintiff leave to file an Amended Statement of Claim joining Avant Insurance Limited as the second defendant. 2. The Amended Statement of Claim is to be filed and served by 28 August 2020. 3. Listed for directions before the Judicial Registrar on 14 September 2020. 4. Costs of the motion be costs in the cause.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 August 2020