CGU Insurance Limited v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173

FEDERAL COURT OF AUSTRALIA CGU Insurance Limited v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 INSURANCE – Professional risks policy – Claims made policy – Policy covered claims notified to insurer within month subsequent to policy period if insureds, during policy period, aware of any fact, situation or circumstance that might give rise to claim – Whether required insureds to be aware of fact etc and aware that it might give rise to claim – Whether insureds were aware that fact etc might give rise to claim – Quality of awareness required – Whether insurer notified within month subsequent to policy period – Whether insurer could rely on absence of notification – Whether insurer refused to pay under policy "by reason only" of absence of notification – Insurance Contracts Act 1984 (Cth), s 54(1). INSURANCE – Professional risks policy – Insureds and a non-insured sued for damages – Proceeding settled on basis that insureds pay applicants' costs, including costs attributable to claims against non-insured – Insureds sought indemnity under policy – Whether settlement reasonable to the extent that it involved the insureds paying so much of the applicants' costs as related to claims against non-insured. INSURANCE – Professional risks policy – Insureds and a non-insured sued for damages – Indemnity for defence costs sought under policy of insurer and under policy of another insurer – Other insurer paid out under its policy – Whether non-insured was covered under other policy – Whether permissible for insureds and non-insured to agree between themselves for payout received from other insured to be allocated first to defence costs of non-insured – Effect on size of defence costs claims by insureds under policy. COSTS – Claim for indemnity costs – Calderbank letter sent by cross-claimants who ultimately succeeded – Criterion for award of indemnity costs in such circumstances – Whether rejection of offer unreasonable.