Metlife Insurance Ltd v Rga Reinsurance Company of Australia Ltd

[2016] NSWSC 416

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Metlife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2016] NSWSC 416
Hearing dates:	08/04/2016
Date of orders:	08 April 2016
Decision date:	08 April 2016
Jurisdiction:	Equity - Commercial List
Before:	McDougall J
Decision:	Order separate and prior determination of questions.
Catchwords:	PROCEDURE – application for determination of separate question – interests of justice dictate hearing of the separate question – order for separate question made through short minutes of order produced by parties
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Tepko Pty Limited v Water Board (2001) 206 CLR 1
Category:	Procedural and other rulings
Parties:	Metlife Insurance Ltd (Plaintiff) RGA Reinsurance Company of Australia Ltd (Defendant)
Representation:	Counsel: I M Jackman SC / J Duncan (Plaintiff) S Donaldson SC / S Lawrance (Defendant)   Solicitors: TurksLegal (Plaintiff) Clyde & Co Australia (Defendant)
File Number(s):	2015/79770

Judgment   (ex tempore – revised 8 april 2016)

1. HIS HONOUR: There is a dispute between the plaintiff (Metlife) and the defendant (RGA) as to Metlife’s entitlement to indemnity from RGA under a reinsurance treaty. That dispute arises from Metlife’s liability as insurer for a number of police officers in this state.

2. There are some hundreds of claims involved. It is obvious, and in any event there is evidence to prove, that if the proceedings go to a final hearing on all issues, they will be expensive to run and occupy many weeks of court time.

3. There is a fundamental question in dispute before the parties as to the proper construction and application of what the parties call the “Initial Event Sentence” in the reinsurance treaty. That sentence states:

“For a claim to be eligible for consideration under the reinsurance arrangement the initial event leading to or contributing to the claim must occur after the date of effect of the treaty.”

4. The parties, through competing notices of motion and with the assistance of the Court in case management hearings, have attempted to work out ways in which there could be a hearing of particular questions relating to a limited number of claims, the effect of which might include resolution (at least after all appeals have been exhausted) of the dispute between them in relation to the operation of the Initial Event Sentence. As part of that process, the parties have now identified two particular claims which may be known simply by their numbers, 27375 and 35090, where resolution one way or the other of the Initial Event Sentence question is likely to give guidance to the parties in resolving the dispute between them as to a large number of the remaining hundreds of claims.

5. For that reason, I am prepared to consider ordering the separate and prior determination of the Initial Event Sentence question in respect of those two claims.

6. I am conscious of the warnings that have been given, including on the highest authority, in respect of the exercise of what is now the power to order separate determination under UCPR 28.2. The case most often cited is Tepko Pty Limited v Water Board (2001) 206 CLR 1; in particular the joint reasons of Kirby and Callinan JJ at [168] to [170].

7. Nonetheless, the power to order separate determination of questions exists. It is a power to be exercised within the dictates of s 56 of the Civil Procedure Act so that the interests of justice may best be served by the swift, just and cheap resolution of the real issues that are in dispute.

8. In the present case, I am satisfied that it is at least likely that the ultimate resolution of the Initial Event Sentence question in relation to the two claims to which I have referred will assist the parties in working out their attitude to many of the residual claims. I accept that not all the residual claims may be capable of resolution by this process. Nonetheless, it seems to me, if the Court can assist the parties by giving them a binding determination, on the basis of agreed facts and documents, of a question genuinely in dispute between them, it should give serious thought to doing so where, as I have said, the consequence may well be a significant reduction in the number of remaining issues for resolution and in the cost of the resolution of those remaining issues.

9. I am also comforted in considering such an approach because, as the parties agree, a determination of the Initial Event Sentence question in respect of claim 35090 will lead to a final judgment of that claim. As I understand it, if the question is resolved in favour of Metlife there will be in substance a declaration that it is entitled to be indemnified by RGA in respect of that claim. If the question is resolved in favour of RGA it will be entitled to judgment on Metlife’s claim against it in respect of that particular claim.

10. There is, however, a note of caution. The same consequence may not follow in respect of claim 27375. It may be that if the question is answered in favour of Metlife, there will still be issues that RGA wishes to litigate. In those circumstances, my attitude is that the separate question should only be ordered in respect of claim 27375 if the parties are satisfied and can assure the Court that the further issues, if any, that require resolution in respect of that claim, (assuming, of course, a decision on the Initial Event Sentence question in favour of Metlife), will not involve cutting across in any way the statement of agreed facts in relation to that claim. Put shortly, it would be a condition of the order in respect of claim 27375 that any subsequent dispute in respect of that claim would not involve facts contrary to those in the statement of agreed facts relating to it.

11. The parties have not finally agreed on the statement of agreed facts and the documents. Nonetheless, I have been assured that this can be attended to, and the documents in question can be assembled as an agreed bundle, before Friday next, 15 April 2016.

12. On that basis I propose to make the remaining orders sought and to stand the matter over to the Directions List on 15 April 2016 for allocation of a hearing date with respect to the separate questions.

13. However, I wish to make it quite clear that the parties must give attention to the concern that I have raised in respect of claim 27375. If they come to the view that the resolution of any subsequent issues in respect of that claim might involve the proof of facts contrary to the agreed facts, they are to notify the list judge or duty judge or me as soon as possible so that the separate order can be rescinded. I will not impose any time limit in respect of that but if the need arises I expect it to be dealt with before, indeed well before, the hearing date so that court time is not wasted.

14. I make orders in accordance with paras 1 to 4 of the short minutes of order, initialled by me and dated today’s date.

15. I list the matter for directions on Friday 15 April 2016 for allocation of a hearing date for the separate questions.

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Amendments

13 April 2016 - coversheet

Decision last updated: 13 April 2016