ARTICLE · 20 AUGUST 2010

Vero Insurance Limited v Kassem [2010] NSWSC 838

Moray & Agnew

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In this case, Vero attacked a deed of company arrangement executed by a developer, Ungul Properties Pty Limited (Ungul). Vero had sued Ungul under its rights of subrogation to recover, amongst other things, amounts paid by Vero under seven certificates of insurance issued in relation to the construction of seven strata units at 120-122 Ocean Parade, Blue Bay by Lusted Pty Limited on behalf of Ungul.

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James Collier

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Vero attacked the deed on various grounds. The Supreme Court ultimately held the deed was valid. Importantly for warranty insurers though, the Court upheld Vero's submission that it was a creditor entitled to attend and vote at the second meeting of creditors at which the deed had been approved. Although the Court addressed a host of other submissions, in this case note we propose only to focus on the Court's consideration of whether Vero had standing to attend and vote at the meeting of creditors.

Background

Vero submitted that it was a creditor of Ungul because Vero had written home warranty insurance under the Home Building Act 1989 (NSW) in relation to the construction of the units at Blue Bay and paid a claim under the insurance. The background was as follows.

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