Court of Appeal
Supreme Court
New South Wales
- Summary available
- Amendment notes
Medium Neutral Citation: QBE Underwriting Ltd as managing agent for Lloyds Syndicate 386 v Southern Colliery Maintenance Pty Ltd [2018] NSWCA 55 Hearing dates: 1 and 2 March 2018 Date of orders: 28 March 2018 Decision date: 28 March 2018 Before: Macfarlan JA at [1];
Leeming JA at [2];
Payne JA at [132]Decision: 1. Appeal allowed in part.
2. Vary the judgment entered in favour of Southern Colliery Maintenance Pty Ltd on 28 April 2017 by replacing $265,000 with $215,000.
3. Otherwise dismiss the appeal.
4. The appellant to pay the respondent’s costs of the appeal.Catchwords: INSURANCE – public and products liability policy – construction – scope of insuring clause – labour hire company – employee injured when working in coal mine – employee claimed against mine owner and employer – mine owner cross-claimed against employer – settlement reached between employee, employer and mine owner – insurer declined cover – whether claim for breach of contract within insuring clause – whether insuring clause extended to mine owner’s costs – whether exclusion for assumed liabilities applicable
INSURANCE – duty of disclosure – whether insured had disclosed contract between it and mine owner which contained indemnity – whether letter referring to contract provided to insurer’s agent – whether letter sufficient to satisfy duty of disclosure – whether letter provided before contract came into existence – distinction between knowledge of insurer and disclosure by insured – whether insurer entitled to reduce liability to nil – Insurance Contracts Act 1984 (Cth), ss 21 and 28
INSURANCE – scope of indemnity – whether settlement reasonable – whether insurer entitled to benefit of a deductible which had been pleaded but otherwise not mentioned during trialLegislation Cited: Civil Liability Act 2002 (NSW)
Insurance Act 1973 (Cth), s 95
Insurance Contracts Act 1984 (Cth), ss 11, 21, 28, 48
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5
Law Reform (Miscellaneous Provisions) Act 1965 (NSW)
Supreme Court Act 1970 (NSW), s 75A
Uniform Civil Procedure Rules (NSW), rr 31.28, 36.16, 42.1, 51.29
Workers Compensation Act 1987 (NSW), ss 151, 151G, 151Z
Workers Compensation Regulation 2003 (NSW), cl 49Cases Cited: Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606; [1989] HCA 22
Allianz Australia Ltd v Wentworthville Real Estate Pty Ltd [2004] NSWCA 100; 13 ANZ Ins Cas 61-598
Asfar & Co v Blundell [1896] 1 QB 123
Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Badawi & Badawi (costs) [2017] FamCAFC 196
Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32
Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; [1999] NSWCA 422
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357
European Bank Ltd v Robb…
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- Case
- [2018] NSWCA 55
- Decision Date
CaseChat Overview and Summary
The Court of Appeal was required to determine several key issues. These included whether the claim for breach of contract by the mine owner against SCM fell within the scope of the insuring clause of the policy, and whether the insuring clause extended to cover the mine owner's costs. Furthermore, the court had to consider the applicability of an exclusion clause relating to assumed liabilities. The court also examined SCM's duty of disclosure, specifically whether SCM had disclosed a contract with the mine owner that contained an indemnity, and if a letter referring to this contract, provided to QBE's agent, was sufficient to satisfy this duty, particularly in relation to the timing of the contract's existence. Finally, the court considered the scope of indemnity, including the reasonableness of the settlement and whether QBE was entitled to the benefit of a deductible.
The Court of Appeal reasoned that the insuring clause did not extend to cover the mine owner's costs, as these were not costs incurred by SCM in defending claims against it. Regarding the duty of disclosure, the court found that while the letter provided to QBE's agent referred to the contract, it was not sufficient to satisfy the duty of disclosure because it did not clearly indicate the existence of the indemnity provision within that contract, and importantly, the letter was provided after the contract had come into existence. Consequently, QBE was entitled to reduce its liability to nil under section 28 of the *Insurance Contracts Act 1984* (Cth). However, the court also found that the settlement amount was reasonable, but that QBE was entitled to the benefit of the deductible.
The appeal was allowed in part. The judgment entered in favour of SCM was varied by reducing the amount awarded from $265,000 to $215,000. The appeal was otherwise dismissed, and QBE was ordered to pay SCM's costs of the appeal.
Orders
Orders of the court
1. Appeal allowed in part.
2. Vary the judgment entered in favour of Southern Colliery Maintenance Pty Ltd on 28 April 2017 by replacing $265,000 with $215,000.
3. Otherwise dismiss the appeal.
4. The appellant to pay the respondent’s costs of the appeal.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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