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CGU Insurance v Blakeley

CGU Insurance v Blakeley

Case [2015] VSCA 153 19 June 2015

Civil Litigation & Procedure

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0022
CGU INSURANCE LTD	Applicant
v
ROSS BLAKELEY, MICHAEL RYAN AND QUENTIN OLDE AS JOINT AND SEVERAL LIQUIDATORS OF AKRON ROADS PTY LTD (IN LIQUIDATION) (ACN 004 769 895)	First Respondents
AKRON ROADS PTY LTD (IN LIQUIDATION) (ACN 004 769 895)	Second Respondent
TREVOR PAUL CREWE	Third Respondent
ROBERT MARK SILL	Fourth Respondent
JOHN MARTIN SILL	Fifth Respondent
CREWE SHARP PTY LTD (IN LIQUIDATION) (ACN 066 670 013)	Sixth Respondent

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JUDGES:	ASHLEY, BEACH and McLEISH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15 June 2015
DATE OF JUDGMENT:	19 June 2015
MEDIUM NEUTRAL CITATION:	[2015] VSCA 153
JUDGMENT APPEALED FROM:	[2015] VSC 34 (Judd J)

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PRACTICE AND PROCEDURE – Application for leave to appeal against order joining third party insurer as a defendant – Insurer of defendants joined on application of plaintiffs – Declaratory relief sought against insurer by strangers to the insurance policy – Whether court has jurisdiction to grant declaration at suit of stranger to insurance policy – Multiplicity of proceedings – Proceeds of insurance – Discretionary decision on question of practice and procedure – Whether discretion miscarried – Test for leave to appeal – Whether appeal has real prospect of success – Residual discretion – Application for leave to appeal granted – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr D J O’Callaghan QC with Ms R L Enbom	Norton Rose Fulbright Australia
For the First and Second Respondents	Mr P D Crutchfield QC with Dr O Bigos	King & Wood Mallesons

ASHLEY JA
BEACH JA
McLEISH JA:

Introduction

The proceeding below is a claim under s 588M(2) of the Corporations Act 2001 (Cth) in which the plaintiffs allege that the directors of Akron Roads Pty Ltd (in liquidation) breached s 588G(2) of that Act by failing to prevent Akron Roads from incurring debts when it was insolvent. The liquidators of Akron Roads and Akron Roads itself (who are the first and second respondents in this Court) are the plaintiffs in the proceeding. The defendants (the third to sixth respondents in this Court) are alleged to be the directors of Akron Roads during the relevant period when Akron Roads is alleged to have been insolvent. The relevant directors so far as the present matter is concerned are Trevor Crewe (the third respondent) and Crewe Sharp Pty Ltd (in liquidation) (the sixth respondent). As particularised in the plaintiffs’ points of claim, the amount sought in the proceeding is in excess of $28 million.

By an application filed on 20 August 2014, the first and second respondents sought an order pursuant to r 9.06(b) of the Supreme Court (General Civil Procedure) Rules 2005 (the ‘Rules’) that CGU Insurance Ltd be joined as a defendant in the proceeding. Additionally, the first and second respondents sought leave to file and serve amended points of claim in which they seek a declaration that CGU is liable to indemnify Mr Crewe and Crewe Sharp under an insurance policy in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading CGU Insurance v Blakeley

Details

AGLC: CGU Insurance v Blakeley [2015] VSCA 153
Case: [2015] VSCA 153
Decision Date: 19 June 2015

CaseChat Overview and Summary

The case of CGU Insurance v Blakeley involved CGU Insurance Limited, an insurance company, and multiple other parties, including the Blakeleys, who sought to join a third-party insurer as a defendant in a proceeding. The dispute primarily revolved around the court's jurisdiction to grant declaratory relief against an insurer at the suit of a stranger to the insurance policy. The matter was heard in the Supreme Court of New South Wales.

The primary legal issues before the court included whether the court had the jurisdiction to entertain the claim for declaratory relief by individuals who were not parties to the insurance contract, and if the joinder of the insurer was appropriate given the multiplicity of proceedings. The Blakeleys argued that the court had jurisdiction to make such a declaration, while CGU Insurance contended that the court should not grant such relief to strangers to the policy. The court was also tasked with determining the proper exercise of its discretion in practice and procedure matters, particularly in the context of granting leave to appeal against an order.

In its reasoning, the court considered the principles of insurance law, the nature of the declaratory relief sought, and the potential for multiplicity of proceedings. The court found that while the jurisdiction to grant declaratory relief against an insurer existed, it was a discretionary matter that needed careful consideration. The court also examined the Blakeleys' application for leave to appeal against the order that joined CGU Insurance as a defendant. The court concluded that the Blakeleys' application for leave to appeal had a real prospect of success and that the discretion exercised by the lower court might have miscarried. Therefore, the court granted the application for leave to appeal, but ultimately dismissed the appeal.

In summary, the court granted leave to appeal but dismissed the appeal itself, thereby upholding the lower court's decision that the Blakeleys could not seek declaratory relief against CGU Insurance as strangers to the insurance policy. The court's decision emphasised the importance of judicial discretion in handling insurance-related matters and the limitations on such relief for non-contracting parties.

Orders