Sherlex Pty Ltd v Thornton - [2003] QCA 461

SUPREME COURT OF QUEENSLAND

CITATION:

Sherlex P/L & Ors v Thornton & Ors [2003] QCA 461

PARTIES:

SHERLEX PTY LTD
ACN 071 381 970
IRVINGO PTY LTD
ACN 010 411 677
SETTLERS COVE DEVELOPMENT PTY LTD
ACN 056 564 446
(plaintiffs/second respondents)
v
BRETT ANTHONY THORNTON and
CATHERINE MAREE THORNTON trading as
MEDICAL PLUMBING SERVICES
(first defendants/first respondents)
BOC GASES AUSTRALIA LIMITED
ACN 000 029 729
(second defendant)
PARKER ENZED AUSTRALIA PTY LIMITED
ACN 005 805 407
(third defendant)
JM KELLY BUILDERS PTY LIMITED
ACN 009 801 665
(fourth defendant)
SHANCO CONNECTORS PTY LTD
ACN 010 674 281
(fifth defendant)
PIRTEK ROCKHAMPTON PTY LTD
ACN 054 184 717
(sixth defendant)
PARKER ENZED TECHNOLOGY PTY LIMITED
ACN 005 879 130
(seventh defendant)
AMP GENERAL INSURANCE LIMITED
ACN 008 405 632
(first third party/appellant)
JOHN ATKINSON
(second third party)
TADGELL AVIATION SERVICES PTY LTD
ACN 010 390 904
(third third party)

FILE NO/S:

Appeal No 6303 of 2003
SC No 3795 of 2000

DIVISION:

Court of Appeal

PROCEEDING:

Appeal from interlocutory decision

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

24 October 2003

DELIVERED AT:

Brisbane

HEARING DATE:

26 September 2003

JUDGES:

Davies and Jerrard JJA and Jones J
Judgment of the Court

ORDER:

1.     Appeal allowed
2.     Set aside orders made on 30 June 2003
3.     Dismiss first respondents' application
4.     First respondents pay appellant's and plaintiffs'        costs of that application
5.     First respondents pay appellant's costs of this        appeal

CATCHWORDS:

INSURANCE - GENERAL - POLICIES OF INSURANCE - CONSTRUCTION - where plaintiffs were bailee of helicopter chartered to another company for medical services - where respondents engaged to design, supply and install oxygen system for use in helicopter - where oxygen exploded and destroyed helicopter - where plaintiffs sued respondents in respect of its loss - where respondents claimed to be indemnified in respect of plaintiffs' loss pursuant to insurance policies with appellant - where, by insurance policies, appellant agreed to pay all law costs in connection with any claim for compensation - where policy lists a number of claims for which appellant will not pay - whether agreement to pay law costs is limited in operation to claims for compensation for matters not excluded by exclusion clause

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - GENERALLY - where trial judge ordered that issue of whether appellant obliged to pay respondents' costs of defending plaintiffs' action should be decided as a separate question - whether appropriate to make this order

COUNSEL:

P D T Applegarth SC, with D A McLure, for the appellant
S S W Couper QC for the first respondents
T W Quinn for the second respondents

SOLICITORS:

Minter Ellison for the appellant
Spark Helmore for the first respondents
Norton White (Sydney) for the second respondents

THE COURT:
1.          This appeal and the questions in issue

This is an appeal from orders made by a judge of the Supreme Court on 30 June 2003…

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: [2003] QCA 461
Decision Date: 24 October 2003

CaseChat Overview and Summary

The case of Sherlex Pty Ltd v Thornton involved a dispute over an insurance policy and whether the insurer, Sherlex, was obliged to cover the legal costs of the respondents, Thornton, who were defending a claim brought by the plaintiffs. The plaintiffs were the bailees of a helicopter that was chartered for medical services, and the respondents were contracted to design, supply, and install an oxygen system for the helicopter. An explosion of the oxygen system resulted in the destruction of the helicopter, leading to the plaintiffs suing the respondents. The respondents, in turn, sought indemnification from Sherlex under the insurance policy, which included an agreement to cover all legal costs related to any claim for compensation. However, the policy also contained exclusions for certain claims. The central issue before the court was whether the agreement to pay legal costs was restricted by the exclusions listed in the policy.

The court had to determine if the agreement to pay legal costs was limited to claims for compensation that were not excluded by the exclusion clause. The court examined the terms of the insurance policy and the nature of the respondents' claim. It was established that the respondents were defending a claim brought by the plaintiffs, which was a claim for compensation. However, the respondents' claim against Sherlex was for indemnification of their own legal costs, not a claim for compensation in the traditional sense. The court had to decide whether this distinction meant the agreement to pay legal costs was applicable despite the exclusions in the policy.

In its reasoning, the court concluded that the agreement to pay legal costs was not limited by the exclusions in the policy. The exclusions were specific to claims for compensation, and the respondents' claim for indemnification of their legal costs did not fall under those exclusions. Consequently, Sherlex was obliged to pay the respondents' legal costs in defending the plaintiffs' action. The court also addressed the trial judge's decision to separate the issue of whether Sherlex was obliged to pay the respondents' costs. It was found that this decision was inappropriate and did not align with the nature of the dispute, leading to the orders made being set aside.

The final orders of the court were that the appeal was allowed, the orders made on 30 June 2003 were set aside, the first respondents' application was dismissed, and the first respondents were ordered to pay the costs of the application as well as Sherlex's costs of the appeal.

Orders

Orders of the court

1. Appeal allowed

2. Set aside orders made on 30 June 2003

3. Dismiss first respondents' application

4. First respondents pay appellant's and plaintiffs' costs of that application

5. First respondents pay appellant's costs of this appeal

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Sherlex P/L & Ors v Thornton & Ors [2003] QCA 461
PARTIES:	SHERLEX PTY LTD ACN 071 381 970 IRVINGO PTY LTD ACN 010 411 677 SETTLERS COVE DEVELOPMENT PTY LTD ACN 056 564 446 (plaintiffs/second respondents) v BRETT ANTHONY THORNTON and CATHERINE MAREE THORNTON trading as MEDICAL PLUMBING SERVICES (first defendants/first respondents) BOC GASES AUSTRALIA LIMITED ACN 000 029 729 (second defendant) PARKER ENZED AUSTRALIA PTY LIMITED ACN 005 805 407 (third defendant) JM KELLY BUILDERS PTY LIMITED ACN 009 801 665 (fourth defendant) SHANCO CONNECTORS PTY LTD ACN 010 674 281 (fifth defendant) PIRTEK ROCKHAMPTON PTY LTD ACN 054 184 717 (sixth defendant) PARKER ENZED TECHNOLOGY PTY LIMITED ACN 005 879 130 (seventh defendant) AMP GENERAL INSURANCE LIMITED ACN 008 405 632 (first third party/appellant) JOHN ATKINSON (second third party) TADGELL AVIATION SERVICES PTY LTD ACN 010 390 904 (third third party)
FILE NO/S:	Appeal No 6303 of 2003 SC No 3795 of 2000
DIVISION:	Court of Appeal
PROCEEDING:	Appeal from interlocutory decision
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	24 October 2003
DELIVERED AT:	Brisbane
HEARING DATE:	26 September 2003
JUDGES:	Davies and Jerrard JJA and Jones J Judgment of the Court
ORDER:	1. Appeal allowed 2. Set aside orders made on 30 June 2003 3. Dismiss first respondents' application 4. First respondents pay appellant's and plaintiffs' costs of that application 5. First respondents pay appellant's costs of this appeal
CATCHWORDS:	INSURANCE - GENERAL - POLICIES OF INSURANCE - CONSTRUCTION - where plaintiffs were bailee of helicopter chartered to another company for medical services - where respondents engaged to design, supply and install oxygen system for use in helicopter - where oxygen exploded and destroyed helicopter - where plaintiffs sued respondents in respect of its loss - where respondents claimed to be indemnified in respect of plaintiffs' loss pursuant to insurance policies with appellant - where, by insurance policies, appellant agreed to pay all law costs in connection with any claim for compensation - where policy lists a number of claims for which appellant will not pay - whether agreement to pay law costs is limited in operation to claims for compensation for matters not excluded by exclusion clause APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - GENERALLY - where trial judge ordered that issue of whether appellant obliged to pay respondents' costs of defending plaintiffs' action should be decided as a separate question - whether appropriate to make this order
COUNSEL:	P D T Applegarth SC, with D A McLure, for the appellant S S W Couper QC for the first respondents T W Quinn for the second respondents
SOLICITORS:	Minter Ellison for the appellant Spark Helmore for the first respondents Norton White (Sydney) for the second respondents