Guild Insurance Ltd v Hepburn

Guild Insurance Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge who had granted the respondent, Ms Hepburn, leave to join Guild Insurance Ltd as a second defendant to proceedings. Ms Hepburn sought damages from her former dentist for alleged wrongful advice and treatment. The joinder was sought pursuant to section 6 of the *Law Reform (Miscellaneous Provisions) Act 1946* (NSW), which permits a claimant to join an insurer as a defendant in proceedings against an insured person in certain circumstances.

The central legal issues before the Court of Appeal were whether there was an arguable case that Guild Insurance Ltd was liable to indemnify its insured, the former dentist, and whether there was an arguable case that the insured was aware of circumstances that might give rise to a claim. Furthermore, the court had to consider whether there was an arguable case that the insured would be unable to satisfy any judgment that might be entered against her.

The Court of Appeal, comprising Macfarlan, Meagher and Gleeson JJA, dismissed the appeal. The court reasoned that the primary judge had correctly applied the relevant legal principles in determining whether to grant leave to join the insurer. The test for granting such leave requires an arguable case that the insurer is liable to indemnify the insured, and that the insured is unable to satisfy a judgment. The court found that Ms Hepburn had established an arguable case on each of these points, thus justifying the joinder of Guild Insurance Ltd as a defendant.

Leave to appeal was granted, but the appeal itself was dismissed with costs.