Chubb Insurance Company of Australia Ltd v Moore

Chubb Insurance Company of Australia Ltd appealed to the Court of Appeal of New South Wales against a decision concerning directors' and officers' liability insurance contracts. The dispute involved the proper construction and territorial operation of section 6 of the *Law Reform (Miscellaneous Provisions) Act 1946* (NSW), particularly in relation to claims-made policies and conduct occurring before the policy's inception.

The Court was required to determine several key legal issues. These included whether section 6 applied to claims-made policies and whether it extended to situations where the insured's alleged conduct giving rise to a claim predated the policy's commencement. The Court also considered whether to depart from its previous decision in *The Owners - Strata Plan No 50530 v Walter Construction Group Limited* [2007] NSWCA 124, which held that section 6 does not apply where the insured's conduct occurred before the policy was entered into, and the circumstances under which a five-judge bench would overrule a prior decision. Further questions concerned whether "insurance moneys that are or may become payable" under section 6 encompassed defence costs paid by the insurer before a claimant's claim was determined, and whether such payments constituted a valid discharge for the insurer. Finally, the Court examined whether insurers had actual notice of charges under section 6 due to correspondence from claimants' solicitors.

The Court of Appeal, constituted as a bench of five judges, ultimately held that section 6 of the *Law Reform (Miscellaneous Provisions) Act 1946* does not apply to claims-made policies. It further determined that the section does not apply where the conduct giving rise to the claim occurred before the policy was entered into, thus affirming the principle in *The Owners - Strata Plan No 50530 v Walter Construction Group Limited*. The Court reasoned that the purpose of section 6 was to protect third-party claimants by creating a charge over insurance moneys payable to the insured, and this purpose was not engaged in the context of claims-made policies or pre-policy conduct. The Court also found that defence costs paid by an insurer before the determination of a claim were not "insurance moneys that are or may become payable" within the meaning of section 6.

The Court ordered that the plaintiffs file and serve short minutes of orders to give effect to the Court's conclusions, along with any submissions on costs, by specified dates. Defendants were also to file and serve submissions on the proposed minutes of orders and costs.