PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (in liq)

PC Case Gear Pty Ltd (PCCG) commenced proceedings against Instrat Insurance Brokers Pty Ltd (Instrat) in the Federal Court of Australia, seeking damages for breach of contract and tortious duty of care. PCCG alleged that Instrat, acting as its insurance broker, failed to identify and advise PCCG of the risk of copyright infringement, leading to PCCG's inability to recover a settlement sum paid to Microsoft for copyright infringement claims. The court had to determine whether Instrat breached its contractual and tortious duties by failing to identify and advise the risk of copyright infringement and whether such breach caused PCCG's loss.

The court held that Instrat breached its contractual and tortious duties by failing to identify and advise the risk of copyright infringement. The court found that a reasonably competent insurance broker, in Instrat's position, would have made sufficient inquiries to identify the risk and advised PCCG accordingly. The court also held that the breach caused PCCG's loss, as PCCG would have obtained relevant cover but for Instrat's breach. The court held that the settlement sum paid by PCCG was reasonable, and PCCG was not required to mitigate its loss. The court also held that PCCG was not contributorily negligent, as it had no reason to believe that its actions would result in copyright infringement.

The court ordered that Instrat pay damages to PCCG in the amount of $250,000, interest, and costs. The court also ordered that the parties file written submissions as to the form of final relief to be ordered, including costs. The court noted that entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.