Trustees of the Roman Catholic Church v Insurance Australia Ltd

[2023] NSWSC 1284

Supreme Court

New South Wales

Medium Neutral Citation:

Trustees of the Roman Catholic Church v Insurance Australia Ltd [2023] NSWSC 1284

Hearing dates:

23 October 2023

Date of orders:

23 October 2023

Decision date:

23 October 2023

Jurisdiction:

Common Law

Before:

Cavanagh J

Decision:

The Court orders:

1. Vacate the hearing date of 4 March 2024.

2. Fix the matter for hearing for 15 days on all claims, subject to leave being formally granted, on 6 May 2024.

3. See paragraphs [27] and [28] for other orders.

Catchwords:

CIVIL PROCEDURE – Originating Process – leave to file amended statement of claim – discovery of documents at late stage

Cases Cited:

Banque Commerciale SA v Akhil Holdings (1990) 169 CLR 279; [1990] HCA 11

Category:

Procedural rulings

Parties:

Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle (Plaintiff)
Insurance Australia Ltd (Defendant)

Representation:

Counsel:
R Cheney SC with G Keesing (Plaintiff)
A Hanak KC with F Spencer SC (Defendant)

Solicitors:
Makinson d’Apice Lawyers (Plaintiff)
HWL Ebsworth Lawyers (Defendant)

File Number(s):

2020/130607

Publication restriction:

None

REVISED EX TEMPORE JUDGMENT

1. Pursuant to a motion filed 8 September 2023, the plaintiff seeks leave to file an amended statement of claim in the form annexed to the motion. In effect, the plaintiff seeks to amend the statement of claim to allege that the defendant, Insurance Australia Limited (IAL), is also liable to indemnify it in respect of occurrences (I will say “claims” in a neutral way) during the period from 1957 to 1968, as well as, as originally pleaded, occurrences during the period from 1968 to 1980.

2. I am not suggesting these are claims-made policies. They appear to be occurrence-based policies but I will refer to claims in a general sense.

3. The plaintiff originally only sought indemnity from the defendant in respect of claims for sexual abuse made in respect of the period from 1968 to 1980. The plaintiff says that it has recently discovered that there were policies of insurance issued by an entity known as the Australasian Catholic Assurance Company Co. Ltd (ACA) for the period from 1957 to 1968. The plaintiff now seeks to include in the current proceedings a claim for indemnity from the defendant in respect of all claims arising from that period.

4. The proceedings were commenced in 2020. They have a long history. The proceedings have been fixed for hearing of a number of separate questions before me for two weeks commencing on 4 March 2024. The plaintiff now seeks to amend the statement of claim, proceed with the original hearing and have issues arising in respect of the period 1957 to 1968 determined at a later stage.

5. The defendant opposes the amendment of the statement of claim for four essential reasons, being:

1. the plaintiff has not shown that it has at least an arguable claim in relation to the proposed amendments;

2. the plaintiff has had sufficient opportunity to raise the amendments at an earlier point in time and has failed to do so;

3. the explanation offered by the plaintiff as to why the amendments were not made earlier is inadequate; and

4. if the amendments were allowed without adjusting the procedural timetable the defendant will be prejudiced.

6. The substance of the defendant's complaint is really two-fold, being:

1. the plaintiff has not properly pleaded the basis on which IAL is said to be liable for the claims arising from the earlier period; and

2. if the amendment is allowed and the matter proceeds, the defendant will suffer substantial prejudice in that it is being afforded insufficient time to prepare for any hearing; or, alternatively, it will result in there being two separate hearings.

7. In support of the application, the plaintiff relies on affidavits of its solicitor Matthew Gerathy dated 8 September 2023 and 4 October 2023. The defendant relies on an affidavit of its solicitor, Elizabeth Fredericks, dated 22 September 2023.

8. On the hearing of the application, Mr Cheney SC appeared with Ms Keesing for the plaintiff and Mr Hanak KC appeared with Ms Spencer SC for the defendant. Both parties provided helpful written submissions.

9. There is an issue between the parties as to what is required in terms of the pleadings. The substance of the defendant's complaint is that the plaintiff merely pleads that there were policies of insurance in existence each year between 1957 and 1967; that there were certain terms of the policies; that the contract was between the plaintiff and ACA; and then pleads, in paragraph 45, that the defendant is liable to pay any liability of ACA. Unlike the case against it in respect of the policies for the period 1968 to 1980, the defendant disputes that it is the correct insurer to be sued. By saying this, I do not mean that the defendant is accepting liability in respect of the period 1968 to 1980. As I understand the position, it accepts, at least, that if there is any liability which would have fallen on South British Insurance (SBI), the entity that issues the policies, for claims arising out of 1968, the defendant accepts it would be responsible. However, it makes no such concession in respect of any of the years 1957 to 1967 and says today that the plaintiff has the wrong defendant because it should be suing Zurich Properties Limited.

10. The defendant says that it does not understand the basis on which it is said to be liable for the 1957 to 1967 period.

11. Enclosed in the material are insurance documents which do tend to suggest that there was a contract of insurance between the plaintiff and ACA in 1957 and, similarly, insurance documents which do tend to suggest that there was an insurance contract in existence between the plaintiff and SBI in 1968. However, the defendant does not accept that on the material thus far disclosed there is sufficient evidence to establish that those policies were renewed on a year-by-year basis between 1957 and 1967 and 1968 and 1980.

12. Annexed to the affidavit of Mr Gerathy is correspondence passing between the solicitors which purports to provide the basis on which the plaintiff is asserting that the defendant is liable for the 1957 to 1967 period. As Mr Cheney points out, it is not necessary for the plaintiff to prove its whole case on this application and, having regard to the explanation provided in the correspondence, the defendant should be aware of the basis on which it is suggested the defendant is liable.

13. While that may be so, it is not apparent from the statement of claim why the plaintiff says the defendant is liable. As is submitted by the defendant, a statement of claim should state all the material facts on which the plaintiff relies and define with clarity the case which must be met by the defendant and the issues for determination: Banque Commerciale SA v Akhil Holdings (1990) 169 CLR 279; [1990] HCA 11 at 285, 296 and 302-3.

14. The plaintiff pleads a contract between it and a different corporate entity from the defendant. There is nothing in the paragraphs of the statement of claim between the pleading of the contract and the allegation that the defendant is liable which sets out the basis on which the defendant is liable. This is surely a matter which is known to the plaintiff and could be particularised. Otherwise, it would not be seeking to sue the defendant in respect of a contract entered into by ACA.

15. The other matters raised by the defendant as a basis for resisting the application to amend relate to prejudice, case management and the keeping of the hearing date.

16. The defendant complains that the plaintiff has not given a satisfactory explanation for the delay in seeking to amend the statement of claim. However, it seems from Mr Gerathy's affidavits that, at some stage during the analysis of the many documents which have been discovered and, indeed, provided to the solicitors for the plaintiff by their client, a solicitor became aware that there were insurance documents contained in the material relating to claims arising out of 1957. The explanation for the delay is that junior solicitors or paralegals previously working on the matter may not have picked up these documents during the review process. In a sense, that is understandable because, on the current statement of claim, the plaintiff only seeks indemnity in respect of the period 1968 to 1980.

17. The defendant may be correct in suggesting that a more fulsome explanation might have been provided. However, I accept that those representing the plaintiff only became aware of the significance of the 1957 documents when the new solicitor, Ms Skinner, noticed the documents and presumably brought them to someone's attention.

18. I do not accept that the proposed amendments should be rejected because of a lack of a proper explanation for the delay.

19. Having said that, I accept that there has been at least some notional prejudice to the defendant arising out of the delay in amending the statement of claim, bearing in mind these proceedings commenced in 2020 and the hearing of the separate questions is listed for March 2024. The defendant says that the amendments raise new issues in the sense that they are new contracts of insurance and that it will be necessary for it to respond to the amendments by obtaining evidence and further discovery. That evidence may include expert evidence. The defendant says that it is already working towards a hearing date in March and that it is unlikely to be able to obtain all of the evidence necessary to defend the new allegations in time for the hearing in March.

20. It is always difficult on an application such as this to determine the extent of real prejudice likely to be suffered as, at least in my experience, when insurers are forced to respond quickly, they can do so. I accept that the defendant will suffer some prejudice but in my view that prejudice can be overcome by case management orders rather than providing a basis for rejecting the application to amend the statement of claim.

21. It is only necessary to say that the plaintiff, as a result of the recent discovery of some documents, now considers that it would be entitled to indemnity from the defendant not just in respect of matters arising during the period from 1968 to 1980 but also in respect of those matters occurring during the period 1957 to 1967.

22. That 1957 to 1967 claim will involve, in general terms, the same issues that arise in respect of the 1968 to 1980 claim. The plaintiff will be required to establish that the named defendant is the entity which is liable to indemnify it in respect of claims made against the plaintiff arising out of each period; and that the defendant is liable to indemnify it in circumstances in which the plaintiff has already settled the claims.

23. The separate questions which are already agreed and which are fixed for hearing on 4 March 2024 are the types of questions which will also have to be addressed in respect of the 1957 to 1967 claim.

24. The defendant does not submit that, because of the lateness in the application and the delay in seeking to amend the statement of claim, it is forever prejudiced or that it will always be impossible for it to meet the new claim.

25. In my view, the pleading point raised by the defendant can also be overcome by appropriate directions which require the plaintiff to give proper notice to the defendant of the basis on which the plaintiff submits that the defendant is liable to indemnify it in respect of the claims/occurrences during the period 1957 to 1967.

26. In the circumstances, I will deal with this motion by making orders directing the parties to take certain steps. Subject to the parties taking those steps, I will make final orders disposing of the motion.

27. At this stage, the only orders I make are as follows:

1. The plaintiff is to write to the defendant within 7 days setting out the basis on which the plaintiff maintains that the defendant is liable in respect of the period 1957-1967.

2. The defendant is to respond, either indicating that it will now consent to the amendment to the Statement of Claim, or specifying why it will not consent, by 8 November 2023.

3. If there is agreement between the parties on the amendment to the Statement of Claim, the parties should provide consent orders and I will make those orders in Chambers.

4. If there is no agreement as to the amendment sought by 8 November 2023, the parties should contact my Chambers and arrange to have matter listed for further argument as to whether leave should be given to amend the Statement of Claim.

5. Vacate the hearing date of 4 March 2024.

6. Fix the matter for hearing for 15 days on all claims, subject to leave being formally granted, on 6 May 2024.

7. Direct that the parties endeavour to reach agreement on consent orders for the future management of the matter.

8. I stand the matter over until 9.30am on 27 October 2023 for further argument or for the making of case management orders.

28. The Court notes:

1. That on hearing my proposed orders, the plaintiff indicated that it may seek instructions to withdraw its application.

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Decision last updated: 30 October 2023