Lopez v Star World Enterprises Pty Ltd - [1997] FCA 454

CATCHWORDS

CORPORATIONS LAW - representative action - whether leave should be given pursuant to s 440D(1) of the Corporations Law

REPRESENTATIVE ACTION - whether the respondent should be ordered to produce for inspection relevant contracts of insurance

Corporations Law ss440D and 562

Foxcraft v The Ink Group 15 ACSR 203

RODOLFO LOPEZ v STAR WORLD ENTERPRISES PTY LTD
VG No.133 of 1997

Olney J
Melbourne
18 April 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION VG 133/97

BETWEEN:
  RODOLFO LOPEZ
  Applicant
  -and-

STAR WORLD ENTERPRISES PTY LTD
Respondent

Coram: Olney J

Place: Melbourne

Date: 18 April 1997

MINUTE OF ORDERS

THE COURT ORDERS THAT:

The time for filing and service of the applicant's notice of motion dated 16 April 1997 be abridged.
The applicant be given leave pursuant to section 440D(1)(b) of the Corporations Law to proceed with the application under Part IVA of the Federal Court of Australia Act 1976 on 1 April 1997 on condition that there be no execution of any judgment without the leave of the Court.
The respondent on or before 22 April 1997 provide to the applicant's solicitors for inspection any public liability insurance contract made between the respondent and Australian Unity Insurance Ltd or any other insurer, in respect of or covering the period 1 July 1996 - 30 June 1997 in respect of any liability the respondent may have to any third party including the applicant in relation to the allegations made in this proceeding.
For the purposes of s 33J(1) of the Federal Court of Australia Act 1976 the time and date of 4.00pm on 6 June
1997 is fixed as the time and date before which a group member may opt out of these proceedings.
The applicant by his solicitors cause an advertisement of size approximately 2" x 8" to be placed in each of the following newspapers for a period of one day no later than 2 May 1997:-

(a) Herald Sun;
(b) The Australian;
(c) Chieu Duong;

The applicant by his solicitors forward no later than 2 May 1997 to each person who has contacted the applicant's solicitors as referred to in paragraph 3 of the affidavit of Andrew Alexander Grech sworn 16 April 1997 and filed herein and for whom an address is known by pre-paid post to such address a copy of the advertisement referred to in paragraph 5.
The applicant in the first instance shall bear the costs of placing such advertisement and giving such notice and his costs of so doing between himself and the respondent be otherwise reserved.
The applicant's notice of motion dated 1 April 1997 be adjourned to 13 June 1997 at 9.30am.
The directions hearing be adjourned to 13 June 1997 at 9.30am.

10.Costs reserved.

NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION VG 133/97

BETWEEN:
RODOLFO LOPEZ

Applicant
-and-

STAR WORLD ENTERPRISES PTY LTD

Respondent

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

Case: [1997] FCA 454
Decision Date: 18 APRIL 1997

CaseChat Overview and Summary

The case of Lopez v Star World Enterprises Pty Ltd involved Rodolfo Lopez, who brought an action for damages for personal injury against Star World Enterprises Pty Ltd, a company that had fallen under administration. The matter was heard in the Federal Court of Australia, Victorian District Registry, before Olney J. The primary issue was whether leave should be granted to Lopez to proceed with a representative action against the respondent under section 440D(1) of the Corporations Law, and whether the respondent should be ordered to produce relevant insurance contracts for inspection.

In granting leave to Lopez to proceed with the representative action, the court considered the potential for a significant number of claimants and the possibility of substantial damages if the claims were successful. The court also took into account the respondent’s financial difficulties and the risk of liquidation, which could affect the availability of insurance indemnity. The court referenced the case of Foxcraft v The Ink Group, where it was noted that insurance coverage details could be pertinent in determining whether leave should be granted. Olney J concluded that it was in the interests of justice to allow Lopez to proceed and to require the respondent to disclose relevant insurance contracts.

The court reasoned that the traditional reluctance to disclose insurance details in jury trials did not apply in this case, as the Federal Court did not employ a jury system. The court also highlighted the importance of ensuring that any successful claimants could avail themselves of any insurance cover if the respondent went into liquidation. Therefore, the court ordered the respondent to produce for inspection any public liability insurance contracts that might cover liabilities arising from the claims in the proceeding. The court further set specific timelines for various procedural steps, including advertising the proceedings and notifying potential group members of their right to opt out.

Orders