Eastern Creek Holdings Pty Limited v Axis Speciality Europe Limited [2010] NSWSC 840

New South Wales Supreme Court

CITATION : Eastern Creek Holdings Pty Limited v Axis Speciality Europe Limited [2010] NSWSC 840

HEARING DATE(S) : 28 July 2010

JUDGMENT DATE : 30 July 2010

JUDGMENT OF : Hammerschlag J

DECISION : Leave granted to commence action against the defendant

CATCHWORDS : INSURANCE LAW – application for leave to commence proceedings against an insurer pursuant to s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) – requirement for leave to be granted that the policy responds to the applicant's claim against the insured – whether satisfied in the present case

LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946 (NSW) Insurance Contracts Act 1984 (Cth)

CATEGORY : Procedural and other rulings

Bede Polding College v Limit (No 3) Ltd [2008] NSWSC 887 CASES CITED : Wilkie v Gordian Runoff (2005) 221 CLR 522 Antico v CE Health Casualty & General Insurance Ltd (1995) 8 ANZ Insurance Cases 61-268

PARTIES : Eastern Creek Holdings Pty Limited - Plaintiff Axis Speciality Europe Limited - Defendant

FILE NUMBER(S) : SC 2010/138378

COUNSEL : D.S. Weinberger [Plaintiff] D.A. Lloyd [Defendant]

SOLICITORS : Sekel Oshry Lawyers [Plaintiff] Kennedys [Defendant]

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

HAMMERSCHLAG J

30 JULY 2010

2010/138398 EASTERN CREEK HOLDINGS V AXIS SPECIALTY EUROPE LIMITED JUDGMENT INTRODUCTION 1 HIS HONOUR: The plaintiff moves by Summons for an order under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("the Act") for leave to commence proceedings against an insurer. 2 Sections 6(1) and (4) of the Act provide as follows: Amount of liability to be charge on insurance moneys payable against that liability (1) If any person (hereinafter in this Part referred to as the insured) has, whether before or after the commencement of this Act, entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability. … (4) Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action and of the judgment given therein the parties shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured: Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken. FACTUAL BACKGROUND The Design and Construction Contract 3 On about 2 August 2006, the plaintiff as Principal entered into a Design and Construction Contract ("the Contract") with Seana Constructions Pty Ltd as Contractor ("the Insured") under which the Insured was to carry out for it the design and construction of a hotel at Jack Brabham Drive, Eastern Creek, New South Wales.