Allianz Australia Insurance Ltd v Certain Underwriters at Lloyd's of London Subscribing to Policy Number B105809GCOM0430

Allianz Australia Insurance Ltd (Allianz) appealed to the Court of Appeal of New South Wales against orders made by Rees J concerning a dispute over double insurance and contribution between insurers. The underlying issue involved a claim by Baulderstone Hornibrook Pty Ltd for indemnity in respect of a personal injury suffered by an employee, Thomas Dempsey. Allianz, as the plaintiff in the primary proceedings, sought a declaration that it was not liable to contribute to the indemnity provided to Baulderstone Hornibrook, arguing that the defendant, Certain Underwriters at Lloyd's of London (Underwriters), was solely liable.

The central legal question before the Court of Appeal was whether, on the proper construction of two distinct insurance policies – one issued by Allianz and the other by Underwriters – there was double insurance in respect of the loss arising from Thomas Dempsey's injury. Specifically, the court had to determine if the "other insurance" clauses within each policy, one containing an "excess" clause and the other an "escape" clause, operated to prevent double insurance or if the rule in *Weddell v Road Transport and General Insurance* applied, thereby creating a situation where both insurers were liable to indemnify the insured.

The Court of Appeal found that the "escape" clause in the Underwriters' policy did not operate to exclude liability in the circumstances of the case. It reasoned that the "excess" clause in Allianz's policy did not constitute "other insurance" for the purposes of the Underwriters' policy's escape clause. Consequently, the court determined that the Underwriters' policy provided primary indemnity, and that the Underwriters were liable to indemnify Baulderstone Hornibrook. The appeal was allowed, the orders of Rees J were set aside, and the separate question posed was answered in the affirmative, confirming the Underwriters' liability. The respondent was ordered to pay the costs of the appeal and the separate question.