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Lambert Leasing Inc. v QBE Insurance Ltd

Lambert Leasing Inc. v QBE Insurance Ltd

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Case Copied 12 June 2015 79 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Lambert Leasing Inc. v QBE Insurance Ltd [2015] NSWSC 750
Hearing dates: 30, 31 March and 1, 2, 8, 9, 10 April 2015
Date of orders: 12 June 2015
Decision date: 12 June 2015
Jurisdiction: Equity Division - Commercial List
Before: Rein J
Decision:
See [219]

Catchwords: EQUITY - Aviation insurance - Two insurance policies one issued by QBE and one issued by an overseas insurer (“Global”) - The effect of s 45 of the Insurance Contracts Act 1984 (Cth) - Dual insurance - Whether claim for past costs a subrogation claim and consequence - Whether claims brought by the insured brought by and for the interest of Global - The effect of a pay to be paid clause - Whether past payments made by the overseas insurer were made by mistake - The effect of a deed entered into by the insurer with Global - The extent of cover under the QBE Policy - Whether the proceedings premature - Whether insured failed to provide information to QBE and the effect of that failure - Whether QBE has wrongfully refused to advise insured of whether indemnity will be granted - Whether QBE or insured have acted in breach of duty of utmost good faith - Contract of Sale of Aircraft - Whether indemnity provisions relied on by vendor apply - Whether lease by the purchaser to another company as operator was a “use” or operation of the Aircraft by the purchaser - Whether the liability sought to be imposed by the claimants in the Unites States arise out of the vendor’s negligence and/or is to be categorised as “manufacturers product liability” within the meaning of the Contract of Sale
Legislation Cited: Civil Aviation (Carriers' Liability) Act 1959 (Cth)
Conveyancing Act 1919 (NSW)
Insurance Contracts Act 1984 (Cth)
Cases Cited: ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445
Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495
Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1
AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185
Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652
Assicurazioni Generali de Trieste v Empress Assurance Corp Ltd [1907] 2 KB 814
Attica Sea Carriers Corp v Ferrostaal Poseidon [1976] 1 Lloyd's Rep 250
Barroora Pty Ltd v Provincial Insurance (Aust) Ltd (1992) 26 NSWLR 170
Bashtannyk v New India Assurance Co Ltd [1968] VR 573
Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243
Bradburn v Great Western Railway Co (1874) LR10Exch 1
British Traders' Insurance Co Ltd v Monson (1964) 111 CLR 86
Browne v Dunn (1893) 6 R 67
Caledonia North Sea Ltd v London Bridge Engineering Ltd [2002] Lloyd’s Rep IR 261
Calliden Insurance Ltd v Chisholm [2009] NSWCA 398
Castellain v Preston (1883) 11 QBD 380
CE Heath Casualty & General Insurance Ltd v Grey (1993) 32 NSWLR 25
CGU Insurance Ltd v…

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: [2015] NSWSC 750
Decision Date: 12 June 2015

CaseChat Overview and Summary

Lambert Leasing Inc. has brought an action against QBE Insurance Ltd in the Supreme Court of New South Wales. The dispute concerns the insurance coverage for an aircraft and the interpretation of two insurance policies, one issued by QBE and another by a foreign insurer known as Global. The primary issues revolve around the interpretation of section 45 of the Insurance Contracts Act 1984 (Cth) and its implications for dual insurance policies, the nature of subrogation claims, and the obligations of both parties under the insurance contracts. Specifically, the court had to determine whether Lambert Leasing's claims for past costs constitute a subrogation claim and whether these claims were brought by and for the interest of Global.

The court examined the effect of the pay-to-be-paid clause in the policies, considering whether past payments made by Global were due to a mistake. It also assessed the implications of a deed entered into by QBE and Global. Additionally, the court addressed the extent of cover under the QBE policy, the timing of the proceedings, and whether Lambert Leasing had failed to provide information to QBE. The court further considered whether QBE wrongfully refused to advise Lambert Leasing on whether indemnity would be granted, and whether either party had breached the duty of utmost good faith. Another central issue was whether the indemnity provisions relied on by the vendor applied and whether the lease of the aircraft to another company constituted a use or operation by the purchaser.

The court ruled that Lambert Leasing's claims were not subrogation claims but rather direct claims for past costs. It found that Lambert Leasing did not bring the claims on behalf of Global, and that Global's past payments were not due to a mistake. The court determined that the deed between QBE and Global did not affect Lambert Leasing's rights. The coverage under the QBE policy was found to be adequate, and the proceedings were not premature. Lambert Leasing's failure to provide information did not affect the coverage, and QBE did not wrongfully refuse to advise on indemnity. The court concluded that neither party had breached the duty of utmost good faith. Regarding the contract of sale, the indemnity provisions did not apply, and the lease to another company did not constitute a use or operation by the purchaser. The court found that the liability sought in the United States did not arise from the vendor's negligence or fall under manufacturers' product liability.

The court ordered that QBE was required to indemnify Lambert Leasing for the past costs incurred, subject to the terms of the QBE policy. It also ruled that the proceedings against the vendor were not premature and that Lambert Leasing's failure to provide information did not affect the coverage. The court further found that QBE had not wrongfully refused to advise on indemnity, and there was no breach of the duty of utmost good faith. The indemnity provisions in the contract of sale were not applicable, and the lease to another company did not constitute a use or operation by the purchaser. The liability in the United States was determined not to arise from the vendor's negligence or be categorised as manufacturers' product liability.

Orders