Quintis Ltd (Subject to Deed of Company Arrangement) v Certain Underwriters at Lloyd's London Subscribing to Policy Number B0507N16FA15350 (No 2)

Quintis Ltd sought relief in the form of rectification of its insurance policies against certain underwriters at Lloyd's London. The dispute arose from the contention that the insurance policies did not accurately reflect the common intention of the parties regarding the coverage and sub-limits for directors and officers liability insurance. The Federal Court of Australia was tasked with determining whether the insurance policies should be rectified to reflect the true intentions of the insured and the insurers, and if so, what form the rectification should take.

The legal issues central to this case were whether the insurance policies could be rectified to align with the common intention of the parties and what form such rectification should take, particularly given that not all insurers shared the same intention. The court had to consider the principles of equity, the contractual structure of the insurance policies, and the specific intentions of each insurer involved in the policies.

The court concluded that Quintis was entitled to relief against certain insurers, namely Argo and Vibe, who were found to share the common intention regarding the coverage and sub-limits. The court reasoned that the rectification of the policies should be calibrated to reflect the specific intentions of these insurers without unfairly disadvantaging them. The court emphasized that the form of relief should bring the policies into conformity with the common intention of the parties without transforming the original bargain. The court found that the principles of equity allowed for such rectification, provided it did not alter the fundamental terms of the contracts beyond what was necessary to reflect the parties' true intentions.

The court ordered that the policies in question be rectified to reflect the common intention of Quintis and the relevant insurers. The rectification involved amending the policies to include specific clauses detailing the sub-limits and the liability of each insurer. Quintis was also ordered to pay 25% of the costs of the second and third respondents, while no order was made regarding the costs between Quintis and the first and fourth respondents. The court granted leave for any party to apply for a lump sum costs order within 14 days.