Forbes Shire Council v AG Australia Holdings Ltd (No 2) [2007] NSWSC 1091

Reported Decision : (2007) 14 ANZ Insurance Cases 61-748

New South Wales Supreme Court

CITATION : Forbes Shire Council v AG Australia Holdings Ltd (No 2) [2007] NSWSC 1091

HEARING DATE(S) : 10/9/07

JUDGMENT DATE : 4 October 2007

JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

DECISION : Defendant to pay plaintiff principal of $1,779,543.95 plus costs on the indemnity basis from 5 July 2005.

CATCHWORDS : INSURANCE [2]- Policies of insurance- General matters- Policy provides for payment of expenses reasonably incurred by insured, provided expenses incurred with insurer's consent- Defendant insurer repudiates policy- Plaintiff insured settles claim and seeks costs of reports prepared for settlement- Defendant refuses to pay, claiming its consent was never obtained- Defendant liable to pay reasonable costs of settlement. PROCEDURE [574]- Costs- Departing from general rule- Order for costs on the indemnity basis- Where defendant declines offer of settlement- Whether vitiated by defendant's inability to evaluate offer due to lack of information- Plaintiff's right to indemnity costs not dislodged by fact defendant's solicitors complained about sufficiency of discovery- Indemnity costs to be paid from date of plaintiff's offer of compromise.

Civil Procedure Act 2005, Sch 6 cl 10 LEGISLATION CITED : Supreme Court Rules 1970, Pt 22 (rep), Pt 52A r 22(4) (rep) Uniform Civil Procedure Rules 2005, Pt 20 r 26, Pt 42 r 14

Edwards v Insurance Office of Australia Ltd (1933) 34 SR (NSW) 88 Hadwin v Lovelace (1809) 1 Acton 126; 12 ER 48 CASES CITED : Hillier v Sheather (1995) 36 NSWLR 414 Marsland v Andjelic (No 2) (1993) 32 NSWLR 649 Newmont Yandal Operations Pty Ltd v The J Aron Corporation [2007] NSWCA 195 Shellharbour CC v Johnson (No 2) (2006) 67 NSWLR 308