Watson, Estate of v Conolly [2012] NSWSC 741

Watson, Estate of v Conolly [2012] NSWSC 741

The Allianz payment was irrelevant to the Estate's claim against the defendants because, under subrogation principles and s 48(2)(b) of the Insurance Contracts Act 1984 (Cth), the Estate would have an obligation corresponding to that of an insured to account to Allianz for any recovery representing the insured loss. The impugned defence paragraphs alleging set-off, negligent compromise with Allianz, negligent advice to commence the proceedings, Allianz's failure to fund the proceedings, and proportionate liability did not disclose relevant or sufficiently arguable defences and would improperly expand the issues. Proposed paragraph 174 was allowed because it was confined to the effect of...

Jurisdiction
Australia
Judgment Date
22 June 2012
Procedural Posture
Interlocutory Applications in Professional Negligence Proceedings / Plaintiff's Notice of Motion to Strike Out Paragraphs of the Defence and Defendants' Application for Leave to File an Amended Defence
Outcome
Plaintiff's strike out application granted; defendants granted leave to amend only by adding proposed paragraph 174; other proposed amendments refused; costs submissions to be determined on the papers.
Legal Topics
['strike Out Application' 'amendment of Defence' 'subrogation' 'insurance Payment and Damages' 'proportionate Liability' 'vexing or Embarrassing Pleadings']
['practice and Procedure' 'professional Negligence' 'insurance Law' 'civil Liability'] ['strike Out Application' 'amendment of Defence' 'subrogation' 'insurance Payment and Damages' 'proportionate Liability' 'vexing or Embarrassing Pleadings']

Case Brief

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Procedural Posture

Interlocutory Applications in Professional Negligence Proceedings / Plaintiff's Notice of Motion to Strike Out Paragraphs of the Defence and Defendants' Application for Leave to File an Amended Defence

Legal Issues

  1. 1 ['Whether paragraphs 184 to 189 of the amended defence should be struck out as irrelevant, vexing or embarrassing.' 'Whether the $1 million paid by Allianz to Mr Watson or the Estate affected the damages recoverable from the defendants.' 'Whether the fact that Mr Watson was not a party to the insurance contract, and relied on s 48 of the Insurance Contracts Act 1984 (Cth), made the Allianz payment relevant to the defence.' "Whether Allianz's alleged refusal to fund or contribute to the plaintiff's costs extinguished any obligation to repay Allianz." "Whether the defendants' proposed proportionate liability pleading under Part IV of the Civil Liability Act 2002 disclosed a proper claim." 'Whether the defendants should have leave to plead proposed paragraph 174 concerning the Deed of Moratorium and the settlement with Allianz.']

Ratio Decidendi

The Allianz payment was irrelevant to the Estate's claim against the defendants because, under subrogation principles and s 48(2)(b) of the Insurance Contracts Act 1984 (Cth), the Estate would have an obligation corresponding to that of an insured to account to Allianz for any recovery representing the insured loss. The impugned defence paragraphs alleging set-off, negligent compromise with Allianz, negligent advice to commence the proceedings, Allianz's failure to fund the proceedings, and proportionate liability did not disclose relevant or sufficiently arguable defences and would improperly expand the issues. Proposed paragraph 174 was allowed because it was confined to the effect of...

Court Disposition

Plaintiff's strike out application granted; defendants granted leave to amend only by adding proposed paragraph 174; other proposed amendments refused; costs submissions to be determined on the papers.

Orders

  • ['Paragraphs 184 to 189 of the amended defence are struck out.' 'Leave is granted to the defendants to file a further defence to the further amended statement of claim which adds paragraph 174 in the form that was handed up in court on 22 June 2012.' 'Any submission and affidavit material from the plaintiff on the...