CGU Insurance Ltd v Watson

Case [2007] NSWCA 301

NEW SOUTH WALES COURT OF APPEAL

CITATION:      CGU Insurance Ltd v Watson (as trustee of the deed of arrangement in respect of Greaves) [2007]  NSWCA 301

FILE NUMBER(S):
40339/07

HEARING DATE(S):               18 September 2007

JUDGMENT DATE: 31 October 2007

PARTIES:
CGU Insurance Ltd - Appellant
David Patrick Watson (as trustee of the deed of arrangement in respect of John Huyshe Greaves) - Respondent

JUDGMENT OF:       Spigelman CJ Giles JA Basten JA   

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S):          ED 50198/06

LOWER COURT JUDICIAL OFFICER:     Hammerschlag J

LOWER COURT DATE OF DECISION:    4 May 2007

LOWER COURT MEDIUM NEUTRAL CITATION:
Watson v CGU Insurance [2007] NSWSC 450

COUNSEL:
A W Street SC & K Rees - Appellant
C Adamson SC & R Scruby - Respondent

SOLICITORS:
Colin Biggers & Paisley - Appellant
Kemp Strang - Respondent

CATCHWORDS:
Practice and procedure - stay of proceedings if costs of prior proceedings unpaid - whether proceedings on the same or substantially similar cause of action - meaning of cause of action - whether claim to declaration a cause of action - nature of claims under contract of insurance - essential facts on which claimant relied in the two proceedings were different - not the same or substantially similar cause of action - no stay.

LEGISLATION CITED:
Bankruptcy Act 1966 (C'th), Pt X

CASES CITED:
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564;
Bowen v Hickey (1958) 78 WN 820;
Bowes v Chaleyer (1923) 32 CLR 159;
British American Tobacco Australia Ltd v Eagle Star Reinsurance Co Ltd [2006] NSWCA 156;
Burghes v Attorney-General (1911) 2 Ch 139;
Carter v Egg and Egg Pulp Marketing Board (Vic) (1942) 66 CLR 557;
Conquer v Boot (1928) 2 KB 336;
Dunbee Ltd v Gilman & Co (Australia) Pty Ltd (1969) 89 WN (Pt 1) 259;
Dyson v Attorney-General (1912) 1 Ch 158;
Firma C-Trade SA v Newcastle Protection and Indemnity Association (1991) 2 AC 1;
Gouriet v Union of Post Office Workers (1978) AC 435;
Guaranty Trust Co of New York v Hannay & Co (1915) 2 KB 356;
Haines v Australian Broadcasting Corporation (1995) 43 NSWLR 404;
Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWCA 202;
Johnston v The Salvage Association (1887) 29 QBD 458;
Kone Elevators Pty Ltd v Popa [2006] VSCA 26;
Letang v Cooper (1965) 1 QB 232;
Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543;
Martin v Earl Beauchamp (1883) 25 Ch D 12;
McCabe v Bank of Ireland (1889) 14 App Cas 413;
Onerati v Phillips Constructions Pty Ltd (in liquidation) (1989) 16 NSWLR 730;
Peter Turnbull & Co Pty Ltd v Mundus Trading (A'Asia) Pty Ltd (1954) 90 CLR 235;
Penrith City Council v Government Insurance Office of New South Wales (1991) 24 NSWLR 564;
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 598;
Reichel v…

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Details
AGLC
CGU Insurance Ltd v Watson [2007] NSWCA 301
Case
[2007] NSWCA 301
Decision Date

CaseChat Overview and Summary

CGU Insurance Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge refusing to stay proceedings brought by Mr Watson. Mr Watson had commenced proceedings against CGU Insurance Ltd seeking a declaration regarding the interpretation of a contract of insurance. CGU Insurance Ltd sought a stay of these proceedings on the basis that Mr Watson had not paid the costs awarded against him in prior proceedings involving the same or substantially similar cause of action.

The central legal issue before the Court of Appeal was whether the current proceedings, seeking a declaration as to the interpretation of an insurance contract, constituted the "same or substantially similar cause of action" as the prior proceedings, thereby justifying a stay under the relevant court rules due to unpaid costs. This required the court to consider the meaning of "cause of action" in this context and whether a claim for a declaration could be considered a cause of action.

The Court of Appeal reasoned that the essential facts upon which Mr Watson relied in the two proceedings were different. The prior proceedings had concerned a claim for indemnity under the policy, whereas the current proceedings sought a declaration about the policy's interpretation. The court held that the nature of the claims, particularly the differing factual bases, meant that the current proceedings did not involve the same or substantially similar cause of action as the prior proceedings. Consequently, the court found no basis for a stay.

The Court of Appeal granted leave to appeal, directed the filing of the appellant's notice of appeal and the respondent's notice of contention within seven days, and ultimately dismissed the appeal with costs, with Giles JA, Spigelman CJ, and Basten JA all agreeing.

Orders

Orders of the court

(1) Grant leave to appeal; (2) Direct the appellant's notice of appeal and the respondent's notice of contention be filed within 7 days; (3) Dismiss the appeal with costs. (Giles JA, woth Spigelman CJ and Basten JA agreeing)

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

SPIGELMAN CJ

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Ratio Decidendi

Legal Principle Established

Established by: SPIGELMAN CJ

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