Insurers brought in from the cold by the High Court

Summary

The High Court of Australia has held that a liquidator of a company may join the company's insurer to proceedings to seek a declaration that the insurer is liable to indemnify the company under an insurance policy.

Facts

The liquidators of Akron Roads Pty Ltd (in Liq) (Akron) brought proceedings in the Supreme Court of Victoria against three former directors of the company including Mr Trevor Crewe and Crewe Sharp Pty Ltd (In Liq) (Crewe Sharp).

The liquidators alleged that the directors failed to prevent Akron from incurring debts when it was insolvent. The liquidators sought an order that the directors pay to them, as a debt due to Akron, an amount equal to the amount of loss or damage suffered by creditors of Akron for debts owed by Akron because of its insolvency.