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Johnston v Endeavour Energy

Johnston v Endeavour Energy

Case [2015] NSWSC 1117 19 August 2015

Jurisdiction

Assignment of Rights

Subrogation

Statutory Interpretation

Standing

Abuse of Process

Civil Litigation & Procedure

Contract Law

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Johnston v Endeavour Energy [2015] NSWSC 1117
Hearing dates: 26 March 2015, 27 March 2015, 1 May 2015
Date of orders: 19 August 2015
Decision date: 19 August 2015
Before: Garling J
Decision:
Proceedings stood over to 21 August 2015 at 9.30am for final orders

Catchwords: PRACTICE AND PROCEDURE – representative proceedings – validity of opt out notices – where Insurers opted insureds out from existing proceedings – whether solicitor had authority to file opt out notices on behalf of insureds – whether insurer can commence proceedings in name of insured without authority – PRACTICE AND PROCEDURE – representative proceedings – standing – definition of group member in Insurers proceedings excludes an individual from being a member in both proceedings – where plaintiff in initial proceedings not opted out by Insurers – whether standing to bring motion and obtain relief sought – whether interference in Insurers proceedings by ‘stranger’ not part of proceedings – plaintiff represents interests of whole group – s 158(3) Civil Procedure Act – that plaintiff not personally opted out does not reduce his standing to contest validity of the opt out notices – CONTRACT – construction – insurance contracts – assignment of rights – whether assignment of insured’s right to insurer – need for explicit contractual basis for insurer to have authority to discontinue an insureds participation in existing proceedings – EQUITY – subrogation – rights of insurers – whether right to recover uninsured losses – STATUTORY INTERPRETATION – scope and application of s 183 Civil Procedure Act 2005 – general power of court to make any order appropriate or necessary to do justice – whether power broad enough to make orders sought – CONSTITUTIONAL LAW – whether Court engaged in an exercise of judicial power arising under Ch III of the constitution – meaning of ‘matter’ – whether matter of legitimate and real controversy – issues raise a matter such that the Court can legitimately exercise Federal jurisdiction – Court not precluded from determining relief sought
Legislation Cited: Civil Liability Act 2002
Civil Procedure Act 2005
Court Suppression and Non-Publication Orders Act 2010
Evidence Act 1995
Federal Court of Australia Act 1976 (Cth)
Insurance Contracts Act 1984 (Cth)
Limitation Act 1969
Uniform Civil Procedure Rules
Cases Cited: AFG Insurances Ltd v City of Brighton (1972) 126 CLR 655
Arthur Barnett Ltd v National Insurance Co of New Zealand Ltd [1965] NZLR 874
Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243
Buckee v The Commonwealth of Australia [2014] FCA 242
Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398
Castellain v Preston (1883) 11 QBD 380
Commercial Union Assurance Co Ltd v Lister (1874) Vol IX LR Chancery Appeals 483
Courtney v Medtel Pty Ltd [2002] FCA 957; (2002) 122 FCR 168
Earglow Pty Ltd v Newcrest Mining Ltd [2015] FCA 328
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7
Fencott v Muller [1983] HCA 12; (1983) 152 CLR…

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 Johnston v Endeavour Energy

Details

AGLC: Johnston v Endeavour Energy [2015] NSWSC 1117
Case: [2015] NSWSC 1117
Decision Date: 19 August 2015

CaseChat Overview and Summary

The matter before the court was an action brought by Johnston against Endeavour Energy, concerning the validity of opt out notices in the context of representative proceedings. The dispute arose from the Insurers' decision to opt insureds out of existing proceedings, and whether their solicitor had the authority to file such notices on behalf of the insureds. The court was tasked with determining whether the Insurers could commence proceedings in the name of an insured without explicit authority, and whether the plaintiff in the initial proceedings had standing to bring the motion and obtain the relief sought. Additionally, the court needed to interpret the scope and application of section 183 of the Civil Procedure Act 2005, and whether the court's power was broad enough to make the orders sought.

The court examined the Insurers' authority to file the opt out notices, determining that the solicitor did not have authority to act on behalf of the insureds without explicit contractual basis. It was held that there was no assignment of the insured’s rights to the Insurers, and thus, no authority for the Insurers to discontinue an insured's participation in the existing proceedings. The court also considered the standing of the plaintiff, concluding that even though the plaintiff was not personally opted out, this did not reduce his standing to contest the validity of the opt out notices. Furthermore, the court addressed the broader issue of whether the plaintiff represented the interests of the whole group, and whether the Insurers’ actions constituted interference in the proceedings by a 'stranger'.

The court found that the Insurers' actions were not authorized and therefore invalid, and that the plaintiff had standing to bring the motion. It was determined that the scope of section 183 of the Civil Procedure Act 2005 was sufficient to allow the court to make the orders sought, and that the issues raised constituted a legitimate and real controversy, thus allowing the court to exercise its Federal jurisdiction.

The court granted the relief sought by the plaintiff, declaring the opt out notices invalid and of no effect. This decision underscores the importance of explicit authority and contractual basis for Insurers to act on behalf of insureds in representative proceedings, and reinforces the standing of a plaintiff to contest such actions even if not personally opted out.

Orders