Kaboko Mining Limited v Van Heerden (No 2)

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FEDERAL COURT OF AUSTRALIA

Kaboko Mining Limited v Van Heerden (No 2) [2018] FCA 706

File number: WAD 403 of 2016
Judge: MCKERRACHER J
Date of judgment: 18 May 2018
Catchwords: PRACTICE AND PROCEDURE – interlocutory application – whether the Court should order the joinder of a person to the proceeding – where the joinder of the defendant’s insurer would avoid multiplicity of proceedings and give effect to the overarching purpose of the Court’s civil practice and procedure provisions – insurer joined as defendant
Legislation:

Bankruptcy Act 1966 (Cth) s 117

Corporations Act 2001 (Cth) s 562

Federal Court of Australia Act 1976 (Cth) ss 21, 22

Federal Court Rules 2011 (Cth) rr 9.05(1)(b)

Cases cited:

Anjin No 13 Pty Ltd v Allianz Australia Insurance Ltd (2009) 26 VR 148

Ashmere Cove Pty Limited v Beekink (No 2) [2007] FCA 1421

Austcorp Project No 20 Pty Ltd v LM Investment Management Ltd, in the matter of Bellpac Pty Ltd (receivers and managers appointed) (in liq) [2013] FCA 883

CGU Insurance v Blakeley [2015] VSCA 153

CGU Insurance Limited v Blakeley (2016) 259 CLR 339

Employers Reinsurance Corporation v Ashmere Cove Pty Ltd (2008) 166 FCR 398

Interchase Corporation (in liq) v FAI General Insurance Co Ltd [2000] 2 Qd R 301

JN Taylor Holdings Ltd (In liq) v Bond (1993) 59 SASR 432

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589

The Owners-Strata Plan 62658 v Mestrez Pty Ltd [2012] NSWSC 1259

Date of hearing: 4 April 2018
Registry: Western Australia
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Category: Catchwords
Number of paragraphs: 35
Counsel for the Plaintiff: Mr N Kirby
Solicitor for the Plaintiff: Clayton Utz Lawyers
Counsel for the First to Fourth Defendants: The First to Fourth Defendants did not appear
Counsel for the Prospective Fifth Defendant: Mr T Searle
Solicitor for the Prospective Fifth Defendant: Clyde & Co

ORDERS

WAD 403 of 2016
BETWEEN:

KABOKO MINING LIMITED ACN 107 316 683 (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)

Plaintiff

AND:

ANDRIES TOBIAS VAN HEERDEN

First Defendant

JANE ROSEMARY FLEGG

Second Defendant

SHANNON JAYNE ROBINSON (and another named in the Schedule)

Third Defendant

JUDGE:

MCKERRACHER J

DATE OF ORDER:

4 APRIL 2018

THE COURT ORDERS THAT:

1.AIG Australia Limited ABN 93 004 727 753 be joined as a Fifth Defendant to the proceeding pursuant to Rule 9.05(1)(b)(i) and (ii) of the Federal Court Rules 2011 (Cth).

2.The issue of AIG’s liability to indemnify each of the defendants, or any of them, on account of the alleged breaches of their statutory, fiduciary and common law duties, be listed for hearing on Friday, 27 July 2018 at 10:15am (the preliminary hearing).

3.The Plaintiff and Fifth Defendant are to provide proposed orders programming the matter forward to the preliminary hearing as soon as practicable, including the filing of an amended Statement of Claim by the Plaintiff.

4.Costs be in the cause.

Note:   Entry of orders is dealt with…

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Details
Case
[2018] FCA 706
Decision Date

CaseChat Overview and Summary

Kaboko Mining Limited brought an action against several defendants, including Van Heerden, seeking damages for alleged breaches of statutory, fiduciary, and common law duties. The court was asked to decide whether to join the defendant's insurer, AIG Australia Limited, as a party to the proceedings. This application arose to avoid the potential for multiple proceedings and to align with the overarching purpose of the Court's civil practice and procedure provisions, which aim for quick, inexpensive, and efficient resolution of disputes.

The primary legal issue before the court was whether the insurer, AIG Australia Limited, should be joined as a party to the proceedings. The court considered that joining the insurer would prevent the multiplicity of proceedings, which would be inconsistent with the overarching purpose of the civil practice and procedure provisions. The court also considered the potential for the insurer to be liable for indemnifying the defendants, or any of them, for the alleged breaches.

The court held that the insurer should be joined as a party to the proceedings to avoid the potential for multiple proceedings and to give effect to the overarching purpose of the civil practice and procedure provisions. The court found that the insurer's joinder would not only avoid multiplicity of proceedings but also provide a more efficient and cost-effective resolution of the dispute. The court also noted that the insurer's potential liability for indemnifying the defendants was a significant factor in favour of its joinder.

In light of the above, the court granted leave to file an amended pleading joining AIG as a defendant. The court ordered that the issue of the insurer's liability to indemnify each of the defendants be listed for a preliminary hearing. The court also ordered that the plaintiff and the insurer provide proposed orders programming the matter forward to the preliminary hearing as soon as practicable, including the filing of an amended Statement of Claim by the plaintiff. The court further ordered that costs be in the cause.

Orders

Orders of the court

1. AIG Australia Limited ABN 93 004 727 753 be joined as a Fifth Defendant to the proceeding pursuant to Rule 9.05(1)(b)(i) and (ii) of the Federal Court Rules 2011 (Cth).

2. The issue of AIG’s liability to indemnify each of the defendants, or any of them, on account of the alleged breaches of their statutory, fiduciary and common law duties, be listed for hearing on Friday, 27 July 2018 at 10:15am (the preliminary hearing).

3. The Plaintiff and Fifth Defendant are to provide proposed orders programming the matter forward to the preliminary hearing as soon as practicable, including the filing of an amended Statement of Claim by the Plaintiff.

4. Costs be in the cause.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The overarching purpose of this Court's civil practice and procedure provisions demands that disputes are determined as quickly, inexpensively and efficiently as possible. CONCLUSION To avoid the likely multiplicity of proceedings, and to give effect to the overarching purpose, leave to file an amended pleading joining AIG was granted.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.