CIMIC Group Limited v AIG Group Limited [2022] NSWSC 999

Supreme Court New South Wales

Medium Neutral Citation: CIMIC Group Limited v AIG Group Limited [2022] NSWSC 999 Hearing dates: 16 May 2022 – 3 June 2022 Decision date: 27 July 2022 Jurisdiction: Equity Before: Peden J Decision: 1. The parties are to confer and provide agreed short minutes of order to give effect to these reasons and appropriate costs orders within 7 days of the publication of this judgment. 2. Should the parties not be able to agree, the parties are to provide their competing short minutes together with submissions of no more than 10 pages, and any necessary evidence, within 10 days of the publication of this judgment. 3. Liberty to apply on 24 hours' notice. Catchwords: INSURANCE — Liability insurance — Directors and Officers — Claim for indemnity and declaratory relief against two consecutive insurance towers — Claim for declaratory relief sought in the alternative against later insurance tower — Costs incurred by insured for securities litigation, investigations and a settlement arising from a file note — Whether costs caught under policy— Whether settlement reasonable — Retention — Statutory interest INSURANCE — Insurance Contracts Act 1984 (Cth) — Duty of disclosure — Non-disclosure and misrepresentation — Construction of insurance policy — Whether parties contracted out of statutory remedies — Whether continuity clause allowed a claim against the later insurance tower — Relationship between liability limits in policies — Whether but for relevant failure insurer would have entered into contract — Whether cover should be reduced to nil INSURANCE — Cross-claim in relation to one insurance policy — Contract — Formation — Rectification — Intention — Common intention — Signed placing slips INSURANCE — Cross-claim by one insurer against two other insurers — Equitable contribution — Double insurance — Coordinate liabilities — Proper measure of contribution INSURANCE — Whether insured barred from its alternative case — Election, waiver and estoppel — Futility — Whether declaratory relief hypothetical — Construction of notification clause — Whether late notification possible under the policy LIMITATION OF ACTIONS — Equity — Application of limitation periods by analogy — Indemnities and insurance — Analogies in Contract and contribution between joint tortfeasors — Whether some claims for costs out of time Legislation Cited: ASX Listing Rules r 3.1 Australian Securities and Investments Commission Act 2001 (Cth) ss 13, 19, 30, 33 Corporations Act 2001 (Cth) ss 674, 1307(1) Criminal Code Act 1995 (Cth) div 70 Evidence Act 1995 (NSW) ss 69, 97, 128, 135, 140(2) Federal Court of Australia Act 1976 (Cth) ss 33V, 33ZF Insurance Contracts Act 1984 (Cth) ss 7, 21, 22, 28, 40(3) 54, 57 Insurance Contracts Amendment Act 2013 (Cth) Insurance Contracts Regulations 2017 (Cth) r 10 Law Reform (Miscellaneous Provisions) Act 1946 (NSW) Limitation Act 1969 (NSW) ss 14(1)(a), 23, 26 Migration Act 1958 (Cth) Practice Note SC Eq 3 Supreme Court Act 1970 (NSW) ss 63, 75 Uniform Civil Procedure Rules 2005 (NSW) r 28.2 Cases Cited: ACN 161 046 304 Pty Ltd (Formerly known as Melbourne City Investments) v CIMIC Group Limited [2019] VSC 48 Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 239 CLR 570 AIG Australia Ltd v Kaboko Mining Ltd [2019] FCAFC 96 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 Albion Insurance v Government Insurance Office (1969) 121 CLR 342 All Class Insurance Brokers (in liq) v Chubb Insurance (No 2) [2021] FCA 782 Allianz Australia Insurance Limited v General Cologne Re Australia Limited [2004] NSWCA 433 AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185 AMP Workers Compensation Services (NSW) Ltd v QBE Insurance Ltd (2001) 53 NSWLR 35 Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652 ASIC v Hellicar (2012) 247 CLR 345 Australian Casualty Co Ltd v Federico (1986) 160 CLR 513 Australian Securities and Investments Commission v Sigalla (No 2) [2010] NSWSC 792 Bankstown Football Club v CIC Insurance Ltd (unreported, Sup Ct, NSW, 17 December 1993) Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Baycorp Advantage Ltd v Royal and Sun Alliance Insurance Australia Limited [2003] NSWSC 941 BNP Paribas v Pacific Carriers Limited [2005] NSWCA 72 BP Petroleum Development Ltd v Esso Petroleum Co Ltd [1987] SLT 345 Brighton Ceiling Pty Ltd v Pocrnja [2005] NSWCA 175 Briginshaw v Briginshaw (1938) 60 CLR 336 Brotherton v Aseguradora Colseguros [2003] EWCA Civ 705 Burke v LFOT Pty Ltd (2002) 209 CLR 282 Caledonian Railway Co v Colt (1860) 3 Macq 833 Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 CGU Insurance Limited v AMP Financial Planning Pty Ltd (2007) 235 CLR 1 CGU Insurance v Blakeley (2016) 259 CLR 339 CGU Insurance v Porthouse (2008) 235 CLR 103 Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 Ciavarella v Balmer (1983) 153 CLR 438 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Claremont Petroleum NL v Cummings (1992) 110 ALR 239 Cohen v Cohen (1929) 42 CLR 91 Commonwealth v Verwayen (1990) 170 CLR 394 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 Delor Vue Apartments v Allianz Australia Insurance Ltd (No 2) [2020] FCA 588 Delta Pty Limited v Mechanical and Construction Insurance Pty Limited [2019] QCA 62 DIF III – Global Co-Investment Fund LP v DIF Capital Partners Ltd [2020] NSWCA 124 DIF III – Global Co-Investment Fund v Babcock & Brown International Pty Limited [2019] NSWSC 527 DIF III – Global Co-Investment Fund v Babcock & Brown International Pty Limited [2020] NSWCA 124 Edwards v Santos (2011) 242 CLR 421 Elilade Pty Ltd v Nonpareil Pty Ltd (2002) 124 FCR 1 Euro Pools Plc v Royal & Sun Alliance Insurance Plc [2019] EWCA Civ 808 FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd (2001) 204 CLR 641 Ferrcom v Commercial Union Assurance (1993) 176 CLR 332 Fitzgerald v CBL Insurance Ltd [2014] VSC 493 Forster v Jododex (1972) 127 CLR 421 Fruehauf Finance Corp Ltd v Zurich Australian Insurance Ltd (1993) 32 NSWLR 735 Galaxy Communications Pty Ltd v Paramount Films of Australia Inc (Unreported, NSW Court of Appeal, 24 February 1998) General Reinsurance Corporation v Forsakringsaktiebolaget Fennia Patria [1982] QB 1022 General Reinsurance Corp v Forsakringsaktiebolaget Fennia Patria [1983] 1 QB 856 GIO General Limited v Wallace [2001] NSWCA 299 Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470 Gordon v Ross [2006] NSWCA 157 Gosford City Council v GIO General Ltd (2003) 56 NSWLR 542 Gregg v R [2020] NSWCCA 245 HDI Global Specialty SE v Wonkana No 3 Pty Ltd (2020) 104 NSWLR 634 HIH Casualty & General Insurance Ltd (in liq) v Insurance Australia Limited (No 2) [2006] VSC 128 HIH Casualty and General Insurance Ltd v Riunione Adriatica Di Sicurta SpA [1999] VSC 336 HLB Kidsons (a firm) v Lloyd's Underwriters [2008] EWCA Civ 1206 Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5 Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 Inabu Pty Ltd as trustee for the Alidas Superannuation Fund v CIMIC Group Limited [2020] FCA 510 Inabu Pty Ltd as trustee for the Alidas Superannuation Fund v CIMIC Group Ltd [2019] FCA 1480 Jamison v The Queen (1993) 177 CLR 574 Jones v Dunkel (1959) 101 CLR 298 Kajima UK Engineering Ltd v The Underwriter Insurance Co Ltd [2008] Lloyd's Reports 391 Kammins Ballroom Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850 Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 La Trobe Capital & Mortgage Corp v Hay Property Consultants (2011) 190 FCR 299 Lawrence Edward Stewart v Australia and New Zealand Banking Group Limited [2020] NSWSC 1787 LCA Marrickville Pty Ltd v Swiss Re International Se [2022] FCAFC 17 Lohar Corp Pty Ltd v Dibu Pty Ltd (1975) 1 BPR 9177 Lynch v Hamilton (1810) 128 ER 15 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 Melbourne City Investments Pty Ltd v Leighton Holdings Limited [2015] VSCA 235 Melin v Mutual Community General Insurance Pty Ltd (1991) 6 ANZ Ins Cas 61-057 Minister for Immigration v Ozmanian (1996) 71 FCR 1 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 National Australia Bank Limited v Nautilus Insurance Pte Ltd (No 2) [2019] FCA 1543 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] 67 ALJR 170 Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 Nicholls v Michael Wilson and Partners [2010] NSWCA 222 Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd (1994) 8 ANZ Ins Cas 61-235 NRMA Insurance Ltd v Tatt (1989) 92 ALR 299 O'Connor v SP Bray Ltd (1936) 36 SR (NSW) 248 O'Neill v FSS Trustee Corporation as Trustee of the First State Superannuation Scheme [2015] NSWSC 1248 Onley v Catlin Syndicate [2018] FCAFC 119 P&S Kauter Investments Pty Ltd v Arch Underwriting at Lloyd's Ltd (2021) 105 NSWLR 110 Paymer v Ayres (2017) 259 CLR 478 Payne v Parker (1976) 1 NSWLR 191 Permanent Trustee v FAI General (2001) 50 NSWLR 679 Permanent Trustee v FAI General (2003) 214 CLR 514 Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2013] NSWCA 252 Protec Pacific v Steuler Services [2014] VSCA 338 Pullen v Gutteridge Haskins & Davey Pty Ltd (1993) 1 VR 27 QBE Insurance (Australia) Ltd v Lumley General Insurance Ltd (2009) 24 VR 326 Quintis Ltd (Subject to a Deed of Company Arrangement) v Certain Underwriters at Lloyd's London Subscribing to Policy Number B0507N16FA15350 [2021] FCA 19 Quintis Ltd (Subject to Deed of Company Arrangement) v Certain Underwriters at Lloyd's London Subscribing to Policy Number B0507N16FA15350 (No 2) [2021] FCA 327 RHG Mortgage Ltd v Ianni [2015] NSWCA 56 Ruby Steam Ship Co Ltd v Commercial Union Assurance Co Ltd (1933) 150 LT 38 Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 Sanderson Computers Pty Ltd v Urica Library Systems BV (1998) 44 NSWLR 73 Sandersons Eastern Suburbs v Mercedez-Benz Australia/Pacific [2018] NSWSC 52 Sargent v ASL Developments (1974) 131 CLR 634 Sayseng v Kellogg Superannuation Pty Ltd [2007] NSWSC 857 Schlaepfer v Australian Securities and Investments Commission [2017] FCA 1122 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85 Stealth Enterprises v Calliden Insurance [2017] NSWCA 71 Sydney Turf Club v Crowley (1971) 1 NSWLR 729 Sydney Turf Club v Crowley (1972) 126 CLR 420 Taylor v The Queen [2020] NSWCCA 355 Tokio Marine & Nichido Fire Insurance Co Ltd v Holgersson [2019] WASCA 114 Trans Realties Pty Ltd v Grbac (1975) 1 NSWLR 170 Tropical Traders Ltd v Goonan (1964) 111 CLR 41 Tszyu v Fightvision Pty Ltd; Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 UBS AG v Tyne (2018) 265 CLR 77 Ucak v Avante Developments [2007] NSWSC 367 United Australia Ltd v Barclays Bank Ltd [1941] AC 1 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603 Vero Insurance v Baycorp Advantage [2004] NSWCA 390 Vero Insurance Ltd v Power Technologies Pty Ltd [2007] NSWCA 226 Walton v Gardiner (1993) 177 CLR 378 Watkins Syndicate v Pantaenius (2016) 244 FCR 5 Weir Services Australia Pty Limited v AXA Corporate Solutions Assurance [2018] NSWCA 100 White Industries Qld Pty Ltd v Hennessey Glass and Aluminium Systems Pty Ltd [1999] 1 Qd R 210 Wilkie v Gordian Runoff (2005) 221 CLR 522 Zhang v ROC Services (NSW) (2016) 93 NSWLR 561 Texts Cited: D K Derrington and R S Ashton, The Law of Liability Insurance (3rd ed, 2013, LexisNexis Butterworths) Handley, Estoppel by Conduct and Election (1st ed, 2006, Lawbook Co) I C F Spry, The Principles of Equitable Remedies (9th ed, Lawbook Co, 2014) JJ Spigelman, 'Knowledge of a Corporate Insured' (1994) 6 Insurance Law Journal 1 Kirsty Sutherland, 'An Uneasy Compromise: An Analysis of the Effect of a Settlement Reached by an Insurer with a Third Party Claimant vis-à-vis his or her Insurer' (1998) 9 Insurance Law Journal 257 Nigel Rein, 'Liability Policies: The Relationship of the Claim against the Insured and the Insured's Claim on the Insurer' (1994) 6 Insurance Law Journal 193 Peter Handford, Limitation of Actions (2nd ed, Lawbook Co, 2007) Peter Mann, Mann's Annotated Insurance Contracts Act (7th ed, 2016, Lawbook Co) P W Young, Declaratory Orders (2nd ed, Butterworths, 1984) Spencer Bower and Turner, The Law Relating to Estoppel by Representation (3rd ed, 1977, Butterworths) WIB Enright and RM Merkin, Sutton on Insurance Law (4th ed, Lawbook Co, 2015) Category: Principal judgment Parties: CIMIC Group Ltd (Plaintiff) AIG Australia Ltd (First Defendant) Chubb Insurance Australia Ltd (Second Defendant) Catlin Syndicate Ltd (Third Defendant) Catlin Australia Ltd (Fourth Defendant) Liberty Mutual Insurance Company (Fifth Defendant) Berkley Insurance Company (Sixth Defendant) Swiss Re International SE (Seventh Defendant) Zurich Australian Insurance Ltd (Eighth Defendant) Arch Underwriting at Lloyd's Limited on behalf of Syndicate 2012 (Ninth Defendant) Dual Australia Pty Ltd (Tenth Defendant) Representation: Counsel: M A Jones SC and B Ryde (Plaintiff) G Rich SC and J Taylor (First Defendant) S R Donaldson SC and N D Oreb (Second Defendant) I R Pike SC and M Newton (Third and Fourth Defendants) M R Elliott SC and L Hulmes (Fifth Defendant) M A Friedgut and A Lim (Sixth Defendant) E Muston SC and H Mann (Seventh Defendant) R Dick SC and S Fitzpatrick (Eighth Defendant) A Horvath SC and M Caristo (Ninth and Tenth Defendants)