Murphy & Allen v SwinbankSwinbank v Cleary [1999] NSWSC 1098

New South Wales Supreme Court CITATION : Murphy & Allen v SwinbankSwinbank v Cleary [1999] NSWSC 1098 CURRENT JURISDICTION : Equity Division, Commercial Division FILE NUMBER(S) : 50138/98, 50007/98 HEARING DATE(S) : 22.10.99 JUDGMENT DATE : 16 November 1999

PARTIES : 50138/98 Christopher Mark Swinbank & ors v Donald James Cleary & ors 50007/98 John William Murphy & ors. v Christopher Mark Swinbank & ors JUDGMENT OF : Einstein J

COUNSEL : B C McDougall QC, R W White SC, R J Powell & J A Halley (Plaintiffs) M A Pembroke SC, D L Williams (Defendants) SOLICITORS : Baker McKenzie (Plaintiffs) Ebsworth & Ebsworth (Defendants) CATCHWORDS : Insurance - Insured's obligation of utmost good faith - Practice - Costs - Calderbank letters ACTS CITED : Insurance Contracts Act 1984 s 13 Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 CASES CITED : Oshlack v Richmond River Council (1997) 152 ALR 83 Wilkinson & Ors v Feldworth Financial Services Pty Ltd [unreported, Rolfe J, Supreme Court of New South Wales, 17 December 1998] DECISION : Short minutes of order should be brought in to reflect these reasons and to record the formal change in parties.

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - COMMERCIAL LIST

EINSTEIN J

16 November 1999

50007/98 Murphy & Anor v Swinbank 50138/98 Swinbank & Ors v Cleary & Ors JUDGMENT 1 A reserved judgment in proceedings 50007 of 1998 ('the main proceedings'), was handed down on 24 September 1999. Proceedings 50138/98 ('the good faith proceedings') which were heard together with proceedings 50007/98 were only relevant should the Court find, contrary to the position of the insurers, that Cleary & Hoare were entitled to indemnity under their 1991/92 policy. As no such finding was made, the Court found it unnecessary to proceed to determine the good faith proceedings [see paragraphs 515 to 517 of the Judgment]. 2 As paragraph 517 of the Judgment makes plain, leave was granted to the parties having the benefit of the reasons for judgment to address submissions as to the need or utility in the Court, notwithstanding the findings, to proceed to determine the good faith proceedings. In addressing submissions to that matter, the Trustees submitted that the Court should determine the good faith proceedings as they were fully contested and fully argued. The Trustees' further submission is that it is necessary for the Court to determine the good faith proceedings in order to determine the appropriate order to be made with respect to costs of those proceedings. 3 The insurers on the other hand submitted that the Court need not determine the good faith proceedings which in the event were in substance defensive. As the insurers submitted, it was only a accident of history that the insurers had been the plaintiffs in relation to those proceedings. As the insurers submitted, the proceedings are properly to be regarded in terms of the final hearing as simply a further defence to the insurers' battery of defences to the main proceedings. 4 In complex commercial litigation, it is a question of judgment as to in what circumstances the Court should go further than to determine the proceedings. To my mind, the insurers having succeeded for the reasons set out in the reserved Judgment, it is clearly not strictly necessary for the good faith proceedings to be determined. I propose however to deal with the proceedings against the event that an Appeal in the main proceedings be successful.