GIO GENERAL LIMITED v NEWCASTLE CITY COUNCIL SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL CLARKE JA 24 April 1995 [1995] NSWCA 174 Clarke JA. The claimant declined to indemnify the opponent, that is the Newcastle City Council, in respect of the latter's liability to pay injured persons damages arising from the events surrounding the Newcastle earthquake. The trial of the issue whether the opponent was entitled to an indemnity was heard by O'Keefe J who, on 30 August 1994, gave judgment in favour of the opponent in the course of which he determined a number of issues which conceivably could have been of relevance in a later proceeding which I will shortly mention. Following the delivery of judgment, Mr Kinsella, the manager corporate insurances of the claimant, gave consideration to the question whether an appeal should be brought from O'Keefe J's judgment. He set out in an affidavit the reasoning process which led him in the end to decide not to appeal. He has been cross-examined on the evidentiary material and this cross-examination, I think, clarified a few matters of doubt. What does appear is that Mr Kinsella gave thought to the question whether the failure to appeal might prejudice the claimant in other proceedings which had been or might be brought against it by the opponent. In the course of his consideration he sought and received oral advice from junior counsel from the claimant in the trial before O'Keefe J. That advice concluded, and I am only putting it broadly, that to allow the judgment of O'Keefe J to stand would be unlikely to prejudice other claims. Mr Kinsella was faced with the need to make a fairly practical decision havingregard to the emotional issues surrounding the personal injury claims arising out of the Newcastle earthquake. He wished, as he makes plain, to pay the injured persons but to do so in a way that did not prejudice the position of the claimant in other proceedings. Having received the advice that he did from junior counsel, he made what has been described as a tactical decision not to appeal and to pay the injured persons. I am informed that a number of those persons have already been paid. In later proceedings brought by the Newcastle Workers" Co-operative Club against the opponent, the Newcastle City Council, the latter cross-claimed against the claimant seeking indemnity in respect of any liability which was found against it in respect of the claim by the Workers" Club. Those proceedings were heard by Bainton J who, on 2 March 1995, found against the claimant and an appeal has been lodged from that decision. In the course of his judgment Bainton J indicated his own view of the effects of s 40 of the Insurance Act (Commonwealth) which was broadly in favour of the claimant but went on to say that as the precise issue had been decided by O' Keefe J and counsel for the claimant had conceded that an issue estoppel arose, he was bound to find the decision contrary to his own preferred view. In every sense a claim was defeated on that issue by the issue estoppel. 2 UNREPORTED JUDGMENTS I should add to this recital of the facts reference to the pleading filed by the opponent in the latter case on 16 December 1995 in which the opponent raised the issue estoppel in reply to defences filed by the claimant. In written submissions dealing with those issues counsel for the claimant conceded that estoppels may arise and his Honour went on to find that the relevant estoppel did arise. In those circumstances the claimant seeks an order of this Court extending the time for instituting an appeal from the decision made on 30 August 1994. Prima facie the interests of justice would favour allowing the application unless it could be demonstrated that prejudice of such a nature flowed from a decision allowing the extension of time such as to require that the application be refused in the overall interests of justice. The prejudice which is relied upon by the opponent is the loss of a juridicaladvantage. It cannot be denied that if I grant this application the opponent will substantially lose the benefit of such an advantage. But that is not all that Mr Sackar relies upon. He says that the position taken by the claimant was the result of a tactical decision which was made in the light of the need to satisfy the claims for personal injury, and adhered to when it must have become apparent to the claimant that it really was at risk in the light of the reply alleging that there were issue estoppels. Mr Sackar argued that once a claimant had that reply before it, it was bound to reconsider the earlier decision and its failure to do so increased the effect of the loss of the juridical advantage and diminished any merit that the present application might have. I would accept at once that a loss of a juridical advantage, whether the trial judge was right or wrong, is a prejudice which can be significant and I also accept that, in a sense, the claimant, having made its decision, was not nearly careful enough in failing to reconsider when the reply was filed. However, if I decline to grant the application the consequence will be that the Court will first have to rule that the issue estoppel reply was good. If it rules that it was good, then the juridical advantage which Mr Sackar seeks will be realised. Tf, on the other hand, it rules that the reply was ineffective, it will be necessary for the Court to proceed to consider the issue which Mr Rayment wants to pursue and on which both trial judges have expressed different views. In my opinion in these circumstances the balance favours the opponent and I propose to make an order, subject to hearing further from Mr Sackar, extending the time for instituting an appeal from the decision of O'Keefe J made on 30 August 1994 on the terms referred to in the summons and limited to the grounds which are set out in the draft Notice of Appeal which is attached to the summons. (Mr Sackar sought costs of the motion today and costs associated with the argument of the O'Keefe J appeal.) The claimant should pay the opponent's costs of the matter today. I reserve any consequential costs that might flow from the order I have made for consideration by the Court which hears that appeal. In the application for expedition I make an order expediting the hearing of the appeal between Government Insurance Office General Limited and Newcastle City Council — the proceedings in the court below were numbered 50267/94. The intent of the order is that the Court will hear the appeal before 30 September 1995 in order to enable it to hand down a decision before the end of the year. I also order that the case and the appeal between the same parties in the Commercial Division numbered 50407/93 be heard together. URJ GIO GENERAL LIMITED v NEWCASTLE CITY COUNCIL (Clarke JA) 3 Costs of the application for expedition will be costs in the appeal from Bainton J. Orders accordingly.