Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Commonwealth Bank of Australia v ACN 076 848 112 Pty Ltd [2015] NSWCA 314 Hearing dates: 2 October 2015 Decision date: 02 October 2015 Before: Basten JA; Emmett AJA Decision: (1) An order pursuant to s 444E(3) of the Corporations Act 2001 (Cth) that the applicant be granted leave to begin and proceed with the application for leave to appeal and the appeal as against the first respondent. (2) Grant leave to appeal from the judgment of Ball J in the Equity Division entered on 1 June 2015. (3) The costs of the leave applications to be costs in the appeal. Catchwords: APPEAL – interlocutory appeal – application for leave – issue of practice and procedure – access to defendant's insurance policy and related documents – principle of restraint – factors relevant to grant of leave – leave required under Corporations Act 2001 (Cth), s 444E Legislation Cited: Civil Procedure Act 2005 (NSW), Pt 6, Div 1 Corporations Act 2001 (Cth), s 444E Category: Procedural and other rulings Parties: Commonwealth Bank of Australia (Applicant) ACN 076 848 112 Pty Ltd (formerly known as Colliers International Consultancy & Valuation Pty Ltd) (First Respondent) Andrew Willsford (Second Respondent) Representation: Counsel: Mr A Leopold SC/Mr P Dowdy (Applicant) Mr D L Williams SC/Mr D S Weinberger (Respondents) Solicitors: Ashurst Australia (Applicant) Johnson Winter and Slattery (Respondents) File Number(s): 2015/184423 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Division Citation: Commonwealth Bank of Australia v ACN 076 848 112 Pty Ltd [2015] NSWSC 666 Date of Decision: 1 June 2015 Before: Ball J File Number(s): 2014/370161 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. THE COURT: The respondent, a company subject to a deed of company arrangement, valued land proposed for residential development at Airlie Beach, Queensland. The applicant, the Commonwealth Bank of Australia ("the Bank"), provided significant funding to the developer, which defaulted on the loans. The Bank has sued the respondent for misleading and deceptive conduct. 2. Pursuant to s 444E of the Corporations Act 2001 (Cth) the Bank required leave to proceed against the respondent. Leave was granted. Under the deed of company arrangement, the Bank is limited (if successful) to an amount covered by the respondent's professional indemnity insurance. To know whether the claim is worth pursuing, the Bank sought access to the policy. Ball J refused to make an order for production of the documents. [1] The Bank requires leave to appeal from that interlocutory judgment, and leave pursuant to s 444E to pursue this application and any consequent appeal. 3. Restraint is required in considering applications for leave to appeal from interlocutory orders involving evaluative or discretionary judgments on matters of practice and procedure. The reasons for that approach are well understood and need not be repeated. However, an exercise of restraint does not mean that leave will not be granted in appropriate cases. 4. There are a number of specific considerations which militate against a grant of leave in the present case. First, the judgment below is well reasoned and refers to the relevant considerations, has regard to the relevant statutory principles and rules and addresses existing authority. Secondly, the result involves no departure from authority. Thirdly, to grant leave will exacerbate the interference with the ordinary trial process which has been delayed already by the consideration of the leave application. Fourthly, the Bank has not indicated it will abandon its claim if unable to obtain access to the insurance documents. 5. There are considerations which militate in favour of a grant of leave. First, and quite properly with respect to a matter of practice and procedure, there are few relevant decisions of intermediate courts of appeal. Secondly, both statute and court rules have changed since some of the leading decisions in this jurisdiction and the provisions now differ from those in other jurisdictions in which similar issues have been considered. Amongst the significant changes referred to by the primary judge is the enactment of Pt 6, Div 1 of the Civil Procedure Act 2005 (NSW) identifying guiding principles for case management. There have also been changes to the availability of discovery under the Uniform Civil Procedure Rules 2005 (NSW). There is merit in this Court considering, in appropriate circumstances the effect of such changes. 6. Thirdly, although the existence and extent of insurance will generally be an irrelevant consideration in relation to civil litigation, that is not the case with respect to proceedings governed by the deed, which specifically referred to the existence of insurance and limited the Bank's claim by reference to that insurance. There is an arguable question as to whether the general principle that the extent of insurance is irrelevant should operate in such circumstances, or whether its relevance is limited to the question of leave. 7. Fourthly, the fact that a claim may not be pursued, or may be pursued in a limited form (because of the limits of the policy) is information which may affect the proceedings, but only if known in advance. There may be both private and public interests in avoiding futile litigation. 8. Fifthly, the claim is for a significant amount (about $100 million) and it may be inferred that the trial process will involve the commitment of significant resources. 9. Sixthly, the Court has the benefit of a well-reasoned judgment in the Court below. This will assist in the matter being dealt with expeditiously and will thus limit the delay resulting from a grant of leave to appeal. 10. Seventhly, the case proposed by the Bank involves matters of principle which can only ever be resolved by way of an interlocutory appeal. 11. In these circumstances, the balance of considerations favours a grant of leave to appeal and a grant of leave under s 444E. The Court should grant leave, with the costs of the application to be costs in the appeal. The appeal will be listed with appropriate expedition. Orders (1) An order pursuant to s 444E(3) of the Corporations Act 2001 (Cth) that the applicant be granted leave to begin and proceed with the application for leave to appeal and the appeal as against the first respondent. (2) Grant leave to appeal from the judgment of Ball J in the Equity Division entered on 1 June 2015. (3) The costs of the leave applications to be costs in the appeal. ********** Endnote 1. Commonwealth Bank of Australia v ACN 076 848 112 Pty Ltd [2015] NSWSC 666. 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: 02 October 2015