Supreme Court New South Wales Medium Neutral Citation: In the application of Balesfire Pty Ltd (De-Registered) trading as Gutter Shop; Cameron Davy v Australian Securities & Investments Commission [2013] NSWSC 1996 Hearing dates: 2 December 2013 Decision date: 02 December 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: The Court notes that: The second defendant Allianz Australia Workers' Compensation (NSW) Ltd admits, for the purpose of these proceedings and for the purpose of the proceedings instituted in the District Court of NSW by the plaintiff against Balesfire Pty Ltd, that Balesfire Pty Ltd was the employer of the plaintiff at the time of the events which gave rise to the liability asserted in the District Court proceedings. The second defendant consents to an order being made by the District Court joining it as an additional defendant in the District Court proceedings to respond to a claim pursuant to Corporations Act s 601AG. The Court orders that: The plaintiff pay the third defendant's costs of these proceedings. The plaintiff's costs of these proceedings be costs in the District Court proceedings. Catchwords: WORKERS' COMPENSATION - proceedings to obtain compensation - determination of claims - seeking order for reinstatement under s 601AH Corporations Act - application for joinder of two insurers under s 601AG Corporations Act - damages for personal injury - no admission of indemnity - question of employment status - liability of insurer - cause of action against deregistered company which was covered by an insurance policy immediately prior to deregistration Legislation Cited: (Cth) Corporations Act 2001 s 601AG, s 601AH Category: Principal judgment Parties: Balesfire Pty Ltd (de-registered) trading as Gutter Shop (plaintiff) Australian Securities and Investments Commission (first defendant) Allianz Australia Workers Compensation (NSW) Limited (second defendant) Insurance Australia Limited (AFS Licence Number 227681) Trading as SGIO Insurance (third defendant) Representation: Counsel: J Sharpe (plaintiff) J Turner (solicitor)(second defendant) A Renshaw (third defendant) D Farrell (directors) Solicitors: Stuart, Duncan Francis Joseph (plaintiff) Goldbergs Lawyers (second defendant) McCulloch & Buggy Lawyers (interested party) File Number(s): 2013/322212 Judgment - EX TEMPORE 1HIS HONOUR: By an originating process filed on 25 October 2013 and amended on 12 November 2013 the plaintiff Cameron Davy sought an order pursuant to (Cth) Corporations Act 2001, s 601AH, that the first defendant Australian Securities and Investments Commission reinstate the registration of Balesfire Pty Limited. Balesfire had been deregistered on the application of its directors while proceedings brought by the plaintiff against it in the District Court, for damages for personal injury suffered by the plaintiff when he fell from a ladder in the course of working for Balesfire either as an employee or as an independent contractor, were pending. 2A claim for compensation had proceeded and the second defendant Allianz Australia Workers' Compensation (NSW) Ltd, Balesfire's workers' compensation insurer, had responded to that claim. However, when the formal proceedings were instituted in the District Court, Allianz did not admit indemnity and put into issue the question of employment. It then emerged that Balesfire had been deregistered. 3At the time of Balesfire's deregistration its liability to the plaintiff was covered by one or other of a workers' compensation insurance policy issued by the second defendant Allianz, or a public liability policy issued by the third defendant SGIO. Which of them would respond to the claim would ultimately depend on whether Mr Davy was an employee or an independent contractor of Balesfire. 4Mr Davy's solicitors sought the consent of the insurers to be "substituted" as a defendant in the District Court proceedings pursuant to Corporations Act, s 601AG, which relevantly makes an insurer liable to a plaintiff who has a cause of action against a deregistered company which was covered by an insurance policy immediately prior to deregistration. For some reason, which does not readily appear, those advising the plaintiff took the view that there was some novelty or difficulty about joining two insurers in the alternative in the District Court proceedings pursuant to s 601AG. While consent to such a joinder was sought, when it was not forthcoming, instead of making an application for such joinder in the District Court, the present application for reinstatement of Balesfire was brought in this court pursuant to s 601AH. 5In my view, the present application was unnecessary and misconceived as a superior result could have been obtained at much less cost and inconvenience by an application for joinder of the two insurers pursuant to s 601AG in the District Court. I do not think that the fact that the second defendant Allianz put employment into issue can really be said to be the cause of the present application. Insurers often put in issue liability on one basis or another. The response to that dispute should have been an application under s 601AG to join the insurer in the District Court, so that the dispute could have been resolved. 6Today, Allianz admits that Balesfire was the employer of the plaintiff at the time of the accident in which he was injured, and indicates that it consents to be joined to the District Court proceedings pursuant to s 601AG. That admission having been made, the potential liability of SGIO as the public liability insurer evaporates. Accordingly, SGIO has been brought to court ultimately for no purpose and no relief is granted against it and it is impossible to see why it should not recover its costs in this respect. However, I do not accept that the joinder of the insurers in this context in the s 601AH application was inappropriate in the sense that reinstatement of the company pursuant to s 601AH would revive a liability of those insurers which they would otherwise not be exposed to and in those circumstances natural justice would require that they be afforded an opportunity to be heard on the reinstatement question if it were a live one. 7Allianz has indicated that it does not oppose an order that the costs of this application be costs in the substantive proceedings, and that is the most generous order that the plaintiff can expect. No application has been made by or against the directors in respect of the costs of these proceedings. 8The court notes that: 1. The second defendant Allianz Australia Workers' Compensation (NSW) Ltd admits, for the purpose of these proceedings and for the purpose of the proceedings instituted in the District Court of NSW by the plaintiff against Balesfire Pty Ltd, that Balesfire Pty Ltd was the employer of the plaintiff at the time of the events which gave rise to the liability asserted in the District Court proceedings. 2. The second defendant consents to an order being made by the District Court joining it as an additional defendant in the District Court proceedings to respond to a claim pursuant to Corporations Act, s 601AG. 9The Court orders that: 3. The plaintiff pay the third defendant's costs of these proceedings. 4. The plaintiff's costs of these proceedings be costs in the District Court proceedings. ********** 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: 07 July 2014