New South Wales Medical Defence Union Ltd v Anastassiou

The New South Wales Medical Defence Union Ltd (the Union) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the Union's obligation to indemnify its members, Dr. Anastassiou and Dr. Goulburn, against certain legal costs and damages arising from a medical negligence claim brought against them. The core of the disagreement lay in the interpretation of the Union's rules regarding the scope of indemnity provided to its members.

The primary legal issue before the Court of Appeal was whether the Union was obliged to indemnify its members for costs incurred in defending a claim for damages for breach of contract, in addition to claims for negligence. Specifically, the court had to determine if the Union's rules, which provided indemnity for "any claim for damages for negligence" and "any claim for damages for breach of contract," were to be read disjunctively or conjunctively, and whether the indemnity extended to costs associated with defending claims that might not ultimately be found to be negligent or in breach of contract.

The Court of Appeal, in allowing the appeal, reasoned that the Union's rules provided for indemnity in respect of two distinct types of claims: claims for damages for negligence, and claims for damages for breach of contract. The court held that the indemnity extended to the costs of defending such claims, even if the claim was ultimately unsuccessful, provided the claim fell within the scope of the indemnity. The Union's argument that the indemnity only applied if the claim was *both* for negligence *and* breach of contract was rejected. The court found that the wording of the rules clearly indicated separate categories of claims for which indemnity was provided.

Consequently, the Court of Appeal ordered that the Union was liable to indemnify its members for the costs and damages awarded in the Supreme Court.