PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (in liq) [2020] FCA 137

FEDERAL COURT OF AUSTRALIA

PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (in liq) [2020] FCA 137 File number(s): VID 336 of 2018

Judge(s): ANDERSON J

Date of judgment: 19 February 2020

Catchwords: CONTRACTS – insurance brokerage – where insurance broker engaged by client on annual basis – where client operates business supplying computer hardware and software – where broker advised on risks and procured cover – consideration of nature and terms of retainer – where client paid settlement sum to settle claims of copyright infringement by third party – where client could not recover settlement sum under insurance policies due to exemption for copyright infringement – whether broker breached contractual duty to act with reasonable skill and care NEGLIGENCE – insurance broker – whether broker failed to act with reasonable skill and care by making insufficient inquiries of the client's business – whether broker failed to act with reasonable skill and care by failing to identify, and advise client of, risk of copyright infringement INSURANCE – obligations of an insurance broker – expert evidence on the conduct of a reasonably competent insurance broker generally, and in the circumstances of client in present case DAMAGES – causation – whether breach of contract and tort by insurance broker caused payment of settlement sum by client – whether client would have obtained relevant cover but for broker's breach – reasonableness of settlement sum paid by client – remoteness – mitigation – loss of opportunity – contributory negligence – whether client's failure to raise risk of copyright infringement negligently caused own loss – whether client's actions comprising alleged breach of copyright negligently caused own loss Held: insurance broker breached duties owed to client in contract and tort to act with reasonable skill and care by failing to identify risk of copyright infringement and advise client – client entitled to damages in the amount of settlement sum paid to third party