Judith Annette Aulich v QBE Insurance Limited and Suncorp Metway Insurance Limited - [2002] ACTSC 61

JUDITH ANNETTE AULICH AND OTHERS v QBE INSURANCE LIMITED AND SUNCORP METWAY INSURANCE LIMITED [2002] ACTSC 61 (24 June 2002)

CATCHWORDS

INSURANCE – application to enforce charge on insurance moneys against insurer – Law Reform (Miscellaneous Provisions) Act 1955, Pt 8 – when charge attaches – whether charge may attach before issue of insurance policy.

Law Reform (Miscellaneous Provisions) Act 1955, ss 25, 26, 27

Andjelkovic v AFG Insurances Ltd (1980) 31 ACTR 17

AFG Insurances Ltd v Andjelkovic (1981) 54 FLR 398

Manettas v Underwriters at Lloyds (1993) 7 ANZ Insurances Cases 61-180

Independent Wool Dumpers Pty Ltd v American International Underwriters (NZ) Limited & Ors (1993) 7 ANZ Insurance Cases 61-152

Capita Financial Group Ltd v Triden Properties Ltd (unreported Supreme Court of New South Wales, 6 September 1993)

National Mutual Property Services (Australia) Pty Ltd and Others v Citibank Savings Ltd and Others (1996) 138 ALR 409

FAI General Insurance Co Ltd v McSweeney and Others (1997) 73 FCR 379

Schipp v Cameron and Others [1999] NSWSC 997

No. SC 832 of 2000

Judge: Miles CJ
Supreme Court of the ACT
Date: 24 June 2002

IN THE SUPREME COURT OF THE  )
  )  No. SC 832 of 2000
AUSTRALIAN CAPITAL TERRITORY  )

BETWEEN:JUDITH ANNETTE AULICH AND OTHERS
Plaintiffs

AND:QBE INSURANCE LIMITED
(ACN 000 157 899)

First Defendant

AND:SUNCORP METWAY INSURANCE LIMITED (ACN 075 695 966)
Second Defendant

ORDER

Judge:  Miles CJ
Date:  24 June 2002
Place:  Canberra

THE COURT ORDERS THAT:

Leave be granted to the plaintiffs to sue the defendants in accordance with these reasons.

The parties bring in short minutes within 14 days.

This is an application under s 26(3) of the Law Reform (Miscellaneous Provisions) Act 1955 (the Act) for leave to enforce against an insurer a charge created by Pt 8 of the Act.

The relevant provisions of the Act are as follows:

“25 Amount of liability to be charge on insurance moneys payable against that liability
(1)If a person (in this part called the insured) has entered into a contract of insurance by which he or she is indemnified against liability to pay any damages or compensation, the amount of his or her liability is, on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of the liability may not then have been determined, a charge on all insurance moneys that are or may become payable in respect of that liability.
(2) If, on the happening of the event giving rise to the claim for damages or compensation, the insured (being a corporation) is being wound up, or if any subsequent winding-up of the insured (being a corporation) is taken to have commenced not later than the happening of that event, the provisions of subsection (1) apply notwithstanding the winding-up.
(3) Every charge created by this section has priority over all other charges affecting the insurance moneys, and where the same insurance moneys are subject to…

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.

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Details

AGLC: Judith Annette Aulich v QBE Insurance Limited and Suncorp Metway Insurance Limited [2002] ACTSC 61
Case: [2002] ACTSC 61
Decision Date

CaseChat Overview and Summary

Judith Annette Aulich and others have applied to the Supreme Court of the Australian Capital Territory for leave to enforce a charge against QBE Insurance Limited and Suncorp Metway Insurance Limited under the Law Reform (Miscellaneous Provisions) Act 1955. The plaintiffs are seeking to enforce a charge on insurance moneys against the insurers to recover damages arising from alleged negligent advice provided by Tax Invest, an entity that had a professional indemnity policy with the defendants. The defendants argue that the charge cannot attach under the Act because the alleged negligent conduct occurred before the policy was issued, and thus, the event giving rise to the claim did not occur while the policy was in effect.

The legal issues the court needed to decide were whether the event giving rise to the plaintiffs' claim for damages occurred before or after the insurance policy was issued, and if the statutory charge can attach to insurance moneys when the policy was effective after the event. The court considered conflicting judicial authority on these points, including decisions from the Federal Court of Australia and the Supreme Court of New South Wales.

The court held that it was sufficient for the plaintiffs to demonstrate an arguable case for enforcement of the charge, and leave should be granted unless there were reasons to deny it. The court rejected the defendants' argument that the court should decide the merits of the case at the leave stage, finding that the defendants' contentions were not so clear as to preclude the plaintiffs from pursuing their claim. The court granted the plaintiffs leave to enforce the charge and ordered the parties to bring in short minutes within 14 days to give effect to the decision.

Orders