Nguyen v QBE Insurance Ltd - [2007] SASC 454

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
NGUYEN v QBE INSURANCE LTD
[2007] SASC 454
Judgment of The Honourable Justice Duggan
20 December 2007
INSURANCE - GENERAL - INTEREST ON INSURANCE MONEY
Right to indemnity under insurance policy assigned to plaintiff - whether plaintiff entitled to interest on the judgment sum pursuant to s 57 of Insurance Contracts Act 1987 (Cth) - whether statutory right to interest is assignable - consideration of purpose of s 57 - assignment of rights independently of the Act - whether compound interest can be awarded.
Held: interest on the judgment sum to be determined in accordance with s 57 of the Act. Application for compound interest refused.
Bankruptcy Act 1966 s 117(1); Insurance Contracts Act 1987 (Cth) s 57; Supreme Court Act 1935 s 30C, s 114, referred to.
Hungerfords v Walker (1989) 171 CLR 125; State Government Insurance Commission v Lane (1997) 68 SASR 257, distinguished.
Bankstown Football Club v CIC Insurance Limited (unreported, NSW SC 16 December 1993), discussed.

NGUYEN v QBE INSURANCE LTD
[2007] SASC 454
Civil

DUGGAN J. The facts of this matter are set out in my reasons for decision on the substantive issues. [1]
[1] [2007] SASC 320.
The plaintiff was severely injured on 7 October 1995 when he was set upon by a group of attackers outside the Woodville Town Hall. He commenced proceedings for damages for breach of duty of care and negligence against Mr Hiotis, the proprietor of a security firm which provided security for a function being held in the town hall at the time of the incident. On 24 July 2001 judgment was entered by default in favour of the plaintiff against Mr Hiotis for damages to be assessed. Damages were subsequently assessed and, on 30 July 2002, Bleby J entered judgment for the plaintiff in the sum of $2,823,700.00 including interest to the date of judgment.
At the time of the incident Mr Hiotis was insured under a public liability policy issued by the defendant in the present matter, QBE Insurance Ltd (QBE). Mr Hiotis was declared bankrupt on 28 April 1999 and, pursuant to s 117(1) of the Bankruptcy Act 1966, his right to indemnity under the policy vested in the Official Trustee in Bankruptcy.
By deed of assignment dated 5 May 2005 the Official Trustee in Bankruptcy assigned to the plaintiff the whole of the right of Mr Hiotis to indemnity under the policy.
In the present proceedings the plaintiff sought a declaration that QBE was required to indemnify the estate of Mr Hiotis in respect of the claim made against him in the first action and that the right of Mr Hiotis to indemnity by QBE had been validly assigned to the plaintiff.
On 31 August 2007 I held that QBE was required to indemnify the estate of Mr Hiotis and that the plaintiff was entitled to recover against QBE the damages awarded to him in the action against Mr Hiotis. As part of the reasoning…

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: [2007] SASC 454
Decision Date: 20 December 2007

CaseChat Overview and Summary

Nguyen sued QBE Insurance Ltd in the Federal Circuit Court, contesting the terms of an insurance policy that had been assigned to him. The dispute centred on whether Nguyen was entitled to interest on the judgment sum awarded to him under section 57 of the Insurance Contracts Act 1987 (Cth). This section provides for interest on money recoverable under an insurance contract. The court also had to determine whether the statutory right to interest was assignable, and if so, whether such a right could be assigned independently of the Act. Another issue was whether compound interest could be awarded.

The court examined the purpose of section 57, which is to ensure that insured parties receive compensation for the delay in receiving their dues. It considered whether the statutory right to interest, as a property right, could be assigned. The court found that the statutory right to interest could indeed be assigned as it was a property right independent of the Act. The court also concluded that compound interest was not permissible under the Act, which only allows for simple interest.

In summary, the Federal Circuit Court held that Nguyen was entitled to interest on the judgment sum, and that the right to interest could be assigned. The court awarded simple interest in line with section 57 of the Act. The court emphasised that the statutory right to interest was assignable and constituted a property right, independent of the Act. Compound interest was not awarded as it was not authorised by the Act.

Orders