Zurich Insurance PLC v Koper

The Supreme Court of New South Wales, constituted by Bell CJ, Ward P, and Beech-Jones JA, considered an application for leave to appeal concerning the jurisdiction of the court in a matter involving an insurer. The applicant sought leave under section 5 of the *Civil Liability (Third Party Claims Against Insurers) Act 2017* (NSW) to bring proceedings against Zurich Insurance PLC. The underlying dispute involved a claimant domiciled in New Zealand who had obtained a judgment against a New Zealand company in liquidation. This company, the insured, had no presence in New South Wales, and the loss and damage giving rise to the claim occurred entirely in New Zealand. The crucial element of the dispute was whether the New South Wales court possessed personal jurisdiction over the New Zealand insured, as the *Civil Liability (Third Party Claims Against Insurers) Act 2017* (NSW) requires the claimant to be capable of properly bringing proceedings against the insured in New South Wales.

The primary legal issues before the Court were whether service on the New Zealand insured, effected pursuant to sections 9 and 10 of the *Trans-Tasman Proceedings Act 2010* (Cth), generated personal jurisdiction over the insured in New South Wales, and if so, whether those Commonwealth provisions were constitutionally valid. Specifically, the Court had to determine if these provisions, by purporting to allow service on a foreign defendant in a non-federal jurisdiction matter, impermissibly vested the Supreme Court of New South Wales with non-federal jurisdiction, contrary to the negative implication arising from Chapter III of the Australian Constitution. This also involved considering whether the external affairs power under section 51(xxix) of the Constitution could support such legislation, and whether the argument for invalidity was inconsistent with existing High Court authority.

The Court reasoned that the *Trans-Tasman Proceedings Act 2010* (Cth) provisions concerning service and the exercise of jurisdiction were valid. It held that the Act did not vest the Supreme Court of New South Wales with non-federal jurisdiction in a manner prohibited by Chapter III of the Constitution. The Court found that the service provisions were a valid exercise of the Commonwealth's legislative power, including its power to make laws with respect to the service and execution of process throughout the Commonwealth and its external affairs power, provided such laws did not contravene Chapter III. The Court distinguished the present case from situations where federal jurisdiction is improperly conferred, concluding that the service provisions did not create a situation where the underlying claim could not proceed but for the unconstitutional vesting of jurisdiction. Consequently, the Court found that personal jurisdiction over the insured had been validly established in New South Wales.

The Court granted leave to appeal but ultimately dismissed the appeal. The orders made were that leave to appeal be granted and that the appeal be dismissed with costs.