Sinclair v Archerfield Kart Hire Pty Ltd
[2024] QDC 183
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- Unreported Judgment
- Sinclair v Archerfield Kart Hire Pty Ltd[2024] QDC 183
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Sinclair v Archerfield Kart Hire Pty Ltd[2024] QDC 183
Sinclair v Archerfield Kart Hire Pty Ltd[2024] QDC 183
DISTRICT COURT OF QUEENSLAND
CITATION: | Sinclair v Archerfield Kart Hire Pty Ltd [2024] QDC 183 |
PARTIES: | KATHLEEN SINCLAIR (Plaintiff) V ARCHERFIELD KART HIRE PTY LTD (ACN 151 617 471) (Defendant) Tokio Marine Kiln Group Limited (Respondent) |
FILE NO/S: | 4399/18 |
DIVISION: | Civil |
PROCEEDING: | Claim |
ORIGINATING COURT: | District Court |
DELIVERED ON: | 11 September 2024 (ex tempore) |
DELIVERED AT: | Brisbane |
HEARING DATE: | 11 September 2024 |
JUDGE: | Porter KC DCJ |
ORDERS: |
|
CATCHWORDS: | PROCEDURE – Civil proceedings in State and Territory courts – Joinder of causes of action and of parties – Parties – Generally – where the plaintiff applies to join, as a party in the proceeding, an insurance company – where the plaintiff sought to advance a cause of action created by s. 601AG of the Corporations Act 2001 (Cth) – where the defendant company was deregistered in 2019, having been re-registered for purposes to do with this litigation – where the respondent insurers submitted there was difficulty in adjoining the insurers into a proceeding in circumstances where the proceeding is abated by deregistration, and there is no defendant – where the plaintiff submitted the court had power in the case of s. 601AG specifically, because the purpose of that provision, particularly, is to avoid the need to re-register – where the plaintiff submitted that where a cause of action arose – whether the insurers be adjoined to the proceeding. |
CASES: | Amcus Pty Ltd v Hertz Rentals Pty Ltd (2010) 77 ACSR 550 Pagnon v WorkCover Queensland [2001] 2 Qd R 492 RGM Graphic Services Pty Ltd v Moon [2001] FCA 1799 |
LEGISLATION: | Corporations Act 2001 (Cth) ss. 601AG, 601AH(2) and (3) Uniform Civil Procedure Rules 1999 (Qld) rr. 69(1), 375 |
COUNSEL: | A Taylor for the plaintiff K Holyoak for the defendant, the respondent and Sterling Insurance Pty Ltd (ABN 12 084 296 168) |
SOLICITORS: | Hall Payne Lawyers for the plaintiff Barry Nilsson Lawyers for the defendant, the respondent and Sterling Insurance Pty Ltd (ABN 12 084 296 168) |
Introduction
- [1]This is an application by the plaintiff, Kathleen Sinclair to join, as a party in the proceeding, an insurance company identified, sufficiently for this, as Sterling Insurance under rule 69(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR); and leave to be granted under r. 375 UCPR to amend her claim and statement of claim to include a claim against Sterling Insurance.
- [2]A couple of preliminary points arose. One was whether the statutory stay under r. 389(2) UCPR had arisen. With some time for both parties to reflect on the evidence that was assembled late in the piece, that point was not pressed, and it looks to me that it is correct that no leave is required.
- [3]A second preliminary point arose, and that is that the solicitors for the respondent to the application, Sterling Insurance, appeared through Mr Holyoak of counsel and swore to and submitted that the insurer relevant to the policy the subject of the proceedings – which, I interpolate, Ms Sinclair, through solicitors, has spent a long time trying to identify – was a company called Tokio Marine Kiln Group Limited (Tokio). A solicitor of this court swears that is the legal entity which is the insurer under the policy, which of itself is probably enough. Mistakes can be made, although the solicitor swearing the affidavit would have had to be satisfied of the existence of the entity whose instructions he was taking; but, in any event, there is a UK company search showing that company exists with a company number in the UK of 02949032.[1]
- [4]It is unknown whether Tokio is a foreign registered company in Australia, but that is enough to identify it. Having reached that point, the question was whether Mr Taylor, who appeared for the plaintiff, amended the application to seek to join Tokio, which application was not opposed by Tokio, who appeared through Mr Holyoak, as well as the other entities on the defendant’s side of the record.
- [5]Mr Holyoak confirmed he had instructions from Tokio to confirm to the court that Tokio was, indeed, the insurer under the policy in question.
The cause of action the plaintiff sought to advance against Tokio
- [6]The cause of action which Mr Taylor’s client sought to advance against Tokio is that created by section 601AG of the Corporations Act 2001 (Cth), which provides:
A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:
- the company had a liability to the person; and
- the insurance contract covered that liability immediately before deregistration.
- [7]The authorities establish that that creates a cause of action. It has not been construed, as one might think it might have been, as a provision that facilitates execution. It is being construed as giving rise to a standalone cause of action.
- [8]Ordinarily, one would think that there would not be any difficulty joining Tokio in respect of that cause of action to a proceeding of this kind, where it is plain Tokio is the relevant insurer. If only it had been that simple.
The consequence of the deregistration of the defendant
- [9]The difficulty, which was identified by Tokio and Sterling Insurance, was that the defendant company, Archerfield Kart Hire, (which, even at this moment, is the only defendant to the proceedings) was deregistered on 10 November 2019 (despite having been re-registered once before for purposes to do with this litigation).
- [10]There is a line of authority that on the deregistration of a company, there is an “automatic abatement of all proceedings” both by and against the company.[2] Exactly what “abatement” means has been articulated as “the proceedings being extinguished or annulled”.[3] The effect of the “abatement”, according to Justice Slattery, who reviewed the authorities, is that the court must “do nothing except refrain from proceeding any further.”[4] The authority for that conclusion is Chief Justice Jordan, no less.[5]
- [11]I was not taken to a case in our Court of Appeal, or by a first instance trial judge in this court, or in the Supreme Court, where that line of authority was applied. However, in circumstances where it involves the interpretation of the consequences of deregistration under a national scheme law, I would follow that unless I thought it was plainly wrong, and I do not. I think I should follow it.
- [12]The area of doubt seems to me to be what the scope of the residual powers of the court are. The decision in Amcus Pty Ltd v Hertz Rentals Pty Ltd (2010) 77 ASCR seems to suggest that there are no residual powers. That case suggests that the court can do nothing, as I said, except refrain from proceeding further, although that case recognises that there are authorities both ways on the questions of whether the court has power to make an order that disposes of the proceedings where they are “abated”. The use of the word “abated” conceals, however, the difficult question of what the scope of the residual powers of the court are where a defendant has been deregistered.
- [13]Mr Holyoak for the insurers submitted that the difficulty for the plaintiff is that they want me to make an order joining the insurer under s. 601AG Corporations Act into a proceeding in circumstances where the proceeding is abated and there is no extant defendant.
- [14]It is fortuitous for the insurer it is in this position, because other authorities recognise that, even if the corporate defendant does not exist, it is sufficient if there are other defendants involved in the proceedings in the same interest as the deregistered company. The problem does not arise in that case because there is an extant defendant before the Court and, accordingly, a properly constituted proceeding in which the court has jurisdiction to make orders.[6]
- [15]I am not so sure that the scope of the court’s powers are as confined as Amcus suggests. When the court’s jurisdiction is properly invoked, at least in the circumstances of a plaintiff that exists, the court has power to hear and determine that application, and all the incidental powers necessary to give effect to that conferral of statutory jurisdiction.
- [16]Mr Taylor submitted that the court had power to join an insurer under s. 601AG Corporations Act even if there was no defendant in existence. He relie,d for that submission, on the purpose of that provision, referring to Justice McPherson’s observations in Pagnon v WorkCover Queensland [2001] 2 Qd R 492 at [17]:
The legislative policy underlying s. 601AG is, however, not open to doubt. It is to “short-cut” the need to reinstate the company, and to do so by enabling the ultimate recipient of the insurance proceeds to sue the insurer direct where the company has been dissolved, without imposing the additional trouble and expense of first applying to have it reinstated. The assets of the company divisible among its creditors are not diminished by adopting that procedure: Corporations Law, s. 562. In a case like this where, so far as appears, the insurance policy covered the liability existing immediately before registration, there is to my mind no question but that the Court, if application were made to it by the plaintiff, would or would have exercised its discretion under s. 601AH(2) to reinstate the company Croway Pty Ltd. See H R Cody Pty Ltd (1992) 8 A.C.S.R. 563, 567, where, on such an application, Murray J. regarded it as material that in Western Australia the liability of an uninsured employer would be met by the Workers’ Compensation Commission out of the general fund maintained by the Commission for that very purpose. Nor in my opinion is there reason to doubt that, if asked to do so, the Court would, for reasons like those of Megarry J. in Re Lindsay Bowman Ltd, be satisfied that it was “just” to make an order under s. 601AH(3)(b) that the limitation period following deregistration of Croway Pty Ltd should not be counted against the plaintiff. Here the deregistration of the company was, as Higgins J. said in Ellul’s case (112 F.L.R. 4, 10), “entirely adventitious”, and the board as insurer should not be entitled to take advantage of it as against the plaintiff, who had nothing whatever to do with that event. His claim for damages was, so far as appears, not statute-barred at the date the company was deregistered and ceased to exist. In circumstances like these, compliance with the requirements of s. 186(2) affords adequate protection for the legitimate interests of the board.
[underlining added]
- [17]Based on that passage, particularly the observations underlined above as to the point of the provision being to avoid the necessity to re-register, Mr Taylor submitted that where the cause of action under s. 601AG Corporations Act arose, it could be folded into proceedings where the defendant company is deregistered as of right, because the purpose of the provision was to avoid the need to re-register.
- [18]It seemed to me that could have been done in this way: I could make an order joining the insurer nunc pro tunc back to the date of the deregistration, such that there was no period where there was no party before the court.
- [19]Mr Holyoak, understandably, submitted on the authorities that whatever the residual powers were, they did not go that far. I do not think I have to decide that here because even if I could do that, I would not.
- [20]I would not do that because it would also have the effect of shutting out any limitation period defence which the insurer has, in respect of the cause of action that arises under s. 601AG Corporations Act. The reasons go full circle, back to the core proposition that s. 601AG Corporations Act creates a separate and new cause of action.
- [21]Another reason why I would not do it, is that the Parliament appears to have turned its mind to exactly this problem by providing a reinstatement power, and such a reinstatement power which, by sub-ss. 601AH(2) and (3) Corporations Act, gives the court plenary powers to solve exactly the sorts of problems that arise here.
- [22]For those reasons, even if my residual powers as a judge of the court, with the power to hear and determine, extended to making an order of the kind I have described, which could address the difficulty arising from the cases, I would not.
Conclusion
- [23]For those reasons, therefore, I dismiss the plaintiff’s application. It may well be there are other things that can be done; but, in my respectful view, I cannot just join the insurer, Tokio, into this proceeding in these very specific circumstances.
- [24]I see no sufficient reason to deprive the respondents of their costs, given their success on the application. I order the plaintiff pay the costs of Sterling Insurance Pty Ltd and Tokio Marine Kiln Group Limited on the standard basis.
Footnotes
[1] Exhibit 1 to the application.
[2] See Amcus Pty Ltd v Hertz Rentals Pty Ltd (2010) 77 ACSR 550 at [12].
[3] See Ibid at [13] where Slattery J agrees with counsel’s submissions that refer to the court passages in Total Eden, where Master Bredmeyer followed Astaire Pty Ltd v Cavanagh and Coope (unreported, Supreme Court of Western Australia, Master Seaman QC, Library No 6601, 23 February 1987).
[4] Ibid at [16].
[5] See Ibid at [14] citing United Service Insurance Co Ltd (in liq) v Lang (1935) 35 SR (NSW) 487 at 497 (Jordan CJ).
[6] See RGM Graphic Services Pty Ltd v Moon [2001] FCA 1799.