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  • The judgment broadens the circumstances in which a liquidator may seek to challenge determinations made by insurers to deny liability under policies of insurance to which the company in liquidation is not a party and where the policy may inure for the benefit or potential benefit of creditors.
  • The bringing of such proceedings does not offend the doctrine of privity of contract.
  • The decision has obvious important ramifications for the Australian insurance industry.

At issue in CGU Insurance Limited v Blakeley & Ors [2016] HCA 2 (11 February 2016) was whether the liquidator of a company was entitled to join an insurer to proceedings for the purpose of seeking a declaration that a professional indemnity policy responded to an insolvent trading claim against a former director and a former shadow director. The resolution of this issue, in turn, depended upon whether there was a ‘justiciable controversy’ as between the liquidator and the insurer.

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