Supreme Court New South Wales Medium Neutral Citation: In the matter of Cross City Motorway Nominees No 2 Pty Ltd; Andrew John Davis v Cross City Motorway Nominees No 2 Pty Limited & Ors [2013] NSWSC 1994 Hearing dates: 19 November 2013 Decision date: 19 November 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Leave granted to plaintiff to begin proceedings against defendants but not to proceed further against the companies without the further leave of the court first had and obtained. Proceedings adjourned further hearing. Catchwords: CORPORATIONS - application for leave pursuant to (Cth) Corporations Act 2001 s 444E(3) to commence or continue proceedings against first and second defendants, being companies each the subject of a deed of company arrangement - proposed proceedings are a claim for damages for personal injuries suffered by the plaintiff, said to have been attributable to the negligence of twelve defendants including the two defendants in these proceedings - whether the plaintiff's claim has a solid foundation and gives rise to a seriously arguable case - whether the defendants are insured against the liability the subject of the proceedings - appropriate course at present stage to preserve plaintiff's rights by granting leave to commence the proceedings but limiting that leave to commencing and serving the proceedings and taking no further steps without the further leave of the court. Legislation Cited: (Cth) Corporations Act 2001 s 440D, s 444E Cases Cited: Attard v James Legal Pty Limited [2010] NSWCA 311 Foxcroft v Ink Group Pty Limited (1994) 12 ACLC 1063 Hopkins v AECOM Australia Pty Limited [2012] FCA 1204 J F Kier Pty Ltd v Priority Management Systems Pty Limited [2007] NSWSC 748 Vagrand Pty Limited v Fielding (1993) 41 FCR 550 Category: Principal judgment Parties: Andrew John Davis (plaintiff) Cross City Motorway Nominees No 2 Pty Ltd (first defendant) Cross City Motorway Pty Ltd (second defendant) Representation: Counsel: N Smith (plaintiff) M Clifton (solicitor) (defendants) Solicitors: Martin & Holmes Legal (plaintiff) Herbert Smith Freehills (defendants) File Number(s): 2013/347565 Judgment - EX TEMPORE 1HIS HONOUR: By originating process filed pursuant to leave granted by the court on 18 November 2013 and returnable pursuant to an abridgment of time for service today, the plaintiff claims a grant of leave pursuant to (Cth) Corporations Act 2001, s 440D, to commence or continue with proposed proceedings against the first defendant Cross City Motorway Nominees No 2 Pty Limited and the second defendant Cross City Motorway Pty Limited, being companies at that time at least in administration. The evidence filed today on behalf of the defendants establishes that the defendants are now each the subject of deeds of company arrangement, and leave is now sought pursuant to Corporations Act s 444E(3) to begin or proceed with proceedings against each of those companies. 2The proposed proceedings are a claim for damages for personal injuries suffered by the plaintiff, said to have been attributable to the negligence of twelve defendants including the two defendants in these proceedings, when, apparently endeavouring to escape from assailants by whom he was being pursued in the area of Kings Cross, he entered a park and then climbed onto a roof which overhangs the entrance to the Cross City Motorway, from which he fell on to the motorway, suffering serious injuries. The defendants in these proceedings are sued on the footing that they were responsible in one way or another for the design of the Cross City Motorway and associated facilities, and that the design was defective in failing to provide an appropriate barrier to deter or prevent entrants from climbing on or from falling off the roof on to the motorway. 3The plaintiff suffered the injuries in question on 21 November 2010, and the limitation period expires on 21 November 2013. Accordingly, the present application is brought as a matter of some urgency, to ensure that doubt does not attend the validity of the plaintiff's institution of the substantive proceedings. It may well be that the plaintiff could institute those proceedings and obtain leave under s 444E(3) subsequently nunc pro tunc, but it is reasonable enough for plaintiff to wish to be protected against that risk by obtaining an order in advance rather than retrospectively. 4There are really two issues on the present application. The first is whether the plaintiff's claim has a solid foundation and gives rise to a seriously arguable case: see Vagrand Pty Limited v Fielding (1993) 41 FCR 550, J F Kier Pty Ltd v Priority Management Systems Pty Limited [2007] NSWSC 748, [8], Attard v James Legal Pty Limited [2010] NSWCA 311, [146], and Hopkins v AECOM Australia Pty Limited [2012] FCA 1204, [20]. The short recitation of the central facts that I have given demonstrates that this is far from the ordinary and far from a straight forward case. There might be scope to argue that the claim has a dubious foundation. However, it is also fair to say that it is probably too early to make that decision at present, and that further evidence will be necessary to illuminate the strength of the case, or lack thereof. Whether and to what extent it will be necessary to be so satisfied is also affected by the second significant issue, to which I come. 5That second issue is whether the companies are insured against the liability the subject of the proceedings: see Foxcroft v Ink Group Pty Limited (1994) 12 ACLC 1063, J F Keir v Priority Management Systems Pty Limited (supra) and Attard v James Legal Pty Limited and Hopkins v AECOM Pty Limited (supra). It is reasonably likely that companies such as the defendants engaged in the type of enterprise in which they were engaged would have insurance cover, and it has emerged during the course of the evidence adduced by the defendants today that they have a policy which might potentially respond to the claim, but understandably enough the insurer has not yet had opportunity to consider whether it will accept or reject indemnity in that respect. If the insurer were not to accept indemnity, then it would be necessary to scrutinise far more closely the merits of the claim in order to judge whether it would be reasonable to put the administrators, uninsured, to the expense and difficulty of defending it in circumstances where they do not have funding to do so. 6Accordingly, it seems to me that the appropriate course at this stage is to preserve the plaintiff's rights, such as they are, by granting leave to commence the proceedings but limiting that leave to commencing and serving the proceedings and taking no further steps without the further leave of the court. The proceedings will be adjourned to enable further evidence to be adduced as to the insurance position, and if necessary also as to the arguability of the case in negligence against these defendants. 7Accordingly, the court orders that: (1)Leave be granted to the plaintiff pursuant to Corporation Act s 444E(3)(a) to begin a proceeding against the first defendant and the second defendant in the form of the statement of claim comprised in tab 1 of Ex PCH1 to the affidavit of Peter Clinton Holmes affirmed 17 November 2013 herein, and to serve such statement of claim on the defendants, but not to proceed further against the companies without the further leave of the court first had and obtained. (2)The proceedings be adjourned to 16 December 2013 at 9.45 am in the Corporations Judge Motions List for further hearing. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 April 2014