DSHE Holdings Ltd (receivers and managers appointed) (in liq) v Abboud; National Australia Bank Limited v Abboud [2017] NSWSC 579

DSHE Holdings Ltd (receivers and managers appointed) (in liq) v Abboud; National Australia Bank Limited v Abboud [2017] NSWSC 579

Leave under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) should be refused in circumstances where indemnity for directors is confirmed by insurers subject only to customary reservations, there is presently no insurance controversy, utility of joining the insurers is speculative, and Court's discretion is to be exercised to avoid unnecessary, unwarranted or inappropriate claims.

Jurisdiction
Australia
Judgment Date
12 May 2017
Procedural Posture
Equity Commercial List / Application for Leave Under S 6(4) of LRMP Act
Outcome
Leave under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) refused
Legal Topics
['directors & Officers Liability Insurance' 'statutory Charge Under S 6 Law Reform (miscellaneous Provisions) Act 1946' 'corporate Duties and Misrepresentation' 'priority of Claims to Insurance Proceeds' "court's Discretion in Granting Leave"]
['insurance Law' 'corporations Law' 'equity'] ['directors & Officers Liability Insurance' 'statutory Charge Under S 6 Law Reform (miscellaneous Provisions) Act 1946' 'corporate Duties and Misrepresentation' 'priority of Claims to Insurance Proceeds' "court's Discretion in Granting Leave"]

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Procedural Posture

Equity Commercial List / Application for Leave Under S 6(4) of LRMP Act

Legal Issues

  1. 1 ['Whether leave should be granted under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to commence proceedings against D&O insurers' 'Whether the utility or necessity exists for joining insurers in proceedings where indemnity for directors is confirmed subject to reservations' 'Priority of claims to insurance proceeds under s 6 and prospect of competing claims']

Ratio Decidendi

Leave under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) should be refused in circumstances where indemnity for directors is confirmed by insurers subject only to customary reservations, there is presently no insurance controversy, utility of joining the insurers is speculative, and Court's discretion is to be exercised to avoid unnecessary, unwarranted or inappropriate claims.

Court Disposition

Leave under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) refused

Orders

  • ['Leave under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to commence proceedings against D&O insurers is refused. Parties invited to submit short minutes for further conduct.']