Nettle v Mathieson Group Pty. Limited

The plaintiff, Nettle, sought to join Vero Insurance Ltd (Vero) as a defendant in proceedings against Mathieson Group Pty. Limited. Nettle's claim against Mathieson arose from alleged professional negligence. The dispute centred on whether Nettle had a right to join Vero, the professional indemnity insurer of Mathieson, as a party to the proceedings, given that no claim had been made against Mathieson during the currency of the insurance policy. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether section 54 of the *Insurance Contracts Act 1984* (Cth) applied to a "claims made" professional indemnity policy where no claim was made during the policy period, and consequently, whether leave should be granted under section 6 of the *Law Reform (Miscellaneous Provisions) Act 1946* (NSW) to join the insurer as a defendant. The court also considered the onus of proof in applications to join an insurer under section 6 of the *Law Reform (Miscellaneous Provisions) Act*.

The Court of Appeal held that section 54 of the *Insurance Contracts Act* was intended to prevent insurers from relying on technical breaches of policy conditions to avoid liability, particularly where the insured had acted honestly. Applying this principle, the court found that section 54 could operate to prevent an insurer from denying liability on the basis that a claim was not made during the policy period, even for a "claims made" policy, if the insured had acted honestly. The court determined that the plaintiff had established a sufficient case to warrant granting leave to join the insurer under section 6 of the *Law Reform (Miscellaneous Provisions) Act*, thereby shifting the onus of proof to the insurer to demonstrate why it should not be joined.

Consequently, the Court of Appeal granted leave to appeal, allowed the appeal, and set aside the orders of the judicial registrar. Leave was granted to the plaintiff to commence an action against Vero and to join Vero as a party in the District Court proceedings. The costs of the application below were ordered to be the plaintiff's costs in the proceedings, and Vero was ordered to pay the plaintiff's costs of the leave application and the appeal.