Quintis Ltd (Subject to Deed of Company Arrangement) v Certain Underwriters at Lloyd's London Subscribing to Policy Number B0507N16FA15350 [2021] FCA 19

Federal Court of Australia

Quintis Ltd (Subject to Deed of Company Arrangement) v Certain Underwriters at Lloyd's London Subscribing to Policy Number B0507N16FA15350 [2021] FCA 19 File number: NSD 733 of 2020

Judgment of: LEE J

Date of judgment: 28 January 2021

Catchwords: INSURANCE – directors and officers' liability insurance – four policies of insurance – amount of cover for "Entity Securities Liability Optional Extension" ("Side C cover") – whether Side C cover sub-limited to primary policy – whether policies should be rectified – whether up to $50 million in Side C cover – Lloyd's insurance market – no expert evidence – principles applicable to construction and rectification of insurance policies – policies represent bundle of contracts between insured and insurers CONTRACTS – construction of policies of insurance –interaction between primary and excess policies – distinction between construction and rectification – must not subconsciously allow evidence of parties' actual intentions to affect questions of interpretation and construction – no ambiguity – no resort to extrinsic material EQUITY – rectification – consideration of relevant principles – standard of proof – policies represent bundle of contracts between the insured and insurer – impact of rectification on third party rights – inability to rectify primary policy to automatically affect excess policies – brokers – attribution of knowledge – common intention to be proved between broker and each insurer – volumes of contemporaneous material – common intention found between broker and some insurers – whether partial relief should be granted – equity should prevent unconscientious departure from true accord – form of rectification – focus on ascertaining the substance of intention EVIDENCE – circumstantial evidence – principles applicable to inferential reasoning – volumes of contemporaneous material – no witnesses called – adverse inferences – consideration of Blatch v Archer (1774) 1 Cowp 63 and Jones v Dunkel (1959) 101 CLR 298 REPRESENTATVE PROCEEDINGS – two class actions – settlement reached – policies of insurance only asset of value – settlement approval application – application adjourned – whether insured amount inadvertently incorrect – proceeding commenced against insurers