FEDERAL COURT OF AUSTRALIA
McAlister v State of New South Wales [2014] FCA 702
Citation: McAlister v State of New South Wales [2014] FCA 702 Parties: PAUL LESLIE MCALISTER BY HIS LITIGATION REPRESENTATIVE NSW TRUSTEE & GUARDIAN v STATE OF NEW SOUTH WALES, AVIBIN PTY LTD (ACN 2669267) and ADRIAN ALAN POWELL File number: NSD 1968 of 2013 Judge: EDMONDS J Date of judgment: 3 July 2014 Catchwords: PRACTICE AND PROCEDURE – application by non-party for joinder under r 9.05, in the alternative r 1.32, of Federal Court Rules 2011 – whether power exists – no application to intervene but relevant principles on application for intervention under r 9.12 considered – consideration of merits of present application if power of joinder exists – joinder refused Legislation: Federal Court of Australia Act 1975 (Cth) s 37M
Federal Court Rules 2011 rr 1.32, 9.05, 9.12
Federal Court Rules O 6 r 8
Uniform Civil Procedure Rules 2005 (NSW) r 6.24Cases cited: Sensis Pty Ltd v Bivami Pty Ltd [2012] FCA 1365 Date of hearing: 25 June 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 34 Counsel for the Applicant on the application: Mr JE Sexton SC with Mr DA Lloyd Solicitor for the Applicant on the application: Lee & Lyons Lawyers Counsel for the Applicant: Mr MBJ Lee SC with Ms K Jones Solicitor for the Applicant: Maurice Blackburn Lawyers Pty Ltd Solicitor for the First Respondent: Crown Solicitor's Office (Ms Z Braybrooke) Counsel for the Second and Third Respondents: Mr SR Donaldson SC Solicitor for the Second and Third Respondents: DLA Piper
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1968 of 2013
BETWEEN: PAUL LESLIE MCALISTER BY HIS LITIGATION REPRESENTATIVE NSW TRUSTEE & GUARDIAN
Applicant
AND: STATE OF NEW SOUTH WALES
First RespondentAVIBIN PTY LTD (ACN 2669267)
Second RespondentADRIAN ALAN POWELL
Third Respondent
JUDGE:
EDMONDS J
DATE OF ORDER:
3 JULY 2014
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The interlocutory application dated 11 March 2014 be refused.
2.The applicant on the interlocutory application dated 11 March 2014 pay the costs of the second and third respondents, as agreed or taxed.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1968 of 2013
BETWEEN: PAUL LESLIE MCALISTER BY HIS LITIGATION REPRESENTATIVE NSW TRUSTEE & GUARDIAN
Applicant
AND: STATE OF NEW SOUTH WALES
First RespondentAVIBIN PTY LTD (ACN 2669267)
Second RespondentADRIAN ALAN POWELL
Third Respondent
JUDGE:
EDMONDS J
DATE:
3 JULY 2014
PLACE:
SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
This is an interlocutory application, dated and filed 11 March 2014, on behalf of certain underwriters at Lloyd’s of London (“the Underwriters”), subscribers to a policy of insurance bearing reference 02080235 (“Underwriters’ Policy”), to be joined as a cross-respondent in these proceedings, commenced as outlined in [5] below (“Proceedings”).
The Underwriters are not a party to the Proceedings…
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Details
- Case
- [2014] FCA 702
- Decision Date
CaseChat Overview and Summary
In the case of McAlister v New South Wales, the plaintiff, McAlister, brought proceedings against the State of New South Wales, Avibin, and Powell. The claims were in respect of acts and omissions occurring between 1 January 2000 and 15 August 2011. The plaintiff sought to join an additional party, the Underwriters, who were insurers of Avibin and Powell. The Underwriters sought limited involvement in the proceedings to protect their interests, specifically in relation to the period from 15 August 2002 to 15 August 2003, during which they held an insurance policy with Avibin and Powell.
The primary legal issue before the court was whether it had the power to order the joinder of the Underwriters as a party to the proceedings, and if so, whether it should exercise its discretion to do so. The Underwriters argued that their limited involvement was necessary to protect their interests in the proceedings, particularly in relation to factual findings that might be made during the proceedings. The court needed to determine whether the potential benefits of joinder outweighed any prejudice to the existing parties and whether the Underwriters had a sufficient interest in the proceedings to warrant their inclusion.
The court found that it had the power to order joinder but believed that it was doubtful. Even if it had the power, the court was not prepared to exercise it. The court considered that requiring McAlister to bring proceedings against the Underwriters against whom no relief was sought would not be appropriate. The court emphasised that any discretion under the Rules would not be exercised in such a manner. Consequently, the application for joinder was refused, and the Underwriters were not added as a party to the proceedings.
The court ordered that the interlocutory application for joinder be refused with costs. The Underwriters were not permitted to participate in the proceedings beyond their limited involvement as agreed in the draft orders. The court's decision effectively preserved the status quo of the existing parties and proceedings.
The primary legal issue before the court was whether it had the power to order the joinder of the Underwriters as a party to the proceedings, and if so, whether it should exercise its discretion to do so. The Underwriters argued that their limited involvement was necessary to protect their interests in the proceedings, particularly in relation to factual findings that might be made during the proceedings. The court needed to determine whether the potential benefits of joinder outweighed any prejudice to the existing parties and whether the Underwriters had a sufficient interest in the proceedings to warrant their inclusion.
The court found that it had the power to order joinder but believed that it was doubtful. Even if it had the power, the court was not prepared to exercise it. The court considered that requiring McAlister to bring proceedings against the Underwriters against whom no relief was sought would not be appropriate. The court emphasised that any discretion under the Rules would not be exercised in such a manner. Consequently, the application for joinder was refused, and the Underwriters were not added as a party to the proceedings.
The court ordered that the interlocutory application for joinder be refused with costs. The Underwriters were not permitted to participate in the proceedings beyond their limited involvement as agreed in the draft orders. The court's decision effectively preserved the status quo of the existing parties and proceedings.
Orders
Orders of the court
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Background
Background to the litigation
For the reasons which follow, assuming I have the power to order joinder which I think, at best, is doubtful, I am not prepared to exercise it by acceding to the Underwriters’ application, even in its modified form.BACKGROUND The Proceedings were commenced by Originating Application and Statement of Claim filed 20 September 2013 by the applicant (“McAlister”) against the first respondent (“the State”), the second respondent (“Avibin”) and the third respondent (“Powell”). Various claims are made by McAlister against the State, Avibin and Powell in respect of acts and/or omissions which allegedly occurred sometime within the period of 1 January 2000 to 15 August 2011 (“Relevant Period”). Throughout the Relevant Period, Avibin and/or Powell held policies of insurance with various insurance companies, including:(1)The Underwriters’ Policy, from 4.00 pm on 15 August 2002 to 4.00 pm on 15 August 2003 (“Policy Period”); and(2) Ansvar Insurance, which insured Avibin and/or Powell from about August 2005. The solicitors on the record for Avibin and Powell act on instructions from Ansvar Insurance. On the hearing of the interlocutory application for joinder, senior counsel for the Underwriters made it abundantly clear that the “real nub” and “crux” of the impetus driving the Underwriters to seek joinder was “not just [avoidance of] multiplicity of proceedings” but “the interests of one insurer against another insurer”: The real problem is a problem between two insurers, one of whom has the advantage of being able to conduct the proceedings to its advantage factually. And he’s maintaining a position which will result in my insurer having to stand, looking over the fence, and then do the best it can, after factual findings have been made in these proceedings, to recoup its position. He elaborated as follows:That’s the problem we’re seeking to avoid. And it’s quite plain that it is a real problem because once Avibin and Powell are free of their obligation to permit insurers’ choice of solicitors to conduct the case on their behalf, they will make a claim against my clients. Alternatively, if they’re insolvent and/or bankrupt by that stage, then it’s very much in the applicant’s interest as well. But in the meantime, as I say, we will be not just on the sidelines but outside the arena, peering over the fence. And it’s that problem that we submit justifies our intervention in a way which is constrained, as formulated in those orders, that is, that we would have very limited involvement, the limit of our involvement being to protect insurers’ interests in relation to what’s said by any of the other parties about what occurred between 2002 and 2003. The reference to the Underwriters’ intervention being constrained as formulated “in those orders” is a reference to draft orders which senior counsel for the Underwriters handed up at the commencement of the hearing and which he said had been agreed with the applicant on the premise that the Underwriters were joined as a cross-respondent. Relevantly, those draft orders provided in paras 2 and 3 as follows:2.The issues upon which Underwriters are entitled to be heard in the proceeding are confined to:(i)Whether Underwriters are liable to indemnify the second and/or third respondents under Policy of Insurance 02080235 and if so to what extent;(ii)the extent of the liability of the second and third respondents to the applicant in respect of the period from 15 August 2002 to 15 August 2003 for which Underwriters are alleged to be liable to indemnify the second and third respondents;having regard to the Policy Defences relied upon by Underwriter referred to in the document annexed and marked A.3.Subject to order 4, the Underwriters’ involvement in the proceeding is confined to:(i)the inspection of documents produced by the parties to the proceeding in accordance with the orders of the Court; and(ii) the cross-examination of witnesses at the hearing of the proceeding,on topics or matters which relate directly to the issues in order 2.POWER TO ORDER JOINDER
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Similarly, any discretion under the Rules would not be exercised so as to require McAlister to bring proceedings against another party against whom no relief is sought, upon application of that other party or otherwise.CONCLUSION For these reasons, the interlocutory application must be refused with costs.
Ratio Decidendi
Legal Principle Established
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