Re Soar Aviation Aircraft Holdings Pty Ltd (in liq) and Gobel Aviation Pty Ltd (in liq)
[2022] VSC 812
•22 December 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2022 04237
IN THE MATTER of SOAR AVIATION AIRCRAFT HOLDINGS LTD (IN LIQUIDATION) (ACN 613 275 853)
BETWEEN:
| TAREK MOHAMED | Plaintiff |
| v | |
| SOAR AVIATION AIRCRAFT HOLDINGS LTD (IN LIQUIDATION) (ACN 613 275 853) | First Defendant |
| GOBEL AVIATION PTY LTD (IN LIQUIDATION) (ACN 006 160 658) | Second Defendant |
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JUDGE: | Hetyey AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 30 November 2022 |
DATE OF JUDGMENT: | 22 December 2022 |
CASE MAY BE CITED AS: | Re Soar Aviation Aircraft Holdings Pty Ltd (in liq) and Gobel Aviation Pty Ltd (in liq) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 812 |
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CORPORATIONS – Corporations Act 2001 (Cth) – Insolvency – s 500(2) – Application for leave to proceed against two companies in voluntary liquidation – Leave sought to proceed against companies in personal injuries claim relating to aircraft crash – Principles and relevant considerations relating to grant of leave – Where liquidators neither consent to nor oppose leave – Policies of insurance likely to respond to claim – Lack of prejudice to creditors – Serious nature of claim – Whether serious question to be tried and solid foundation for claim – Alleged defects in proposed pleading – Not appropriate forum to determine pleading issues – Whether claim statute-barred – Not appropriate to determine limitation question at interlocutory stage – Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 followed – Leave to proceed granted.
CORPORATIONS – Supreme Court (Corporations) Rules 2013 (Vic) – r 2.13 – Underwriters of insurance policies seeking leave to be heard in substantive application as ‘interested persons’ and, if leave granted, to oppose application – Where granting of leave to proceed would not of itself prejudice rights of underwriters – Where underwriters unable or unwilling to confirm any particular insurance policy responsive to personal injuries claim – Where personal injuries claim not clearly futile, hopeless or statute-barred – Application for leave to be heard refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Lipinski of counsel | LHD Lawyers |
| For the Defendants | No appearance | |
| For Apollo APL 1969, Amtrust ATL 1861 and Antares AUL 1274 as underwriters seeking to intervene | Ms K Brazenor of counsel | Norton White |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background and procedural history............................................................................................... 1
Legal principles.................................................................................................................................. 7
Underwriters’ application for leave to intervene....................................................................... 12
Leave to proceed............................................................................................................................... 15
Position of the liquidators.......................................................................................................... 15
Whether insurance available to meet any judgment?........................................................... 16
Nature and seriousness of the claim........................................................................................ 18
Stage of proceedings and delay................................................................................................ 19
Serious question to be tried and solid foundation of claim.................................................. 19
Alleged defective pleadings............................................................................................. 21
Argument claim statute-barred....................................................................................... 22
Conclusion......................................................................................................................................... 27
HIS HONOUR:
Introduction
By originating process filed on 20 October 2022, Tarek Mohamed (‘the plaintiff’), seeks leave to proceed against two companies in liquidation, being Soar Aviation Aircraft Holdings Pty Ltd (in liq) (ACN 613 275 853) (‘SAAH’) and Gobel Aviation Pty Ltd (in liq) (ACN 006 160 658) (‘Gobel’), in order to name them as defendants to a proceeding commenced on 30 September 2021 in the Personal Injuries List of this Court[1] (‘the personal injuries proceeding’). In the personal injuries proceeding, the plaintiff alleges he was a passenger in an aircraft which crashed on 5 October 2018 (‘the incident’) near Stawell, Victoria, and that as a consequence of the incident he has suffered significant injury.
[1]Proceeding S ECI 2021 03580.
The liquidator of SAAH and Gobel does not oppose the plaintiff’s application for leave to proceed. However, certain underwriters at Lloyd’s[2] that subscribe to a number of insurance policies which may respond to the incident (‘the Underwriters’), seek leave to be heard in respect of the present application. Further, in the event leave to be heard is granted by the Court, the Underwriters oppose the relief sought in the application.
[2]The underwriters being Apollo APL 1969, Amtrust ATL 1861 and Antares AUL 1274.
Background and procedural history
Soar Aviation Pty Ltd (deregistered) (‘Soar Aviation’), Gobel and SAAH were part of a group of companies known as the ‘Soar Aviation Group’ which, together, constituted one of Australia’s largest flying schools. The Soar Aviation Group partnered with the Box Hill Institute to provide flight training for a Diploma of Aviation (Commercial Pilot Licence) and flight training to private students. On 29 December 2020, Brendan Richards and James Stewart of KPMG were appointed as joint and several voluntary administrators of both Gobel, SAAH and other companies comprising the Soar Aviation Group. A report prepared by Mr Richards and Mr Stewart as voluntary administrators explains that Soar Aviation Holdings Pty Ltd was the holding company for the other entities within the Soar Aviation Group, with the subsidiary entities performing various functions. Gobel was the main training entity of the Soar Aviation Group and the holder of the relevant Civil Aviation Safety Authority Air Operator’s Certificate and registered training organisation licence. Gobel also received the majority of trading revenue while performing a treasury function and distributing funds to other group entities. SAAH was the registered owner of aircraft assets and received rent from a sublease of hangar space.
On 11 February 2021, the creditors of the relevant companies within the Soar Aviation Group resolved that the entities be wound up. Subsequently, Mr Richards and Mr Stewart became joint and several liquidators of the relevant companies, including Gobel and SAAH.
By letter dated 2 November 2022 to the plaintiff’s lawyers, the liquidators confirmed that all funds held by them are subject to security interests and there will not be any dividend for unsecured creditors. Because of a lack of funds in the liquidations of Gobel and SAAH, there is no property available to fund the liquidators to take any steps in either the present proceeding or the personal injuries proceeding.
At the time the personal injuries proceeding was commenced, the named defendants were Soar Aviation (as first defendant) and Michael Hawthorne (as second defendant). The writ and statement of claim relevantly alleged that: Soar Aviation operated a flight training school from premises including at Moorabbin Airport, Victoria; that Mr Hawthorne was undertaking a flight training navigation exercise in partial fulfilment of the requirements to obtain a commercial pilot licence; and that the plaintiff was travelling as a passenger in the aircraft at the time. It was further alleged that during the navigation exercise, Mr Hawthorne lost control of the aircraft which crashed near Stawell. The incident was alleged to be caused by the negligence of Soar Aviation and Mr Hawthorne.
The plaintiff filed an amended written statement of claim in the personal injuries proceeding on 22 March 2022 naming Catalyst Consulting (Aust) Pty Ltd (‘Catalyst Consulting’) as the insurer of Soar Aviation and as the new first defendant on account of Soar Aviation being deregistered on 7 October 2020. The claim was made against Catalyst Consulting pursuant to s 601AG of the Corporations Act 2001 (Cth) (‘the Corporations Act’). That provision allows a person to recover from the insurer of a deregistered company an amount payable to the company under the insurance contract if the company is liable to the person and the applicable insurance contract covered the relevant liability. Catalyst Consulting then brought an application for summary judgment on the basis that it is not a proper defendant to the personal injuries proceeding because it has never been an insurer but is instead an insurance underwriting agency and therefore does not fall within the scope of s 601AG. The summary judgment application has been deferred until after the hearing and determination of an application by the plaintiff in the personal injuries proceeding for leave to amend his pleading. The amendment application is currently returnable in the personal injuries proceeding on 17 February 2023.
A proposed further amended statement of claim has since been prepared by the plaintiff in the personal injuries proceeding (‘the proposed pleading’) which seeks to remove Catalyst Consulting as a defendant and to add the Underwriters (who are described as ‘subscribing to policy number A039511’) as defendants in order to make out the claim under s 601AG. The proposed pleading also refers to Soar Aviation Melbourne Pty Ltd (deregistered) (‘Soar Aviation Melbourne’) in place of Soar Aviation. Soar Aviation Melbourne was deregistered on 25 September 2022. Given both Soar Aviation and Soar Aviation Melbourne are both deregistered entities and are named in relevant insurance policies (see further below), it is unclear whether the plaintiff intended in the proposed pleading to substitute Soar Aviation Melbourne for Soar Aviation or to retain reference to both entities.
In the proposed pleading, the plaintiff relevantly alleges that:
(a) at all material times, each of Soar Aviation Melbourne, SAAH and Gobel were part of the Soar Aviation Group of companies, which together operated flying schools;
(b) at all material times, Soar Aviation Melbourne, or alternatively SAAH, or alternatively Gobel Aviation, operated a Bristell light sport aircraft, registration VH-YVX (‘the aircraft’);
(c) on 5 October 2018, Soar Aviation Melbourne, or alternatively SAAH, or alternatively Gobel Aviation, permitted the second defendant to undertake a flight training navigation exercise as part of a training program for pilots using the aircraft when it knew or ought to have known that the plaintiff was travelling as a passenger in the aircraft;
(d) the plaintiff was present in the aircraft during the flight training navigation exercise with the knowledge, express or implied, of Soar Aviation Melbourne, or alternatively SAAH, or alternatively Gobel Aviation;
(e) at all material times, Soar Aviation Melbourne, or alternatively SAAH, or alternatively Gobel Aviation owed the plaintiff a duty to take reasonable care to avoid foreseeable risk of injury to him;
(f) the incident was caused by the negligence of Soar Aviation Melbourne and/or SAAH and/or Gobel Aviation and/or the second defendant in breaching the duty of care owed to the plaintiff. Particulars of the breach of duty of care include, among other things, failing to maintain any or adequate control of the aircraft and permitting the plaintiff to be present on the aircraft at the time of the accident;
(g) by reason of the above, the plaintiff has suffered injury loss and damage, specifically T-10 paraplegia with associated physical injuries and psychological injuries;
(h) at all relevant times, Soar Aviation Melbourne and/or SAAH and/or Gobel held a contract of insurance with the Underwriters (‘the contract’), the terms of which were partly written and partly to be implied. Insofar as they were written, they comprised a written insurance policy (‘the policy’), together with a back sheet listing each of Soar Aviation, SAAH and Gobel Aviation as an insured;
(i) at all relevant times, pursuant to the contract, the Underwriters were required to indemnify Soar Aviation Melbourne and/or SAAH and/or Gobel for amounts in respect of which they may be legally liable to pay as compensation for civil liability owed to, among others, the plaintiff;
(j) in the event the plaintiff is successful in establishing liability on the part of SAAH and/or Gobel, he seeks an order pursuant to s 562 of the Corporations Act and the contract that any amount received by the companies or the liquidators from the Underwriters in respect of the plaintiff’s claims must be paid to the plaintiff; and
(k) further or alternatively, in the event the plaintiff establishes liability on the part of SAAH and/or Gobel and should either of those entities become deregistered, the plaintiff is entitled to recover the amount of such liability directly from the Underwriters pursuant to s 601AG of the Corporations Act and the contract.
By letter dated 20 April 2022, Norton White, the lawyers for Catalyst Consulting, provided the plaintiff’s lawyers with the following insurance documents in respect of which the Underwriters are the named insurers:
(a) a document titled ‘Hangarkeepers Legal Liability Insurance Policy / Airport Owners And Operators Liability Policy’ held for the period 21 November 2017 to 21 November 2018 (policy number A039511) (‘the Hangarkeepers Policy’) and accompanying schedule (notwithstanding its title as ‘Airport Owners and Operators Liability Insurance Policy Schedule’);[3] and
(b) a document titled ‘Aircraft Hull and Liability Insurance Policy’ for the period 29 December 2017 to 29 December 2018 (policy number H3-36920) (‘the Hull Policy’) and accompanying schedule.
[3]Despite the different title used the policy schedule, it is apparent that it relates to the Hangarkeepers Policy because it adopts the same policy number. The Underwriters did not suggest otherwise.
It is apparent from its accompanying schedule that the Hangarkeepers Policy names Gobel (by way of the composite reference ‘Soar Aviation Pty Ltd T/As Gobel Aviation Pty Ltd T/As Soar Advanced Flight Training’), Soar Aviation and other parties as insured.
The schedule to the Hull Policy names SAAH, Soar Aviation, Soar Aviation Melbourne and other parties as insured parties. One of the other parties is an entity referred to as ‘Global Aviation Pty Ltd Soar Advanced Flight Training’. It is unclear whether this is a reference to ‘Gobel Aviation Pty Ltd T/As Soar Advanced Flight Training.’ The Hull Policy also identifies the aircraft as being covered by the policy.
In support of the application for leave to proceed, the plaintiff relies upon the affidavits of Joseph Catoggio, solicitor, sworn 20 October 2022 and 21 November 2022 and written submissions prepared by counsel dated 21 November 2022. Whilst the plaintiff’s originating process seeks leave under s 471B of the Corporations Act, on 2 November 2022 the liquidators informed the plaintiff that each of SAAH and Gobel are in fact in voluntary liquidation and, as such, s 471B does not apply. Accordingly, the plaintiff applies for leave to amend the originating process to seek leave to proceed under s 500(2) instead.
By summons dated 26 October 2022 and made pursuant to r 2.13 of the Supreme Court (Corporations) Rules 2013 (Vic) (‘the Corporations Rules’), the Underwriters seek leave to be heard in the plaintiff’s application as interested persons and, if leave is granted, to oppose the plaintiff’s application. In support of their summons, the Underwriters rely upon the affidavit of Ian Ross Adrian, solicitor, sworn 26 October 2022, the affidavits of Andrew Dunn, solicitor, sworn 11 November 2022 and 25 November 2022 and written submissions prepared by counsel dated 11 November 2022. I granted the Underwriters leave to file the 25 November 2022 affidavit of Mr Dunn out of time.
In the interests of efficiency and because of the degree of overlap of the relevant issues, on 30 November 2022, I heard the application by the Underwriters for leave to intervene as interested persons and the plaintiff’s substantive application for leave to proceed instanter.
Legal principles
Section 500(2) of the Corporations Act prohibits the commencement or continuation of a proceeding against a company under voluntary liquidation without leave of the Court. The provision specifically provides:
After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.
Whilst s 500(2) of the Corporations Act applies in circumstances where a company has entered into voluntary liquidation, its sister provision, s 471B has application to companies which have been placed into liquidation by court order. The principles that have been articulated in cases seeking leave under s 471B are equally applicable to applications made under s 500(2) of the Corporations Act (such as the present case).[4]
[4]Snelgrove v Great Southern Managers Australia Ltd (in liq) (recs and mgrs apptd) [2010] WASC 51, [28] (Le Miere J); Timbercorp Finance Pty Ltd (in liq) v Vivian (2016) 114 ACSR 198, 203 (Derham AsJ) (‘Timbercorp’); Re W.W Property Development (in liq) [2022] VSC 606 [14] (Garde J) (‘Re W.W Property Development’).
In the recent case of Re W.W Property Development (in liq),[5] Garde J explained the purpose and operation of s 500(2) in the following way:[6]
[5][2022] VSC 606.
[6]Citing Timbercorp, 204; Re 2 Nails Pty Ltd (in liq) [2018] VSC 745, [22] (Sifris J); Leasing Centre (Aust) Pty Ltd v Shepard [2011] FCA 443, [50]–[51] (Robertson J) (‘Leasing Centre’); Connelly v One Rail Australia (FLA) Pty Ltd [2021] FCA 946, [21] (Derrington J).
(a)s 500(2) gives effect to the statutory policy of ensuring that the assets are distributed rateably amongst all creditors;
(b)the provision prevents a company in liquidation from being subjected to expensive litigation conducted at the expense of the company’s creditors;
(c)the liquidators’ time and resources should not be diverted into expending substantial funds on defending claims against the company in court, when the proof of debt process is available as a cheaper and more efficient alternative;
(d)the proof of debt process is preferred as the way in which disputes are resolved unless the applicant can show good reason to depart from that procedure;
(e)in determining whether leave should be granted, the Court considers the balance of convenience and whether an applicant should be permitted to proceed by way of action to judgment, or left to pursue their claim by lodging a proof of debt with the liquidator;
(f)the onus is on the applicant to demonstrate why it is more appropriate to proceed by way of action…
Further, it is important to assess whether the claim has a solid foundation and gives rise to a serious dispute.[7] Put differently, there must be a serious or substantial question to be tried and the claim must not be futile.[8]
[7]See Re AJ Benjamin Ltd (in liq) [1969] 2 NSWR 374 (Street J) (‘Re AJ Benjamin’); Executive Director of the Department of Conservation and Land Management v Ringfab Environmental Structures Pty Ltd [1997] FCA 1484 (Lee J); Timbercorp, 204; Re W.W Property Development [14].
[8]Timbercorp, 204.
In determining an application for leave to proceed pursuant to s 471B or s 500(2), the Court has a broad discretion. In Timbercorp Finance Pty Ltd (in liq) v Vivian,[9] Derham AsJ identified the following considerations as being relevant to the assessment of applications for leave to proceed:[10]
[9][2016] VSC 338.
[10]Ibid 205-6 (citations omitted). See also Swaby v Lift Capital Partners Pty Ltd [2009] FCA 749 at [29] (Gilmour J); Global Partners Fund Ltd v Babcock & Brown (in liq) (2010) 267 ALR 144; 179 (Hammerschlag J); Leasing Centre; Cassegrain v Gerard Cassegrain & Co Pty Ltd (in liq) [2012] NSWCA 435, [33] (Ward JA), quoted in QBH v Dalle [2018] VSC 171, [2]; Stock Australia Pty Ltd (in liq) v One Rail Australia (FLA) Pty Ltd [2021] FCA 946 [21] (Derrington J); Re W.W Property Development, [15]; Austin, R.P and Black, A.J, Austin and Black’s Annotations to the Corporations Act (LexisNexis) at [5.471B].
(iv) the amount, nature and seriousness of the claim;
(v) the degree of complexity of the legal and factual issues involved;
(vi)whether the relief is not otherwise available to the applicant except by application to the Court;
(vii)the stage to which the proceedings, if already commenced, may have progressed;
(viii)in the case of a counterclaim (or cross-claim), whether it arises out of the same factual matrix as the claims made in the primary proceedings;
(ix)whether there is a risk that the same issues would be re-litigated if the claims were to be the subject of a proof of debt;
(x)whether the proceedings will result in prejudice to the creditors;
(xi)whether the company has a policy of insurance from which any judgment will be paid;
(xii)whether the claim is in the nature of a test case for the interest of a large class of potential claimants;
(xiii) whether the grant of leave will unleash an ‘avalanche of litigation’;
(xiv)whether the cost of the hearing will be disproportionate to the company's resources;
(xv) delay; and
(xvi)whether pre-trial procedures, such as discovery and interrogatories, are likely to be required or be beneficial.
As to the availability of insurance, Derham AsJ articulated the following further statement of principle:[11]
Where there is an insurance company standing behind the company to pay any judgment which the claimant may obtain, that is a factor strongly favouring the grant of leave. In such circumstances, the proceedings will generally cause no prejudice, either procedural or substantive, to the other creditors.[12]
[11]Timbercorp, 206.
[12]Citing Re AJ Benjamin; Re Sydney Formworks Pty Ltd [1965] NSWR 646; Re Coastal Constructions Pty Ltd (in liq) (1994) 13 ACSR 329; Lawless v Mackendrick (No 2) [2008] WASC 15 [37].
It is a usual condition of leave to proceed that an applicant not enforce any judgment without first obtaining leave of the Court.[13]
[13]Palace v RCR O’Donnell Griffin Pty Ltd (in liq) [2021] QCA 137, [40] (Sofronoff P, Morrison and Bond JJA). See also Commonwealth v Davis Samuel Pty Ltd(ACN 083 081 984) and Others (No 5) (2008) 164 ACTR 1.
Rule 2.13 of the Corporations Rules, states:
(1)The Court may grant leave to be heard in a proceeding without becoming a party to the proceeding to any person who is, or who claims to be—
(a) a creditor, contributory or officer of a corporation; or
(b) an officer of a creditor, or contributory, of a corporation; or
(c) any other interested person.
In Pilarinos and Ors v ASIC (‘Pilarinos v ASIC’),[14] the State of Victoria sought leave to intervene on an application for reinstatement of a deregistered company in order to argue that the applicants for reinstatement were not persons aggrieved within the meaning of s 601AH(2) of the Corporations Act and that it would be futile to order the reinstatement because any resulting proceeding by the relevant company against the State would fail. The Court refused the State leave to intervene. In doing so, Gillard J observed that it would be inappropriate for the Court to go into factual matters and untested evidence which may be the subject of dispute,[15] and that an application for reinstatement was not the proper forum for the ventilation and determination of the dispute between the parties.[16] His Honour expressed concern that:
If it is necessary to require notice to be given to the person who could be held ultimately responsible, a practice will develop whereby the cause of action may be the subject of a disputed application for reinstatement, resulting in a trial on affidavit of the merits. This, in my view, is the course that should be avoided.[17]
[14][2006] VSC 301.
[15]Ibid [22].
[16]Ibid [26].
[17]Ibid [27].
Justice Gillard also made the following further statement on the question of notice to interested parties:
… it would be appropriate, also, as a general guideline, that if a judge formed the view on the material that it was proposed to sue the company, and the cause of action was hopeless, it may be appropriate to require notice to be given to the potential litigant. Examples of this would be where there is a clear defence, such as a limitation defence or some statutory defence. However, it would only be in the clearest of clear cases that that should happen. I reiterate that the proper venue for the cause of action to be heard and determined is a court or statutory tribunal. The parties will then have every opportunity to fight the case in a proper setting, to have the advantage of discovery, to test the other party’s case, and to properly present their cases.[18]
[18]Ibid [29].
In Oak Dedicated Ltd v ASIC,[19] Gardiner AsJ considered an application by Oak Dedicated Ltd (‘Oak’) for reinstatement of a company under s 601AH of the Corporations Act, the consequential appointment of a liquidator to the company once reinstated and the granting of leave pursuant to s 471B. HIH Casualty and General Insurance Ltd (in liquidation), HIH Claims Support Ltd and Andrew Young (‘the HIH parties’) sought leave to intervene and oppose the application. The HIH parties had claimed relief as plaintiff in separate proceedings against Oak in relation to policies of insurance held by the deregistered company with a number of Lloyd’s underwriters for whom Oak was the nominee defendant. By way of counterclaim, Oak sought the rectification of a particular insurance policy and required the reinstatement of the relevant company in order to proceed with that claim.
[19][2009] VSC 665
In refusing the HIH parties leave to be heard, Gardiner AsJ referred to and adopted the principles and observations set out by Gillard J in Pilarinos v ASIC, noting that Gillard J’s approach was also approved by the Court of Appeal in AMP General Insurance Ltd v Victorian Workcover Authority and Others.[20] Similarly, in Chalker v Clark & ASIC & Ors,[21] Maxwell P, Dodds-Streeton JA and Osborn AJA endorsed the observation of Whelan J at first instance that:
It is often not appropriate for prospective defendants to a proceeding proposed to be pursued after reinstatement of a deregistered company to be permitted to make submissions as to the merits of the proposed action on the reinstatement application. In some circumstances, it is appropriate to entertain such submissions. For example, where it can be demonstrated that reinstatement is futile, as the proposed cause of action is clearly statute barred.[22]
[20](2006) 15 VR 175 at [42].
[21][2008] VSCA 92.
[22]Ibid [33].
More recently, in Re Hundy, 3 Property Group 12 Pty Ltd (in liq),[23] a case in which an intervening party sought leave to be heard in relation to a liquidator’s application under s 477(2B) of the Corporations Act for approval of funding agreement, Wigney J confirmed that:
The Court’s power under r 2.13 of the Rules to grant leave to, relevantly, a creditor, claimed creditor or officer of a creditor of a company is plainly discretionary. That discretion is relevantly unfettered. Considerations which may be relevant to the exercise of the discretion would include the nature of the relevant proceeding in respect of which the applicant wishes to be heard, the nature and extent of the applicant’s interest in the outcome of that proceeding, and the extent to which the applicant’s participation in the proceeding would assist the Court in the resolution of the proceeding.[24]
[23][2022] FCA 1216 (‘Re Hundy’).
[24]Ibid [29].
Although the cases I have referred to concern the question of leave to intervene in the context of applications made under ss 477(2B), 601AH, and 471B, the same principles apply equally to applications made under s 500(2).
Underwriters’ application for leave to intervene
It is appropriate to firstly deal with the Underwriters’ application for leave to intervene in the proceeding pursuant to r 2.13 of the Corporations Rules.
The Underwriters submit they should be granted leave to be heard on the plaintiff’s application as interested persons because, in the proposed pleading, the plaintiff proposes to join ‘[C]ertain Underwriters at Lloyds Subscribing to Policy Number A039511’ as the new first defendant (Policy Number A039511 is the Hangarkeepers Policy) in the personal injuries proceeding. Further, according to Mr Cattoggio in his 20 October 2022 affidavit, the Underwriters are asserted to be the insurers of a policy or policies that purportedly respond(s) to liability on the part of SAAH and Gobel in respect of the injuries the plaintiff has sustained as a result of the incident. Although the proposed pleading is ambiguous about which policy or policies are relied on by the plaintiff, if the Underwriters are in fact contractually required to indemnify, amongst others, SAAH and Gobel for amounts they may be legally liable to pay as compensation to the plaintiff, it follows that the Underwriters’ interests are potentially affected by the outcome of this application. When pressed on this point further, counsel for the Underwriters suggested that, depending on how the claim is put against her clients, the Underwriters may seek to step in and take an active role in the personal injuries proceeding or become involved at the conclusion of the proceeding.
Further, the Underwriters argue that, as interested persons, they may be able to assist the Court in the hearing and determination of the application, particularly given the liquidators do not seek to be heard. It is suggested that the Court would be assisted by the appearance of the Underwriters as contradictors.
I have determined to refuse the application for leave to intervene for the reasons set out below.
First, I am not satisfied that the granting of leave to proceed to the plaintiff against Gobel and SAAH would of itself prejudice or affect the rights of the Underwriters as insurers of a policy (or policies) that the plaintiff alleges respond(s) to the alleged liability of SAAH and /or Gobel. The exposure of the Underwriters to the plaintiff’s claim depends initially upon the plaintiff first succeeding against Gobel and SAAH and then upon the Underwriters being required to indemnify those companies under the relevant insurance policy or policies. As Mr Adrian deposes in his affidavit of 4 November 2022, no claim has yet been made against either the Hangarkeepers Policy or the Hull Policy in relation to the incident. It is apparent that the Underwriters are a few steps removed from having their interests impacted by the granting of leave to proceed against SAAH and Gobel in the personal injuries proceeding.
The Underwriters are named as defendants in the proposed pleading by way of a statutory claim under s 601AG of the Corporations Act following the deregistration of Soar Aviation Melbourne. Although the plaintiff pre-empts a further claim against the Underwriters pursuant to s 601AG in the event SAAH and/or Gobel also become deregistered, that aspect of the proposed proceeding contemplates a hypothetical scenario and no such claim presently exists against the Underwriters. Further, because any such claim would not be made against SAAH or Gobel, it is therefore strictly irrelevant to the application for leave to proceed.
Secondly, the Underwriters’ material is equivocal as to whether the Hangarkeepers Policy and the Hull Policy are responsive to the incident and the plaintiff’s substantive claim. When this was pointed out by the Court during the course of the hearing, counsel for the Underwriters submitted that the question of whether either or both of the policies were responsive to the plaintiff’s claim was not a matter for the Underwriters who were ‘not obliged to come up with the plaintiff’s case for him’. Instead, it was submitted that the plaintiff ‘has the relevant insurance documents and it is a matter for his advisers to come up with a proper claim.’ In circumstances where the Underwriters are unable or unwilling to confirm at this stage that any particular policy of insurance responds to the plaintiff’s claims against Gobel and SAAH or that the Underwriters are required to indemnify those entities for any liability owed to the plaintiff, I do not consider they should be permitted to intervene as interested persons in the extant application.
Thirdly, even though the Underwriters have identified a number of perceived defects in the proposed pleading (as set out in a schedule to the Underwriters’ written submissions and discussed further below), this is not the appropriate forum for the ventilation of such arguments. The plaintiff does not yet even have leave to file the proposed pleading. The Underwriters will have ample opportunity in the personal injuries proceeding to oppose the plaintiff’s claim at the hearing of the amendment application on 17 February 2023. Additionally, they may do so by way of summary judgment application, or at trial.
Fourthly, for reasons which I will further detail in connection with the application for leave under s 500(2), it is apparent that the proposed claims against SAAH and Gobel in the personal injuries proceeding have a solid foundation and raise a serious question to be tried. The claims are not clearly futile, hopeless or statute-barred.
Lastly, I am unconvinced that the Underwriters’ participation in this proceeding either as interveners or contradictors would necessarily assist in its resolution. A number of points sought to be raised by the Underwriters are highly technical in nature, including in relation to the perceived deficiencies in the proposed pleading and a contention that the claims against SAAH and Gobel are statute-barred. Such arguments are more appropriately made at the time the amendment application is returnable in the personal injuries proceeding or at trial. An application for leave to proceed against a company in liquidation under ss 500(2) or 471B should not become a proxy for a summary judgment application or a trial on the merits.
At the hearing the Underwriters also relied on the decision of Karellas Investments Pty Ltd v FW Projects Pty Ltd (in liq) (‘Karellas’)[25] in support of an argument that because the liquidators have adopted a neutral stance in the present application, the Underwriters are well-placed to provide assistance as a contradictor. However, in Karellas the party seeking leave to be heard on an application to appoint a special purpose liquidator was a substantial creditor concerned with the efficient administration of the liquidation. The creditor also contended it had an interest in the proceeding because it would be the main subject of investigations by the special purpose liquidator, including through the public examination procedure. Here, the Underwriters do not claim to be creditors of Gobel or SAAH and are not the subject of investigations or public examinations. As I have already stated, the interests of the Underwriters are not directly impacted by the application for leave to proceed. Their interests are more remote.
[25][2021] FCA 870.
Having refused the Underwriters leave to intervene or to act as contradictors, I am conscious that it may be somewhat artificial to consider the plaintiff’s application as if it were effectively unopposed or on the basis that the evidence and submissions relied upon by the Underwriters should be entirely disregarded.[26] I also recognise that the application for leave to intervene and the plaintiff’s substantive application have been heard together in circumstances where the issues overlap to some degree. In view of those matters, and in the event I am wrong in declining the Underwriters leave, I will pay appropriate regard to the matters advanced by the Underwriters in considering the plaintiff’s application.
[26]See Re Hundy [50].
I turn then to the merits of the plaintiff’s application for leave to proceed.
Leave to proceed
Set out below are a number of factors which are particularly germane to the determination of the plaintiff’s application.
Position of the liquidators
In their letter dated 2 November 2022, the liquidators notified the plaintiff that they neither consented to nor opposed the application, provided the plaintiff agrees to the following conditions:
(a) the plaintiff not enforce any judgment against SAAH or Gobel in any proceeding without further leave of the Court; and
(b) the plaintiff does not require any involvement from SAAH or Gobel in this proceeding or the personal injuries proceeding.
The second condition was sought because the liquidations of SAAH and Gobel are essentially unfunded. In the event the plaintiff requires the involvement of SAAH and Gobel in each proceeding, the liquidators say that leave to proceed should only be granted on the condition that the plaintiff pay the costs of those companies. By letter dated 14 November 2022, the liquidators confirmed that they consented to an amendment to the originating process to ensure leave is sought under the correct provision of the Corporations Act, namely s 500(2).
The plaintiff has agreed to the liquidators’ condition not to enforce any judgment against SAAH or Gobel in any proceeding without first obtaining leave. Further, the plaintiff has confirmed he does not require SAAH or Gobel to take part in the personal injuries proceeding. In those circumstances, it is difficult to see how the interests of creditors would be prejudiced by the granting of leave to proceed. Further, the imposition of this latter condition means that one of the recognised purposes of s 500(2) will be served by ensuring the liquidators’ time and resources are not diverted into expending substantial funds on defending claims against the relevant companies.
Whether insurance available to meet any judgment?
There is prima facie evidence that insurance policies held by SAAH and Gobel respond to any liability incurred by those companies as a consequence of the personal injuries proceeding. As I have already stated, the Hangarkeepers Policy and its schedule names Gobel, Soar Aviation, Soar Aviation Melbourne and other entities as insured parties, whereas the schedule to the Hull Policy names SAAH, Soar Aviation, and other parties as insured. This was also specifically confirmed by Mr Adrian’s affidavit of 4 November 2022. In addition, it may be the case that the Hull Policy was also intended to cover Gobel as an insured but simply misdescribes that entity as ‘Global Aviation Pty Ltd Soar Advanced Flight Training’. The Underwriters were unable to clarify that issue at the hearing. I note in this regard that Gobel is described as ‘Gobel Aviation Pty Ltd t/as Soar Advanced Flight Training’ in the Hangarkeepers Policy and is part of the composite reference ‘Soar Aviation Pty Ltd T/As Soar aviation Gobel Aviation Pty Ltd T/As Soar Advanced Flight Training’ in the accompanying schedule. Further, there is no entity by the name ‘Global Aviation Pty Ltd Soar Advanced Flight Training’ in any other material before the Court concerning the external administration of companies within the wider Soar Aviation Group. No doubt, the question of whether Gobel Aviation is in fact covered by the Hull Policy can be resolved as part of the personal injuries proceeding. The Hull Policy also identifies the aircraft the subject of the incident as being covered by the policy. Both policies were in place at the time the incident occurred.
The amount of indemnity given under the Hangarkeepers Policy is $20 million in respect of any one accident. The insuring clauses contained within the first page of the Hangarkeepers Policy are broad and ostensibly cover, amongst other things, any liability of the insured with respect to any person suffering bodily injury in or about the premises specified in the schedule ‘as a direct result of the services granted by the Insured’ or occurring ‘in the course of any work or the performance of any duties carried out by the Insured or [its] employees in connection with the business and operations specified in the Schedule’ (the flying school) where such injury is caused by the fault or negligence of the insured.
At the hearing of the application, the Underwriters tentatively suggested that the insuring clauses in the Hangarkeepers Policy may be affected by an exclusion clause in respect of bodily injury caused by ‘aircraft owned, chartered, used or operated by or on account of the Insured’. The Underwriters also submitted that the plaintiff had not addressed that exclusion in construing the Hangarkeepers Policy. I do not consider that the exclusion clause necessarily has effect. A key allegation made by the plaintiff against Gobel is that it permitted the plaintiff to board the aircraft and allowed the second defendant to undertake a flight training navigation exercise when the plaintiff was travelling in the aircraft as a passenger. In other words, the claim against Gobel relates to the manner in which the flying school conducted its operations. But no claim is made in respect of the aircraft itself. Regardless, whether the exclusion actually applies is a matter to be properly determined in or at the conclusion of the personal injuries proceeding and the Underwriters would ultimately bear the onus of establishing that the exclusion has effect.
Sections 2 and 3 of the Hull Policy are also broad in their terms and cover legal liability to third parties and passengers for bodily injury ‘whilst entering, on board or alighting from the [a]ircraft caused by an Occurrence [which is defined to include an accident which results in bodily injury] arising from the use of the [a]ircraft by the Insured.’ According to the Hull Policy Schedule, any such liability is capped at $20 million per occurrence in respect of the aircraft.
Whilst the Underwriters did not confirm that the relevant insurance policies are responsive to the plaintiff’s claims, they also did not explicitly deny this to be the case.
The existence of a policy or policies of insurance held by the companies in liquidation, which may be utilised to pay any judgment the plaintiff obtains, strongly favours the granting of leave and militates against any prejudice to the creditors of SAAH and Gobel.
Nature and seriousness of the claim
I accept the plaintiff’s submission that the claim he intends to make against SAAH and Gobel is of a very serious nature. The gravamen of the claim is an allegation that the plaintiff was rendered paraplegic because of the negligence of SAAH and/or Gobel in permitting the plaintiff to be present on the aircraft at the time of the incident. The damages sought are presently unspecified but will not be insignificant. The proposed pleading states that as a consequence of suffering his injuries in the incident, the plaintiff has been unable to return to paid work as a website designer or to pursue a new career. He claims for complete loss of earnings to date and into the future to retirement age. Unless leave to proceed is granted, the plaintiff will effectively be shut out from making his claims.
While a claim for unliquidated damages for tort may be admissible to proof in a liquidation,[27] given the nature and seriousness of the plaintiff’s claim, I consider that the prosecution of that claim through inter partes proceedings is a more appropriate procedure. Moreover, a conventional claim would more readily allow the position of the Underwriters to be accounted for than the proof of debt process found in Pt 5.6 of Div 6 of the Corporations Act and Pt 5.6 of the Corporations Regulations 2001 (Cth).
[27]Meehan v Stockmans Australian Cafe (Holdings) Pty Ltd (1996) 22 ACSR 123 at 128; Timbercorp, 205.
There is no evidence that the granting of leave will unleash an ‘avalanche’ of litigation in the liquidation of the relevant companies.
Stage of proceedings and delay
Whilst the application for leave to proceed has been made approximately 13 months after the commencement of the personal injuries proceeding, I do not regard such delay to be significant. I also note that the Hangarkeepers Policy and Hull Policy were only provided to the plaintiff’s lawyers on 20 April 2022.
The granting of leave to facilitate the bringing of a claim against SAAH and Gobel as defendants would not compromise the efficient conduct of the personal injuries proceeding.
Serious question to be tried and solid foundation of claim
On the basis of the evidence before the Court, it is clear the plaintiff’s claim has a solid foundation and that there is a serious question to be tried. There is a probability that at the trial of the action the plaintiff will be held entitled to relief against SAAH and /or Gobel for negligence for breach of duty of care by, among other things, permitting the plaintiff to board the aircraft which was piloted by the second defendant who was undertaking training to obtain a commercial pilot licence. Further, I do not regard the claim to be clearly hopeless or futile.
In arriving at this view, I have considered and dismissed a number of points raised by the Underwriters in identifying certain perceived defects and legal obstacles to the plaintiff’s claim.
Initially, the Underwriters suggested in their written submissions that a matter relevant to whether leave to proceed should be granted was that the plaintiff’s application has been brought on the wrong legal basis by referring to s 471B of the Corporations Act instead of s 500(2). Quite sensibly that argument was not pressed at the hearing and I granted the plaintiff leave to file an amended originating process seeking relief under the correct statutory provision.
The Underwriters argued that to the extent the plaintiff’s claim against SAAH, Gobel and the Underwriters purports to be predicated upon one or more insurance policies, that claim (as presently articulated in the proposed pleading) is hopeless and bound to fail. It is true that the plaintiff has not identified with precision the policy or policies relied upon. For example, the plaintiff alleges there was ‘a contract of insurance’ between ‘Soar Aviation and/or SAAH and/or Gobel’ on the one hand, and the Underwriters on the other. No identifying details of that contract are pleaded or particularised, although policy number A039511, which corresponds to the Hangarkeepers Policy, is referred to in the identification of the Underwriters as proposed defendants on the title page of the proposed pleading. As previously discussed, the Hangarkeepers Policy names Gobel, Soar Aviation and other parties as insured parties, whereas the schedule to the Hull Policy identifies SAAH, Soar Aviation, Soar Aviation Melbourne and other parties as insured but the proposed pleading does not make this clear. The plaintiff’s affidavit material also confuses the question of which insurance policy purportedly covers which entity, as does a submission made by the plaintiff’s counsel at the hearing, to the effect that the plaintiff is covered by both the Hangarkeepers Policy and Hull Policy ‘taken together’. However, the policy documents themselves assist in clarifying the position that Gobel and SAAH are at least each named in a separate insurance policy.
Regardless, it is not the case that the plaintiff’s claims against SAAH and Gobel are predicated on any insurance policy responding to the incident. Instead, the relevant insurance policies are pleaded only in relation to the claim made against the Underwriters under s 601AG of the Corporations Act in light of the deregistration of Soar Aviation Melbourne and any further s 601AG claim in the event Gobel and/or SAAH are themselves deregistered. The insurance policies are also referred to in connection with s 562 of the Corporations Act by which the plaintiff seeks to be directly paid the insurance proceeds of any successful claim against the companies in liquidation.
Alleged defective pleadings
The Underwriters also contended that the proposed pleading suffers from a number of fundamental defects, insofar as the negligence claims alleged against SAAH and Gobel are concerned. It was argued that the proposed pleading is embarrassing as it places SAAH and Gobel in a position of not knowing precisely what is alleged against them, or what case they have to meet at trial. The alleged defects in the proposed pleading are enumerated in an annexure to the Underwriters’ written submissions and include, by way of example:
(a) a conclusion of law (namely, that a duty of care was owed by certain persons to the plaintiff), in respect of which the material facts have not been pleaded;
(b) ‘backwards reasoning’ from the fact of injury, to a conclusion that a duty must have been owed to the plaintiff to prevent it;
(c) a failure to set out the scope or content of a novel duty of care that is alleged;
(d) a reference to a ‘duty of care’ (in the singular) alleged to have been owed by ‘Soar Aviation and/or SAAH and/or Gobel Aviation and/or the Second Defendant’, which is said to be embarrassing;
(e) inadequate and embarrassing particulars of the alleged duty of care;
(f) a failure to identify, with sufficient specificity for the defendants to know what is alleged against them, which insurance policy (or policies) are relied upon by the plaintiff. (I have already addressed that criticism); and
(g) a failure to set out the material facts required to support a conclusion that s 601AG of the Corporations Act applies.
I accept that the proposed pleading has regrettably been drawn in a way that lacks precision. But it is not unintelligible. It hangs together in a way that sufficiently communicates the key elements and material facts of the claim so as to satisfy the Court that it has a solid foundation and gives rise to a serious dispute. That is enough for present purposes.
As I have already stated, this is not the appropriate time for the ventilation of technical pleading arguments. The Underwriters have an opportunity to oppose the plaintiff’s claim at the hearing of the application to amend the writ and statement of claim and name the Underwriters, SAAH and Gobel as defendants. They may also seek to argue about the adequacy of the plaintiff’s claim by way of summary judgment application, or at trial. I do not consider that a Court should descend into an in-depth and granular analysis of the adequacy of a proposed pleading on an application for leave to proceed against a company in liquidation. There is a danger that by doing so, if the Court were to ultimately grant leave and the same pleading arguments were later agitated in the substantive proceeding, this could result in inconsistent rulings.
Argument claim statute-barred
The Underwriters put forward a number of detailed arguments that leave to proceed should be refused because the plaintiff’s claim against the two companies in liquidation is statute-barred by reason of the expiry of a limitation period. In this regard, they relied on ss 27D(1) and 27F of the Limitation of Actions Act1958 (Vic) (‘theLAA’).
Section 27D(1) of the LAA states:
An action in respect of a cause of action to which this Part applies shall not be brought after the expiration of whichever of the following periods is the first to expire:
(a)the period of 3 years from the date on which the cause of action is discoverable by the plaintiff;
(b)the period of 12 years from the date of the act or omission alleged to have resulted in the death or personal injury with which the action is concerned.
Section 27F of the LAA says:
(1)For the purposes of this Part, a cause of action is discoverable by a person on the first date that the person knows or ought to have known of all of the following facts—
(a)the fact that the death or personal injury concerned has occurred;
(b)the fact that the death or personal injury was caused by the fault of the defendant;
(c)in the case of personal injury, the fact that the personal injury was sufficiently serious to justify the bringing of an action on the cause of action.
(2)A person ought to know of a fact at a particular date if the fact would have been ascertained by the person had the person taken all reasonable steps before that date to ascertain the fact.
(3)In determining what a person knows or ought to have known, a court may have regard to the conduct and statements, oral or in writing, of the person.
Having regard to these provisions, the Underwriters argued that given the incident occurred on 5 October 2018, the limitation period started to run from (or shortly after) that date, and therefore expired on (or shortly after) 5 October 2021. Further, they submitted that:
(a) in accordance with s 27F(1)(a) and (c) of the LAA, the plaintiff knew, or ought to have known, immediately upon the occurrence of the incident (alternatively, shortly thereafter) that (a) he had suffered serious injuries, and (b) those injuries were sufficiently serious to justify bringing an action. Reference was made to correspondence sent by the plaintiff’s former solicitors on 31 January 2019 to ‘Soar Aviation’ which asserted that the plaintiff was severely injured in the accident and sought details of applicable insurance policies to assist him in receiving treatment. Attention was also drawn to later correspondence sent to Norton White on 21 February 2019 reiterating the request for details of relevant insurance policies;
(b) pursuant to s 27F(1)(b) of the LAA, immediately upon the occurrence of the incident (alternatively, shortly thereafter), the plaintiff knew, or ought to have known, that his alleged injuries were caused by ‘the fault of the defendant’ (the defendant in this case being SAAH and/or Gobel, the companies now sought to be joined to the personal injuries proceeding by the plaintiff some 13 months after its commencement, and some four years after the incident). Reliance was placed on a number of ‘admissions’ in the proposed pleading regarding the plaintiff’s knowledge of the affairs and operation of the Soar Aviation flying school (and specifically, the involvement of SAAH and/or Gobel) at around the time of the incident in October 2018;
(c) the proposed pleading and the material adduced in support of the present application omits to disclose that the plaintiff was a student of the Soar Aviation flying school, from at least September 2017 to January 2018. Accordingly, some familiarity with the affairs and operations of the flying school should be imputed to the plaintiff;
(d) because the plaintiff engaged lawyers shortly after the incident occurred on 5 October 2018 and there was correspondence from January 2019 onwards concerning the cause of action which the plaintiff now seeks to bring against SAAH and Gobel, that cause of action was therefore discoverable at, or shortly after, the time of the incident in October 2018;
(e) alternatively, by early 2019 the limitations period had well and truly started to run.[28] In this regard, the Underwriters pointed to correspondence from the plaintiff’s former lawyers to Norton White dated 21 February 2019 repeating the request for details of insurance policies to cover medical expenses and noting that Norton White’s client (which was referred to in previous correspondence from Norton White on 4 February 2019 as being Soar Aviation) was the owner/operator of a pilot training facility and that the pilot at the time of the incident was a student of Soar Aviation;
(f) at all relevant times, it was open to the plaintiff to join various Soar Aviation Group defendants to the personal injuries proceeding in the alternative, to account for the possibility that more than one such company might be liable. However, the plaintiff did not seek to do so until October 2022, well after the alleged expiry of the three-year limitation period relating to his claim, which occurred in or shortly after October 2021. No extension of the limitation period has been sought by the plaintiff pursuant to the LAA; and
(g) in the circumstances, there would be no utility in the Court granting leave to proceed against SAAH and Gobel in liquidation.[29]
[28]Transcript of Proceedings, In the matter of Soar Aviation Aircraft Holdings Ltd (In Liquidation) (Supreme Court of Victoria, S ECI 2022 04237, Hetyey AsJ, 30 November 2022) 121-2.
[29]Referring to Timbercorp at 213, 233 where Derham AsJ made the grant of leave to proceed against companies in liquidation conditional on the removal of a claim from a proposed amended pleading which his Honour found was clearly statute-barred. Similarly, in Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283 Connock J at [397], [400]-[401] refused to grant leave to amend a pleading in respect of a particular claim which was clearly statute-barred.
At the hearing of the application, the plaintiff’s counsel was reluctant to make substantive submissions on the question of when the plaintiff’s claim was discoverable because he had not been briefed on that question and did not wish to prejudice his client. That is not an unreasonable position in the circumstances and given the importance of the issue.
Contrary to the Underwriters’ extensive submissions on the point, I do not accept it is appropriate in the present application to determine whether the plaintiff’s claims against Gobel and SAAH are statute-barred.
In Wardley Australia Ltd v State of Western Australia,[30] the High Court provided the following cautionary guidance:
We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.[31]
(emphasis added)
[30](1992) 175 CLR 514 (‘Wardley’).
[31]Ibid 533 (Mason CJ, Dawson, Gaudron and McHugh JJ).
This is not the clearest of cases. The limitation issue should be determined at trial in the light of all the evidence (not on a selection of ‘admissions’ in a draft pleading and various correspondence) and with the benefit of comprehensive submissions to identify precisely when the limitation period commenced and when the cause of action against Gobel and SAAH was ‘discoverable’. A cause of action is ‘discoverable’ when a plaintiff knows or ought to have known ‘the key factors necessary to give rise to liability’[32] and what this requires in a particular case will depend upon all of the relevant facts and circumstances.[33] I note the Underwriters are themselves somewhat equivocal in their position on exactly when the limitations period commenced. I accept the plaintiff’s submission that in circumstances where a limitations argument has not yet been made in the personal injuries proceeding itself, he should be afforded the opportunity to put on proper evidence concerning the discoverability of his claim.
[32]Moore v Escott & Ors [2022] VSC 353 [49], [66], (O’Meara J), citing Beazley JA in State of New South Wales v Gillett [2012] NSWCA 83 [94] (‘NSW v Gillett’).
[33]Ibid [50], [70] citing NSW v Gillett [97].
In any event, I note that the plaintiff proposes to seek an order in the personal injuries proceeding under rr 36.01(1) and (4) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’) to correct a mistake in the name of a party,[34] by naming SAAH and Gobel as defendants. The plaintiff’s counsel says that if the amendment is permitted, the effect of such amendment will be that the proceeding will be taken to have commenced against SAAH and Gobel at the commencement of the personal injuries proceeding[35] (which was within three years of the incident occurring), with the consequence that the limitations argument falls away. Failing that course, the plaintiff intends to apply to extend the limitations period under s 27K of the LAA if the Court is satisfied that it is ‘just and reasonable to do so’. According to s 27M of the LAA, an application to extend the limitations period may be made even though the limitations period has expired or the action in respect of the personal injury has commenced. Were the Court to determine the limitations issue in this proceeding, the plaintiff would be unjustifiably precluded from pursuing those avenues.
[34]Referring also to Bridge Shipping Pty Limited v Grand Shipping S.A. (1991) 173 CLR 231.
[35]See r 36.01(5) of the Rules.
While the Underwriters noted that no extension of the limitations period has yet been sought by the plaintiff, I accept the plaintiff’s submission that he can only make such an application under s 27K of the LAA if he first obtains leave to proceed against SAAH and Gobel.
Conclusion
By reason of the foregoing matters, I will grant the plaintiff leave to proceed against Gobel and SAAH pursuant to s 500(2) of the Corporations Act. I will hear from the plaintiff and the Underwriters on the precise formulation of orders and the question of costs.
SCHEDULE OF PARTIES
| S ECI 2022 04237 | |
| BETWEEN: | |
| TAREK MOHAMED | Plaintiff |
| - v - | |
| SOAR AVIATION AIRCRAFT HOLDINGS LTD (IN LIQUIDATION) (ACN 613 275 853) | First Defendant |
| GOBEL AVIATION PTY LTD (IN LIQUIDATION) (ACN 006 160 658) | Second Defendant |
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