One. Tel (In Liq) v David Watson and Anor [2009] NSWCA 282

One. Tel (In Liq) v David Watson and Anor [2009] NSWCA 282

The deed of arrangement and the assignment of rights under the policy (upon notice) operated as an absolute assignment in law to the trustee, who thus retained standing to pursue the insurer after termination of the deed. There were no words in the deed requiring the right to enforce the claim to end with termination. The assignment did not become conditional or void; it continued for the benefit of those intended by the trust, and thus the appeal was allowed and the primary judgment set aside.

Parties
Appellant: One.Tel Limited (In Liquidation); First Respondent: David Watson; Second Respondent: CGU Insurance Limited
Jurisdiction
Australia
Judgment Date
02 October 2009
Procedural Posture
Appeal / Judgment on Appeal From a Decision of the Supreme Court Equity Division (mac Dougall J, 19 November 2008), NSW Court of Appeal
Outcome
Appeal allowed
Legal Topics
Deeds of Arrangement, Assignment of Chose in Action, Trustee Standing, Directors and Officers Insurance, Effect of Termination of Deed of Arrangement, Legal/equitable Assignment
Insolvency Law Bankruptcy Insurance Law Equity Deeds of Arrangement Assignment of Chose in Action Trustee Standing Directors and Officers Insurance +2 more

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Parties

One.Tel Limited (In Liquidation)

Appellant

David Watson

First Respondent

CGU Insurance Limited

Second Respondent

Procedural Posture

Appeal / Judgment on Appeal From a Decision of the Supreme Court Equity Division (mac Dougall J, 19 November 2008), NSW Court of Appeal

Legal Issues

  1. 1 Whether the trustee of a terminated deed of arrangement has standing to pursue proceedings as assignee of rights under a directors' liability policy
  2. 2 Whether assignment was 'absolute' within s 12 of Conveyancing Act 1919 (NSW)
  3. 3 Whether the deed's termination vitiated the trustee's right to continue recovery action against the insurer

Ratio Decidendi

The deed of arrangement and the assignment of rights under the policy (upon notice) operated as an absolute assignment in law to the trustee, who thus retained standing to pursue the insurer after termination of the deed. There were no words in the deed requiring the right to enforce the claim to end with termination. The assignment did not become conditional or void; it continued for the benefit of those intended by the trust, and thus the appeal was allowed and the primary judgment set aside.

Court Disposition

Appeal allowed

Orders

  • (1) Appeal allowed.
  • (2) The appellant (One.Tel) to file within 14 days short minutes of order giving effect to these reasons.