Author: Ilkay Antepuzumu
Judgment Date: 7 June 2019
Citation: Insurance Australia Limited v Dent  NSWCA 134
Jurisdiction: NSW Court of Appeal*
The plaintiff was driving home and got out of his car to assist the defendant. The defendant assaulted the plaintiff outside of the vehicle. The defendant drove off in the plaintiff's car while the plaintiff was attempting to get back into his own vehicle.
The insurer's position was that the plaintiff was injured as a result of a prior assault (i.e. criminal act) by the defendant and not in the course of an MVA and that if the plaintiff obtained judgement against the defendant, the insurer would have a right of recovery against the defendant in the District Court proceedings.
The insurer had not granted indemnity to the insured driver, nor had it exercised its rights to take over the defence of the proceedings on behalf of the insured driver, pursuant to s 78 of the MACA. The insurer also did not file a defence on behalf of the insured driver. Instead, it filed a notice of motion (and then an amended notice of motion) seeking to be joined as a party to the proceedings pursuant to s 79 (a joinder application) to argue that, in the circumstances of the case, it had no obligation under the policy to indemnify the defendant.
The primary judge rejected the joinder application. He observed that any joinder would be for the sole purpose of resolving a dispute between the insurer and its insured. Any such dispute between the insurer and the owner of the insured vehicle was not before the court.
The Court of Appeal decided that the error in the primary judge's approach was failing to address a relevant consideration, namely, "whether there was a real possibility of a conflict of interest" between the insurer and the defendant, (namely exposing the defendant to prosecution for a criminal offence).
Ultimately, the court considered it in the interests of justice and the "just, quick and cheap" resolution of the real issues in dispute that the court re-exercise the discretion and determine the joinder application on the merits. The insurer's appeal was allowed and the order for joinder was made.
Another example of where a real possibility of conflict of interest may arise for the purposes of a joinder application, is where the insurer has evidence to establish the plaintiff and defendant engaged in fraud.
When making a joinder application on the basis of a conflict of interest however, the insurer should clearly demonstrate the interests of the insurer and defendant as potentially not being aligned.
* Basten JA, Gleeson JA, McCallum JA
1 Second reading speech of the Minister (the Honourable J W Shaw) relating to an amendment of the predecessor provision to s 79 of the MACA, being s 47A of the Motor Accidents Act 1988 (NSW)).