Insured Party Granted Leave to File Cross-Claim Against Insurer

The court granted the defendant leave to file a cross-claim against the insurer, allowing the defendant to pursue indemnity under a Public and Products Liability Insurance policy. The plaintiff opposed the joinder of the insurer, but the court found that the defendant had an arguable basis for coverage under the policy.

Supreme Court New South Wales

Medium Neutral Citation: [NAME] v [COMPANY] [2020] NSWSC 237 Hearing dates: 11 March 2020 Date of orders: 11 March 2020 Decision date: 11 March 2020 Jurisdiction: Common Law Before: Cavanagh J Decision: (1) The first defendant is granted leave, pursuant to s 22 of the Civil Procedure Act 2005 (NSW), to file and serve a cross-claim against [COMPANY]. (2) The first defendant inform the other parties whether it is the first defendant's position that it is ready and willing to proceed with the mediation in good faith by 5.00pm today, that is proceed with the mediation on Friday 13 March 2020. (3) If not, then the first defendant should inform the other parties and the mediator [NAME] by 5.00pm that it is not ready to proceed, and it should seek the consent of the other parties to vacate the mediation date on Friday 13 March 2020. (4) If the first defendant informs the parties that it is not in a position to proceed with the mediation in good faith on Friday, 13 March 2020, then the parties should proceed to a mediation prior to 31 May 2020 and if there is some issue as to dates as to availability between the [NAME] and the other parties, then the [NAME] should get priority. (5) The first defendant pay the [NAME] costs of the motion before the Court today. (6) The first defendant pay the [NAME] defendant's costs of the Motion. (7) The question of costs of the motion between the first defendant and [COMPANY] be reserved. (8) There be no order as to costs of the mediation. Catchwords: CIVIL PROCEDURE — cross-claims — against third party — for contribution or indemnity Legislation Cited: Civil Procedure Act 2005 (NSW), s 22 Category: Procedural and other rulings Parties: [NAME] (Plaintiff) [COMPANY] (First Defendant/Applicant) [COMPANY] ([NAME] Defendant) [COMPANY] ([NAME] Respondent) Representation: Counsel: [redacted]

Solicitors: [redacted] [NAME] (First Defendant) [NAME] ([NAME] Defendant) [NAME] ([NAME] Respondent) File Number(s): 2018/56825 Publication restriction: Nil

REVISED EX TEMPORE Judgment 1. The matter comes before the Court today by way of a motion filed by the first defendant, [COMPANY], seeking leave to file a cross-claim joining the proposed cross-defendant, [COMPANY] ("[COMPANY]"), as a cross-defendant.

2. The plaintiff, who is represented by [NAME] of counsel, opposes [COMPANY] being joined at this late stage to the proceedings. [COMPANY], who is represented by [NAME], neither consents nor opposes the joinder.

3. The first defendant, who is represented by [NAME], seeks to join [COMPANY] as a cross-defendant on the basis that it maintains that it is entitled to indemnity under the terms of a Public and Products Liability Insurance policy effected by [COMPANY] ("[NAME]") with [COMPANY].

4. In support of the application, the first defendant relies on an affidavit of [NAME], sworn 28 February 2020. Exhibited to that affidavit is a certificate of currency under a [NAME] letterhead dated 5 May 2017. Although the insured is named as [NAME], the first defendant is named as an additional named insured. 5. [NAME] points to that document as evidencing an entitlement to indemnity under the policy.

6. As set out in the statement of claim filed on 20 February 2018, the plaintiff alleges that on 1 May 2017, whilst employed by [NAME], he attended at a building site in Redfern. Whilst there, he fell approximately three metres through a deck and sustained injury.

7. The plaintiff alleges that the first defendant was the head contractor and occupier of the building site.

8. The plaintiff also names the [NAME] defendant as a formwork contractor conducting work on the site.

9. The first defendant has been seeking indemnity under the [COMPANY] public liability policy since at least September 2019. [COMPANY] has at this stage neither confirmed nor denied indemnity under its policy. I am informed by [NAME] that it is still investigating the claim and no decision has yet been made.

10. The proceedings have been listed for hearing for five days commencing 3 August 2020. I am informed that the matter is also scheduled for a mediation on this Friday, 13 March 2020, before mediator [NAME].

11. In circumstances in which [COMPANY] neither consents nor opposes to its joinder, and the first defendant has established an arguable basis on which it might be entitled to coverage under the [COMPANY] policy, there ordinarily should be no reason why [COMPANY] should not be joined to the proceedings, the claim having been made some months ago and [COMPANY] still determining its position, as it is entitled to do.

12. However, the plaintiff opposes the joinder of [COMPANY] on the basis that the plaintiff has concerns as to losing the mediation date, losing the hearing date, the length of the hearing and suggests also that, having regard to the documentation exhibited to in [NAME]'s affidavit, the first defendant may be already insured. 13. [NAME] assures me from the Bar table that, although the first defendant does hold other insurance and a claim has been made, indemnity has not been afforded by that other insurer. I understand from [NAME] that the other insurer continues to reserve rights under the policy.

14. The first defendant not having been afforded indemnity by any other insurer, it is entitled to pursue indemnity from [COMPANY] if it wishes to do so. It has not been already indemnified and thus there can be no suggestion that it will be indemnified twice.

15. No doubt other issues might arise should the first defendant be entitled to indemnity from both insurers. However, I am not concerned with that issue at this time.

16. In the circumstances, I am satisfied that leave should be granted to the first defendant to join [COMPANY] as a cross-defendant subject only to the consideration of the case management issues identified by [NAME]. 17. [NAME] submitted that having waited this long for a mediation and a hearing, those dates should not be vacated. He submitted that the plaintiff, being a young man, would be understandably anxious over the prospect of any delay in his case.

18. He points to the chronology, being that the statement of claim was filed on 20 February 2018 and that the defendants were first ordered to file cross-claims in May 2018. We are here nearly two years later and the first defendant is seeking to file a cross-claim joining the insurer.

19. Those points are well made except that it is not as if the first defendant is seeking to join a third-party contractor. It is seeking to join the party who it says is its insurer on the basis that the insurer has not yet afforded indemnity.

20. At least based on the evidence before me, I cannot think of a reason why the joinder of the insurer at this time should result in the vacation of the hearing date. The insurer has been on notice of these proceedings since at least September and the defendant has been on notice that it may be entitled to coverage from the insurer since that time as well.

21. If, because of issues between the insurer and the first defendant, there is some suggestion that the hearing date cannot proceed, one of those parties will need to approach the Court and explain to the Court why the hearing date should be vacated. At least as far as I can see at the moment it is an unlikely proposition and one that I would not have regard to in terms of the orders I make today.

22. I do not understand why a claim under a liability policy would result in an insurer needing to adjourn the matter in circumstances in which the defendant, a well-known construction company, has been represented by a [NAME], a well-known and reputable [NAME], for the past two years, who I assume have done everything that they should have done in terms of the preparation of the defence of the matter. [NAME]'s submissions, I am not persuaded that the joinder of the insurer is likely to result in the loss of the hearing date.

23. In the circumstances, I make the orders sought in the motion being that the first defendant is granted leave pursuant to s 22 of the Civil Procedure Act 2005 (NSW) to file and serve a cross-claim against [COMPANY].

24. That leaves two other issues. One is the fate of the mediation. Again, I acknowledge there is force in [NAME]'s submission that the mediation may be lost but at least in my experience in circumstances in which there is a dispute between an insured and an insurer, it is often the case that mediations being forced to proceed do not achieve the desired result.

25. I direct that: 1. the first defendant inform the other parties whether it is the first defendant's position that it is ready and willing to proceed with the mediation in good faith by 5.00pm today, that is proceed with the mediation on Friday 13 March 2020; 2. if not, then the first defendant should inform the other parties and the mediator [NAME] by 5.00pm that it is not ready to proceed, and it should seek the consent of the other parties to vacate the mediation date on Friday 13 March 2020; 3. if the first defendant informs the parties that it is not in a position to proceed with the mediation in good faith on Friday, 13 March 2020, then the parties should proceed to a mediation prior to 31 May 2020 and if there is some issue as to dates as to availability between the [NAME] and the other parties, then the [NAME] should get priority.

1. I have heard the parties on costs. I note that the plaintiff does not seek costs thrown away, even if the mediation is adjourned.

2. I further order that: 1. the first defendant pay the [NAME] costs of the motion before the Court today; 2. the first defendant pay the [NAME] defendant's costs of the motion; 3. the question of costs of the motion between the first defendant and [COMPANY] be reserved; and 4. there be no order as to costs of the mediation.

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