In a significant decision for the insurance industry, the Federal Court of Australia has granted leave to shareholders to bring a direct action against a company’s insurers where the (insured) company was in liquidation. This is one of the earliest cases to make use of the new Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (Third Party Claim Act), and provides some useful guidance for the industry on how this new legislation will be applied.

The decision impacts plaintiff lawyers, policyholders and insurers alike. Importantly:

In a decision handed down earlier today, in Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers appointed) (in liquidation) [2013] HCA 51,  the majority of the High Court upheld the Victorian Court of Appeal’s conclusion that the liquidators of an insolvent landlord can disclaim a lease, thereby extinguishing the tenant’s leasehold interest.