AIG Insurance Ltd v Hanna

AIG Insurance Ltd appealed a decision of the District Court of South Australia concerning a public liability insurance policy. The dispute arose after a formworker slipped and fell from scaffolding at a construction site managed by the insured builder. The insurer, AIG, had repudiated the policy, alleging misrepresentations by the insured. The primary judge had found that the policy responded to liability assumed by the insured through a consent judgment, and that the insured had discharged his onus of proving his liability to the formworker and the reasonableness of the settlement amount.

The appeal raised several legal issues, including whether the insurance policy responded to liability assumed by the insured via a consent judgment, whether the insured was required to prove actual liability to the injured formworker (rather than just the reasonableness of the settlement), and whether the settlement amount was reasonable in the circumstances. A further issue arose concerning an application to amend the notice of appeal to introduce a new ground, which had not been argued in the court below and might have been met by further evidence at trial.

The Full Court of the Supreme Court of South Australia dismissed the appeal. It held that the policy did respond to liability assumed by the insured through a consent judgment, provided that the liability was one that the policy was intended to cover. The court affirmed that the insured bore the onus of proving that he was liable to the formworker and that the settlement amount was reasonable. The application to amend the notice of appeal was refused, as the new ground was not one that could be readily considered on appeal without the potential for further evidence and argument.

The appeal was dismissed with costs.