Arms v WSA Online Limited (ACN 081 121 495) (Subject to a Deed of Company Arrangement) [2007] FCA 1712

Arms v WSA Online Limited (ACN 081 121 495) (Subject to a Deed of Company Arrangement) [2007] FCA 1712

The applicant was entitled to a lien or charge over CGU indemnity moneys because those moneys were a fund brought into existence by the applicant's prosecution of the action against WSA. Equity required the reasonable costs and disbursements of creating that fund to be borne by the fund in priority to the claims of the administrators and creditors under the Deed of Company Arrangement. The recognised categories of equitable lien were not closed, and the claim was not defeated by the fact that the applicant, rather than a liquidator, trustee or solicitor in his own right, incurred the relevant costs.

Jurisdiction
Australia
Judgment Date
09 November 2007
Procedural Posture
Motion for Declaration of Charge or Equitable Lien in Federal Court Damages Proceedings / Reasons for Ruling on Charge or Equitable Lien After Judgment for the Applicant Against the First Respondent
Outcome
Declaration made that the applicant is entitled to a lien or charge over CGU indemnity moneys to the extent of costs and disbursements reasonably expended in prosecuting the action against WSA, with priority over the administrators and creditors under the Deed of Company Arrangement.
Legal Topics
['equitable Lien or Charge Over Litigation Proceeds' 'priority of Costs and Disbursements Incurred in Creating a Fund' 'deed of Company Arrangement' 'professional Indemnity Insurance Proceeds' 'costs']
['equity' 'corporations and Insolvency' 'insurance' 'civil Procedure'] ['equitable Lien or Charge Over Litigation Proceeds' 'priority of Costs and Disbursements Incurred in Creating a Fund' 'deed of Company Arrangement' 'professional Indemnity Insurance Proceeds' 'costs']

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Procedural Posture

Motion for Declaration of Charge or Equitable Lien in Federal Court Damages Proceedings / Reasons for Ruling on Charge or Equitable Lien After Judgment for the Applicant Against the First Respondent

Legal Issues

  1. 1 ['Whether the applicant was entitled to an equitable lien or charge over moneys paid or payable by CGU Professional Risks Insurance to WSA by way of indemnity under the Civil Liability Professional Indemnity Insurance Policy.' "Whether any such lien or charge had priority over the claims of WSA's administrators and creditors under the Deed of Company Arrangement." 'Whether the asserted lien was confined to costs and disbursements reasonably incurred in prosecuting the action against WSA rather than extending to the whole fund.']

Ratio Decidendi

The applicant was entitled to a lien or charge over CGU indemnity moneys because those moneys were a fund brought into existence by the applicant's prosecution of the action against WSA. Equity required the reasonable costs and disbursements of creating that fund to be borne by the fund in priority to the claims of the administrators and creditors under the Deed of Company Arrangement. The recognised categories of equitable lien were not closed, and the claim was not defeated by the fact that the applicant, rather than a liquidator, trustee or solicitor in his own right, incurred the relevant costs.

Court Disposition

Declaration made that the applicant is entitled to a lien or charge over CGU indemnity moneys to the extent of costs and disbursements reasonably expended in prosecuting the action against WSA, with priority over the administrators and creditors under the Deed of Company Arrangement.

Orders

  • ['It be declared that the applicant is entitled to a lien or charge over any moneys paid or payable by CGU Professional Risks Insurance to the first respondent by way of indemnity pursuant to a Civil Liability Professional Indemnity Insurance Policy in respect of the claim by the applicant, such lien or charge being...