P & S Kauter Investments Pty Ltd v Arch Underwriting at Lloyds Ltd [2021] NSWCA 136

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: P & S Kauter Investments Pty Ltd v Arch Underwriting at Lloyds Ltd [2021] NSWCA 136 Hearing dates: 10 and 11 June 2021 Decision date: 02 July 2021 Before: Bathurst CJ at [1]; Bell P at [2]; Meagher JA at [3] Decision: Appeal dismissed with costs. Catchwords: INSURANCE – professional indemnity insurance – claims made and notified policy – where insurers notified within policy period of "chance of a claim" by insured's clients for any loss "that may be incurred" – whether notification of "facts that might give rise to a claim" engaging Insurance Contracts Act 1984 (Cth), s 40(3) – whether loss more than a potential possibility on notified facts INSURANCE – non-disclosure and misrepresentation – where dispute about extent of disclosure – whether non-disclosure entitling insurers to reduce liability to nil under Insurance Contracts Act 1984 (Cth), s 28(3) – whether evidence that insurers would not have issued policy but for non-disclosure directed to undisclosed matters distributively or taken together INSURANCE – non-disclosure and misrepresentation – where insurers seek to avoid policy for fraudulent misrepresentation under Insurance Contracts Act 1984 (Cth), s 28(2) –whether fraudulent misrepresentations specifically pleaded – whether misrepresentations concerning matters of fact or statements of opinion COSTS – where separate proceedings against same defendants heard together – where most issues of fact and law common or closely related – where plaintiffs and defendants represented by the same lawyers in each proceeding – whether plaintiffs should be jointly and severally liable for defendants' costs Legislation Cited: Insurance Contracts Act, ss 21,24, 26(2), 28(1), 28(2), 28(3), 40(1), 40(3) Cases Cited: Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606 Antico v CE Heath Casualty and General Insurance Ltd (1995) 8 Anz Ins Cas 61-268 CGU Insurance Ltd v Porthouse (2008) 235 CLR 103 DIF III – Global Co-Investment Fund LP v DIF Capital Partners Ltd [2020] NSWCA 124 Federal Deposit Insurance Corporation v St Paul Fire & Marine Insurance Co, 993 F.2d 155 (1993) GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558 HLB Kidsons v Lloyds Underwriters [2008] EWCA Civ 1206; [2009] Lloyd's Rep IR 178 House v The King (1936) 55 CLR 499; [1936] HCA 40 J Rothschild Assurance Plc v Collyear [1999] 1 Lloyd's Rep IR 6 Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 Thompson v ACT Television Pty Ltd (1996) 186 CLR 524 Texts Cited: Australian Law Reform Commission, Report No 20, Insurance Contracts Category: Principal judgment Parties: P & S Kauter Investments Pty Ltd (First Appellant) Esined No. 9 Pty Ltd (Second Appellant) Esined No. 10 Pty Ltd (Third Appellant) Graeme Manning (Fourth Appellant) Nancy Manning (Fifth Appellant) Graeme and Nancy Manning as executors of the estate of Roy Maytom (Sixth Appellant) Jalin Holdings Pty Ltd (Seventh Appellant) Arch Underwriting at Lloyds Ltd on behalf of Syndicate 2012 (First Respondent) Hiscox Dedicated Corporate Member Limited (Second Respondent) Liberty Mutual Insurance Europe Limited (Third Respondent) Barbican Managing Agency Limited (Fourth Respondent) Representation: Counsel: A J Bannon SC and J S Drummond J E Sexton SC and S Kanagaratnam (First, Second and Fourth Respondents) M A Jones SC and E W L Anderson (Third Respondents)