Casey v AIG Australia Limited [2021] FCA 553

Federal Court of Australia

Casey v AIG Australia Limited [2021] FCA 553 File number: NSD 277 of 2021

Judgment of: ALLSOP CJ

Date of judgment: 24 May 2021

Catchwords: INSURANCE – where applicants are former directors of company insured by respondent pursuant to not-for-profit management liability policy – where applicants sued by company and its liquidators in proceedings in Supreme Court of New South Wales for breach of fiduciary duties and breach of duty of care – where policy included obligation to advance defence costs – where respondent accepted obligation to pay defence costs incurred by applicants in defending allegations of breach of duty of care – where respondents paid 70 per cent of defence costs pursuant to allocation clause – whether respondent liable under policy to pay costs incurred in defending alleged breach of fiduciary duties – whether applicants were acting for or on behalf of the insured company – respondent liable to pay the whole of the costs of the defence until further order – allocation clause not engaged

Legislation: Corporations Act 2001 (Cth) ss 180–185, 199B Insurance Contracts Act 1984 (Cth) ss 14, 57

Cases cited: Angas Law Services Pty Ltd (in liquidation) v Carabelas [2005] HCA 23; 226 CLR 507 Boardman v Phipps [1967] 2 AC 46 Chew v The Queen [1992] HCA 18; 173 CLR 626 Grove v Flavel (1986) 43 SASR 410 Meinhard v Salmon 249 NY 458; 164 NE 545 (1928) MOS Beverages Pty Ltd v Insurance Australia Ltd trading as CGU Insurance [2020] FCA 1716 R v Byrnes [1995] HCA 1; 183 CLR 501 Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378; [1967] 2 AC 134