FAI General Insurance Company Ltd v McSweeney, B.A

[1993] FCA 94

JUDGMENT No. ........ .......,..	94	I .......,....	199 S	I	~
!

IN THE FEDERAL COURT OF AUSTRALIA )

1 No. NG 312 of 1992

GENERAL DIVISION j

BETWEEN :	FA1 GENERAL INSURANCE
COMPANY LTD  !

8            .

Applicant	!
.,

AND :	BRIAN ALBERT McSWEENEY	L.
I .

First Respondent

Bruce William Phillips

Second Respondent

Tag Pacific Limited

Third Respondent

and

Toikan Holdings Pty

Limited

Fourth Res~ondent

-. RECEI

CORAM: WILCOX J -4 MAR 1993

WILCOX J: There are two motions before the Court. Although	I .
they were made returnable on different days, by agreement they have been brought together. They each arise in proceeding 312
of 1992, in which FA1 General Insurance Company Limited is the	applicant and there are four respondents. Two of them, Tag
Pacific Limited and Toikan Holdings Pty Limited, are represented by Mr Robb QC. The issue I have to determine today is two-fold: firstly, whether or not an order will be made for the third and fourth respondents to cease to be parties to the proceeding, with consc~ ~ential amendments to the Statement of Claim; and, secondly, whether their cross- claim should be struck out.
In relation to the first matter, the Rules of the Court provide that a party making a claim for relief may discontinue a proceeding, so far as concerns the whole or any part of any claim for relief made by him, without leave of the Court prior to the first directions hearing; and with the leave of the Court, or the consent of any other party, until pleadings have closed. Once pleadings have closed, as here, it is necessary either to obtain the consent of all other parties or the leave of the Court. Consent is not forthcoming to the amendment of the Statement of Claim and the elimination of the third and fourth respondents. The question, therefore,
view that it made very little difference whether or not the	is whether the Court should give leave. During the course of submissions, I expressed the
third and fourth respondents stayed in the principal proceeding, providing that, from their point of view, the cross-claim was able to be maintained. In the cross-claim they seek relief directed to the question whether FA1 has validly disclaimed its liability pursuant to an insurance policy which was apparently held with it by the first and second respondents, Messrs McSweeney & Phillips.
However, Mr Robb submits that, even if there was no cross-claim, his clients are a proper party, if i10t a necessary party, in the proceeding by FA1 against the holders of the policy. They are chargees of the policy, because they have successfully sued Mr McSweeney and Mr Phillips to judgment. Consequently s.6(1) of the Law Reform jMiscellaneous Provisionsl Act 1946 NSW applies. It seems to me that it is correct to say that, if a person has an interest in an asset, the retention of which by the primary holder is in contest, that person is, at least, a proper party. I have in mind a situation, for example, where somebody impugns the title of a registered proprietor of a parcel of land. Assume that the land was mortgaged at the time, so that the mortgagee had an interest in the registered proprietor retaining title, I would have thought that the mortgagee was a proper party, perhaps even a necessary party. I think that this is the
themselves. situation in which the third and fourth respondents find
In one sense it might be said to be an academic question, whether they are retained in the principal proceeding, providing that the cross-claim remains on foot. But I think Mr Robb is correct in saying that, as a matter of principle, they are entitled to remain in the principal proceeding. There would be no advantage in the orders being made. No costs would be saved and I think that their retention in the role of respondents will help the Court to grapple with the merits of the matter. The true issue in the case is whether or not FA1 was entitled to disclaim the policy. It is obvious that counsel appearing for the third and fourth respondents will be able to assist the Court in that regard, especially having regard to the fact that the disclaimer occurred pursuant to findings made in litigation to which those respondents were parties.
In regard to the application to strike out the cross-claim, it seems to me that there is no merit in this application. It is important that all proceedings designed to raise live issues arising out of a controversy be heard at the one time. The substance of the cross-claim is that the cross- claimants, that is to say Tag and Toikan, claim declarations as to the subsistence of FAI's obligation to Messrs McSweeney and Phillips and, therefore, to themselves as chargees. The proposed declarations are framed in various ways. There is a
question whether declaration D, which relates to the	respondents' entitlement to leave to proceed, is a declaration
which ought to be made, having regard to the terms of S. 6 ( 4 ) of the Law Reform lMiscellaneous Provisions) Act. This is a matter which can be debated at the trial. It is only one of five declarations which are sought. Even if I took the view that this declaration was inappropriate, that would not furnish a reason for striking out the Statement of Claim.
Accordingly, it is my view that the relief sought in both notices of motion should be refused. I dismiss the notices of motion.

PLACE :	SYDNEY	FEDERAL COURT
DATE :	17 FEBRUARY 1993	AUSlRALIb PRINCIPAL REGISTR'

EXTEMPORE REASONS FOR JUDGMJ3NT a

[Counsel addressed on costs.]

I dismiss both notices of motion dated 15 February

1993. I order that the applicant pay the costs of the

respondents to the motions. They are to be taxed on the basis

of a single notice of motion.

I certify that this and the preceding four (4) pages
are a true copy of the Reasons for Judgment

of the Honourable Justice Wilcox.

Associate:

Dated:  17 February 1993

APPEARANCES

Counsel for the Applicant:	M Maurice QC and P Liney
Solicitors for the Applicant:	Colin Biggers and Paisley
Counsel for the First and
Second Respondents:	M J Gillis
Solicitors for the First and
Second Respondents:	Gillis Delaney Brown
Counsel for the Third and
Fourth Respondents:	S D Robb QC
Solicitors for the Third and
Fourth Respondents:	Rosenblum and Partners
Counsel for Travel Compensation
Fund :	A Monaghan
Solicitors for Travel Compensation Fund :	T G Hartmann & Associates
Dates of hearing:	17 February 1993