Leighton Holdings Ltd v HIH Casual and General Insurance Ltd
[2001] WASC 34
LEIGHTON HOLDINGS LTD & ANOR -v- HIH CASUAL & GENERAL INSURANCE LTD [2001] WASC 34
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 34 | |
| Case No: | CIV:2013/2000 | 5 FEBRUARY 2001 | |
| Coram: | MASTER SANDERSON | 13/02/01 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | LEIGHTON HOLDINGS LTD (ACN 004 482 982) LEIGHTON CONTRACTORS PTY LTD (ACN 000 893 667) HIH CASUAL & GENERAL INSURANCE LTD (ACN 008 482 291) |
Catchwords: | Practice and procedure Application to strike out all or part of statement of claim Turn on its own facts |
Legislation: | Property Law Act, s 11 |
Case References: | Re Cryan (1930) 284 NW 238 Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd & Ors (1987) 14 FCR 215 Bruce v Odhams Press Ltd [1936] 1 KB 697 Phillips v Phillips & Ors [1878] IV QBD 127 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Stabler v Ramsay (1952) 89 Q (2d) 544 The Russian Commercial & Industrial Bank v British Bank for Foreign Trade [1921] 2 AC 438 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
LEIGHTON CONTRACTORS PTY LTD (ACN 000 893 667)
Second Plaintiff
AND
HIH CASUAL & GENERAL INSURANCE LTD (ACN 008 482 291)
Defendant
Catchwords:
Practice and procedure - Application to strike out all or part of statement of claim - Turn on its own facts
Legislation:
Property Law Act, s 11
(Page 2)
Result:
Application dismissed
Representation:
Counsel:
First Plaintiff : Mr R J Ainslie
Second Plaintiff : Mr R J Ainslie
Defendant : Mr G R Hancy
Solicitors:
First Plaintiff : Mallesons Stephen Jaques
Second Plaintiff : Mallesons Stephen Jaques
Defendant : Hammond Worthington
Case(s) referred to in judgment(s):
Re Cryan (1930) 284 NW 238
Case(s) also cited:
Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd & Ors (1987) 14 FCR 215
Bruce v Odhams Press Ltd [1936] 1 KB 697
Phillips v Phillips & Ors [1878] IV QBD 127
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Stabler v Ramsay (1952) 89 Q (2d) 544
The Russian Commercial & Industrial Bank v British Bank for Foreign Trade [1921] 2 AC 438
(Page 3)
1 MASTER SANDERSON: This is the defendant's pleading summons seeking to strike out the action of the first plaintiff, or alternatively, par 7 of the plaintiffs' amended statement of claim. To understand the nature of the application it is necessary to quote in part from the plaintiffs' amended pleading.
2 Paragraphs 1 and 2 introduce the parties. Paragraph 3 pleads a policy of insurance issued by the defendant for the benefit of the first plaintiff "and its subsidiaries". Paragraphs 4, 5, 6 and 7 are in the following terms:
"4 The material portion of the Insuring Clause of the Policy provides:
'We the Insurers hereby agree to indemnify the Insured up to but not exceeding in the aggregate the amount stated as The Sum Insured:
(a) for any sum or sums which the Insured may become legally liable to pay arising from any Claim made against them during The Period of Insurance and notified to the Insurers:
(b) for loss of expense sustained by the Insured which is directly attributable to the costs to achieve compliance with their contractual responsibilities and which is first discovered and notified to Insurers;
during the Period of Insurance stated in the Schedule arising from the conduct and execution of The Professional Activities And Duties Of The Insured.'
5 The Excess provision of the Policy provides:
'In respect of each Claim made against the Insured the amount of the Excess shall be borne by the Insured at their own risk and the Insurer shall only be liable to indemnify the Insured in excess of such amount.
Should any Claims made against the Insured involve more than one act, error or omission then the Excess specified in the Schedule shall apply to each such act, error or omission separately.
(Page 4)
- The application of the Excess shall be limited to a maximum payment of the sum of two Excesses any one single project/contract for Claims notified to the Insurers during any one Period of Insurance.'
- 6 The Policy defines a 'Claim' as follows:
'Claim' shall mean:
(a) the receipt by the Insured of any written or verbal notice of demand for compensation made against the Insured;
(b) any writ, statement of claim, summons, application or other originating legal or arbitral process, cross-claim, counterclaim or third or similar party notice served upon the Insured.'
7 The second plaintiff has incurred loss and expense during the Period of Insurance stated in the Schedule to the Policy which is directly attributable to the cost to achieve compliance with its contractual responsibilities in relation to construction of the duplicate Narrows Bridge, Perth and has made a claim for such loss and expense under insuring clause (b) of the Policy."
3 Paragraph 8 pleads that "no Claim has been made" under the policy and par 9 is in the following terms:
"9 The plaintiff's contend that on a true construction of the Policy no Excess (as referred to in paragraph 5 hereof) shall be borne by the plaintiff to reduce the liability of the defendant pursuant to insuring clause (b) of the Policy to indemnify the plaintiff for loss or expense sustained by the Insured which is directly attributable to the plaintiff's costs to achieve compliance with its contractual responsibilities. This is denied or alternatively, not admitted by the defendant."
- By way of relief the plaintiff seeks a declaration that:
"on a true construction of the Policy no excess shall be borne by the plaintiff to reduce the liability of the defendant pursuant to insuring clause (b) of the Policy to indemnify the plaintiff for loss or expense sustained by the Insured which is directly
(Page 5)
- attributable to the plaintiff's costs to achieve compliance with its contractual responsibilities."
4 The defendant raises two complaints about the pleading. The first is that the document does not by its terms mention the second plaintiff. It was submitted on behalf of the defendant that it was by no means clear what relationship the second plaintiff had to the defendant and what, if any, interest the second plaintiff has in the policy of insurance. In its written submissions the second plaintiff says that it is a named beneficiary of the policy but is not a party to the policy. It is therefore said that either under s 11 of the Property Law Act or under O 18 r 4(2) the second plaintiff is properly a party to these proceedings.
5 The second plaintiff is clearly correct in its submissions. By par 2 of the statement of claim the second plaintiff is identified as a wholly owned subsidiary of the first plaintiff. By par 3 it is pleaded that the Policy was issued for the benefit of the first plaintiff and its subsidiaries. In the circumstances I am satisfied that there is no substance in the defendant's complaint.
6 The second ground of complaint by the defendant essentially relates to par 7 of the amended statement of claim. It is submitted that this paragraph assumes, without pleading, material facts that the second plaintiff has incurred loss and expense which brings it within subpar (b) of the insurance clause pleaded in par 4. It is said by the defendant that unless and until material facts are pleaded which if proved establish that the second plaintiff has incurred loss and expense which would fall within insuring clause (b), there is no action properly before the court. On that basis it is said that par 7 of the amended statement of claim ought be struck out.
7 The plaintiffs say that what they are seeking is a declaration as to the proper interpretation of the policy as to whether the Excess provision in the Policy will apply if a claim is made under insuring clause (b). They submit that for the purposes of making such declaration it is not necessary to establish that a claim has been made under the subclause or that an amount is payable pursuant thereto. They simply seek a declaration as to the interrelationship between insuring clause (b) and the excess provision. Once they have that declaration the parties can take steps to work out what their liability might be. It is submitted that for the purposes of the dispute - that is to say, for the purposes of obtaining declaratory relief - it is not necessary for them to establish that they have actually incurred loss and expense which would fall within insuring clause (b). All they need do
(Page 6)
- is show that there is "the ripening seeds of controversy" to allow declaratory orders to be made: see Re Cryan (1930) 284 NW 238.
8 It is apposite to note that this action was commenced by originating summons. Clearly the plaintiffs did not intend to put any evidence before the court but simply seek a declaration as to the meaning and effect of the contractual relationship between the parties. On that basis it is perhaps unfortunate that the matter was ordered to proceed by way of pleadings. Be that as it may, it seems to me that the plaintiff should be permitted to seek a declaration as to the proper interpretation of the contract. The plaintiffs say costs have been incurred, although no claim has yet been made. The seeds of controversy are in hand if not yet planted. It establishes that there might well be a dispute between the parties, the questions raised by the proceedings are not hypothetical and the situation exists where a declaration could properly be made.
9 It is, in my view, important to look at precisely what the plaintiffs seek to achieve by these proceedings. They wish to know whether a claim under insuring clause (b) of the Policy will be subject to the excess clause. Once this is clarified one issue between the parties is removed. It is possible to imagine a situation where the plaintiffs claim against the defendant pursuant to insuring clause (b) and the claim is rejected. One aspect of the dispute between the parties might well be the relationship between the insuring clause and the excess clause. It might be appropriate to deal with that as a preliminary issue - elimination of that question may then lead more readily to a resolution of a dispute between the parties. Viewed in that way, this present action may be seen as an attempt to limit the scope of any future dispute between the parties. That provides a sound practical reason for allowing the action to proceed.
10 In my view the pleading in its present form allows the defendant to understand the very limited case it has to meet. I would therefore dismiss the defendant's application. I will hear the parties as to costs.
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