Metlife Insurance Ltd v Visy Board Pty Ltd & 25 ors

[2007] NSWSC 1168

CITATION:	Metlife Insurance Ltd v Visy Board Pty Ltd & 25 ors [2007] NSWSC 1168
HEARING DATE(S):	24 August 2007
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	24 August 2007
DECISION:	Expedition not granted. Directions made.
CATCHWORDS:	PROCEDURE – Miscellaneous procedural matters – expedition – where sought to gain priority over matter regularly initiated in an industry tribunal.
PARTIES:	Metlife Insurance Limited (plaintiff) Visy Board Pty Limited (1st defendant) Visy Paper Pty Limited (2nd defendant) Visy Board Superannuation Pty Limited (3rd defendant) Arpad Kozma (4th defendant) Colin Frewen (5th defendant) Reginald De Livera (6th defendant) Stephen Smith (7th defendant) Florian Karwacki (8th defendant) Sylvia Kleinman (9th defendant) Oscar Marconi (10th defendant) Petru Suciu (11th defendant) Thomas Hall (12th defendant) Mark Williams (13th defendant) Concetta Tedesco (14th defendant) Don Rakoci (15th defendant) Slako Gorguc (16th defendant) Shane Rogers (17th defendant) Maurice Rafidi (18th defendant) Edward Denko (19th defendant) Maria Drago (20th defendant) Milenco Baloi (21st defendant) Cane Mickovski (22nd defendant) Eyup Turkoglu (23rd defendant) Ugur Arslan (24th defendant) Gregory Sabitino (25th defendant) Ramadan Salievski (26th defendant)
FILE NUMBER(S):	SC 6399/06
COUNSEL:	D S Weinberger (plaintiff) B G Haines (sol) (1st - 3rd defendants) R E Montgomery (4th - 26th defendants)
SOLICITORS:	Deacons (plaintiff) Holding Redlich (1st - 3rd defendants) Maurice Blackburn Cashman (4th - 26th defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Friday, 24 August 2007

6399/06 Metlife Insurance Limited v Visy Board Pty Limited & 25 ors

JUDGMENT (ex tempore)

1 HIS HONOUR: During the 1990s, the plaintiff Metlife Insurance Ltd (then known as Citicorp Life Insurance Ltd), issued in respect of employees of the Visy companies (the first and second defendants) a group life insurance policy, which included cover for total and permanent disablement benefits, payable to the trustee of the Visy Board Superannuation Fund (the third defendant), and a group disability policy paying monthly benefits described as salary continuance insurance benefits to employees of the first and second defendants under certain circumstances. Metlife adopted the view of these policies that entitlement to receive a salary continuance benefit ceased once a member became totally and permanently disabled within the group life insurance policy and received a total and permanent disablement (“TPD”) benefit under that policy. The TPD benefit was usually much less valuable than the salary continuance benefit. A number of former employees have contended that the group disability policy did not allow Metlife to cease paying salary continuance insurance benefits upon paying the TPD benefit. Metlife disagrees with that contention, and by Summons filed on 20 December 2006 claims rectification of the group disability policy to give effect to what it says was the true agreement between it and the Visy companies. The Visy companies consent to that relief, but the fourth to twenty-sixth defendants, who are or have been eligible employees under the group disability policy, have been joined and oppose the relief sought.

2 Before these proceedings were commenced, at least the fourth defendant and possibly the fifth defendant had brought a compliant to the Financial Industry Complaints Service (“FICS”), of which Metlife is a member. Metlife and the fourth defendant have contested that complaint before FICS, and its determination by FICS is now imminent, with a meeting to consider it next week, and a decision to be issued probably within eight weeks of that date. Although they are not before me, I have been informed and it is not contentious that the submissions before FICS agitate the issues on the rectification suit with Metlife contending, in substance, that the written form of the policy does not reflect the true contract of insurance.

3 Expedition is sought primarily so that this Court can decide the rectification suit before FICS decides the complaint before it. Metlife is concerned that if FICS decides the complaint first, Metlife will be bound by that decision (as the FICS rules make tolerably clear), will not be able to have it reviewed in the event that it ultimately succeeds in the rectification suit, and may as a result be liable to pay the fourth defendant’s salary continuance payments, totalling about $3.5 million, until he attains age 65.

4 The parties have, for two years since August 2005, litigated this issue before FICS. In particular, the fourth defendant chose that forum, which is held out by the industry of which the plaintiff is a member as a forum in which disputes can be relatively expeditiously, cheaply and fairly resolved.

5 I am not unmindful of the concern that FICS’ decision might expose Metlife to a substantial long term liability. I think it most unlikely, as presently advised, that – if this Court ultimately were to determine that the contract of insurance should be rectified – there would be no basis for ceasing payment under the rectified policy. I also think it most unlikely that there would be no adequate right of review on FICS’ decision; it is clear that FICS’ decisions can be reviewed at least on judicial review grounds. But if I be wrong in these views, the position remains that the jurisdiction of FICS is one to which the plaintiff has submitted by its membership, and whether or not it is required to do so as a condition of its licence is beside the point.

6 In those circumstances, I do not see that this Court should expedite a case specifically for the purpose of preventing a proceeding in another appropriate jurisdiction from running its course. I am quite unpersuaded that it would be presently appropriate, at the last minute of that process, in effect to gazump it by this Court expediting a hearing of a claim brought some considerable time after the FICS proceedings had been instituted, and after issue had been joined, including on the present (rectification) issues, in it.

7 I note that the evidence of the plaintiff and the first to third defendants, other than any evidence in reply, is complete.

8 I direct that the fourth to twenty-sixth defendants notify the plaintiff and first to third defendants of categories of documents for discovery by 29 August 2007.

9 I direct that the plaintiff and the first to third defendants give discovery with verification of those categories by 5 September 2007.

10 I reserve liberty to apply in the event of any difficulty arising in respect of discovery.

11 I direct that the fourth to twenty-sixth defendants serve any affidavit evidence on which they propose to rely by 19 September 2007.

12 I adjourn the proceedings to 21 September 2007 at 10am in the Expedition List for further directions.

13 The prospect that the matter will receive a relatively early hearing date is not excluded, but for the reasons I have given it is not appropriate to take that course yet. However, I am not removing the matter from the Expedition List at this stage. I will not make any specific costs order; that issue can be revisited on the next occasion, if I remove the proceedings from the Expedition List then.

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