Vero Insurance Ltd v Harden-Jones
[2007] WADC 210
•11 December 2007
VERO INSURANCE LTD -v- HARDEN-JONES & ANOR [2007] WADC 210
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 210 | |
| Case No: | CIV:2428/2005 | 28 NOVEMBER 2007 | |
| Coram: | DEPUTY REGISTRAR HEWITT | 10/12/07 | |
| PERTH | |||
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | VERO INSURANCE LTD (ACN 005 297 807) JENNIFER ANNE HARDEN-JONES GILES HARDEN HARDEN-JONES |
Catchwords: | Practice and procedure Application to strike out part of pleadings in form previously permitted by order of court |
Legislation: | Insurance Act 2003 |
Case References: | Jarvis v Stirling Corporation Pty Ltd [2005] WASC 210 Southern Equities Corporation and Others v Western Australian Government Holdings Ltd (No. 2) (1993) 10 WAR 351 Yango Pastoral Co Pty Ltd and Others v First Chigaco Australia Ltd (1978) 139 CLR 410 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff (Respondent)
AND
JENNIFER ANNE HARDEN-JONES
First Defendant (Appellant)
GILES HARDEN HARDEN-JONES
Second Defendant (Appellant)
Catchwords:
Practice and procedure - Application to strike out part of pleadings in form previously permitted by order of court
Legislation:
Insurance Act 2003
(Page 2)
Result:
Application dismissed
Representation:
Counsel:
Plaintiff (Respondent) : Mr P G McGowan
First Defendant (Appellant) : Mr G R Hancy
Second Defendant (Appellant) : Mr G R Hancy
Solicitors:
Plaintiff (Respondent) : Lavan Legal
- First Defendant (Appellant) : Clavey Legal
Second Defendant (Appellant) : Clavey Legal
Jarvis v Stirling Corporation Pty Ltd [2005] WASC 210
Southern Equities Corporation and Others v Western Australian Government Holdings Ltd (No. 2) (1993) 10 WAR 351
Yango Pastoral Co Pty Ltd and Others v First Chigaco Australia Ltd (1978) 139 CLR 410
(Page 3)
1 DEPUTY REGISTRAR HEWITT: By order dated 19 June 2007 his Honour Judge Eaton granted to the first and second defendants leave to amend their defence in terms of a minute of proposed amended defence filed 24 April 2007. That leave was availed of and the defendants filed the amended pleading on 19 June 2007.
2 The plaintiff now applies to strike out par 9.7 of the amended defence. Paragraph 9.7 of the pleading as it stands on the Court record is identical to a paragraph of the same number which was contained within the minute to which Judge Eaton's order refers.
3 The application raises as a preliminary point whether or not it is competent for a party to apply to strike out a portion of a pleading when that pleading has been expressly approved and permitted by an earlier order of the Court.
4 The defendants rely principally on the case of Southern Equities Corporation and Others v Western Australian Government Holdings Ltd (No. 2) (1993) 10 WAR 351.
5 The argument advanced is that the amendment was the subject of a specific application to the Court and was a matter ruled upon by the Court in the determination of that application. It is contended on behalf of the defendants that the matter is no longer capable of being reviewed save by appeal from his Honour Judge Eaton's decision.
6 In the Southern Equities Corporation and Others ("Southern Equities") decision Master Adams stated the principle in the following terms:
"The plaintiff's object to this application on the basis of what is said to be the principle of the decision in PRL Nominees Pty Ltd v Glaser Nominees Pty Ltd (unreported, Supreme Court, WA, Master Staples, Library No 7235, 8 August 1988).
That principle is to the effect that where specific amendments are before the court and require leave to be effected that is only done upon notice to other parties to the action, and those parties then have the opportunity to raise objections to the pleading or reserve their rights to apply later to strike out the pleading, and if they do not do so, that is either object or reserve their rights, then they cannot be heard later to apply to strike it out.
(Page 4)
- It was suggested in argument that the principle should be considered in the light of the facts of that case where the orders were made by consent, but the principle has not been so restricted in practise and indeed as I read the decision that fact was not a determinant in the reasons. The principle of that decision has been applied in practise in this Court. I have applied it myself and authority was cited this morning indicating that it was followed in published reasons in Pillinger v Ropework Services (unreported, Supreme Court, WA, Master Staples, Library No 7976, 5 December 1989) and a more recent decision of Master Bredmeyer in Hamersley Iron Pty Ltd v Mining and Energy Workers’ Union (WA) (unreported, Supreme Court, WA, Library No 920672, 11 December 1992)."
7 Later Master Adams said at p 6:
"It is clearly an irritant to other parties and costly to them as well, to be faced with constant challenges to the pleadings. That happens quite frequently, but it does seem to me that it is sensible there should be a point where the court has ruled upon a pleading that it should then be immune to further interlocutory attack. If it were otherwise, then the parties could constantly attack the same pleadings and the court would be obliged to rehear the same arguments again."
8 Although urged upon me that Master Adams decided this matter on the basis that the adequacy of the amendment proposed which was before him had been fully argued previously, it seems to me on a reading of the case that the Master discerned a general principle which would be independent of whether the matter had been argued or whether it had not and that principle is that where a party has had an opportunity to object to the form of a pleading it should do so at the time that the pleading is presented to the Court for approval or alternatively ask the Court to reserve its rights to object at a later date and that if neither of those courses is taken then the right to object is lost.
9 Against that line of authority the plaintiff relied upon the decision of Master Sanderson in Jarvis v Stirling Corporation Pty Ltd [2005] WASC 210. That case required the Master to consider an application to strike out paragraphs of a pleading where consent to amend had been given without the reservation of any right to strike out. The solicitor representing the applicant explained to the Court in an affidavit
(Page 5)
- that he thought that defects within the pleading could be cured by a request for particulars and it was for that reason that he consented to the amendment. On later consideration the solicitor reached the conclusion that the defects were so profound that an application to strike out was the proper course.
10 I take the view that this matter is distinguishable from the present in a number of ways, not the least of which is that this amendment was not allowed by consent but was allowed by a Judge of this Court upon an application for leave to amend in the form now before the Court. Nor do I consider that the decision of Master Adams was based upon the fact that there had been argument on the relevant issue on a previous occasion. As I read his decision it is sufficient that the party has the opportunity to object to the adequacy of a proposed pleading which is before a court to disentitle it from further challenge to that pleading.
11 Additionally it is fairly clear when one reads the affidavit in support of the present application that its stimulus lies largely in what is perceived to have been the onerous nature of the process of discovery which the inclusion of the relevant paragraph would cast upon the plaintiff. That appears clearly in the affidavit of Mr R D Shaw sworn 2 October 2007 in which in par 3 he said:
"In or about early August 2007 I became aware that the defendants would be seeking extensive discovery of all documents relating to my client's underwriting activity and that such discovery obligation would be onerous. This is evident from an email the plaintiff received direct from the second defendant with respect to discovery dated 7 August 2007. Annexed and marked 'RSD1' is a true copy of that email."
12 It is abundantly clear that the task of discovery led the plaintiff to reconsider the matter and in particular whether par 9.7 which broadens the ambit of discovery might be able to be struck out from the pleading in order to relieve the plaintiff of what it perceived to be an onerous and intrusive task of discovery. That task of course is only relevant where the defendant has chosen to dispute the allegation.
13 Of the authorities cited to me I prefer that of the Southern Equities' case and it is for that reason that I consider that it is not open to me to make an order which would effectively contradict that made by Judge Eaton and retract the leave granted by him to the defendant to include within its pleading the material introduced by par 9.7. On that
(Page 6)
- ground therefore I am of the view that the present application should fail. For the sake of completeness however I move on to consider the paragraph of the pleading itself and to do so I place the action in some context.
14 The plaintiff sues the defendants under the terms of a deed of indemnity which they granted to it as a condition of it providing a policy of insurance in favour of a company of which the defendants were directors. The contention advanced by the defendants is that such an indemnity amounts to re-insurance and that it infringes the provisions of the Insurance Act 1973 such that it is illegal and unenforceable.
15 Paragraph 9.7 alleges that the plaintiff adopted as a general operating practice the requirement that deeds of indemnity be executed by directors and/or shareholders of building companies to which it issued home warranty insurance contracts. The pleading therefore goes beyond the particular namely whether or not the deed of indemnity upon which the plaintiff relies in the present case is enforceable and seeks to engage the wider practice of the plaintiff in the area of the insurance market in which it operated. The defendant contends that such behaviour, were it to be proved, would impact upon whether or not the policy of the Insurance Act in regard to re-insurance was being intentionally breached by the plaintiff such that the deed of indemnity might be classified as not only illegal (ie. exposing the plaintiff to penalty for breach) but additionally unenforceable.
16 I perceive this issue as being relevant to the broader question of whether or not the plaintiff complied with the provisions of the Insurance Act 3 in respect of the obtaining of the approval of the Australian Prudential Regulation Authority in regard to re-insurance arrangements.
17 Whilst I do not claim to be conversant with the operations of the Australian Prudential Regulation Authority I doubt that it is necessary for an insurer to obtain the approval of that authority in relation to individual insurance contracts which it proposes to re-insure. I draw that conclusion on the basis that notice of the authorisation is required to be published in the Commonwealth Gazette and it seems to me axiomatic that the authority which is granted would be as to a general means of re-insurance rather than the insurance in respect of an individual policy. For that reason I think it relevant to explore the general practice of the plaintiff as to deeds of indemnity and whether or not approval for that general
(Page 7)
- practice, should it be interpreted to be re-insurance, was sought or obtained from the Australian Credential Regulation Authority.
18 It is therefore my view that although the ambit of the matters introduced by par 9.7 is wide, and the burden imposed upon the plaintiff may well be considerable if it denies the allegation, it is nonetheless a proper matter to be included in the defendant's pleading and not a matter which should be struck out.
19 Finally in relation to the issue of the breadth of par 9.7 both parties referred me to the case of Yango Pastoral Co Pty Ltd and Others v First Chigaco Australia Ltd (1978) 139 CLR 410 which in my view stands for the proposition that a court interpreting a statutory provision is entitled to look at the broader picture in order to determine if that provision makes a contract unenforceable or merely visits a penalty on the party which infringed the provision.
20 The orders will therefore be that the application is dismissed. I shall hear from the parties as to an appropriate order for costs.
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