Bistritz v Linkjet Holdings Pty Ltd (Under Administration)
[2001] WASC 67
BISTRITZ -v- LINKJET HOLDINGS PTY LTD (Under Administration) [2001] WASC 67
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 67 | |
| Case No: | COR:304/2000 | 2 FEBRUARY 2001 | |
| Coram: | MASTER SANDERSON | 16/03/01 | |
| 4 | Judgment Part: | 1 of 1 | |
| Result: | Limited leave granted | ||
| PDF Version |
| Parties: | ELWYN MAY BISTRITZ LINKJET HOLDINGS PTY LTD (Under Administration) (ACN 069 978 347) |
Catchwords: | Corporations Law Application for leave to proceed against corporation subject to a deed of arrangement Plaintiff claims under Fatal Accidents Act Defendant's insurer not admitting liability |
Legislation: | Corporations Law, s 444E(3)(a) Insurance Contracts Act, s 48 Workers Compensation & Assistance Act 1981, s 93D |
Case References: | Trident General Insurance Company Ltd v McNiece Bros Pty Ltd (1988) 80 ALR 574 Foxcroft v The Ink Group Pty Ltd (1994) 15 ACSR 203 Maritime Union of Australia v Patrick Stevedores No 1 Pty Ltd (1998) 153 ALR 602 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 626 Pioneer Water Tanks (Australia 94) Pty Ltd v Delat Pty Ltd (Administrator Appointed) (1997) 25 ACSR 757 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
LINKJET HOLDINGS PTY LTD (Under Administration) (ACN 069 978 347)
Defendant
Catchwords:
Corporations Law - Application for leave to proceed against corporation subject to a deed of arrangement - Plaintiff claims under Fatal Accidents Act - Defendant's insurer not admitting liability
Legislation:
Corporations Law, s 444E(3)(a)
Insurance Contracts Act, s 48
Workers Compensation & Assistance Act 1981, s 93D
Result:
Limited leave granted
(Page 2)
Representation:
Counsel:
Plaintiff : Mr T T S Chin
Defendant : Mr D L Whitehead
Solicitors:
Plaintiff : Taylor Smart
Defendant : Mallesons Stephen Jaques
Case(s) referred to in judgment(s):
Trident General Insurance Company Ltd v McNiece Bros Pty Ltd (1988) 80 ALR 574
Case(s) also cited:
Foxcroft v The Ink Group Pty Ltd (1994) 15 ACSR 203
Maritime Union of Australia v Patrick Stevedores No 1 Pty Ltd (1998) 153 ALR 602
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 626
Pioneer Water Tanks (Australia 94) Pty Ltd v Delat Pty Ltd (Administrator Appointed) (1997) 25 ACSR 757
(Page 3)
1 MASTER SANDERSON: This is the plaintiff's application for leave to proceed against a company in liquidation. The application is brought under s 444E(3) of the Corporations Law. The defendant is a corporation subject to a deed of company arrangement. The plaintiff's claim is an action seeking damages pursuant to the Workers Compensation & Assistance Act 1981 ("the Act"). Proceedings have been issued in the District Court of Western Australia but are stayed under the provision of s 444E(3)(a) pending the determination of this application.
2 The plaintiff's husband was killed while he was on route to his place of employment. On 23 September 1999 the District Court of Western Australia granted the plaintiff leave to bring an action pursuant to the provisions of s 93D of the Act. At the time of the accident the defendant had a workers' compensation insurance policy with SGIO. However, it appears that SGIO have not conceded liability to the defendant under the terms of this policy and it is by no means certain they will do so.
3 Applications by injured workers for leave to proceed against a company in liquidation or the subject of a deed of company arrangement are by no means unusual. It is generally the case that a policy of insurance is in place and solicitors appointed by the insurer take over conduct of the proceedings so that the corporation is a defendant in name only. If an award of damages is made against the corporation the liability is met by the insurer. Thus there is no impact upon the creditors of the corporation or those bound by the deed of company arrangement.
4 But this situation is somewhat different. The manager of the scheme is concerned that if leave to proceed is given and liability is not admitted by the insurers, the assets of the corporation will be dissipated as a consequence of the litigation. Accordingly, the scheme manager proposes that the plaintiff should lodge a proof of debt. As the plaintiff's claim is unliquidated, presumably what is suggested is that the proof should be lodged in an amount to which the plaintiff claims she is entitled. What happens thereafter is unclear. The scheme administrators have it within their power to either accept or reject the proof of debt. They may well negotiate with SGIO to ascertain whether the insurers will indemnify the company against the claim. Were an indemnity to be provided, presumably the plaintiff's claim would be paid in full - although how this sits with her having lodged a proof of debt which would generally entitle her to participate in the scheme of company arrangement as an unsecured creditor and not be paid in full, is unclear.
(Page 4)
5 I fully appreciate the anxiety of the scheme managers to proceed with the scheme. Nonetheless, the course they propose is, in my view, impractical. It is also manifestly unjust to the plaintiff and those she represents.
6 There is another option. It is at least arguable the plaintiff could proceed directly against SGIO based upon the provisions of s 48 of the Insurance Contracts Act 1984. Alternatively, the plaintiff may be able to proceed against SGIO on the basis of the principles set out in Trident General Insurance Company Ltd v McNiece Bros Pty Ltd (1988) 80 ALR 574. In either case the appropriate course would be to apply to join SGIO as a defendant to the District Court proceedings. This would involve an application to the District Court for leave to join SGIO as a defendant to the proceedings and may raise questions about the applicability of s 93D of the Workers Compensation Act.
7 In my view, the better course of action in this case is to grant to the plaintiff leave to proceed against the defendant with respect to applying to join SGIO as a defendant to the District Court proceedings. The plaintiff should have liberty to apply with respect to conduct of the proceedings once the application to join SGIO as a defendant has been determined.
8 I will hear the parties as to costs and the precise form of the orders.
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