FEDERAL COURT OF AUSTRALIA
Travel Compensation Fund v FAI General Insurance Co Ltd [1999] FCA 1214
INSURANCE – whether leave should have been granted under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to sue the insurer – effect of finding against insurer’s defence.
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 6(4)
AFG Insurances Ltd v Andjelkovic (1981) 54 FLR 398 referred to
Oswald v Bailey (1987) 11 NSWLR 715 referred toTRAVEL COMPENSATION FUND v FAI GENERAL INSURANCE CO LTD
NG 1002 of 1998
Burchett, Lehane and Hely JJ
Sydney
31 August 1999
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1002 of 1998
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
TRAVEL COMPENSATION FUND
AppellantAND:
FAI GENERAL INSURANCE CO LTD
Respondent
JUDGE:
BURCHETT, LEHANE AND HELY JJ
DATE:
31 AUGUST 1999
PLACE:
SYDNEY
EX TEMPORE REASONS FOR JUDGMENT
BURCHETT J: What I am about to say represents the judgment of the Court. This appeal relates to one narrow point out of many issues in a difficult case arising out of the disputed insurance of accountants against their liability to professional negligence claims.
The point is whether an order should have been made under s 6(4) of the Law Reform (Miscellaneous Provisions) Act1946 (NSW) giving leave to the appellant to commence an action against the insurance company. It was held in AFG Insurances Ltd v Andjelkovic (1981) 54 FLR 398 at 400, that, in such an application:
“[T]he court has a general power to grant leave in all cases which do not fall within the provision that it shall not grant leave and in which it is made to appear by evidence available in the application that there is an arguable case of liability against the insured being a liability against which the insured is indemnified by a contract of insurance in force at the time of the happening of the event said to give rise to the claim.”
That view of the matter received the endorsement of Priestley JA in Oswald v Bailey (1987) 11 NSWLR 715 at 734, when he said:
“A principal test which the court applies in deciding whether or not to grant leave pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act is whether the applicant has shown: ‘an arguable case of liability against the insured, being a liability against which the insured is indemnified by a contract of insurance in force at the time of the happening of the event said to give rise to the claim’.”
His Honour referred to Andjelkovic, and added:
“[O]r, more simply ‘has the (applicant) presented a case which is at least arguable’”?
The appellant says the course approved in Andjelkovic should have been followed here. Whether that be so, or not - and we do not propose to go into the discretionary considerations that applied at the outset of the litigation - the appellant's principal point now is that all the insurance company's defences have failed, and that accordingly there was no good reason to deny the appellant leave. We think this must be right.
Accordingly, the appeal should be allowed to the extent of granting the leave sought by the appellant, and the Court so orders.
I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate:
Dated: 8 September 1999
Counsel for the Appellant: Mr P Roberts QC with Mr M Minehan Solicitor for the Appellant: Hartmann & Associates No appearance for the respondent
Date of Hearing: 31 August 1999 Date of Judgment: 31 August 1999
- AGLC
- Travel Compensation Fund v FAI General Insurance Co Ltd [1999] FCA 1214
- Case
- [1999] FCA 1214
- Decision Date
CaseChat Overview and Summary
The primary legal issue was whether the appellant had presented an arguable case of liability against the insured, which was indemnified by a contract of insurance in force at the time of the event that allegedly gave rise to the claim. The Court referred to the case of AFG Insurances Ltd v Andjelkovic (1981) 54 FLR 398, which established the principle that a court has a general power to grant leave in such cases. The Court also referred to Oswald v Bailey (1987) 11 NSWLR 715, where the court endorsed the view that the principal test for granting leave is whether the applicant has shown an arguable case of liability against the insured. The appellant argued that the course of action approved in Andjelkovic should have been followed in this case, and that the failure of all the insurance company's defences meant that there was no good reason to deny the appellant leave.
The Court held that the appellant's principal point was correct, and that all the insurance company's defences had failed. As a result, the Court found that there was no good reason to deny the appellant leave, and that the appeal should be allowed to the extent of granting the leave sought by the appellant. The Court ordered that the leave be granted, and that the case be remitted to the lower court for further proceedings.
In summary, the Court granted the appellant leave to sue the insurance company under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), following the principles established in AFG Insurances Ltd v Andjelkovic and endorsed in Oswald v Bailey. The Court found that the appellant had presented an arguable case of liability against the insured, and that the failure of all the insurance company's defences meant that there was no good reason to deny the appellant leave.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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