Hakea Holdings Pty Ltd v Neon Underwriting Ltd

The appeal in Hakea Holdings Pty Ltd v Neon Underwriting Ltd involves the interpretation and application of a Directors and Officers Liability Insurance Policy. Hakea Holdings Pty Ltd (Hakea) sought indemnification from Neon Underwriting Ltd (Neon) for liabilities incurred by Mr McGrath, a director of Hakea. Neon denied coverage, asserting that an exclusion clause in the policy barred indemnity due to Mr McGrath's alleged personal profit or advantage gained through unlawful conduct. The primary judge ruled in favour of Neon, finding that the exclusion clause applied. Hakea appealed this decision, arguing that the exclusion clause did not apply because it required the personal profit or advantage to be established by admission or adjudication in proceedings. The appeal centred on the interpretation of terms in the insurance policy, particularly the exclusion clause and the definition of 'received'.

The court had to decide whether the exclusion clause in the policy correctly applied to the facts of the case, and whether the primary judge's interpretation of the term 'received' was correct. This involved determining whether the term'received' in the context of the policy required the insured to have a subjective awareness of the content of the claim. Additionally, the court had to consider whether the claim against Mr McGrath was made within the period of insurance. The appeal also questioned whether the primary judge should have found that the claim was not made in the period of insurance, considering the nature of the policy as a claims-made policy and the timing of the email notification received by Mr McGrath.

The court found that the primary judge did not err in concluding that a claim was made against Mr McGrath during the period of insurance. The policy's definition of a 'Claim' as a 'written notice received' indicated that a claim was made when the written notice was delivered, regardless of whether Mr McGrath read or understood the content. The court also determined that the primary judge's interpretation of the term 'received' was consistent with the natural and ordinary meaning of the word, applied from the perspective of a reasonable businessperson. The appeal was dismissed, and the court ordered that both parties file written submissions regarding costs, limited to three pages, by specified dates.

The final orders included dismissing the appeal, requiring both parties to file written submissions on costs by a set date, and allowing the court to determine the question of costs on the papers unless otherwise ordered. Submissions were to be limited to three pages, and any necessary affidavits had to be confined to matters of evidence in support of the cost order sought.