David Watson v CGU Insurance Limited [2008] NSWSC 1409

David Watson v CGU Insurance Limited [2008] NSWSC 1409

Upon termination of the deed, s 219 and the deed no longer authorised Mr Watson to maintain proceedings as trustee, so he could not continue the claim against CGU. Termination did not undo any prior vesting of the policy rights, but Mr Watson held any such rights only as bare trustee for Mr Greaves beneficially. Mr Greaves was not released under clause 10 because no clause 9 certificate was issued, but he retained the benefit of the clause 11 stay against enforcement. Because the policy was one of indemnity, if the orders were not enforceable against Mr Greaves there was no present indemnity entitlement. The assignment to Mr Watson was effective at least in equity and was not rendered...

Jurisdiction
Australia
Judgment Date
19 November 2008
Procedural Posture
Supreme Court of New South Wales Equity Division Commercial List Proceedings Concerning Enforcement of an Insurance Policy After Termination of a Deed of Arrangement / Separate Questions for Separate and Prior Determination; Ex Tempore Judgment
Outcome
Separate questions answered; parties directed to bring in draft short minutes of order and proceedings stood over.
Legal Topics
['termination of Deed of Arrangement' 'trustee Powers After Termination' 'beneficial Ownership of Trust Property' 'assignment of Insurance Rights' 'deed Construction' 'directors and Officers Liability Insurance']
['bankruptcy' 'insurance' 'trusts' 'contract'] ['termination of Deed of Arrangement' 'trustee Powers After Termination' 'beneficial Ownership of Trust Property' 'assignment of Insurance Rights' 'deed Construction' 'directors and Officers Liability Insurance']

Case Brief

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Procedural Posture

Supreme Court of New South Wales Equity Division Commercial List Proceedings Concerning Enforcement of an Insurance Policy After Termination of a Deed of Arrangement / Separate Questions for Separate and Prior Determination; Ex Tempore Judgment

Legal Issues

  1. 1 ["Whether Mr Watson could maintain proceedings to recover Mr Greaves' alleged rights under the CGU policy after termination of the deed of arrangement." 'Whether termination of the deed divested Mr Watson of rights or interests assigned to him as trustee.' 'In what capacity Mr Watson held any rights under the policy and for whose benefit.' 'Whether Mr Greaves was released or protected from enforcement in respect of the compensation and costs orders.' 'Whether CGU had accrued or binding rights under the deed preventing recovery under the policy.' 'Whether any party was precluded from bringing a claim against CGU because there was no relevant Loss under the policy.' 'Whether the covenant or assignment to Mr Watson was effective.' 'Whether the transfer and assignment became void after termination by reason of clause 1(e) of the deed or s 213 of the Bankruptcy Act.']

Ratio Decidendi

Upon termination of the deed, s 219 and the deed no longer authorised Mr Watson to maintain proceedings as trustee, so he could not continue the claim against CGU. Termination did not undo any prior vesting of the policy rights, but Mr Watson held any such rights only as bare trustee for Mr Greaves beneficially. Mr Greaves was not released under clause 10 because no clause 9 certificate was issued, but he retained the benefit of the clause 11 stay against enforcement. Because the policy was one of indemnity, if the orders were not enforceable against Mr Greaves there was no present indemnity entitlement. The assignment to Mr Watson was effective at least in equity and was not rendered...

Court Disposition

Separate questions answered; parties directed to bring in draft short minutes of order and proceedings stood over.

Orders

  • ['Question 1 answered: no.' 'Question 2 answered in substance that after termination Mr Watson held any assigned property as bare trustee, not with Pt X or deed powers.' 'Question 3(a) answered conformably with Question 2; Question 3(b) answered: does not arise.' 'Question 4 answered: for Mr Greaves beneficially.'...