FAI General Insurance Co Ltd v McSweeney - [1997] FCA 152

CATCHWORDS

INSURANCE - "claims made and notified" policy - insurer (FAI) denying indemnity to insured (PMS) in respect of judgment against PMS in favour of TCF - PMS asserting right to indemnity under the policy - TCF applying for leave to bring an action against FAI pursuant to sub-s 6 (4) Law Reform (Miscellaneous Provisions) Act 1946 (NSW) before seeking to enforce judgment against PMS - whether s 6 Law Reform (Miscellaneous Provisions) Act applies to claims made and notified policies which come into existence after the event giving rise to the insured's liability to third party claimant - whether TCF should be granted leave to bring an action against FAI as a matter of discretion.

Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 6

AFG Insurances Ltd v Andjelkovic (1980) 47 FLR 348 (ACT/Blackburn J); (1981) 54 FLR 398 (FCA/FC)
Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399
Cambridge Credit Corporation Ltd (Receivers Appointed) v Lissenden (1987) 8 NSWLR 411 (Clarke J)
Capita Financial Group Ltd v Triden Properties Ltd, unreported, 6 September 1993 (NSW/Cole J)
FAI (NZ) General Insurance Co Ltd v Blundell & Brown Ltd [1994] 1 NZLR 11
Grimson v Aviation & General (Underwriting) Agents Pty Ltd (1995) 25 NSWLR 422 (CA)
Manettas v Underwriters at Lloyds (1993) 7 ANZ Insurance Cases 61-180 (NSW/Cole J)
National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1996) 138 ALR 409 (FCA/Lindgren J)
New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469 (CA)
Oswald v Bailey (1987) 11 NSWLR 715 (CA)
Ratcliffe v Border Homes Ltd (1987) 9 NSWLR 390 (Hunt J)
Schipp v Cameron (1995) 8 ANZ Insurance Cases 61-256 (NSW/Young J)

FAI GENERAL INSURANCE CO LIMITED v BRIAN ALBERT McSWEENEY & ORS
No NG 312 of 1992

TRAVEL COMPENSATION FUND v FAI GENERAL INSURANCE CO LIMITED
No NG 948 of 1992

REASONS FOR JUDGMENT (PART I)

Lindgren J
Sydney
12 March 1997

TABLE OF CONTENTS

REASONS FOR JUDGMENT (PART I)

INTRODUCTION........ ........ ........ ........ ........ 1

Parties........ ........ ........ ........ ........ ..... 1

The TAG proceeding........ ........ ........ ........ .. 2
The TCF proceeding........ ........ ........ ........ .. 4

Appearances on the hearing of the two
insurance proceedings........ ........ ........ ...... 5

Development of a connection between the

TAG facts and the TCF facts........ ........ ........ 5

OUTLINE OF THE PRESENT TWO INSURANCE

PROCEEDINGS........ ........ ........ ........ ........ 8

Outline of the TAG insurance proceeding........ .... 8

Outline of the TCF insurance proceeding........ .... 17

OUTLINE OF THE TAG FACTS AND THE TCF FACTS........ . 30

The TAG facts and proceeding - Reasons for
Judgment of Olney J delivered on 28 February
1992 based on the hearing on 22-25, 29-31
July 1991, 1-2, 5-6 August 1991, 21-22

October 1991........ ........ ........ ........ ....... 31

The TCF facts and proceeding - Reasons for
Judgment of Wilcox J delivered on 2 December
1992 based on hearing…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1997] FCA 152
Decision Date: 12 MARCH 1997

CaseChat Overview and Summary

The case of FAI General Insurance Co Ltd v McSweeney concerns two insurance proceedings, one initiated by FAI General Insurance Co Limited against Brian Albert McSweeney and others, and another initiated by Travel Compensation Fund against FAI General Insurance Co Limited. The TAG insurance proceeding revolves around FAI's refusal to indemnify McS and Phillips against damages awarded in a separate proceeding against them by TAG Pacific Limited. The TCF insurance proceeding involves TCF's application for leave to bring an action against FAI pursuant to sub-s 6 (4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) before seeking to enforce judgment against McS and Phillips. The legal issues at hand include whether s 6 of the Law Reform (Miscellaneous Provisions) Act applies to claims made and notified policies which come into existence after the event giving rise to the insured's liability to the third party claimant, and whether TCF should be granted leave to bring an action against FAI as a matter of discretion. Justice Lindgren found that s 6 of the Law Reform (Miscellaneous Provisions) Act does apply to claims made and notified policies that come into existence after the event giving rise to the insured's liability to the third party claimant, as it is consistent with the policy objective of ensuring that the claimant will have the benefit of the moneys payable under a liability indemnity policy. However, the Court refused to grant leave to TCF to bring an action against FAI as a matter of discretion, as TCF had not made out a case for the granting of leave and its rights were parasitic on those of McS and Phillips.

Orders