Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Vero Insurance Ltd v Kassem [2011] NSWCA 381 Hearing dates: 30 August 2011 Decision date: 13 December 2011 Before: Campbell JA at [1]; Young JA at [123]; Meagher JA at [182] Decision: Leave to appeal granted.
Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: BUILDING AND CONSTRUCTION- Home Building Act 1989 s 18E- proceedings for breach of statutory warranty to be commenced within seven years after the completion of the work to which it relates- whether limitation period commences with date of practical completion of the works as a whole or when the work to which the damage relates was completed- limitation period commences upon completion of work to which it relates.
BUILDING AND CONSTRUCTION- damages claim for breach of statutory warranties- mitigation of damage- where the insurer denied liability for the claim for nearly four years- whether the damage became worse during the period that the insurer was denying liability- whether the action of the insurer in not settling the claim was an unreasonable failure to mitigate its damage.
CORPORATIONS- deed of company administration entered into- whether DOCA should be terminated- Corporations Act 2001 (Cth)- whether the DOCA was oppressive or unfairly prejudicial, unfairly discriminatory or contrary to the interests of the creditors of the company as a whole- purpose of a DOCA is to maximise the chances of a company continuing in existence or achieve a better return for the company than would result from an immediate winding up- Court can also take into account the public interest, including the public interest in examination of a company's affairs- possibility of better return from winding up not demonstrated- DOCA not terminated.
CORPORATIONS- voluntary administration- whether person entitled to vote at meeting of creditors when a creditor by subrogation and no just estimate of the value of the claim has been made- whether creditor for nominal sum only or for substantial amount.
SUBROGATION- insurer not entitled to exercise a right of subrogation against a co-insured- developer not an "insured" under the policy of insurance- insurer entitled to claim against developer.Legislation Cited: Corporations Act 2001 (Cth), ss 9, 435A, 439A, 440D, 444E, 445D, 491, 513A, 513B, 513C, 558G, 558H, 588FE, 588M, 600A, Pt 5.3A
Corporations Regulations 2001, cl 5.3A.07, r5.6.23
Home Building Act 1989, ss 3A, 18B, 18C, 18D, 18E, 92, 103C
Home Building Regulation 1997, cl 42
Uniform Civil Procedure Rules, r51.22Cases Cited: Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 1235; 226 ALR 510
Bovis Lend Lease Pty Ltd v Wily (2003) 45 ACSR 612
Emanuele…
Keep reading for free
Create a free CaseChat account to read Vero Insurance Ltd v Kassem and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2011] NSWCA 381
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the Court of Appeal were whether the primary judge erred in finding that Vero was a creditor for only a nominal sum, and consequently, whether the DOCA should have been terminated. Vero contended that it was a creditor for a substantial amount, which should have been given greater weight in the decision to terminate the DOCA. The court was also required to consider whether the primary judge had provided adequate reasons for refusing to terminate the DOCA.
The Court of Appeal considered Regulation 5.6.23 of the Corporations Regulations 2001 (Cth), which dictates how a creditor's vote is valued when a just estimate of their claim has not been made. The primary judge had found that the chairman of the creditors' meeting correctly determined that Vero was entitled to vote only for a nominal sum, as no just estimate of its claim had been made. The Court of Appeal agreed with the primary judge's reasoning that the chairman was not in error in rejecting Vero's proxy and that the DOCA was not oppressive or unfairly prejudicial. The court noted that Vero was not appealing the finding that a "just estimate" of its debt at the time of the meeting would have been a nominal sum, but rather that the court itself should have found Vero to be a creditor for a substantial amount.
Leave to appeal was granted, but the appeal was ultimately dismissed with costs. The Court of Appeal upheld the primary judge's decision that Vero was a creditor for a nominal sum and that the DOCA should not be terminated.
Orders
Orders of the court
Leave to appeal granted.
Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Regulation 5.6.23 Corporations Regulations 2001 (Cth) provides: The primary judge held that a consequence of Regulation 5.6.23(2) was that the Insurer was not entitled to vote at the meeting of creditors unless a just estimate had been made of the value of its claim. The judge noted that Mr Barnden, the Chairman of the meeting of creditors, did not make a "just estimate" of the value of the claim of the Insurer. As his Honour correctly observed, there was no need for Mr Barnden to make such an estimate, when he had already decided that the proxy was invalid. However, the judge said that had Mr Barnden made a "just estimate" he would have had regard to the contentions and counter-contentions made to him by the respective solicitors. The judge held that, faced with those contentions and counter-contentions, Mr Barnden "could not reasonably have done otherwise than to make an estimate of a nominal sum that would see Vero entitled to vote but with token power only on any calculation of votes by value": [38]. The primary judge then held that Mr Barnden was not in error in declining to adjourn the meeting. He also held that Mr Barnden had acted correctly in rejecting the proxy of the Insurer. No challenge is made on this appeal to either of those decisions. In light of the conclusions he had reached to that point, the judge stated at [85] that it was not necessary to consider how Mr Barnden would have exercised his casting vote. The primary judge's reasons for rejecting the Insurer's claim that the DOCA should be terminated were extremely brief: The grounds of appeal raise two topics. The first is that the Insurer contends that the primary judge was mistaken in finding that the Insurer was a creditor for a nominal sum only. Instead, the Insurer contends, the primary judge should have found that the Insurer was a creditor for $794,012.80, or some other very substantial amount. Mr S Robb QC appears for the Insurer on the appeal with Mr A Lo Surdo. Mr Robb submits that the first topic of appeal is relevant even when there is no challenge to the judge's upholding the correctness of Mr Barnden's decision that the proxy was invalid. The relevance arises, he submits, from the court giving greater weight, in deciding whether a DOCA should be terminated, to the views of a substantial creditor than to the views of a creditor for a nominal amount. It is important to be clear about precisely what the ground of appeal relating to this topic is. There is no appeal against the finding that a "just estimate" of the amount of the Insurer's debt at the time of the creditors' meeting would have been a nominal sum. Rather, the contention is that the court itself should have found that the Insurer was a creditor for $794,012.80 or some other substantial amount and addressed its application to terminate the DOCA on the basis that it was a substantial creditor. The other topic of the grounds of appeal is whether the DOCA should have been terminated. Part of it is a ground of appeal contending that the judge had given inadequate reasons for his finding that the Insurer had failed to establish grounds for terminating the DOCA.