CGU Insurance Limited v Porthouse [2008] HCA 30

HIGH COURT OF AUSTRALIA

GUMMOW, KIRBY, HEYDON, CRENNAN AND KIEFEL JJ

CGU INSURANCE LIMITED APPELLANT

AND

ANTHONY PORTHOUSE RESPONDENT

CGU Insurance Limited v Porthouse [2008] HCA 30

30 July 2008

S530/2007

ORDER

1. Appeal allowed.

2. Set aside the order of the Court of Appeal of the Supreme Court of New South Wales made on 11 April 2007 and, in its place, order that:

(a) the appeal to that Court be allowed;

(b) orders 3 and 8 made by Judge Balla in the District Court of New South Wales on 23 March 2006 be set aside and in their place order that judgment be entered for the appellant on the respondent's cross-claim; and

(c) the respondent pay the appellant's costs at trial and in the Court of Appeal of the Supreme Court of New South Wales.

3. The appellant pay the respondent's costs of the appeal to this Court.

On appeal from the Supreme Court of New South Wales

Representation

M A Pembroke SC with G Lucarelli for the appellant (instructed by Kennedys)

A J Meagher SC with A J Payne and D F C Thomas for the respondent (instructed by Langes Lawyers)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

CGU Insurance Limited v Porthouse

Insurance – Professional indemnity – Barrister's liability policy conforming with Legal Profession Act 1987 (NSW) – "Known Circumstance" exclusion – "Known Circumstance" defined to include any fact, situation or circumstance which a reasonable person in the insured's professional position would have thought, before the policy began, might result in someone making an allegation against an insured in respect of a liability that might be covered by the policy – Denial of liability by insurer – Meaning of exclusion clause – Relevance of what insured actually thought – Whether exclusion clause operated by reference to an objective standard.