Dean v Phung

The plaintiff, Dean, brought an action against the defendant, Phung, a dentist, for grossly excessive dental treatment. Phung's insurer conducted the defence, conceding the excessiveness of the treatment. Dean's case was premised on both negligence and assault, with an allegation that consent to the treatment was fraudulently obtained. Dean sought to limit the damages by the Civil Liability Act on the basis of intentional acts by Phung. Phung admitted negligence but denied both the assault and the fraudulent procurement of consent. At first instance, Dean was awarded damages for negligence and a costs order but the balance of the claim failed. On appeal, Dean succeeded in establishing that Phung had committed assault and intentional acts, including fraudulently obtaining consent. As a result, Dean was awarded exemplary damages. The insurer denied indemnity for the costs at the final instance. Dean then sought the costs of the proceedings from the insurer, arguing that the insurer had represented that indemnity would not be denied even if fraud or similar conduct was established.

The central legal issues in this case were whether the insurer made any representations regarding indemnity, and if so, whether Dean was entitled to the costs of the proceedings from the insurer. The court examined the conduct of the insurer and the evidence presented to determine if there was any such representation made. It was crucial to establish whether the insurer's conduct could be construed as a representation that would bind them to indemnify Dean for costs, irrespective of the outcome of the fraud allegations.

The court found that the insurer did not make any such representation. The evidence did not support Dean's contention that the insurer had assured him that indemnity would not be denied even if fraud or similar conduct was established. The court emphasised that the insurer's duty to indemnify was contingent upon the terms of the policy and the conduct of the defendant, not on any external assurances provided during the litigation. Consequently, the court dismissed Dean's application for costs, finding no basis to hold the insurer liable for the costs of the proceedings.