Esined No. 9 Pty Limited v Moylan Retirement Solutions Pty Ltd; P&S Kauter Investments Pty Ltd ATF the Kauter Superannuation Fund v Moylan Retirement Solutions Pty Ltd; Graeme Manning v Arch Underwriting At Lloyds Limited on Behalf of Syndicate 2012 (No. 2) [2020] NSWSC 359

Supreme Court New South Wales

Medium Neutral Citation: Esined No. 9 Pty Limited v Moylan Retirement Solutions Pty Ltd; P&S Kauter Investments Pty Ltd ATF the Kauter Superannuation Fund v Moylan Retirement Solutions Pty Ltd; Graeme Manning v Arch Underwriting At Lloyds Limited on Behalf of Syndicate 2012 (No. 2) [2020] NSWSC 359 Hearing dates: 5-16 November & 5 December 2018 Date of orders: 08 May 2020 Decision date: 08 May 2020 Jurisdiction: Equity Before: Slattery J Decision: Judgment for the defendants. The plaintiffs will be ordered to pay the defendants' costs of the proceedings unless any party applies by motion for a special costs order within 28 days. Directions made in relation to the making of any application for a special costs order. Catchwords: INSURANCE – a corporate financial planner and holder of an Australian financial securities licence issued under the Corporations Act 2001, gave financial advice to the plaintiffs, who are four separate groups of its clients – based on this financial advice the plaintiffs advanced funds into a series of recommended investments, which failed as a result of the global financial crisis – the licenced entity was deregistered and its principal made bankrupt – the plaintiffs sued the licenced entity's professional indemnity insurers pursuant to Corporations Act, s 601AG on the basis that the deregistered entity had a liability to the plaintiffs and that the professional indemnity insurance policies covered that liability immediately before its deregistration – whether the deregistered licenced entity had a liability to the plaintiffs at the time it was deregistered – whether the deregistered entity's insurance policy with the defendants covered any liability that the deregistered entity had to the plaintiffs – whether exclusion clauses in the insurance contract excluded the defendants' liability to the plaintiffs. Legislation Cited: Banking Act 1959 (Cth) Civil Liability Act 2002, ss 34, 34(1), 34(2), 35, 35(1) Competition and Consumer Act 2010 (Cth), Schedule 2, ss 18, 20 Corporations Act 2001 (Cth), Chapter 5C, Chapter 6D, Chapter 7, ss 9, 706, 708, 601AG, 601AG(a), 601AG(b), 601EB(2), 912A, 912A(1), 912B, 914A, 914D, 940C(1)(b), 942B(2), 947B(1), 947B(2), 946A, 1012A, 1013A, 1013D, 1013E Corporations Regulations 2001 (Cth) reg 7.6.02AAA(1) Evidence Act 1995 (Cth), s 140(2) Fair Trading Act 1987, ss 42, 43 Insurance Contracts Act 1984 (Cth), ss 21, 21(1), 21(2), 22, 26, 27, 27A, 28, 28(2), 28(3), 40, 40(3), 54(2) Cases Cited: Aequitas Ltd v Sparad No 100 Ltd (formerly Australian European Finance Corp Ltd) (2001) 19 ACLC 1006 Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd; Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd (2005) 62 NSWLR 148 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 Anglo-African Merchants Ltd v Bayley [1971] 1 QB 311 Bartlett v Barclays Trust Co [Nos 1 and 2] (1980) Ch 515 Briginshaw v Briginshaw (1938) 60 CLR 336 CGU Insurance Ltd v Porthouse (2008) 235 CLR 103 CIBC Mortgages Plc v Pitt (1994) 1 AC 200 Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 Commonwealth v Verwayen (1990) 170 CLR 394 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371 Elkateb v Lawindi (1997) 42 NSWLR 396 Esined No 9 Pty Limited v Moylan Retirement Solutions Pty Ltd; P&S Kauter Investments Pty Ltd ATF the Kauter Superannuation Fund v Moylan Retirement Solutions Pty Ltd; Graeme Manning v Arch Underwriting At Lloyds Limited on Behalf of Syndicate 2012 [2018] NSWSC 1706 FAI Insurance v Australian Hospital Care (2001) 204 CLR 641 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Greenhill v Federal Insurance Co Limited [1927] 1 KB 65 Hansen v Marco Engineering (Aust) Pty Ltd [1948] VLR 198 Hadid v Lenfest Communications Inc [1999] FCA 1798 Hitchens v Zurich Australia Ltd [2015] NSWSC 825 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 Jones v Dunkel (1959) 101 CLR 298 Maguire v Macaronis (1997) 188 CLR 449 McKenzie v McDonald (1927) VLR 134 Murdock v Lipman (2012) NSWSC 983 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd & Ors (1992) 110 ALR 449 Newcastle City Council v GIO General Limited (1997) 191 CLR 85 Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 Payne v Parker [1976] 1 NSWLR 191 Prepaid Services Pty Ltd & Ors v Atradius Credit Insurance NV (2013) 302 ALR 732 San Sebastian Pty Ltd v The Minister Administering the Environment Planning and Assessment Act 1979 and Another (1986) 162 CLR 340 Sargent v ASL Developments Ltd; Turnbull v ASL Developments Ltd (1974) 131 CLR 634 Smart v AAI Ltd; JRK Realty Pty Ltd v AAI Ltd [2015] NSWSC 392 Soole v Royal Insurance Co Ltd [1971] 2 Lloyd's Rep 332 Spellson v George (1992) 26 NSWLR 666 Warman International Ltd v Dwyer (1995) 182 CLR 544 TBI Pty Ltd v AON Financial Planning Limited (2004) 13 ANZ Ins Case 61-601 Tepko Pty Ltd and Ors v The Water Board (2001) 206 CLR 1 Category: Principal judgment Parties: (2012/374893) Esined No. 9 Pty Ltd (first plaintiff) Esined No. 10 Pty Ltd (second plaintiff) Moylan Retirement Solutions Pty Ltd (first defendant) Arch Underwriting at Lloyd's Ltd on behalf of Syndicate 2012 (second defendant) Barbican Managing Agency Limited (third defendant) Hiscox Dedicated Corporate Member Limited (fourth defendant) Liberty Mutual Insurance Europe Limited (fifth defendant)