Strahinja Pandurevic v Southern Cross Constructions (NSW) Pty Limited (No 3)

Strahinja Pandurevic brought an action against Southern Cross Constructions (NSW) Pty Limited for damages for personal injury suffered at work. The dispute centred around the costs incurred by Pandurevic during the proceedings, specifically those incurred without the written consent of his insurer. The crux of the matter was whether section 54 of the Insurance Contracts Act applied, making the insurer liable to indemnify Pandurevic for the costs incurred without written consent, and whether the insurer should pay Pandurevic's costs of the proceedings on an indemnity basis.

The primary legal issue was whether section 54 of the Insurance Contracts Act applied to the circumstances of the case, which would necessitate the insurer indemnifying Pandurevic for costs incurred without written consent. Additionally, the court had to determine whether the costs should be paid on an indemnity basis. The court considered whether the statutory provisions regarding indemnity and the common law rules on indemnity costs were applicable, and if the insurer was bound by the terms of the insurance policy.

The court held that section 54 of the Insurance Contracts Act did apply, making the insurer liable to indemnify Pandurevic for the costs incurred without written consent. The court further found that the insurer should pay Pandurevic's costs of the proceedings on an indemnity basis. The court emphasised that the statutory provisions were intended to protect insured individuals and that the insurer's liability under the policy should not be limited by common law rules unless explicitly stated. The decision underscored the importance of clear communication between the insurer and the insured regarding costs and the insurer's obligations under the policy.

The final orders were that Southern Cross Constructions (NSW) Pty Limited was liable to indemnify Strahinja Pandurevic for the costs incurred without written consent and to pay those costs on an indemnity basis. The court's decision reinforced the statutory protection afforded to insured individuals in proceedings related to personal injury claims.