Keys v Royal & Sun Alliance Insurance [2000] NSWSC 1122

New South Wales Supreme Court

CITATION : Keys v Royal & Sun Alliance Insurance [2000] NSWSC 1122 FILE NUMBER(S) : SC 10509/2000 HEARING DATE(S) : 19/4/00;20/4/00 JUDGMENT DATE : 20 April 2000

PARTIES : Hazel Violet Keys & 1 Or v Royal & Sun Alliance Insurance & Ors. JUDGMENT OF : O'Keefe J

LOWER COURT District Court JURISDICTION : LOWER COURT 6157/98; 7524/98 FILE NUMBER(S) : LOWER COURT Not applicable JUDICIAL OFFICER :

COUNSEL : Mr C J Carrigan - plaintiff Mr J Simpkins - defendant Solicitors for Plaintiff Tress Cocks & Maddox Sydney SOLICITORS : Solicitors for First Defendant Gadens Sydney CATCHWORDS : Practice - Cross-vesting - Transfer of actions from District Court - Transfer of actions to interstate Court - Criteria LEGISLATION CITED : Jurisdiction of Court's (Cross-Vesting) Act 1987, ss 5 & 8 CASES CITED : Bankinvest v Seabrook (1988) 14 NSWLR 711 Spiliada Maritime Corporation v Cansulex Limited (1987) AC 460 DECISION : Summons and Notice of Motion dismissed with costs.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

O'KEEFE J

Thursday 20 April 2000

IRC10509/00 - H V KEYS v ROYAL & SUN ALLIANCE INSURANCE (AUSTRALIA) LIMITED. JUDGMENT

1 HIS HONOUR: By summons and notice of motion filed on 6 March 2000, Hazel Violet Keys (Mrs Keys) and Wendy Hazel Pope (Mrs Pope) seek to transfer two actions from the District Court, and having had them transferred to this Court, to have those proceedings cross vested to the Queensland Supreme Court. 2 The circumstances giving rise to the application are that there are two actions in the District Court in New South Wales commenced by Royal and Sun Alliance Insurance Australia Limited (Royal and Sun Alliance). One of those actions is against Nautic Blue Pty Limited (Nautic Blue), Mrs Keys, William John Edward Cusack (Cusack) and the partners of Coopers and Lybrand (Coopers and Lybrand). It is a claim for $217,500 arising out of a contract of 17 September 1997 under which Royal and Sun Alliance agreed to issue what was described as a deposit power insurance bond in respect of the purchase of a property known as Lot 5, Sir Leslie Theiss Drive, Townsville. That property was owned by a company, Leda Developments Pty Limited (Leda). 3 It agreed to sell the property for $2,175,000. The deposit power insurance bond was provided and used in that transaction in lieu of a cash payment as the deposit required under the contract. The purchasers under that contract defaulted and as a consequence the contract was terminated. Leda has sued in the Supreme Court of Queensland in respect of losses it claims to have incurred as a consequence of the default of the proposed purchasers of the property, Lot 5 Sir Leslie Theiss Drive, Townsville. The loss was occasioned because on resale the property has been said to have realised only $1,300,000. 4 One of the sequelae of the default under the contract was that Royal and Sun Alliance was required to make the payment of $217,500 under the deposit power insurance bond which it had issued. It has sued in the District Court in proceedings which were instituted on 25 August 1998. That action has proceeded to a stage where the fixing of a hearing date is imminent and a hearing during the course of the third quarter of the current year is possible and is virtually certain during the final quarter of the current year at the latest. 5 In those proceedings, defences have been raised by Mrs Keys that the bond was not authorised by her and that any signatures purporting to be hers are forgeries. I shall return to the issues in that case later in the course of this judgment. 6 By an agreement made in February 1998, Royal and Sun Alliance agreed to issue a further deposit power insurance bond for $200,000. It was issued in respect of the purchase of the property known as Zurich House, 67 - 73 Denham Street Townsville. As in the previous instance the bond was used in lieu of cash for the deposit payable under the contract. Again there was default and again Royal and Sun Alliance was called upon by the vendor to pay the amount of the bond $200,000, consequent upon the default. 7 As a consequence of that payment having been made, Royal and Sun Alliance has sued Wydark Pty Limited (Wydark), Mrs Keys and Mrs Pope, to recover the amount paid. 8 In the action concerning the bond for $217,500, default judgment has been obtained against Nautic Blue and Cusack. The action will therefore proceed against only Mrs Keys and Coopers and Lybrand. 9 In the action concerning the bond for $200,000 default judgment has been obtained against one of the defendants, Mr Geoffrey Keys, a son of Mrs Keys. That action will now proceed, against Wydark, Mrs Keys and Mrs Pope. 10 On 8 November 1999 Leda commenced proceedings in the Supreme Court of Queensland seeking to recover the damages to which I have already referred. A defence to this action was filed on 8 December 1999. No cross claim against Coopers and Lybrand was included with that defence. 11 However, the evidence reveals that as at 21 January 2000, instructions had been given to counsel to draw the appropriate process to join Coopers and Lybrand as parties to these proceedings. As at the date of hearing of the present application that joinder has not been effected. However, according to the evidence, it is still "proposed". The delay in effecting the joinder of Coopers and Lybrand is sought to be explained by the fact that for a period of some seven weeks, terminating on 10 April 2000, there had been without prejudice discussions which endeavoured to bring about a settlement of the matter. But as has been pointed out by counsel for the defendants in this application, those discussions involved Royal and Sun Alliance but did not involve Coopers and Lybrand Moreover, the period between the date on which the defence was filed in the Queensland action and the date on which the negotiations with Royal and Sun Alliance began is not insignificant. Furthermore, it is not explained. If one goes back seven weeks from 10 April,2000, mid February 2000 is fixed as the approximate date of commencement of the negotiations. That leaves unexplained a period of some two months, perhaps more, between the date of filing of the defence and the institution of the negotiations. It also leaves unexplained why Coopers and Lybrand, if they are to be joined, were not joined at the time the defence was filed. 12 In addition, although it is probably not of any great significance, it is relevant to note that the defendants in the Queensland proceedings filed their defence on the last date fixed for that purpose. 13 The application which has been made to lift up the two District Court actions depends upon the power given to this Court by S.8 of the Jurisdiction of Courts (Cross Vesting) Act 1987. That section provides as follows: "(1) Where -