Power v Ace Insurance Ltd

SUPREME COURT OF QUEENSLAND

CITATION:

Power v ACE Insurance Ltd [2005] QSC 327

PARTIES:

DAVID LESLIE POWER
(applicant)
v
ACE INSURANCE LIMITED ABN 23 001 642 020
(respondent)

FILE NO/S:

BS9014/05

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme, Court, Brisbane

DELIVERED ON:

11 November 2005

DELIVERED AT:

Brisbane

HEARING DATE:

4 November 2005

JUDGE:

Douglas J

ORDER:

Order in terms of paragraphs 1, 2 and 3 of each originating application.  Further submissions sought as to costs

CATCHWORDS:

INSURANCE – GENERAL – POLICIES OF INSURANCE – CONSTRUCTION – where applicants are councillors of the Gold Coast City Council – where respondent is the Council’s insurer – whether the two councillors are “involved” in an investigation by the Crime and Misconduct Commission (CMC) into alleged impropriety before, during and after the last Gold Coast City Council election – where councillors contend that the CMC investigation is within the scope of the types of legal proceedings covered by the insurance policy – where insurer denies that the policy extends to these circumstances – whether policy covers expenses of the Councillors for the CMC investigation

Crime and Misconduct Act 2001 (Qld), s 15
Local Government Act 1993 (Qld), s 1021

COUNSEL:

Mr I Temby QC for the applicant Power

Mr G Radcliff for the applicant Shepherd

Mr D B Fraser QC with him Mr J Webb for the Gold Coast City Council and the Chief Executive Officer of the Gold Coast City Council
Mr H B Fraser QC with him Mr N Jarro for the respondent

SOLICITORS:

Nyst Lawyers for the applicant Power

Gold Coast City Solicitors for the applicant Shepherd

David Montgomery for the Gold Coast City Council and the Chief Executive Officer of the Gold Coast City Council
Phillips Fox for the respondent

1. DOUGLAS J:  On 23 December 2004 the Gold Coast City Council entered into a directors and officers insurance policy with ACE Insurance Limited.  Two councillors of the Gold Coast City Council, Councillor Power and Councillor Shepherd, have brought applications seeking declarations that upon the true construction of that insurance policy an investigation currently in progress by the Crime and Misconduct Commission is an investigation which involves an allegation that those councillors committed wrongful acts as that term is defined within the policy of insurance.  They also seek declarations that they are entitled to payment by ACE on an ongoing basis of all their reasonable legal fees, costs and expenses incurred in being legally represented in relation to the investigation by the Crime and Misconduct Commission.

1. The councillors fall within the definition of “insured” under the policy particularly because of endorsement number 7.  Clause 3(b) provides that:

“ACE shall pay on behalf of the Insured(s) on an ongoing basis all reasonable legal fees, costs and expenses incurred in being legally represented with respect to any legally compellable attendance at any investigation PROVIDED THAT:

(1) the Investigation involves an allegation that the Insured(s) committed a Wrongful Act”.

1. “Wrongful Act” is defined in cl 2(r) to mean “any actual or alleged…