Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Allianz Australia Insurance Ltd v BlueScope Steel Ltd [2014] NSWCA 276 Hearing dates: 16 April 2014 Decision date: 21 August 2014 Before: Basten JA at [1]; Meagher JA at [69]; Ward JA at [94] Decision: 1. Appeal allowed in part. 2. Set aside the orders of the Dust Diseases Tribunal made on 30 May 2013. 3. Remit the cross-claim to the Tribunal for the purpose of determining: (a) whether BlueScope was dispensed from compliance with condition 3 of the Policy; (b) whether, if not, BlueScope should be excused under s 18(1) of the Insurance Act 1902 (NSW) from any breach of condition 3 of the Policy; and (c) if necessary, BlueScope's claim to damages for breach of Allianz' obligation of utmost good faith in the respects alleged in par 22(b) of BlueScope's cross-claim. 4. No order as to the costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: INSURANCE - s18(1) of the Insurance Act 1902 (NSW) - whether primary judge erred in finding no prejudice for the purposes of s18(1) of the Insurance Act 1902 (NSW) - whether loss of chance to cross-examine plaintiff amounted to prejudice from late notification of the claim - whether refusal to take over conduct of proceedings and/or to indemnify dispensed insured from obligation not to make settlement without prior consultation - whether loss of opportunity to seek contribution from co-defendant to moneys paid to plaintiff to settle claim amounted to prejudice for the purposes of s18(1) of the Insurance Act 1902 (NSW) arising from failure to consult before settlement CONTRACTS - general contractual principles - construction and interpretation of contracts - whether insurer breached contract in declining to take over conduct of proceedings - whether refusal to indemnify by insurer amounted to breach of the policy allowing the insured to claim damages for settlement moneys paid without consent of the insurer APPEAL - whether trial judge misconstrued test required for s 18(1) of the Insurance Act 1902 (NSW) by taking the term "prejudice" to require "irretrievable prejudice" APPEAL - whether trial judge erred in failing to find or giving reasons for not finding that failure to seek contribution from co-defendant to settlement sum paid to plaintiff was a breach of the obligation of good faith owed by the insured to the insurer APPEAL - s 32 Dust Diseases Tribunal Act 1989 (NSW) - appeal limited to points of law - where there are not the requisite factual findings to enable determination of a question of law remittal to enable requisite findings of fact to be made Legislation Cited: Dust Diseases Tribunal Act 1989 Dust Diseases Tribunal Regulation 2007 Insurance Act 1902 Supreme Court Act 1970 Workers Compensation Act 1926 (NSW) Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 Amaca Pty Ltd v Booth [2011] HCA 53; (2011) 246 CLR 36 Amaca Pty Ltd v New South Wales [2003] HCA 44; (2003) 77 ALJR 1509 AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185; (2005) 146 FCR 447 Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524 Australian Stratacore Holdings Ltd (in liq) v Sanwa Australia Securities Ltd [1994] NSWCA 11 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2009) 74 NSWLR 481 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Booth v Amaca Pty Ltd [2010] NSWDDT 8 Bowes v Chaleyer [1923] HCA 15; 32 CLR 159 Browne v Dunn (1893) 6 R 67 HL Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; (2009) 75 NSWLR 649 Captain Boyton's World's Water Show Syndicate Ltd v Employers' Liability Assurance Corporation Ltd (1895) 11 TLR 384 CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; (2007) 235 CLR 1 CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; 187 CLR 384 Craine v The Colonial Mutual Fire Insurance Company Ltd [1920] HCA 64; 28 CLR 305 CSR Ltd v Amaca Pty Ltd [2009] NSWCA 338 Dasreef v Hawchar [2011] HCA 21; (2011) 243 CLR 588 Distillers Co Bio-Chemicals (Aust) Pty Ltd v Ajax Insurance Co Ltd [1974] HCA 3; (1974) 130 CLR 1 Downes v Amaca Pty Ltd [2010] NSWCA 76; (2010) 78 NSWLR 451 DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423 Eaton v Carrier Air Conditioning Pty Ltd (2004) 1 DDCR 716 Edwards v Insurance Office of Australia Ltd (1933) 34 SR (NSW) 88 Fercometal v Mediterranean Shipping Co [1989] 1 AC 788 Foran v Wight [1989] HCA 51; 168 CLR 385 General Omnibus Co Ltd v London General Insurance Co Ltd [1936] IR 596 Groom v Crocker [1939] 1 KB 194 Hotham v East India Co (1787) 1 TR 638; 99 ER 1295 ICM Agriculture Pty Ltd v Perry [2002] NSWCA 257 James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78; (1998) 196 CLR 53 King v Caltex Petroleum Pty Ltd [2013] NSWDDT 4 Kodak (Australasia) Pty Ltd v Retail Traders Association [1942] SR (NSW) 231 Kweifio-Okai v RMIT University [1999] FCA 1686, (1999) 47 AILR 4-223 McPherson and Davies Shopfitters Pty Ltd v Mercantile Mutual Insurance Ltd (Supreme Court (NSW), Wood J, 26 June 1986, unrep) Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 North Broken Hill Ltd v Tumes [1999] NSWCA 309; 18 NSWCCR 412 Park v Brothers [2005] HCA 73; 80 ALJR 317 Patrick Operations Pty Ltd v Comcare (2006) 68 NSWLR 131 Penrith City Council v Government Insurance Office of New South Wales (1991) 24 NSWLR 564 Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235 Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363 Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Sargent v ASL Developments Ltd [1974] HCA 40; 131 CLR 634 Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603 Toronto Railway Co v National British and Irish Millers Insurance Company Ltd (1914) 111 LT 555 Vetter v Lake Macquarie City Council [2001] HCA 12: (2001) 202 CLR 439 Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 Texts Cited: Clarke, The Law of Insurance Contracts, (6th ed 2009, Informa) Category: Principal judgment Parties: Allianz Australia Insurance Ltd (Appellant) BlueScope Steel Ltd (Respondent) Representation: Counsel: B W Walker SC with D T Miller SC (Appellant) D F Jackson AM QC with G J McCarthy SC (Respondent) Solicitors: Rankin Ellison Lawyers (Appellant) KJK Legal (Respondent) File Number(s): CA 2013/00107578 Publication restriction: Nil Decision under appeal Citation: BlueScope Steel Ltd v Allianz Australia Ltd [2013] NSWDDT 3 Date of Decision: 2013-03-15 00:00:00 Before: Judge MJ Finnane QC File Number(s): DDT 6166 of 2006 HEADNOTE [This Headnote is not to be read as part of the judgment] This is an appeal from a decision of the Dust Diseases Tribunal in a dispute as to the liability of Allianz Australia Insurance Ltd to indemnify BlueScope Steel Ltd for the costs incurred by the latter in settlement of a claim brought against it by a former employee, the late Mr Jackson. Mr Jackson had developed mesothelioma as a result of exposure to asbestos. He claimed compensation from both BlueScope and from BHP Billiton Ltd. BlueScope was his former employer. The claim against BHP related to a period when he had allegedly been seconded to BHP during his employment with BlueScope. Following the corporate demerger of BHP Steel Pty Ltd, BHP had indemnified BlueScope for workers' compensation claims at the relevant premises, subject to BlueScope using reasonable endeavours to pursue any applicable insurance. BlueScope and BHP were initially represented by the same solicitors and counsel, who attended a bedside hearing at the Tribunal shortly before Mr Jackson died. BlueScope subsequently notified Allianz of the insurance claim and requested that Allianz take over conduct of the proceedings and confirm that it would indemnify BlueScope. The insurance policy contained two relevant conditions: condition 2 - that the insured notify the insurer of any claims as soon as practicable - and condition 3 - that the insured, among other things, not enter into any settlement without written authority of the insurer. Allianz declined to take over the conduct of the proceedings. After some time had elapsed, it informed BlueScope that it would not indemnify BlueScope under the policy due to the breach of the policy by late notification of the claim. Shortly before the hearing of Mr Jackson's claim, BlueScope sought instructions as to Allianz' willingness to communicate and discuss with it settlement negotiations that it was anticipated would take place at the hearing. Allianz did not respond to that request. At the hearing, BlueScope agreed to settle the claim by way of payment to Mr Jackson's widow. It was not disputed by Allianz that the amount of the settlement was reasonable. Allianz' complaint, rather, was that it had lost the opportunity to seek contribution from BHP towards that settlement amount. BHP settled the claim against it for a judgment in its favour with each party to bear its own costs. The effect of this judgment was to preclude any later claim for contribution by Allianz standing in the shoes of BlueScope. BlueScope then cross-claimed against Allianz under its statutory workers' compensation policy for the amount it had paid in settlement of the claim. Allianz denied liability on the basis that BlueScope had breached conditions 2 and 3 of the policy and its duty of good faith to the insurer. BlueScope maintained that it had not breached the policy but that, if it had, any breach should be excused under s 18(1) of the Insurance Act 1902 (NSW) because Allianz had suffered no prejudice by any breach. The primary judge held that Allianz was liable to BlueScope. His Honour found that BlueScope had breached the policy by late notification of the claim but that this should be excused under s 18 of the Insurance Act because no prejudice was suffered by Allianz. His Honour considered that the settlement of the proceedings without the consent of Allianz was not in breach of the policy because BlueScope was entitled to act as a prudent uninsured, as Allianz had refused to take over the defence of the claim and had refused to indemnify BlueScope. In the appeal proceedings, Allianz submitted that his Honour had misconstrued the test in s 18(1) of the Insurance Act as requiring "irretrievable prejudice" rather than "prejudice" and that his Honour had erred in finding that there had been no actual or non-theoretical prejudice suffered by Allianz due to the late notification of the claim. The prejudice identified was the loss by Allianz of the opportunity of cross-examining Mr Jackson. Allianz pointed to the fact that BHP and BlueScope had shared legal representation when their interests were in conflict. Allianz further submitted that the primary judge erred in determining that it was obliged to assume the conduct of the defence of the claim when notified by BlueScope and to confirm that it would indemnify BlueScope before any liability to indemnify had arisen. Further, Allianz argued that this conduct did not dispense BlueScope from its obligation under condition 3 of the policy not to make any payment in settlement of the proceedings without its consent; and that his Honour failed to deal with, or give adequate reasons for, the issue whether breach of condition 3 should be excused under s 18 of the Insurance Act. Held: (1) Basten JA at [56] & [59], Ward JA at [216] & [326] (Meagher JA agreeing at [73]): the primary Judge did not misconstrue the test under s 18 of the Insurance Act to require "irretrievable prejudice" rather than "prejudice". (2) Basten JA at [67], Meagher JA at [73], Ward JA at [234], [252] & [326]: there was no error in law in his Honour's conclusion that, although BlueScope had breached condition 2, no prejudice was suffered by Allianz by reason of that breach. (Basten at [65]: to the extent that the submission asserted that this had been wrongly decided, this does not demonstrate error of law and must be rejected) (3) Basten JA at [19] & [30], Meagher at [76], Ward JA at [263]: the primary judge erred in law in finding that Allianz had a legal obligation to take over the conduct of defence of the claim once notified by BlueScope. (4) Basten JA at [53], Meagher JA at [74] & [92], Ward JA at [299], [314], [326] & [334]: the primary judge had erred in concluding that BlueScope was dispensed from compliance with condition 3, not having made the necessary findings to support such a conclusion. Specifically, his Honour did not address whether, by its conduct, Allianz represented that there was no point in BlueScope seeking its written authority to the settlement of the proceedings (because Allianz would not give that authority in circumstances where it had denied liability) and whether BlueScope relied on that representation. This question should be remitted to the Tribunal for consideration of the appropriate findings on the evidence. (5) Meagher at [78], Ward JA at [299]: the primary judge had erred in finding that Allianz was in breach of the contract to indemnify, or had repudiated that contract, by declining to indemnify BlueScope. Allianz was not obliged to confirm its agreement to indemnify BlueScope until liability to indemnify was established. (6) Basten JA at [23], Ward JA at [305], [314] & [334] (Meagher JA agreeing at [93]): the question whether any breach of condition 3 should be excused under s 18 of the Insurance Act was not expressly dealt with by his Honour and must be remitted. (7) (obiter) Ward JA at [313]: to the extent that his Honour implicitly held that no prejudice was occasioned by breach of condition 3 and that any such breach should be excused, his Honour did not provide reasons for these conclusions. (8) Ward JA at [315], [326] & [334] (Meagher JA agreeing at [93]): there was no express consideration by his Honour as to the allegation by BlueScope of breach of good faith by Allianz. (9) Ward JA at [325] (Basten and Meagher JJA agreeing at [68] and [93], respectively): whether Allianz breached its obligation of utmost good faith should be remitted to the Tribunal for decision. (10) Basten JA at [40]: Allianz was required to act in good faith and deal with any request it received from BlueScope. As the late notification of the claim did not justify a refusal to indemnify, Allianz would have been in breach of its obligations under the policy if it had failed to consider in a timely manner and bearing in mind the interests of all parties, any request from BlueScope regarding conduct or settlement of the matter. Judgment 1BASTEN JA: On or shortly before 18 July 2006, Youden Richard Jackson died from mesothelioma. On 5 July 2006, less than two weeks before his death, Mr Jackson commenced proceedings in the Dust Diseases Tribunal against BlueScope Steel Ltd (the respondent) and BHP Billiton Ltd. Between 1957 and 1965 he had been employed for a number of periods by John Lysaght (Australia) Ltd, the predecessor to BlueScope. During part of that time he worked at the Newcastle steel works operated by the Broken Hill Proprietary Co Ltd (BHP), the predecessor of BHP Billiton. During the period when Mr Jackson said he was exposed to airborne asbestos, John Lysaght was independent of BHP. In 1979 it was acquired by BHP Steel, but was again separated by a demerger in 2003. 2Throughout the period covered by Mr Jackson's claim, John Lysaght held statutory workers compensation insurance policies with MMI Insurance, a predecessor to Allianz Australia Insurance Ltd (the appellant). Although the policies were several and renewed annually, the terms were prescribed under the Workers' Compensation Act 1926 (NSW), and did not vary during the relevant period: accordingly, it is convenient to refer to them as "the policy". At all material times, BHP was a self-insurer. 3On 21 August 2007 BlueScope settled Mr Jackson's claim by making a payment, without admission of liability, to his estate. BHP was released from liability by a judgment in its favour. 4BlueScope sought to recover the amount of the settlement pursuant to the indemnity under the policy. Allianz declined to accept liability and, on 25 March 2011, BlueScope commenced proceedings against Allianz by cross-claim in Mr Jackson's proceedings in the Dust Diseases Tribunal. (In what sense those proceedings were still on foot is unclear, but nothing turned on this procedural issue.) 5There was one further aspect of the corporate history which bore upon these proceedings. That concerned the demerger by which BlueScope achieved independence from BHP Billiton. The demerger was a complex process, the only aspect relevant to the present proceedings being a "Workers Compensation Deed of Indemnity" entered into between BHP Billiton and BHP Steel (now BlueScope) dated 10 May 2002. One effect of the deed was that BHP Billiton indemnified BlueScope against claims such as Mr Jackson's, subject to BlueScope's obligation to use reasonable endeavours to pursue any insurance available to it in respect of the claim against it. To the extent that a claim was made against both BlueScope and BHP Billiton, liability was to be apportioned. In the event of a shared claim (as Mr Jackson's claim was) Allianz had a financial interest in maximising BHP's responsibility, whereas both BHP and BlueScope, pursuant to the deed, had an interest in maximising BlueScope's liability, to the extent that it could recover from its insurer, Allianz. Issues at trial 6In order to understand the issues raised on the appeal, it is necessary to have regard to the issues litigated in the Tribunal, the findings made by the trial judge and the nature of an appeal to this Court. 7The primary matters pleaded by BlueScope in its cross-claim were the existence of the relevant insurance policies, and the facts said to give rise to liability for indemnity under the policies. Paragraph 22 of the cross-claim was in the following terms: "22 Further: (a) each of the Policies was a contract of the utmost good faith; (b) Allianz breached its obligation of utmost good faith in failing, upon notification of the Jackson claim to it, to consider in good faith and in with proper expedition and reasonably whether: (i) to grant Bluescope indemnity against the claim; and/or (ii) to take over the conduct of the claim; and/or (iii) to consent (if, contrary to paragraph 21(d) above, consent had not already been given) to Bluescope's incurring reasonable costs in defending the claim; (c) the expenses incurred by Bluescope in defending and settling the claim resulted from one or more of those breaches and/or from steps reasonably taken by Bluescope to mitigate the losses resulting from one or more of those breaches." 8Allianz' defence denied that it owed a duty of the utmost good faith to BlueScope and denied each of the other allegations in subparagraphs 22(b) and (c): Defence, pars 7 and 8. Allianz admitted that it had "declined to exercise its right to take over the conduct of the proceedings for the cross-claimant but [said] that the conduct of the cross-claimant had prejudiced it as to the defence of the claim": par 9. 9By way of further defence, Allianz alleged breach of condition 2, in that BlueScope did not give notice to Allianz of Mr Jackson's claim as soon as practicable after it came to its knowledge: par 10(b). It also alleged that, in breach of a contract of the utmost good faith, BlueScope acted contrary to the interests of Allianz because it was represented by solicitors who also acted for another defendant whose interests were inimical to the interests of Allianz: par 10(d). Further Allianz alleged at par 10(c): "(c) in breach of condition 3 of the policy the cross claimant: (i) incurred the expense of litigation without the written authority of the insurer; and (ii) made a payment, settlement or admission of liability in respect of the claim without the written authority of the insurer." 10In its reply, BlueScope: (a) admitted that it had not notified Allianz prior to 10 July 2006, but denied that its failure to do so was a breach of condition 2; (b) admitted that it had incurred litigation expenses and settled the proceedings without the written authority of Allianz, but said that it acted as a "prudent uninsured" with the authority of Allianz; (c) denied that its conduct in retaining solicitors acting for BHP was a breach of contract; (d) said that it had advised Allianz of its retention of solicitors on 14 July 2006; (e) said that Allianz thereupon was obliged to consider in good faith and as quickly as reasonably practicable, whether to grant indemnity and whether to authorise the incurring of legal expenses or to assume the conduct of the defence itself; (f) said that Allianz' failure to take those steps was a breach of its obligations under the policy and excused BlueScope from further compliance with the requirements to act only with written authority, and (g) to the extent that there was a breach of condition 2, condition 3 or the obligation to act in the utmost good faith, BlueScope relied upon s 18 of the Insurance Act 1902 (NSW) and sought an order that any such breach be excused. 11In particular, in response to the alleged breach of condition 3, BlueScope stated: "4.1.4 On 20 July 2006 the Cross-Defendant denied indemnity, and thereafter maintained its denial of indemnity, and thereby breached its obligations under the policy: 4.1.5 The Cross-Defendant's denial of indemnity was also an intimation that the Cross-Claimant need not thereafter comply with the obligations pleaded in sub-paragraphs 10(c) and 10(d); and 4.1.6 By virtue of the Cross-Defendant's conduct, the Cross-Claimant was thereafter discharged from the obligations pleaded in sub-paragraphs 10(c) and 10(d). Judgment of primary judge 12On 15 March 2013, the Tribunal, constituted by Finnane DCJ, gave judgment for BlueScope for the amounts claimed and interest. 13After a careful consideration of the evidence, the trial judge set out a number of findings of fact at [88]. Some of those findings will be referred to below; on one view, the findings made were not sufficient to dispose of the issues raised by the parties. 14With respect to the first limb of Allianz' defence, the judge accepted that there had been a failure by the solicitors for BlueScope to give notice to Allianz of Mr Jackson's claim as soon as practicable after it came to the knowledge of BlueScope, in breach of condition 2 of the standard form statutory policy: at [98]. 15Secondly, the judge held that Allianz had failed to establish any actual prejudice from the late failure to notify (at [107]), with the result that the breach was to be excused, pursuant to s 18 of the Insurance Act: at [113], although no order to that effect appeared in the judgment given by the Tribunal. The result of the findings with respect to condition 2 was that "Allianz declined to take over proceedings brought by Mr Jackson against BlueScope Steel, for reasons that lacked substance. ... From that point onwards, BlueScope was entitled to act as a prudent uninsured": at [107]. 16The trial judge noted that "[o]n 6 July 2007 Allianz declined indemnity": at [108]. That step was relied upon as a basis for excusing BlueScope from its continuing obligation to obtain written authority from Allianz with respect to further steps in the litigation, including acceptance of a proposed settlement. As to the claim that settlement without written authority was a breach of the policy, the judge accepted that Allianz "had no entitlement to be consulted since it declined indemnity without any reason": at [109]. The findings continued: "[111] In my opinion, that breach [late notification of the claim], in the circumstances, was not sufficient to entitle Allianz to decline to take over the proceedings, much less to decline indemnity. [112] In my opinion, Allianz was in breach of its contract to indemnify and its breach entitled BlueScope to act as a prudent uninsured and to settle the claim of Mr Jackson." Issues on appeal 17The appeal to this Court, pursuant to s 32 of the Dust Diseases Tribunal Act 1989 (NSW) is limited, relevantly to the present case, to the circumstance where a party is "dissatisfied with a decision of the Tribunal in point of law". (A ground relating to the rejection of evidence was not pressed on the appeal.) 18By ground 1, Allianz challenged the finding of lack of prejudice for the purposes of s 18 of the Insurance Act, in relation to the breach of condition 2 (late notification of claim). Three particulars were identified in that regard: "i. misconstruing in section 18(1) of the Act in taking the term 'prejudice' therein to mean 'irretrievable prejudice' - judgment at [102]; ii. wrongly deciding that the statutory requirement in s 18(1) of the Act, of there being no prejudice occasioned by reason of the breaches, was satisfied on the evidence; iii. (impliedly) deciding that no evidence of actual (or, non-theoretical - Judgment at [107]) prejudice had been adduced by the Appellant." 19Ground 2 covered a number of separate issues. First, it challenged the conclusion that Allianz was obliged under the policy to take over the defence of the proceedings on 20 July 2006, when it was notified of the claim. For reasons which will be noted shortly, Allianz had no legal obligation to take over the conduct of the claim once notified. However, as the pleadings recognised, that did not necessarily constitute a refusal to indemnify and, as BlueScope recognised in its pleading in reply, it could maintain its claim to be indemnified so long as it acted as a prudent uninsured: Reply, par 2.1. 20The notice of appeal identified either a finding or an implied finding that the letter of 6 July 2007, by which Allianz declined indemnity, constituted "a repudiation of the Policy by the Appellant with the consequence that the Respondent was thereafter free to enter judgment in favour of the second defendant (BHP Billiton) without giving prior notice to the Appellant and contrary to condition 3 of the Policy": ground 2(b). Significantly, the challenge did not extend to the other terms of the settlement with Mr Jackson. 21The third limb of ground 2 needs to be set out verbatim: "2. The trial judge further erred in point of law in: ... c. failing to exercise jurisdiction by finding, or impliedly finding, but without providing reasons therefore [sic], that in consenting to the entry of judgment in favour of the second defendant [BHP] without prior notice to the Appellant the Respondent breached its obligation of utmost good faith to the Appellant." 22This ground appeared to constitute a complaint that BlueScope had breached its obligation of utmost good faith to Allianz, and the judge had found as much, but without giving reasons for the finding. If, as was the case, the judge made no such finding, the ground went nowhere. 23In its written submissions, Allianz raised a completely different line of argument, stating that this ground of appeal "focuses on condition 3 of the policy": submissions, par 56. Self-evidently, the ground set out above made no such complaint. However, following the new line of argument, the written submissions noted that BlueScope had admitted in its pleadings that it did not seek prior written authority. In that circumstance, the appellant's submissions proceeded, the judge should have found that a breach of condition 3 was made out and then dealt with BlueScope's reliance on lack of prejudice for an order that its breach be excused. As Allianz correctly noted, the judge did not address the operation of s 18 with respect to the breach of condition 3. 24So far as it went, that submission should be accepted. However, ground 2(c) was probably intended to address the further pleading in BlueScope's reply that, by its letter of 20 July 2006, Allianz had denied indemnity and thereby breached its obligations to act in good faith and as quickly as reasonably practicable, under the policy. The trial judge appears to have upheld that defence on two bases. First, by failing to take over the defence of the proceedings on 18 and 19 July 2006, it had acted without justification. It was that position which Allianz continued to uphold thereafter, but not with any better justification. Secondly, he held that the letter of 6 July 2007 declining indemnity, being based upon the earlier (unjustifiable) claim of prejudice, allowed BlueScope to proceed without written authority. On the other hand, the complaint of lack of reasons (which may really have been a lack of a necessary finding) did not explain the basis upon which BlueScope was excused from compliance with condition 3. On one view, there may have been an implied finding of waiver with respect to condition 3; on another view, there was an implied finding of repudiation of the contract. 25BlueScope implicitly accepted the absence of critical findings, because it sought by a notice of contention to support the judgment of the Tribunal on grounds other than those relied on by the Tribunal, which were as follows (omitting grounds which were not pressed): "2 On the true construction of the Policy, [condition] 2 was not a condition but rather a warranty or an intermediate term any breach of which was not sufficient to justify termination by Allianz. 3 Allianz's conduct in confirming its denial of indemnity on 6 July 2007 was such as to discharge Bluescope from compliance with any obligation to obtain Allianz's consent under [condition] 3 in accordance with the principle in Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1953) 90 CLR 235. ... 5 Any breach of [condition] 3 was such that it ought to be excused under the Insurance Act 1902, s 18. 6 Allianz's conduct from 20 July 2006 onwards in declining indemnity without any substantial reason (see at [107]) was such as to amount to a breach of its obligations as insurer under the Policy, and thereby entitle Bluescope to recover its loss on the claim as damages for such breach." 26These contentions accept that there was non-compliance with condition 3, that there was no order excusing BlueScope pursuant to s 18 of the Insurance Act, that there was no finding of waiver of compliance with condition 3 and that there was no express finding as to whether Allianz' conduct from 20 July 2006 constituted, in effect, a repudiation of the policy, entitling BlueScope to recover damages for breach of contract. If any of these findings constituted a necessary step to support the judgment below, either the matter required remittal to the Tribunal, or (if it has power) this Court must make the finding. 27It is convenient to deal first with the challenge to the finding that Allianz repudiated the contract of insurance. Accepting that there was no repudiation, the next question as to breach is whether BlueScope was in breach of condition 3, or whether Allianz had waived compliance. Thirdly, it will be convenient, after addressing those questions, to consider Allianz' appeal with respect to the finding that it suffered no prejudice from the late notification and that BlueScope's breach of condition 2 should be excused. Repudiation of contract 28The primary relief sought by BlueScope in the cross-claim was a judgment based on the liability of Allianz under the insurance policies. In the alternative, it sought damages for breach of contract. BlueScope neither pleaded, nor expressly sought relief based on, repudiation by Allianz of its obligations under the policy. The reference in paragraph 2 in the notice of contention to "termination" by Allianz, following late notification of the claim, was therefore inapt. The position Allianz took in July 2006 and subsequently was that late notification was a breach by BlueScope which justified Allianz both in declining to exercise its right to take over the defence of the claim and its refusal to indemnify under the policy. 29In relation to a policy, the language of which will be considered further below, but is relevantly not distinguishable from the present policy, Stephen J stated in Distillers Co Bio-Chemicals (Australia) Pty Ltd v Ajax Insurance Co Ltd [1974] HCA 3; 130 CLR 1 at 24 stated: "The present policy, like other policies which have come before English courts, allows the insurer to stand by, neither accepting nor declining liability; it also casts upon him no obligation to defend claims made against the insured." 30The application of this conclusion to the present case should be accepted. Because Allianz had no obligation to take over the defence of the claim, it needed no justification (such as reliance upon late notification by BlueScope) to justify its position in that regard. Waiver of condition 3 31As Stephen J noted in Distillers, a refusal by the insurer to take over conduct of the proceedings may leave the insured with a dilemma. In the present case, the dilemma may be summarised in the following terms: if BlueScope were to accept a reasonable offer of settlement, it would do so without the written authority of Allianz, in breach of condition 3. If BlueScope defended the case, it would incur expenses of litigation, again without the written authority of Allianz, in breach of condition 3, and might suffer a greater adverse judgment. 32There are, however, circumstances in which a breach of condition 3 will not result. First, even though a refusal to take over the defence of the claim does not constitute a repudiation by the insurer, where there is, on other grounds, a wrongful refusal to indemnify that may constitute a "waiver by conduct" of the requirements of condition 3: General Omnibus Co Ltd v London General Insurance Co Ltd [1936] IR 596. To the extent that that case depended upon such a wrongful repudiation, the correctness of the conclusion was not doubted in Distillers: at 9-10 (Menzies J); 13 (Gibbs J); 27-28 (Stephen J). The question in the present case is whether, absent wrongful repudiation, either by its action in relying on the late notification (later excused under s 18) or by its conduct in July 2007, Allianz waived any obligation of BlueScope to obtain written authority before either incurring expense in defending, or in settling, the proceedings: see Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; 90 CLR 235 at 252-253 (Kitto J) using the language of "dispensing with" fulfilment of a condition. 33The appeal in Distillers concerned the correctness of two declarations made by Helsham J in the Equity Division. Declaration 2(a) reflected the terms of condition 3 of the policy in the present case. In considering the language of the declaration, Stephen J remarked that "it is important that the making of this second declaration should not be thought to confer any arbitrary power of refusal of consent upon the insurer": at 29. After referring to passages in the judgments of Scott LJ and MacKinnon LJ in Groom v Crocker [1939] 1 KB 194 at 223 and 226 respectively, referring to the implied boundaries and limitations of the insurer's power with respect to the control of proceedings, Stephen J stated at 31: "This duty of good faith and fair dealing must, I think, not only control the actions of an insurer who has taken over its insured's defence but will apply equally to the insurer's exercise of its power of granting or withholding consent to the making of admissions etc. even if it elects not to take over the defence." 34Noting that no issue had yet arisen as to refusal of consent to a particular settlement, Stephen J continued at 31-32: "It would I think be improper for the insurer to refuse its consent to an otherwise proper and reasonable settlement if it did so not because there were reasonable prospects of a defence to claims succeeding but rather because, as remote as those prospects might appear, they seemed to it preferable to a settlement involving it in payment up to the full amount of its limit of liability. ... On the other hand the insurer might quite properly refuse consent to a settlement which was attractive to the insured not because of an objective evaluation of the prospects of a successful defence but rather because it would avoid the adverse publicity of a trial or would enable the insured to share in, and require its insurer to share in, a liability which properly should be wholly borne by its parent company, the supplier of the allegedly harmful drug." 35This last example has some relevance in the present case, in the sense that Allianz could properly object to a settlement which transferred liability to it, to the benefit of BlueScope's indemnifier, BHP. In other observations having immediate application in the present case, Stephen J noted at 33: "One claim, relating to the child, Laura Anne Thompson, has been the subject of a specific denial of liability upon the ground of late notification of the claim but the summons in these proceedings does not seek any declaration in respect of that claim. Were it ultimately to be established that the insurer was not entitled to deny liability in respect of that claim and was in breach of contract in doing so I would not necessarily regard the terms of the present declaration as applicable to her case." 36The effect of the last observation was that a declaration stating the effect of the condition requiring written authority of the insurer before making any admission or settling proceedings, did not apply in its terms to such a case. The issue foreseen by Stephen J arises for determination in this case. 37The relevant principles with respect to wavier of a contractual condition are more than adequately discussed by Meagher JA and Ward JA: I gratefully adopt their explanations. It is sufficient for present purposes to note the statement of Dixon CJ in the case relied upon by the respondent, Peter Turnbull v Mundus Trading, noted at [32] above. Dixon CJ stated at pp 246-247: "But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention." 38In applying that principle, it is necessary to have regard to much of the same material as that relied upon by the trial judge in considering whether Allianz repudiated the contract. The purpose for reviewing the material is, however, a different one and it will be necessary to consider whether the findings made by the trial judge reflected the appropriate analysis or, if they did not, whether only one conclusion was reasonably open on the accepted facts. If neither of those conclusions is available, the matter will need to be remitted to the Tribunal. 39The arguments commenced by reference to the initial failure to notify. There was no dispute that the failure to notify as soon as practicable constituted a "failure by the insured to observe or perform a term or condition of the contract of insurance", for the purposes of s 18(1). The Tribunal held that the failure should be excused. That order having been made, BlueScope argued that "the rights and liabilities of all persons in respect of the contract of insurance concerned shall be determined as if the failure the subject of the order had not occurred": s 18(2). Thus, if the order stands, Allianz was retrospectively precluded from relying upon the breach of condition 2 as a breach of contract by BlueScope. 40Allianz was entitled to decline to take over the conduct of the proceedings; however, as held in Distillers, the obligation of BlueScope to obtain written authority pursuant to condition 3 applied in those circumstances. Again in accordance with Distillers, Allianz was required to act in good faith and deal fairly with any request it received. Because the late notification did not justify a refusal to indemnify, Allianz would have been in breach of its obligations under the policy if it had failed to consider in a timely manner and bearing in mind the interests of all parties, any request from BlueScope with respect to the manner in which the proceedings were conducted, or settled. 41The trial judge did not deal with the legal issues or make findings by reference to "waiver". Rather he dealt with the case as pleaded primarily on the basis of obligations imposed on Allianz "by virtue of the contract being a contract uberrimae fidei": reply, par 3.6. Those obligations were identified in terms of the need to "consider in good faith, and as quickly as reasonably practicable, whether to grant indemnity and whether to authorise the incurring of legal expenses": reply, par 4.1.2. However, BlueScope also pleaded that the denial of indemnity was "an intimation that [BlueScope] need not thereafter comply with the obligations pleaded" by Allianz, including condition 3: reply, par 4.1.5. That pleading involved different language from that adopted by Stephen J in Distillers, but the factual considerations were the same and the legal formulations did not impose any higher duty on Allianz than those identified above. 42The material on which the Tribunal relied to find breach by Allianz, excusing BlueScope from compliance with condition 3, must be addressed. It involved a flow of letters between Piper Alderman, and later Sparke Helmore, (solicitors for BlueScope and BHP) and Ellison Tillyard Callanan (solicitors for Allianz). On 19 July 2006 Piper Alderman noted the prior history of the matter and advised that "BlueScope now seeks indemnity pursuant to the policy in relation to" Mr Jackson's claim. They asked for advice as to whether Allianz would indemnify BlueScope; whether they would file a notice of appearance on behalf of BlueScope and whether they would attend a hearing fixed for 20 July 2006 on behalf of BlueScope. Ellison Tillyard replied stating that they did not "yet have instructions in respect to indemnity of [BlueScope] as very late notification of this matter has precluded retrieval of any relevant documentation." 43There was no further response from Ellison Tillyard before Piper Alderman were replaced by Sparke Helmore as solicitors for BlueScope. (They continued to act for BHP.) On 23 November 2006 Sparke Helmore wrote to Ellison Tillyard seeking advice as to whether Allianz agreed to indemnify BlueScope and enclosing an amended statement of claim. The letter noted a directions hearing had been listed for 8 November 2006 and a further directions hearing for 30 January 2007 to fix a date for hearing. 44On 30 November 2006 Sparke Helmore wrote again, noting that no response had been received since the letter to Piper Alderman of 19 July 2006. On 25 January 2007 BlueScope wrote directly to Allianz seeking confirmation that Allianz would assume conduct of the defence of the claim. 45On 27 April 2007 Sparke Helmore wrote again to Ellison Tillyard noting that the matter had been listed for hearing on 20, 21 and 23 August 2007 and referring to unanswered correspondence of 15 August, 23 November and 30 November 2006 and the January 2007 correspondence from BlueScope to Allianz. A reply was sought within 14 days failing which there was a threat that BlueScope would issue proceedings against Allianz. 46On 9 May 2007 Ellison Tillyard responded, describing a claim made by counsel for Allianz in court on 20 July 2006 alleging that the conduct of BlueScope and previous solicitors had "irretrievably prejudiced" Allianz' defence of the claim. The letter concluded: "For the record, our client has instructed us, as advised on 20 July 2006 that they shall not take over the running of the case nor indemnify your client." 47On 29 May 2007 Sparke Helmore replied, casting doubt on the purported summary of what senior counsel had said in the Tribunal. (It is not necessary to stay to consider whether the summary accurately reflected what had in fact been said in the Tribunal on 20 July.) The letter also noted the failure to respond to the correspondence referred to above and noted the suggestion that BlueScope "was in breach of various provisions of its statutory policy", seeking advice as to which provisions were said to have been breached and the manner in which the breach was said to have occurred. 48On 6 July 2007 Ellison Tillyard responded, repeating the statement that at the hearing on 20 July 2006 senior counsel had indicated that Allianz "was now irretrievably prejudiced in that it could no longer obtain evidence from the plaintiff that would dictate whether it should indemnify or not." The breach of the policy conditions was identified as a failure to notify the insurer of the claim. It referred to BlueScope's "breach of the policy conditions, leading to the prejudice to the insurer by a claim at the late stage at which it was made." 49Whether or not the statements in the Ellison Tillyard letter as to what happened at the hearing on 20 July 2006 were correct or not, the effect of the correspondence was unequivocal: Allianz was disclaiming any liability to indemnify under the policy because of an alleged breach of condition 2. 50It is no doubt true that a refusal by an insurer to take over the conduct of a claim against an insured places the insured in a dilemma. However, there is also a dilemma for the insurer which receives what it believes to be late notification of a claim as a result of which it may have suffered prejudice. If it does not take the point promptly, it may be thought to have waived reliance on a possible breach by the insured; if it does take the point, but insists on the insured's performance of the contract, again it may be taken to have waived reliance on the earlier breach. In the present case, Allianz adopted the position, at least in 2007, that there had been late notification which justified it in refusing to indemnify BlueScope. It implicitly refused to give written authority with respect to any aspect of the proceedings. 51Despite the clear statement in the letter of 9 May 2007 that Allianz would not indemnify BlueScope, Sparke Helmore wrote to Ellison Tillyard again on 17 August 2007 in the following terms: "This matter is listed for further hearing in Dust Disease Tribunal before his Honour Judge Kearns on 20, 21, 22 and 23 August 2007. We note your client has denied indemnity to our client alleging various breaches of the conditions of the policy of insurance. We are presently seeking instructions in respect of issuing proceedings by way of cross claim against your client. We anticipate on the hearing date there may be settlement discussions between the Plaintiff and the Defendants. Whilst we appreciate your client's stated position on the indemnity question we feel it would be of mutual benefit to both our clients to keep open the option of settlement. Accordingly, we would like to be in a position whereby we can communicate and discuss with you any settlement negotiations. We would appreciate it if you could take your client's instructions in relation to this and indicate its position." 52There being no response to that letter, an inference available to be drawn by BlueScope was that Allianz wished to have no part in any settlement negotiations and that it would be useless for BlueScope to continue to seek prior approval. If that were the proper inference, the settlement agreed by BlueScope without admission of liability, including a judgment in favour of BHP, would not constitute a breach by BlueScope of condition 3. 53That the findings of fact made by the Tribunal did not extend to the issue of waiver was reflected in ground 3 of BlueScope's notice of contention. Given that the appeal to this court is limited to questions of law, the absence of essential findings of fact prevent this court disposing of the matter. Accordingly the matter should be remitted to the Tribunal to determine whether: (a) the conduct of Allianz unmistakeably intimated to BlueScope that it would be pointless for it to seek approval prior to negotiating a settlement with the claimant; (b) BlueScope relied upon that intimation in proceeding to settle the claim, and (c) if both of (a) and (b) are not satisfied, breach of condition 3 should nevertheless be excused pursuant to s 18 of the Insurance Act. Breach of condition 2 - whether prejudice from late notification 54The remaining question is whether the Tribunal erred in law in finding that there was no prejudice to Allianz resulting from the late notification of the claim. If it did not, ground 1, challenging the order under s 18 with respect to the breach of condition 2, must fail. 55In its original notice of contention, BlueScope had challenged the finding that it was in breach of condition 2 by failing to notify Allianz of Mr Jackson's claim prior to 12 July 2006. That contention was not pressed on the appeal. The only question, therefore, with respect to the late notification, was whether there was error of law on the part of the Tribunal in ordering that it be excused, pursuant to s 18 of the Insurance Act. The relevant ground of appeal involved two limbs. First, it was said that the Tribunal misconstrued s 18(1) by referring to "irretrievable prejudice", rather than prejudice, thereby setting a higher hurdle than did the statute. Leaving aside the question of which party bore the burden of proof in a legal sense, there is little doubt that Allianz at least bore an evidential burden. It would have been sufficient, it submitted, that it provide evidence of any level of prejudice; it did not have to demonstrate irretrievable prejudice. 56That submission must fail for two reasons. The first is that, as demonstrated by the analysis of the letters set out above, the phrase "irretrievable prejudice" was language derived from Allianz' correspondence. Thus, in several passages the trial judge referred to "irretrievably prejudiced", the quotation marks being his. When making findings of fact, at [63] and [88](10), the judge used the phrase "irretrievably prejudiced", referring to the claims made by counsel for Allianz at the hearing on 20 July 2006. That was not what counsel had said (set out by the trial judge at [57]) but it was the language used by Allianz' solicitors in identifying what had been said. The phrase was used again at [101], again in quotation marks, and again by reference to the statements by Allianz' solicitors. When, at [102], the trial judge held that Allianz did not suffer any "irretrievable prejudice", he again used the phrase in quotation marks, thus indicating that he was referring to the claim set out in the previous paragraph. Similarly, at [110], he noted that Allianz had declined to take over the proceedings and then, in 2007, "declined indemnity substantially relying on the claim that it was 'irretrievably prejudiced'". None of this demonstrated that the trial judge had misapprehended the statutory test. 57In identifying the legal issues, at [88]-[94], the trial judge merely referred, as the final issue, to s 18 of the Insurance Act. After considering the claims and counter-claims, the judge concluded at [107]: "The position then, in my opinion, is that Allianz declined to take over proceedings brought by Mr Jackson against BlueScope Steel, for reasons that lacked substance. Certainly, it could justifiably claim that BlueScope was in breach of condition 2 for not informing it of the claim at the earliest opportunity. But it could not point to any prejudice, apart from a theoretical one, that it had suffered as a result of the late failure to notify." 58The judge then turned to consider the circumstances of Allianz declining indemnity in July 2007, concluding that they did not justify Allianz taking that step. The judge expressed a final conclusion at [113] in the following terms: "If I am wrong in this opinion, I am of the opinion that the failure of BlueScope to give notice as soon as possible caused no prejudice to Allianz and it may reasonably be excused on the ground that Allianz was not prejudiced by the failure and I order, pursuant to s 18 of the Insurance Act 1902 as amended, that the failure be excused." 59There is no basis for concluding that the trial judge misunderstood the terms of s 18. The use of quotation marks when referring to the concept of irretrievable prejudice indicated that he was, on each occasion, identifying a claim made by Allianz in its correspondence. The expression of his conclusions with respect to the issue did not use that language, but merely referred to "prejudice", being the concept identified in s 18. The submission that he misunderstood that concept must be rejected. 60Whether or not there was prejudice to Allianz by the late notification was a question of fact. To the extent that appeal ground 1(ii) asserted that the judge wrongly decided that there had been "no prejudice occasioned by reason of the breaches" did not identify an error of law and must be rejected. 61The alternative expression at (iii) purported to identify an implied decision that "no evidence of actual (or, non-theoretical) prejudice had been adduced" by Allianz. As the use of the epithet "impliedly" deciding indicated, there was no express finding in those terms. Implicit in the statement of the ground is an assumption as to the burden of proof, namely that Allianz was subject to an evidential burden to adduce evidence of prejudice once BlueScope had raised the application of s 18. 62There is no reason, however, to accept the basis on which the ground rests, namely that the judge impliedly decided that Allianz had adduced no evidence of relevant prejudice. That was not the way the trial judge dealt with the issue. Rather, he sought to identify the claim of prejudice and then consider whether the claim should be accepted, on the evidence before him. 63The claim had two elements, each grounded in the conflict of interest between BHP and Allianz. Mr Jackson had joined both BlueScope and BHP, on the basis that he may have been exposed to airborne asbestos whilst working for or at the premises of either company. The evidence with respect to exposure at the BHP plant was, on any view, not strong. The evidence was not limited to that of Mr Jackson, but it certainly included his evidence. Given Mr Jackson's terminal illness, his evidence was taken very shortly after the claim was lodged. At that stage, BHP and BlueScope were represented by the same lawyers. Mr Jackson was cross-examined by their counsel. As Allianz correctly noted, there was a conflict of interest between BlueScope and BHP: BHP had an interest in minimising its liability, a position which BlueScope had little interest in resisting, as it was indemnified by BHP with respect to its liability, subject to any recovery from Allianz. Thus, Allianz saw the joint representation as prejudicial to its interests. In principle that was correct and was accepted. The second element of prejudice arose from the fact that the late notification had prevented it obtaining separate representation at the bedside hearing convened to take Mr Jackson's evidence. Again, as a factual matter, that element of potential prejudice was accepted. The prejudice crystallised, from Allianz' point of view, in the settlement which included a judgment in favour of BHP, on the basis that it was not liable to any extent. 64All of these steps were understood by the trial judge, but proved inconsequential because of two factual findings. These may be broadly identified as, first, that, given that Mr Jackson was near death at the time of the hearing, and given his inability to deal with questions put to him at the hearing, the trial judge was not satisfied that any questioning designed to elicit more detail of his possible exposure to airborne asbestos at the BHP plant would have been productive. Secondly, other evidence as to his exposure whilst working at BHP provided no basis for maintaining the claim against BHP. 65In short, the trial judge did not base his conclusion as to absence of prejudice upon a failure of Allianz to adduce evidence. Allianz had articulated an arguable basis for asserting prejudice which was then assessed on the evidence before the Tribunal. 66The traditional way of challenging a finding of fact as constituting an error of law is to assert that there was no probative evidence to support the finding. The "no evidence" ground can give rise to difficulties in formulation, depending upon whether the appellant bore the onus of proof at trial, or the respondent did. Where the appellant bears the onus of proof, a finding that the relevant fact was not established cannot give rise to an error of law on the basis of an absence of evidence for the contrary conclusion: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156 (Glass JA). In other words, the party bearing the onus cannot turn the necessary element of a cause of action into an unsupportable negative finding. That is, if the plaintiff has to prove injury, a complaint that the trial judge found, without supporting evidence, that there was no injury will not demonstrate any error of law. 67The present case is somewhat different from the standard case where a party must establish positive elements of a cause of action. BlueScope could only succeed under s 18 if the Tribunal were satisfied that the insurer "was not prejudiced by" the breach of contract. Allianz did not bear the burden of proof; rather, the judge had to be satisfied as to a negative factor. That satisfaction involved a matter of evaluation, based on the evidence. It was open to the trial judge to be satisfied that no prejudice had been caused; accordingly there was no error of law in that finding. Conclusion 68Allianz has made good its challenge to the judgment of the Tribunal in part; accordingly, the decision of the Tribunal must be set aside and the matter remitted to it for determination of the outstanding issues. I agree with the orders proposed by Ward JA. 69MEAGHER JA: This appeal is concerned with whether the appellant (Allianz) is liable to indemnify the respondent (BlueScope) under a workers compensation insurance policy in respect of its liability resulting from the settlement of a claim made by Youden Richard Jackson. That claim was made in proceedings that were commenced in the Dust Diseases Tribunal in July 2006 and settled in August 2007. The proceedings were brought against the respondent and BHP Billiton Ltd. The circumstances in which those claims arose and were made and resolved are set out in the judgment of Ward JA at [106] to [143]. 70Allianz denied liability to indemnify BlueScope. It did so on three grounds. The first two were that its obligation to indemnify was subject to the due and proper observance by BlueScope of policy conditions which required the prompt notification of claims (condition 2) and that the insured not incur any expense of litigation or make any payment, settlement or admission of liability without Allianz's written authority (condition 3). Allianz alleged that BlueScope had breached or not complied with those conditions. 71The third basis on which Allianz denied liability was that in breach of its duty of utmost good faith BlueScope had acted contrary to Allianz's interests. The breach alleged was BlueScope's retainer of Piper Alderman to act for it when that firm also acted for BHP, in circumstances where BHP's interests were said to be contrary to those of Allianz because of an indemnity given by BHP to BlueScope. The terms of that indemnity and the nature of the conflict are dealt with by Ward JA at [144] to [147]. The basis on which a breach of this duty could provide a substantive defence to BlueScope's claim was not explained by Allianz's pleading or addressed by the Tribunal. Compliance with any duty of utmost good faith was not a condition precedent to BlueScope's entitlement to an indemnity. Accordingly it would seem that this defence could only be relied upon to set-off any damages to which Allianz might be entitled against any amount to which BlueScope is entitled. However, no such set-off was claimed in Allianz's defence to BlueScope's cross claim. 72The Tribunal did not make any express finding as to Allianz's defence based upon a breach by BlueScope of its obligation of utmost good faith. The fact that the Tribunal did not do so is not relied upon by Allianz as a ground of appeal. Accordingly it is not necessary to consider this argument any further. 73I agree, for the reasons given by Ward JA, that the Tribunal did not err in law in concluding that although BlueScope had breached condition 2, there was no prejudice to Allianz resulting from that breach. Accordingly it did not err in excusing that breach under s 18(1) of the Insurance Act 1902 (NSW). 74I also agree with Ward JA that the Tribunal did err in concluding for the reasons that it gave that BlueScope was not required to comply with condition 3. The Tribunal did not address that question by reference to the correct legal principles or make the findings necessary to answer it. That being the position, the question whether BlueScope was dispensed from performing condition 3 should be remitted to the Tribunal to be determined together with the other matters referred to by Ward JA at [334]. This is not a case in which it is suggested that there could be only one answer to that question so that it might be dealt with by this Court. 75The Tribunal's reason for concluding that BlueScope was not required to comply with condition 3 was that by August 2007 Allianz was "in breach of its contract to indemnify" entitling BlueScope "to act as a prudent uninsured and to settle the claim of Mr Jackson": BlueScope Steel Ltd v Allianz Australia Ltd [2013] NSWDDT 3 at [112]. The "breach" referred to would appear to be Allianz's declining to take over the defence of Mr Jackson's claim and continuing to refuse indemnity: [2013] NSWDDT 3 at [109]-[112]. Significantly, the Tribunal did not in terms or otherwise address whether Allianz, by its conduct, represented that there was no point in BlueScope seeking its consent in accordance with condition 3 because it would not respond to any such request, other than by maintaining that it was not liable. Nor did the Tribunal address whether for that reason BlueScope abstained from seeking Allianz's consent to the settlement. 76Allianz submits that the Tribunal erred in law in concluding that it was obliged to take over the defence of the proceedings and that it was "in breach of its contract to indemnify" by asserting that it was not liable on the basis that there had been a breach of condition 2 which could not be excused under s 18(1) of the Insurance Act 1902. In relation to that submission, two matters are not controversial. The first is that condition 4 (which related to the defence of proceedings) did not impose any obligation upon Allianz to conduct or take over the defence of Mr Jackson's claim. Like the clause considered in Distillers Co Biochemicals (Aust) Pty Ltd v Ajax Insurance Co Ltd [1974] HCA 3; 130 CLR 1, but in quite different terms, condition 4 cast no obligation on Allianz to defend Mr Jackson's claim. It follows that there was no breach of condition 4 involved in Allianz's communicated decision not to do so. 77Secondly, BlueScope did not plead or argue that Allianz's conduct, in denying liability on that basis and maintaining that denial, was a repudiation of the contract of insurance. Unlike the insured in Edwards v Insurance Office of Australia Ltd (1933) 34 SR (NSW) 88, BlueScope did not purport to terminate the contract by acceptance of an alleged repudiation of liability and claim damages flowing from that repudiation. Instead, like the insured in CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; 187 CLR 384, BlueScope claimed the moneys to which it was entitled upon the proper construction of the policy. It remained bound by the conditions in the contract unless something happened which operated to excuse or discharge it from performance of any particular condition or conditions; just as would have been the position had there been an anticipatory breach of an essential term of the contract and it elected not to treat that breach as a repudiation and terminate the contract: see Bowes v Chaleyer [1923] HCA 15; 82 CLR 159; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; 90 CLR 235; Foran v Wight [1989] HCA 51; 168 CLR 385; and Fercometal v Mediterranean Shipping Co [1989] 1 AC 788. 78I agree with Ward JA's analysis at [267]ff that Allianz's reliance upon the breach of condition 2 as entitling it to deny liability did not constitute a breach of its promise to indemnify and was not repudiatory conduct. The relevant insured event was that BlueScope "shall be liable to pay" common law damages. That event did not happen, in the case of Mr Jackson, until August 2007. (A number of the authorities which support that analysis are referred to by Giles J (as his Honour then was) in Penrith City Council v Government Insurance Office of New South Wales (1991) 24 NSWLR 564 at 571-572). It follows that the Tribunal erred in law in concluding that by declining to indemnify BlueScope, Allianz was "in breach of its contract to indemnify". 79It remains necessary to consider whether the Tribunal's conclusion that BlueScope was entitled to disregard condition 3 was justified in law upon the basis that, as it found, Allianz had declined to take over the defence of the proceedings and maintained that it was not liable to indemnify BlueScope. 80That conclusion was not justified by reference to the proper construction of condition 3. It was not argued before the Tribunal or on appeal that this condition did not apply in circumstances where the insurer had not exercised its right to take over the defence of the claim and had indicated that it denied liability in respect of it. In Distillers Co, Gibbs J (as his Honour then was and dissenting) held that the clause there under consideration did not apply where the insurer had declined to take over and conduct the defence or settlement of the claim against the insured: at 14. The majority reached the opposite conclusion (Menzies J at 9-10, Stephen J at 27-28). A similar issue of construction arose in the Irish case of General Omnibus Co Ltd v London General Insurance Co Ltd [1936] IR 596. The trial judge (Hanna J) construed the relevant condition as not applying to an admission, promise or payment made in circumstances where the insurer had refused to take advantage of the right to take over the action and repudiated liability (at 601). On appeal to the Supreme Court, Murnaghan J (Kennedy CJ agreeing) reached the same conclusion (at 608, 619). 81Stated generally, the Tribunal's conclusion was that Allianz's conduct precluded it from insisting on performance of the condition as to the making of admissions. In Sargent v ASL Developments Ltd [1974] HCA 40; 131 CLR 634 at 655, Mason J (as his Honour then was) said the principles governing such circumstances "have their origin in the differences to be found in the various doctrines (election, waiver and estoppel) which may come into operation and in the differing concepts which each doctrine has at times been thought to embrace". Also, as the plurality (Gummow, Hayne and Kiefel JJ) said in Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 at [90], the proposition that a contractual condition has been "waived" is a statement of conclusion which does not reveal the process of reasoning leading to the assignment of that description. Their Honours also observed at [84]: "... in many cases in which it is said that a party to a contract has 'waived' a condition for that party's benefit, the party said to have waived the condition will have made an election between inconsistent rights (to insist on further performance or treat the contract as discharged for failure of the condition). In other cases, of which [Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473] is an example, the case may be better identified as one of estoppel." 82In General Omnibus Co the insurer, at a very early stage following the motor accident in respect of which the appellant sought an indemnity, said that it repudiated all liability under the policy and that it was "not prepared to deal with the matter in any way whatever". In the face of that conduct, the third member of the Supreme Court, FitzGibbon J held (at 615) that there was "an express waiver by the defendants of all right to be consulted about the conduct of the defence" of the proceedings instituted by the second of the two passengers injured in the accident. Adopting the later language of Dixon CJ in Peter Turnbull & Co at 248, the insurer could have been described as having "unmistakably intimated" to the insured that it would be pointless to seek its consent to the making of any admission, promise or payment. 83In Distillers Co the majority rejected an argument that the insurer could not rely upon a condition precedent requiring its written consent to any settlement of the claim against the insured. The insurer was not in breach of contract. There was no obligation to conduct the insured's defence and no repudiatory conduct in denying liability under the policy. Citing the decision in General Omnibus Co, Menzies J said (at 9-10) the "insured may make a reasonable settlement where the insurer breaches the contract by denying liability and refusing to defend or settle". In support of that proposition he also cited the dictum of Lord Esher MR in Captain Boyton's World's Water Show Syndicate Ltd v Employers' Liability Assurance Corporation Ltd (1895) 11 TLR 384. None of the judgments in General Omnibus Co in terms supports such an unqualified proposition or reveals the underlying principles which would support it. Nor does the report of the judgment of Lord Esher MR which makes no reference to there being any issue as to whether a condition precedent could be relied upon. Furthermore, the present case is not within that general proposition for the same reasons that Menzies J considered that the proposition did not apply in Distillers Co - the insurer had not repudiated its obligations and was not in breach of contract by having denied liability and refused to defend or settle. 84This analysis leads to a consideration of the principles underlying the judgment in Peter Turnbull & Co, which is relied upon by BlueScope. The plaintiff agreed to purchase oats under a contract for sale which required delivery by the defendant FOB Sydney on a vessel nominated by the plaintiff. In the face of the seller's stated inability to supply the oats from the port of Sydney, the parties initially sought to make alternative arrangements for that supply from Melbourne. When it became clear that those arrangements could not be made, the defendant seller confirmed that it could not load from Sydney and the plaintiff terminated the contract for breach. In the period during which the negotiations for alternative arrangements were occurring, the plaintiff had not nominated a ship and shipping dates as required by the contract. In answer to the plaintiff's claim for damages for repudiation the defendant relied upon its failure to comply with that nomination condition. The majority (Dixon CJ, Webb and Kitto JJ) rejected that argument on the basis that the defendant had "dispensed" the plaintiff from fulfilling the condition. The presently relevant passages in the judgments of Dixon CJ and Kitto J are extracted in the reasons of Ward JA at [294] to [297]. 85In Foran v Wight Mason CJ formulated (at 395-396) the principle in Peter Turnbull & Co as follows: "A failure by the innocent party to treat an anticipatory breach of an essential term as a repudiation and to terminate the contract has the effect of leaving the contract on foot, in which event it remains in force for the benefit of both parties, just as it would if the anticipatory breach had never occurred, subject to a qualification to which I shall refer in a moment. The parties then remain bound by the contract and the repudiating party may rely on any supervening circumstance which justifies his non-performance of the contract when the time for performance arrives ... The qualification is that, if the repudiating party by his refusal to perform or other conduct intimates to the innocent party that he need not perform an obligation which is a condition precedent to the performance by the repudiating party of his obligation, and does not retract that intimation in time to give the innocent party an opportunity to perform his obligation, that party may be excused from actual performance of the condition precedent. The repudiating party then waives complete performance of the condition precedent and his conditional promise becomes unconditional. The term 'waiver' is generally used where one party by words or conduct relieves the other party from timely fulfilment of a condition or performance of a promise, time being of the essence of the contract: Peter Turnbull." [Emphasis added] 86That principle was considered and applied in Park v Brothers [2005] HCA 73; 80 ALJR 317. The Court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), after referring to the statement set out above, continued: "[42] In the earlier case, Dixon CJ referred to repudiatory conduct which expressly or implicitly intimates to the innocent party that it is useless to perform a condition, in consequence of which that party is dispensed from performing the condition. This, he said, was 'just as effectual as actual prevention'." 87There was then set out the paragraph from the judgment of Kitto J which is the first extracted by Ward JA at [296]. The Court continued: "[43] The application of that principle to a given case may be affected by the nature of the promise, and the nature of the condition. If the conduct of the party in breach of contract prevents the performance by the other party of the condition, then it has been said to be 'evident from common sense' that it is equal to performance' of the condition. The result has been explained sometimes in terms of waiver, and sometimes in terms of estoppel. Lord Mansfield said that 'reason' dictated that if one party stops the other offering performance by showing an intention not to perform 'it is not necessary for the first to go farther, and do a nugatory act'." [Footnotes omitted] 88In Foran v Wight, Mason CJ (at 410-411), Brennan J (at 420-422), Deane J (at 434), Dawson J (at 445-449) and Gaudron J (at 456) considered the outcome in Peter Turnbull & Co to be best explained as achieved by operation of an estoppel. In Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524 this Court (Clarke JA, Kirby P and Handley JA relevantly agreeing) proceeded on the basis that since Foran v Wight the legal basis for dispensation from performance of a condition in such cases should be regarded "as firmly grounded in estoppel" the elements "being an intimation by one party that it would not perform its obligations thereby rendering nugatory any attempt by the innocent party to do so and an acting on that intimation by the innocent party to its detriment" (at 533-534). 89Whilst the three High Court cases to which reference has been made (Peter Turnbull & Co, Foran v Wight and Park) involved the operation of an estoppel in circumstances where there had been repudiatory conduct, the relevant principle obviously applies in any circumstances where there has been a representation giving rise to a estoppel with respect to the enforcement of or reliance on a defence or right. 90In relation to an insurance contract, the non-application of the waiver clause considered in Craine v The Colonial Mutual Fire Insurance Company Ltd [1920] HCA 64; 28 CLR 305 turned on the distinction between waiver involving an election between inconsistent rights or positions and estoppel by conduct, and there being an estoppel available in the circumstances of that case (at 326-327). In The Law of Insurance Contracts, (6th ed 2009, Informa) at par 26-4A2 Professor Clarke formulates that distinction in the following terms: "When the insurer knows something which entitles him to rescind the contract (misrepresentation, non-disclosure) or to repudiate a claim (breach of procedural condition), he 'has to choose whether to exercise that right or not' and his choice of one course is waiver of the other. When, however, at a time before disclosure is due or a condition has to be performed, the insurer indicates that he will not insist on disclosure or performance of the condition, that is a case of estoppel." 91An example of a case described as involving the waiver of a condition precedent in a policy of insurance but better identified as one of estoppel is the decision of the English Court of Appeal in Toronto Railway Co v National British and Irish Millers Insurance Co Ltd (1914) 111 LT 555. The question was referred to as being whether the insurer under a fire policy had by its conduct waived the right to insist upon a condition precedent which required the completion of an adjustment report and certificate of a magistrate. In the judgments of Kennedy LJ at 561 (col 2) and Scrutton LJ at 563 (col 2), the insurer's waiver was analysed in terms of estoppel. Kennedy LJ concluded that the insurers "had so indicated to the plaintiffs their intention not to insist upon the stipulations of the policy as to the ascertainment of the amount of loss, and so led them to act and to abstain from acting during nearly eight months out of the twelve within which an action must be brought, so as to debar them from afterwards insisting upon adherence to those stipulations, and to entitle the plaintiffs to enforce their claim by action as they have done." 92By ground 3 of its notice of contention, BlueScope sought to support the primary judge's conclusion in accordance with the principle in Peter Turnbull & Co on the basis that Allianz's conduct in and from July 2006 (when it first declined to take over the defence of the claim) had discharged BlueScope from compliance with any obligation under condition 3 in relation to the incurring of expenses and the settlement of Mr Jackson's claim. The earlier discussion shows that the Tribunal erred in concluding that any breach of contract on the part of Allianz freed BlueScope of any obligation to obtain its written consent. The position remains that the Tribunal did not address and make findings as to whether, consistently with the principles to which reference has been made, Allianz was estopped from relying on any non-compliance with that condition. Specifically, it did not address whether by its conduct Allianz represented that there was no point in BlueScope seeking its written authority to the settlement of the proceedings because Allianz would not give that authority in circumstances where it had denied liability. Because the Tribunal did not make the findings necessary to address it, that question should be remitted to the Tribunal for determination. 93I agree that the primary judge erred in law in concluding that there was no breach of condition 3 and that that finding must be set aside. The orders proposed by Ward JA should be made and the proceedings remitted to the Tribunal for the purpose of determining the matters referred to by Ward JA at [334] and whether Allianz dispensed BlueScope from performing condition 3 of the policy. 94WARD JA: This is an appeal by Allianz Australia Insurance Ltd (Allianz) from a decision in the Dust Diseases Tribunal of New South Wales. Allianz, as insurer, was found to be liable to its insured, BlueScope Steel Ltd (BlueScope), for moneys paid by BlueScope in settlement of a compensation claim made against it in the Tribunal by the late Mr Youden Jackson. 95There was no dispute that Allianz was on risk for the claim by Mr Jackson against BlueScope, in its capacity as BlueScope's statutory workers' compensation insurer, BlueScope having assumed the obligations of the statutory insurer at the relevant time (Manufacturers Mutual Insurance Ltd (MMI)). 96Allianz declined to take over the conduct of the Tribunal proceedings, which were defended by BlueScope and in due course settled by agreement between BlueScope and the plaintiff on terms which included the entry of judgment against BlueScope and in favour of the plaintiff in the sum of $225,000 plus costs. It also declined to indemnify the claim, relying on an alleged breach of the policy conditions (late notification to it of the claim). BlueScope then brought a cross-claim in the Tribunal proceedings against Allianz seeking recovery of the settlement sum and its defence costs. 97Allianz defended the cross-claim, and denied liability under the policy, on the basis that BlueScope had breached two of the policy conditions: condition 2, which in effect obliged BlueScope to give notice of a claim under the policy as soon as practicable after it came to the knowledge of BlueScope, and condition 3, which precluded BlueScope, without the written authority of the insurer, from incurring any expense of litigation or from making any payment, settlement or admission of liability in respect of any injury to or claim made by any worker. Allianz also contended that BlueScope had acted contrary to Allianz' interests in relation to the contract of insurance, noting that this was a contract of the utmost good faith. 98BlueScope denied each of the alleged breaches but, in the event that any such breach was established, sought to be excused therefrom pursuant to s 18 of the Insurance Act 1902 (NSW). 99There was no dispute by Allianz as to the reasonableness of the settlement sum, if considered in isolation. However, issue was taken by Allianz as to the lack of an opportunity to seek contribution to that sum from BlueScope's co-defendant, in circumstances to which I will refer shortly. 100The primary judge concluded (at [112]) that Allianz was in breach of its contract to indemnify and that its breach entitled BlueScope to act as a prudent uninsured and to settle Mr Jackson's claim. By reference to what was said by his Honour at [111], it appears that his Honour concluded that Allianz had breached its contract to indemnify in two respects: in declining to take over the conduct of the proceedings and in declining indemnity. 101In the event that the conclusion at [112] were to be incorrect, his Honour went on to express the opinion (at [113]) that the failure of BlueScope to give notice to Allianz as soon as possible of Mr Jackson's claim had caused no prejudice to Allianz and that it might reasonably be excused pursuant to s 18 of the Insurance Act. His Honour so ordered. 102As to the alleged breach of condition 3 of the policy, his Honour indirectly addressed this by concluding (at [110]) that Allianz had no entitlement to be consulted about the policy, having declined indemnity "without any reason". His Honour did not address the questions which would have flowed from a finding of breach of condition 3, namely as to whether Allianz had suffered prejudice as a result and, if there was no prejudice from that breach, whether it would be reasonable to excuse BlueScope from that breach in all the circumstances. 103His Honour implicitly addressed certain aspects of the allegation (at [10(d)] of the Defence to Cross-Claim) of breach by BlueScope of its good faith obligation as insured, in making certain findings as to BlueScope's conduct of the proceedings to which I will refer in due course, but his Honour did not make any express finding as to the alleged breach of this obligation, nor did his Honour deal with the claim for relief under s 18 of the Insurance Act in relation thereto. His Honour also did not expressly address or make findings in relation to the particular breaches BlueScope alleged Allianz had committed of its obligation of good faith as insurer, other than to find that Allianz had declined indemnity without any reason. 104Allianz appeals from his Honour's decision. BlueScope has filed a notice of contention seeking to support his Honour's decision on other grounds. Background 105In order to understand the prejudice Allianz contends was suffered as a result of late notification of the claim (bearing in mind that notification was made a mere 9 days after service of the writ), and the allegations of breach of obligations of good faith by the respective parties, it is necessary to set out the chronology of events in some detail. 106Mr Jackson was a bricklayer who had been employed by BlueScope (then known as John Lysaght (Australia) Ltd) between 1957 and 1961 as an apprentice bricklayer and between 1962 and 1965 as a tradesman bricklayer. For a six month period in between those two terms of employment, Mr Jackson worked as a refractory bricklayer with Simon Carves (Australia) Pty Ltd (Simon Carves). Mr Jackson deposed that, during his employment with Simon Carves, he had done some work at the BHP Steelworks in Newcastle. Some time after his employment with BlueScope ceased, Mr Jackson commenced employment with an asbestos removal company (J.A. Crockett Pty Ltd). 107Mr Jackson was diagnosed as suffering from mesothelioma in November 2005. He died in July 2006. Shortly before he died, Mr Jackson commenced proceedings in the Dust Diseases Tribunal against both BlueScope and BHP Billiton Ltd (BHP). As against BHP, the claim related to a period, during Mr Jackson's second term of employment with BlueScope, in which Mr Jackson contended that he had been required to undertake works at the BHP Newcastle Steelworks and had there been exposed to asbestos dust and fibre. 108The Dust Diseases Tribunal proceedings were commenced by verified Statement of Claim filed in the Tribunal on 5 July 2006. It is not disputed that by this time Mr Jackson was gravely ill. A sealed copy of the claim, together with the plaintiff's verified statement of particulars, was served on both BlueScope and BHP on 5 July 2006. 109While BlueScope had the benefit of the statutory workers' compensation policy at the relevant time, BHP was at all relevant times self-insured. As between BlueScope and BHP, it was agreed that responsibility for the damages claim by Mr Jackson was governed by a deed of indemnity that had been entered into in 2002 at the time of a corporate de-merger involving the BHP Billiton/BHP Steel Group of Companies and that under this deed it was BHP which had responsibility for any damages payable in respect of Mr Jackson's claim. 110BHP retained Piper Alderman on 6 July 2006 to act for both defendants in the Tribunal proceedings on that basis, advising Mr Hay of that firm that BHP was to "assume BlueScope's liabilities" (see Mr Hay's file note dated 6 July 2006). A draft notice of appearance was served on Mr Jackson's solicitors on 7 July 2006, under cover of a letter confirming that Piper Alderman acted on behalf of both defendants. The formal Notice of Appearance was served under cover of a letter dated 10 July 2006. 111Mr Hay was informed by BHP on 10 July 2006 that BlueScope had commenced as a self-insurer on or about 1 September 1976 and that prior to that time MMI or Allianz was on risk. In a separate file note on that day, Mr Hay recorded a telephone attendance on BHP's workers' compensation coordinator, Mr Miller, to the effect that BlueScope was insured by Allianz until 1 September 1976; that Mr Miller was to enquire with BlueScope to obtain insurance documents; and that there might be an entitlement ("may be entitled to") a full indemnity from Allianz. In the Tribunal proceedings, Mr Miller deposed that he was aware of the BlueScope insurance cover from his time working with the then John Lysaght workers' compensation department prior to 2002. 112Due to the advanced state of Mr Jackson's illness, an application was made before the President of the Dust Diseases Tribunal on 10 July 2006 for an urgent hearing of the matter. Upon the undertaking of Mr Jackson, through his legal representative, that no Browne v Dunn point (referring to Browne v Dunn (1893) 6 R 67 HL) would be taken, his Honour, over the objection of the defendants, appointed 12 July 2006 as the time for taking Mr Jackson's oral evidence. 113A bedside hearing was duly held on 12 July 2006 before Kearns DTTJ. On that occasion, an affidavit affirmed by Mr Jackson on 11 July 2006 was tendered, in which Mr Jackson deposed to his exposure to asbestos and work history, including work at BHP Steelworks both while employed by Simon Carves and in his second term of employment with BlueScope. 114Both defendants were represented at the bedside hearing by Mr Morgan of Counsel, who was instructed by Mr Hay. Mr Morgan was briefed by Mr Hay in advance as to a number of matters said to be of special concern, including the extent and content of Mr Jackson's exposure to asbestos. Mr Hay's written instructions to Counsel expressly noted that, pursuant to the deed of indemnity, all liability for injuries to employees of BlueScope in Mayfield (where the BlueScope premises were located), and any third party liabilities arising from exposure at the Newcastle Steelworks, rested with BHP. There was nothing raised in the brief as to any concern to establish, as between BlueScope and BHP, the extent of Mr Jackson's exposure to asbestos dust and fibre at his different places of employment or his employment history in that context. 115Shortly after the bedside hearing, Mr Morgan reported to Piper Alderman as to its outcome, noting that the cross-examination was limited by some very obvious restraints. Mr Morgan's observation was that Mr Jackson was making use of an oxygen machine; appeared to be in considerable discomfort; was confused, short of breath; and tired rapidly. Mr Morgan noted in that report that Mr Jackson had conceded that his exposure was highest during his years as an apprentice with BlueScope (of relevance in relation to the position vis a vis BHP, since Mr Jackson had deposed in his affidavit that he had not worked outside BlueScope's premises during his apprenticeship - though he contradicted this in his oral evidence). 116On 14 July 2006, Piper Alderman, still acting on behalf of both defendants, instructed a loss adjuster, Mr John Harvey, to carry out a factual investigation into the circumstances of Mr Jackson's exposure to asbestos. 117It is apparent from Mr Hay's file notes that at that stage Mr Hay was continuing to make enquiries as to BlueScope's insurance cover with Allianz/MMI and that his instructions from BHP were that BHP wanted Allianz "involved". 118The first notification of the claim to Allianz was on 14 July 2006. Coincidentally or otherwise, this was the day the matter was listed in the Tribunal for a further hearing to take place on 20 July 2006. Mr Hay had a telephone conversation with an employee of Allianz, Mr Tolhurst. Mr Hay said he informed Mr Tolhurst of the "dust claim" by Mr Jackson and that he was instructed that BlueScope might have had a workers compensation policy with MMI/Allianz for the former Lysaght business during the period (and that, if so, BlueScope wished to make a claim under that policy) (Mr Hay's affidavit at [27]). 119Allianz then instructed Ellison Tillyard Callanan to act for it in relation to the matter. On 17 July 2006, Mr Hay received a telephone call from Mr Anderson of that firm, advising that he had instructions to act for Allianz. In that conversation, Mr Hay sought Allianz' confirmation of the insurance cover. Perhaps not surprisingly, since Allianz had only just been notified of the claim, Mr Anderson was not in a position to give such confirmation. 120On 18 July 2006, Mr Jackson died. 121By letter dated 19 July 2006, Mr Hay wrote to Allianz' solicitors confirming that BlueScope sought indemnity pursuant to the statutory workers' compensation policy effected with MMI for the period from 1958 to 1975. Mr Hay requested confirmation that Allianz' lawyers would attend the hearing on 20 July 2006 on behalf of BlueScope. 122In response, by letter of the same date, Mr Anderson confirmed that his firm did not yet have confirmation in respect to indemnity "as very late notification of this matter has precluded retrieval of any relevant documentation" but did have instructions to seek Senior Counsel's advice in respect to Allianz' involvement in the claim and that he would advise further in due course. 123On the same day, 19 July 2006, Piper Alderman wrote to BlueScope, noting that they were acting for both defendants "by virtue of" the 2002 indemnity deed between BHP and BlueScope; referring to the existence of a workers' compensation policy that would indemnify BlueScope; and advising BlueScope to make a claim under the policy held with Allianz. In that letter, Mr Hay opined that the workers' compensation policy would meet the claim against BlueScope and that it would not then be necessary for BlueScope to maintain a claim under the deed of indemnity with BHP. By that stage, it should have been apparent that the interests of BHP and of BlueScope's insurer were directly in conflict in relation to the claim. 124On 20 July 2006, an adjournment of the hearing was sought and granted. Mr Parker SC, who had previously been instructed for both defendants, appeared and informed Kearns DTTJ that he and his junior wished to confine their appearance to BHP. Mr Little SC attended the Tribunal on that occasion and advised his Honour that he had been asked to attend for Allianz (as "amicus"). An issue was identified as to whether Allianz' insurance position had been prejudiced. Both Mr Little and Mr Parker indicated that it was necessary to resolve the question of the defendants' representation. Kearns DTTJ was also informed by Mr Parker that it was necessary for steps to be taken to allow for the conduct of the litigation by the late Mr Jackson's legal personal representative, his widow. 125On 21 July 2006, Piper Alderman served BlueScope with a notice of intention to cease acting for it in the proceedings, following receipt of instructions for the matter to be transferred to Sparke Helmore. It remained on the record for BHP. BlueScope agreed to Piper Alderman continuing to act on behalf of BHP, following advice from Sparke Helmore recommending that it do so. (Allianz pleaded this conduct as part of the alleged breach by BlueScope of its obligation of good faith.) 126On 22 August 2006, Mr Harvey provided to Piper Alderman his report as to the investigation of the employment and work duties of Mr Jackson, including with that report a statement made on 21 July 2006 by Mr Bill Powell, who had been the general foreman in the yard department at BHP's Mayfield plant in 1970 and had, at the relevant time, held the position of leading hand and then foreman in the yard department. Mr Powell's statement raised doubts as to Mr Jackson's claim to have worked at the BHP steelworks while employed by BlueScope. That statement was not provided to Sparke Helmore when the balance of the report from Mr Harvey was provided to them on 13 December 2006, though it was later made available to them. (Allianz also took issue, in its pleading, with lack of timely provision of information to BlueScope.) 127By letter dated 25 January 2007, in the absence of any communication by or on behalf of Allianz as to its position in relation to indemnity under the policy, BlueScope formally notified Allianz of the claim for indemnity. It sought both indemnity and confirmation that Allianz would assume conduct of the defence of the claim on behalf of BlueScope. There was no response to that letter, or the earlier enquiries made by its lawyers, until May 2007. 128By letter dated 26 March 2007, Sparke Helmore notified Piper Alderman (then acting only for BHP) that, as Allianz had not agreed to insure BlueScope, BlueScope relied on the deed of indemnity. The letter sought the provision of indemnity from BHP and that BHP conduct the defence for both companies. It also foreshadowed the filing of a notice of intention to cease acting as solicitor for BlueScope. Ultimately, however, Sparke Helmore remained on the record for BlueScope in the Tribunal proceedings, there being a difference arising at that stage between BHP and BlueScope as to the interpretation of the deed of indemnity. 129BHP's position in that regard, as conveyed by Sparke Helmore to its client BlueScope, was as to whether reasonable endeavours were required by BlueScope to pursue insurance from Allianz. Sparke Helmore advised BlueScope that it might not be protected from the implications of a default judgment if there were any doubt about the operation of the deed of indemnity, since it might be that BlueScope would be said not to have acted as a prudent uninsured, and therefore that separate representation should be maintained. In that context, again, BlueScope was on notice of the potential for its insurer's interest in the outcome of the proceedings to be in conflict with BHP's interest. 130By letter dated 9 May 2007, Ellison Tillyard Callanan finally responded to the various requests that had been made of Allianz for confirmation of indemnity under the policy. They expressed the opinion that BlueScope was in breach of various (unidentified) provisions of the statutory policy and advised that: For the record, our client has instructed us, as advised on 20 July 2006 that they shall not take over the running of the case nor indemnify your client. (my emphasis) 131Pausing there, there is no evidence of any statement (whether made by Mr Little or by his instructing solicitors or anyone else on behalf of Allianz) on 20 July 2006 that meets the description of the advice the letter asserts was given on that day (i.e., that Allianz would not take over the running of the case and would not indemnify BlueScope). Certainly, Mr Little expressed in the Tribunal his client's disinclination to take over the conduct of the proceedings but the position of the defendants' representation was expressly left open. Allianz did not in fact take up the opportunity then (or later) to assume the conduct of the defence on behalf of BlueScope but the first notification that it would not do so, and that it would not indemnify BlueScope, seems to have been by way of the letter of 9 May 2007. 132What Mr Little had informed his Honour on 20 July 2006 was transcribed as follows: ... The position is that the one firm of solicitors acting for both BlueScope and BHP, as your Honour's aware of course, evidence was taken in this case by the solicitors acting on behalf of the two defendants. It is now alleged that the people who I have been asked to come along for as amicus curiae, it has been suggested they were an insurer of BlueScope, they should take over the conduct of the case. We see a number of difficulties about that, that is that the firm that represented both defendants had a conflict between different insurers and the case has the potential to be run in that way with one suffering a disadvantage in the running of the case. There are other insurance issues that arise and it seems to us that the solicitors who were for both defendants probably would find themselves in an even worse position if they got rid of one and retained the running of it for the other, and it looks as though the whole question of defendants representation will have to be reviewed. We certainly do not want at this late stage in the day to take over the conduct for one defendant, the other defendant being privy perhaps to information to our detriment and remaining in the case. So it is a question of fixing up representation first, your Honour, as we see it. 133Similarly, the earlier assertion in the letter of 9 May 2007 that Mr Little had indicated in open court that the conduct of BlueScope and its previous solicitors had "irretrievably prejudiced" the defence by Allianz of Mr Jackson's claim is not supported by reference to the above transcript, although possible prejudice to the insurer in the manner in which the case had been conducted to that date was certainly raised. The reference to "irretrievable" prejudice seems instead to have emanated first from Allianz' solicitors (in their 9 May 2007 letter and, later, in their 6 July 2007 letter). 134As to the so-called irretrievable prejudice referred to in the 9 May 2007 letter, this was identified by reference to the possibility that material prejudicial to Allianz may have been obtained by, or provided to, Piper Alderman or BlueScope. The only material to which this could refer is the investigation report from Mr Harvey. The letter also stated that the death of Mr Jackson meant that the situation could not be remedied in respect to the evidence he had given on 12 July 2006. 135Nothing ultimately turns on whether or not what was said by Mr Little at the Tribunal on 20 July 2006 amounted to, or was admitted by Allianz to be, a refusal to indemnify (though I find it difficult to see how what Mr Little had said at the Tribunal could be so construed), because what was conveyed by the 9 May 2007 letter was clearly such a refusal. The relevant question for present purposes (which I will address in due course) is whether what was said or done by or on behalf of Allianz in refusing indemnity dispensed BlueScope from performance of its obligations under the policy. It was not pleaded by BlueScope as amounting to anticipatory breach or repudiatory conduct by Allianz nor was any such finding made by his Honour. 136When pressed for detail of the policy provisions said to have been breached (see letter dated 29 May 2007 from Sparke Helmore), Ellison Tillyard Callanan asserted, by letter dated 6 July 2007, that Mr Little had advised Kearns DTTJ that the death of the plaintiff may have the result that the insurer was now "irretrievably prejudiced" in that it could no longer obtain evidence from the plaintiff that would dictate whether or not it should indemnify. Again, it is not apparent from the transcript that this was expressly stated. Nor is it made clear in the letter, or elsewhere, what evidence Allianz would have sought from Mr Jackson in order to determine whether it should indemnify BlueScope (instead, in submissions Allianz refers to the information it would have sought from Mr Jackson that might have enabled it to inculpate BHP). 137The breach of the policy conditions was identified in the letter as the failure: ... to notify the insurer of the claim, forwarding the proceedings and any served material and the like so that the insurer was in a position to decide whether or not it was required to indemnify at the outset of the matter, bearing in mind that there may have been highly relevant questions to be answered about the date the liability of the defendant arose, to identify the appropriate indemnifiers (if any) the policy limits and other like matters. 138It was agreed by Ellison Tillyard Callanan that the hearing on 20 July 2006 did not "resolve the insurer question" but the letter went on to assert that the question was "now unable to be resolved because of [the] breach of the policy conditions, leading to the prejudice to the insurer by a claim at the late stage at which it was made". 139Thereafter, it seems that BlueScope proceeded with its defence of the proceedings without reference to Allianz until, in advance of the then imminent hearing, Sparke Helmore wrote to Allianz' lawyers on 17 August 2007, noting that the matter had been listed for hearing and that there had been a denial of indemnity; and stating that: We anticipate on the hearing date there may be settlement discussions between the Plaintiff and the Defendants. Whilst we appreciate your client's stated position on the indemnity question we feel that it would be of mutual benefit to both our clients to keep open the option of settlement. Accordingly, we would like to be in a position whereby we can communicate and discuss with you any settlement negotiations. We would appreciate it if you could take your clients [sic] instructions in relation to this and indicate its position. It is not suggested that there was any response to that letter. 140Settlement discussions indeed took place during the course of the first day of the hearing (20 August 2007) and resulted in an agreement for the settlement of the whole of the plaintiff's claim. What followed was the filing in the Tribunal on 21 August 2007 of separate agreements as to judgment between the plaintiff (by then, Mr Jackson's widow as his legal personal representative) and each of BHP and BlueScope, respectively. Judgment was entered broadly in accordance with those agreements). It does not appear that BlueScope formally consented, or was required to consent, to the entry of judgment as between BHP and the plaintiff. (Nor did his Honour consider that BlueScope would have been entitled to object thereto, though it presumably could at least have raised an objection in the course of settlement negotiations to the disposition of the proceedings without preservation of its right to seek contribution from BHP to the settlement sum. That of course, would immediately have brought the position as between BHP and BlueScope to the negotiating table, so to speak.) 141The combined effect of those judgments was that BlueScope bore sole responsibility for payment of Mr Jackson's claim (agreed at $225,000 plus costs). It is accepted that this had the effect that no claim for contribution from BHP could thereafter be maintained by BlueScope's insurer acting by way of subrogation to the insured's rights in that regard (James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78; (1998) 196 CLR 53). 142Allianz' consent was not sought to the terms, or entry, of the judgment to which BlueScope had consented (though, as noted, Allianz had been invited to participate in discussions with BlueScope as to settlement negotiations). 143A Deed of Release was entered into between the plaintiff and BHP pursuant to which the plaintiff agreed to pay BHP's legal costs agreed at $2,500 inclusive of GST. BlueScope was clearly aware of this arrangement, if not also the terms of the Deed of Release (see letter dated 4 December 2007 from Piper Alderman to Sparke Helmore). Deed of indemnity - 10 May 2002 144The deed of indemnity, entered into on 10 May 2002 during the course of the corporate de-merger of BHP Steel Pty Ltd, was entitled "Workers Compensation Deed of Indemnity". It made provision as to the responsibility, as between the BHP Billiton Group and the BHP Steel Group respectively, for workers' compensation claims in respect of the various BHP entities. 145Under clause 4.1, the BHP Billiton Group companies (which included BHP) indemnified BlueScope for any workers' compensation claims in respect of workers at the former John Lysaght plant. However, clause 4.3 obliged BlueScope in effect to use its reasonable endeavours to pursue any insurance or third party claims available to it in respect of any workers' compensation claim referred to in the indemnity. In the event of a shared claim as defined in the deed (as Mr Jackson's claim was), clause 6 provided for responsibility to be apportioned according to the respective parties' contributions to the worker's condition, incapacity or death. 146Although there was a suggestion that the deed of indemnity itself precluded a cross-claim by BlueScope for contribution from BHP in relation to liability for Mr Jackson's claim, there appears to be no express provision in the deed to that effect. Rather, clause 10.3 required that there be notification of the dispute, and consultation as to whether the dispute could be resolved informally, before the institution of proceedings. The solicitor on the record for BlueScope at the time of the settlement (Ms Brewster) appears to have understood the effect of the deed in this way. In cross-examination during the hearing of BlueScope's cross-claim, Ms Brewster said that in order for her to have objected to the verdict in favour of BHP "that the plaintiff was keen to enter into" she would have had to issue a cross-claim; that she did not feel that the evidence was there to pursue such a cross-claim; and that she was not in a position to issue a cross-claim at that time as the deed of indemnity required that a dispute resolution process first be followed. 147Allianz contends that, from the moment of the deed of indemnity, the interests of BHP and those of Allianz (in its capacity as BlueScope's workers' compensation insurer) were directly in conflict with each other in relation to claims such as that of Mr Jackson's claim. This is clearly the case since, to the extent that Allianz bore liability for the claim, BHP was spared the obligation to indemnify under the deed, something well understood by the lawyers acting for both BHP and BlueScope at the commencement of the proceedings. Settlement of Mr Jackson's claim 148Ms Brewster gave evidence in the proceedings before his Honour as to the circumstances in which BlueScope entered into the settlement of the proceedings (affidavit sworn 23 September 2010). Ms Brewster was not present at Court during the negotiations but gave instructions based on Counsel's advice as relayed to her on the day. Her recollection was that she recommended that BlueScope resolve the proceedings based on her belief that the plaintiff would establish liability against BlueScope and that she had reviewed the transcript of Mr Jackson's cross-examination in coming to that belief ([25]). 149As to the position with BHP, Ms Brewster deposed that she had recommended BlueScope consenting to a verdict being entered in favour of BHP because she had serious doubts that the plaintiff would establish liability against BHP, noting that the deceased had given evidence under cross-examination that the work he did with another contractor (Simon Carves) at the premises of BHP was "acid work", which did not involve the use of asbestos rope or millboard ([26]). Ms Brewster also considered that the allegation of exposure as a result of being at BHP's site whilst employed by BlueScope would have been strongly challenged by the material received from Piper Alderman on 13 December 2006 (i.e., Mr Harvey's investigation report which included the statement from Mr Powell). 150Ms Brewster did not consider BlueScope's position with respect to Allianz in recommending settlement of the proceedings, noting that Allianz had expressly denied liability (at [28]). (In cross-examination Ms Brewster said that she had turned her mind to the question of any potential claim against BHP for contribution (Black 57J) and considered it did not have reasonable prospects based on the evidence.) She deposed that she was satisfied that the agreement negotiated with BHP at the time of settlement would result in her client being indemnified by BHP in respect of the conduct and settlement of the Tribunal proceedings and any further proceedings against Allianz. 151Ms Brewster said that it was the plaintiff who was pressing for consent judgment in favour of BHP (Black 66W), though it is not immediately apparent why that would have been the case and this is not consistent with the contemporaneous report Ms Brewster gave to her client. She confirmed that it was her belief that, even if there had been strong evidence that the plaintiff had been exposed to intense asbestos fibre and dust at BHP's premises, any cross-claim would have been precluded by the deed of indemnity and she accepted that this was to the insurer's disadvantage (Black 67L-M). Cross-claim by BlueScope in Tribunal proceedings 152As noted above, following the resolution of Mr Jackson's claim, BlueScope filed a cross-claim against Allianz in the Tribunal proceedings. In that cross-claim, BlueScope contended (at [22]) that Allianz had breached its obligation of utmost good faith in failing, upon notification of Mr Jackson's claim "to consider in good faith and with proper expedition and reasonably" whether: to grant indemnity; to take over the conduct of the claim; and/or (if consent to the incurring of reasonable defence costs had not already been given) to consent to the incurring by BlueScope of reasonable costs in defending the claim. It further contended that the expenses incurred in defending and settling the claim resulted from one or more of the alleged breaches by Allianz and/or from steps taken by BlueScope to mitigate the losses resulting therefrom [(22(c)]. 153BlueScope contended (at [14] of the cross-claim) that Allianz had intimated (by failing or refusing to grant indemnity from 14 July 2006 onwards) that BlueScope should act as a prudent uninsured with respect to the claim. Allianz (at [3] of its defence to cross-claim) admitted that it had indicated that BlueScope needed to act as a "prudent uninsured", though it is not clear by what means the intimation that it was accepted had been given had been made. 154Allianz denied liability based on the breach by BlueScope of conditions 2 and 3 of the policy conditions and of its duty of good faith. 155As to the breach of condition 2 of the policy (now not disputed by BlueScope), Allianz contended ([10(b)] of Allianz' defence to cross-claim): first, that BlueScope should have given it notice of Mr Jackson's claim on or about 5 July 2006 and "forthwith and before filing a notice of intention to act and/or brief counsel to take the plaintiff's evidence" and, then, that BlueScope was in breach in not forwarding the statement of claim to it on 6 July 2006. 156As to the alleged breach of condition 3, this is pleaded (at [10(c)]) as being that BlueScope had: (i) incurred the expense of litigation without the written authority of the insurer and (ii) made a payment, settlement or admission of liability in respect of the claim without the written authority of the insurer. On appeal, Allianz disavowed any defence based on the first of those allegations, i.e., incurring of litigation expenses without written authority (Appeal transcript 6.36-39), on the basis that this was not an issue that had been explored in the proceedings before the primary judge. As to the settlement alleged to have been made by BlueScope in breach of condition 3, this was identified in oral submissions on the appeal as being the settlement between BlueScope and the plaintiff. It was not contended on appeal that BlueScope had breached condition 3 of the policy by consenting to the entry of judgment in favour of BHP. 157Apart from the breaches of conditions 2 and 3 of the policy, Allianz also alleged (at [10(d)]) that BlueScope had acted contrary to the interests of Allianz (and, by inference, in breach of its obligation of utmost good faith) in that: (i) it was represented by solicitors who also acted for BHP, whose interests were inimical to BlueScope, in a situation of conflict of interest between those parties; (ii) its solicitors instructed a single Counsel to represent both defendants when there was a clear conflict of interest; (v) it was clearly in the interest of BHP that it be exculpated and that liability in the Jackson proceedings be attributed instead to BlueScope as the insured entity; (vi) questions asked by Counsel appearing for the two parties were designed to achieve that outcome; (vii) BlueScope had a duty to endeavour to obtain evidence from Mr Jackson that would assist in the prosecution of cross-claims against BHP and Counsel, properly instructed as to the conflict of interest, should not have asked questions directed to Mr Jackson having had heavier exposure to asbestos while an apprentice at BlueScope; (viii) Piper Alderman continued to act for BHP in of breach of the solicitors' obligation not to use confidential information obtained on behalf of a client against that client and in breach of BlueScope's duty to protect its insurer; and (ix) contrary to the interests of Allianz and in breach of obligation owed to Allianz, BlueScope consented to Piper Alderman continuing to act against it in the proceedings. There was no reference (at [10(d)]) to BlueScope's conduct in relation to the entry of judgment in favour of BHP. 158BlueScope's reply denied each of the alleged breaches. In further answer to the claim, it pleaded that Allianz had breached its obligation uberrimae fidei, between 14 and 20 July 2006 to consider in good faith, or as quickly as reasonably possible, whether to grant indemnity; whether to authorise the incurring of legal expenses and whether to assume the conduct of the defence on behalf of BlueScope as quickly as reasonably practicable ([4.1.2] and [4.1.3]). It further pleaded ([4.1.4]) that Allianz breached its obligations under the policy by denying indemnity on 20 July 2006 and thereafter maintaining that denial. 159BlueScope contended that the denial of indemnity was an intimation that BlueScope need not thereafter comply with the obligations pleaded in [10(c)] and [10(d)] of the defence to cross-claim (i.e., both the obligation under condition 3 of the policy and the obligation of utmost good faith) ([4.1.5]). It further alleged (at [4.1.6]) that, by virtue of the conduct of Allianz (thereby presumably referring to the matters earlier pleaded in [4.1]), BlueScope was thereafter discharged from the said obligations. 160If, and to the extent that, BlueScope was found to have breached any of the obligations pleaded in [10(b)], [10(c)], or [10(d)] of the defence to cross-claim, BlueScope relied upon s 18 of the Insurance Act and moved the court for an order that any such breach be excused. Policy provisions 161The opening words of the statutory workers' compensation policy under which BlueScope claimed indemnity contain an express agreement that the indemnity is subject to the due and proper observance and fulfilment by the employer (BlueScope) of the policy conditions. Those policy conditions include, relevantly: 2. The employer shall give notice to the Insurer of any personal injury as soon as practicable after information as to the happening of such, or of any incapacity arising therefrom, comes to the knowledge of the Employer or of the Employer's representative for the time being, and shall forward to the Insurer forthwith after receipt thereof, every written notice of claim or proceedings, and all information as to any verbal notice of claim or proceedings. 3. The Employer shall not, without the written authority of the Insurer, incur any expense of litigation, or make any payment, settlement, or admission of liability in respect of any injury to or claim made by any worker. 4. The Insurer shall in respect of anything indemnified under this Policy, including the bringing, defending, enforcing or settling of legal proceedings for the benefit of the Insurer, be entitled to use the name of the Employer. The Employer shall give all necessary information and assistance, and forward all documents to enable the Insurer to settle or resist any claim as the Insurer may think fit. Primary judgment Mr Jackson's evidence 162His Honour's reasons for judgment commence by setting out the background to the Tribunal proceedings. His Honour had before him transcript of the bedside hearing on 12 July 2006, as well as a tape recording of the evidence given by Mr Jackson. Having listened to the recording, with the assistance of the transcript, his Honour observed (at [15]) that "Mr Jackson spoke in a quite indistinct voice" and that at times appeared "not to be entirely clear about some of the answers he was giving" and on many occasions "indicated he could not remember". His Honour referred in this regard to evidence given by Mr Jackson (that his Honour noted was of potential relevance to the claim against BHP) as to his employment with Simon Carves. His Honour considered (at [16]) that it was clear as the cross-examination progressed that Mr Jackson was becoming "weaker and weaker and less and less clear"; that he was not sure about some of the matters in his affidavit and that on a number of occasions his voice trailed off and Mr Jackson's wife had intervened. 163His Honour noted (at [26]): As I have recounted earlier in this judgment, I have heard a tape recording of the plaintiff's evidence and it is evident that he was very ill and quite weak at the time of the hearing. At times his voice trailed off and at times it was not easy to understand what he said. At other times he appeared to be quite clear in what he said. The evidence of the plaintiff stopped when it was clear he was not really responding meaningfully to the questions of counsel. (my emphasis) 164His Honour (at [60]) took issue with the statement by Mr Little on 20 July 2006 that the notification had been at a "late stage" of the proceedings, saying that: The case had barely started and it must have been clear to Mr Little and to his instructing solicitors that the plaintiff's case would need to have much more evidence called than merely his affidavit and oral evidence, if the plaintiff were to succeed against either or both defendants. The oral evidence of the plaintiff also seemed to make the case against BHP rather tenuous as he claimed he worked the acid bricks and failed to confirm that he did any work involving asbestos when working at BHP premises. This was a different claim to the one he made in his affidavit. 165At [88], his Honour made a number of findings of fact, including that Mr Jackson was gravely ill during the hearing and at times was unresponsive to questions, at times was obviously ill and unable to say very much at all, and that some of his oral evidence contradicted his written evidence. His Honour found also, that, because of Mr Jackson's advanced state of illness, he ceased to be able to give any meaningful evidence before Mr Morgan had completed his cross-examination. 166His Honour included, as a finding of fact (at [88]), that Mr Little had claimed, when he appeared on 20 July 2006, that the conduct of BlueScope and its lawyers had "irretrievably prejudiced" the defence of the claim by the insurer and had made it clear that the insurer would not take over the action. With respect, that is not clear from the transcript of what had been said on that occasion, but nothing turns on whether or not Mr Little did make any such statement. Assessment of Mr Jackson's claim against BHP 167In the course of his Honour's outline of the facts, his Honour made various observations as to the strength of Mr Jackson's claim against BHP, based on the material before him. 168At [61], his Honour said: There could be no doubt in my mind that [Mr Jackson's] case against BHP would have had little chance of success if he did not have more evidence from other persons and perhaps, supporting documentary evidence, to establish that he did work on BHP premises, that he was exposed to asbestos on those premises and that BHP, in breach of its duty of care to him, exposed him to that asbestos. 169In the proceedings before his Honour, Allianz had relied, among other things, on an affidavit from the solicitor acting on behalf of Allianz in relation to Mr Jackson's claim (Mr Prentice). Mr Prentice deposed (at [25]) that, having read Mr Jackson's affidavit, he would, if instructed to act on BlueScope's behalf, have had an expectation of obtaining a contribution from BHP of a minimum of 25% towards the settlement or judgment in favour of Mr Jackson. His Honour was of the view (at [80]) that Mr Prentice was wrong when he expressed the opinion that Allianz, in the name of BlueScope, could have brought a cross-claim against BHP. His Honour said he was of this view without needing to consider the terms of the de-merger indemnity deed. His Honour went on to say (at [81]): The plain fact of the matter is that if the plaintiff wanted to discontinue his case against BHP, BlueScope had no entitlement to object. Indeed, it had no standing at all to do so. If the plaintiff was unwilling to present evidence that he worked at BHP premises in Newcastle at any time during which he was exposed to asbestos, there was no possibility for BlueScope to prove that he had done so. There was evidence before me of an affidavit of Mr Joseph Abercrombie who did work for BHP at Newcastle that exposed him to asbestos, but Mr Abercrombie did not claim that the plaintiff worked with him, nor did he claim that he worked at any time in the BHP premises in Newcastle with anyone from [BlueScope]. The plaintiff in his affidavit and in his oral evidence gave contradictory evidence about working at BHP premises in Newcastle, but that evidence did not show any exposure of a provable type to asbestos. His written evidence was vague about his working at BHP. (my emphasis) 170His Honour noted (at [82]) that an affidavit had been tendered from a person who had brought proceedings against BHP and BlueScope in 2011 relating to exposure to asbestos while working in the BHP blast furnaces in Newcastle in the 1970's and that the deponent (Mr Fischer) gave no evidence of having worked with Mr Jackson or anyone from BlueScope. His Honour concluded (at [83]) that the evidence of Mr Abercrombie (referred to in the extract above) and Mr Fischer could not have been relied upon by Mr Jackson to establish his case against BHP. 171His Honour concluded (at [84]) that, as far as he could determine, Mr Jackson had no realistic prospect of establishing a case against BHP. 172His Honour then considered a submission by Allianz that the evidence of Mr Powell could be relied on as establishing that Mr Jackson may have been present at BHP (at [86]) but was of the view that, at best, this established evidence of a possibility (at [87]), saying that: Even if Mr Jackson had been working at various times as a [BlueScope] employee at the BHP steelworks in Newcastle, he would have had to prove exactly what work he was doing, that it subjected him to asbestos exposure and that someone from BHP was directing him in what to do. Mr Powell's affidavit would have been of no assistance. Consideration of legal and factual issues 173His Honour then set out his consideration of the legal and factual issues enumerated in his reasons at [98]-[113]. Alleged breach of condition 2 174As to the alleged breach by BlueScope of condition 2 of the policy, his Honour noted the cross-examination of Mr Hay to the effect that Mr Hay's knowledge of BlueScope's insurance position in 2004 derived from information obtained when he had acted for BlueScope in earlier proceedings in the Tribunal ([29]) and from Mr Miller at BHP ([32]). 175At [42], his Honour found that both Mr Hay and BlueScope had actual knowledge on 4 November 2004 of the existence of a policy of insurance putting Allianz at risk for claims by employees of BlueScope in respect of their pre-30 September 1979 employment. 176While it is not clear from his Honour's reasons the basis of his Honour's finding of knowledge on the part of BlueScope (if not some imputed knowledge derived from its solicitor), there is no challenge to the finding that BlueScope had actual knowledge on or from 4 November 2004 of the existence of a policy of insurance putting Allianz on risk for the relevant claim. Indeed, it is clear, from evidence filed in the proceedings before his Honour, that BlueScope (known from 10 January 1994 to 7 February 2002 as BHP Steel (JLA) Ltd and from then until 17 November 2003 as BHP Steel Ltd) was on notice of this even earlier, the company having claimed indemnity from Allianz under the relevant statutory workers' compensation policy in February 2001 and again in April 2003 (see affidavit of Mr Prentice sworn 16 October 2012 (at [8]-[9]) annexing copies of correspondence in that regard). 177At [98], his Honour found that Mr Hay had an obligation to inform the insurer and its solicitors before the bedside hearing on 12 July 2006 of the plaintiff's claim; that both BlueScope and Mr Hay knew or ought to have known of the existence of insurance before the bedside hearing, and that Mr Hay's failure to inform Allianz was in breach of clause 2 of the insurance policy. As noted, this finding is not now challenged. 178It is not clear from his Honour's judgment as to when his Honour found the breach of condition 2 occurred. There is no express finding that the breach occurred at the time alleged by Allianz (5 or 6 July 2006). At [98], his Honour referred to there being an obligation to inform "before" the bedside hearing on 12 July 2006. His Honour elsewhere seems to suggest that the giving of information to Mr Hay as to the insurance position on 10 July 2006 meant that there was a failure to inform from that date. No issue is taken with the precise date of the breach, though Allianz nevertheless points out that the date of breach of this condition gives content to the putative prejudice (Appeal Transcript 2.48). Alleged breach of condition 3 179As to the alleged breach of condition 3 of the policy, his Honour (at [110]) accepted the submissions of BlueScope that Allianz had no entitlement to be consulted in relation to the policy since it had declined indemnity "without any reason"; thereby implicitly finding no breach of that condition. His Honour did not otherwise address this issue. Alleged breach of utmost good faith obligation 180As to the alleged breach by BlueScope of the obligation of utmost good faith (pleaded at [10(d)] of the defence to cross-claim), his Honour does not seem to have made any express finding. His Honour did, however, advert to certain of the matters alleged (at [10(d)]), as giving rise to that breach (summarised at [157] above). 181His Honour did not expressly address the allegation that the interests of the two defendants were in conflict (the substance of what was pleaded at [10(d)(i)-(vii)]), though expressing the opinion (at [12]) that if there was no insurer involved for either party it would have been "entirely appropriate" in light of the BHP indemnity for one solicitor to represent both (a non-sequitur since here there was an insurer present). However, his Honour did address other aspects of the matters pleaded at [10(d)(i) - (vii)]. 182His Honour referred to, and accepted, Mr Morgan's evidence: that he had understood that there was a possibility that there might be an insurer and that he had to be very careful in cross-examination ([23]); that his instructions were to the effect that BHP was fully liable for injuries to employees of BlueScope and any third parties arising from any exposure at the Newcastle Steelworks and that he was to be impartial as between the two defendants ([23]). His Honour accepted that Mr Morgan's instructions were not to put anything to Mr Jackson that would implicate specifically either BHP or BlueScope; and that Mr Morgan's conclusion during the cross-examination was that Mr Jackson "was not really in a position to give any real detail about anything" ([24]). His Honour accepted (at [25]) that Mr Morgan had tried to obtain "in chronological fashion" Mr Jackson's employment history. His Honour said that it was clear that Mr Morgan had asked questions about Mr Jackson's employment with BHP but that he had obtained answers on this topic and others that were not entirely clear and some that were contradictory of what was in Mr Jackson's affidavit. 183At [99], his Honour said that he did not accept that Mr Morgan had acted to prejudice the insurer by deliberately refraining from asking any questions about BHP and that Mr Jackson did not give any "certain evidence" that would enable anybody to conclude that BHP had exposed him at any time to asbestos. (Allianz takes issue with the latter observation, given what was said in Mr Jackson's affidavit and in the sworn particulars of claim. Allianz also maintains that it is not to the point that Mr Morgan acted impartially as between the respective defendants; maintaining that it was in the interests of Allianz, as BlueScope's insurer, that Mr Morgan seek to obtain information from Mr Jackson to inculpate BHP and that he did not do so.) 184The only other aspect of the breach of good faith allegation to which his Honour adverted was that pleaded at [10(d)(viii)]. At [106], his Honour said that BlueScope suffered no detriment "whatsoever" by reason of the fact that Mr Hay was privy to information and results of investigations undertaken for both the defendants and did not pass the information on in a timely matter, since the only affidavit in question was that of Mr Powell and it contained no information about the employment of Mr Jackson by BlueScope at the BHP Steelworks. Prejudice suffered by breach of condition 2 185As to whether any prejudice was suffered by Allianz as a result of the breach of condition 2, at [100] his Honour said that, although Mr Hay did not inform Allianz of the policy or make any claim until 14 July 2006, nothing had happened between 12 and 14 July 2006 that changed the position of the parties "at all". While that may be the case, it does not address the contention by Allianz that it suffered prejudice by loss of the opportunity to attend the bedside hearing on 12 July 2006 and to cross-examine (first) Mr Jackson. 186At [102], his Honour seems to have addressed the question of prejudice by reference to whether an advantage had been conferred on BHP to BlueScope's prejudice, saying that: In my opinion, [Allianz] was entitled to regard BlueScope as being in breach of condition 2 of the policy for its failure to notify as soon as practicable. However, it did not suffer any "irretrievable prejudice" as a result of the conduct of the hearing by Mr hay [sic] and Mr Morgan. Contrary to the claims it made in its pleadings, the fact that Mr Hay represented both parties at the bedside hearing did not confer any advantage on BHP ... nor did this joint representation give BHP ... access to documents or information to the prejudice of BlueScope. The fact was that the claim concerned events so far distant that neither defendant had any records by the time of the bedside hearing of Mr Jackson's employment. Nothing that Mr Hay obtained during the time up to 18 and 19 July enabled [BHP] to gain some unfair advantage over [BlueScope]. It did not get access to confidential documents it otherwise might not have had. 187His Honour further noted (at [103]) that, by the giving of the Browne v Dunn undertaking, either or both of the defendants was able to call evidence to add to, or contradict anything, said in the bedside hearing or in Mr Jackson's affidavit. 188At [104], his Honour made clear that he rejected the claim that Mr Hay and Mr Morgan had acted improperly at the bedside hearing to the prejudice of Allianz' interests and the advantage of BHP. 189At [106], his Honour rejected the submission that BlueScope had suffered prejudice as a result of the late provision of Mr Powell's affidavit, on the basis that it contained no information about Mr Jackson's employment by BlueScope at the BHP Steelworks. His Honour went on to say that "[t]he claim by Mr Jackson that he did work at the steelworks was of no evidentiary value unless he could make it plain that he was significantly exposed to asbestos". (Allianz takes issue with this as being an incorrect statement of the test for causation in relation to asbestos claims.) 190His Honour then in effect repeated the finding at [102] in his conclusion at [107] that Allianz could justifiably claim that BlueScope was in breach of condition 2 for not informing it of the claim at the earliest opportunity but went on to say that Allianz could not point to any prejudice, apart from a "theoretical" one, that it had suffered as a result of the late failure to notify. His Honour said that from that point onwards BlueScope was entitled to act as a prudent uninsured. His Honour also concluded that Allianz had declined to take over the proceedings "for reasons that lacked substance". Allianz' position in relation to the claim 191In the course of his Honour's reasons, his Honour referred to the position Allianz had taken in relation to the claim. 192At [55], his Honour said that the solicitors for Allianz had made it clear on 18 and 19 July 2006 "that they would not agree to indemnify BlueScope Steel". Later, at [88(9)], his Honour again referred to the position as being that Mr Anderson had "declined to agree to an indemnity". 193Since up to May 2007 there was no communication of any decision not to indemnify, his Honour must have there been referring (at least at [55]) to there being at that stage no decision as to whether or not Allianz would indemnify, not that there had been a positive decision by Allianz to decline indemnity. 194At [101], his Honour said that when, on 18 and 19 July 2006, Allianz: ... declined to take over conduct of the proceedings and declined to indemnify, it could rely on two matters only in taking these decisions, namely the delay by Mr Hayes [sic] in notifying it of the claim and the "irretrievable prejudice" it claimed to suffer as a result of conduct of the bedside hearing. 195Pausing there, there had been no refusal of indemnity as at 20 July 2006, nor had there been any notification of a decision not to assume conduct of the proceedings at that date (though at that stage Allianz had not taken up the opportunity to do so). Allianz says that [101] is, in effect, a finding by his Honour that, by declining to take over conduct of the proceedings, it was in breach of the policy. Certainly, the manner in which [101] is worded leads to the conclusion that his Honour perceived there to be a need for Allianz to be able to rely on something as justifying a decision to decline to assume the conduct of proceedings, such that if there were no justification for not taking over conduct of the proceedings it was in breach of some obligation to do so. (Allianz further emphasises that there was no finding by his Honour that, by declining indemnity, it had repudiated the policy.) 196His Honour noted (at [109]) the submission of BlueScope that Allianz had no entitlement to be consulted in relation to the policy, having declined indemnity without any reason. His Honour accepted that submission (at [110]) without explaining his reason for so doing, saying that: It is clear to me that Allianz firstly declined to take over the proceedings [something Allianz maintains was always the insurer's right] and then more than a year later, declined indemnity substantially relying on the claim that it was "irretrievably prejudiced" by the conduct of Mr Hay and Mr Morgan at the bedside hearing. I have rejected Allianz [sic] submissions about this and it follows that Allianz could rely only on late notification of the claim. 197At [111], his Honour said that that breach (i.e., late notification of the claim) "in the circumstances, was not sufficient to entitle Allianz to decline to take over the proceedings, much less to decline indemnity" (my emphasis). Again, the manner in which this conclusion is expressed suggests that his Honour considered that Allianz was obliged to take over conduct of the proceedings unless it had a justifiable reason not to do so. His Honour also seems to have considered that Allianz was not entitled to decline indemnity as a result of a breach of condition 2 of the policy without adequate reason. However, that is precisely the effect of condition 2, subject only to the possibility that the breach might ultimately be excused pursuant to s 18 of the Insurance Act. His Honour's conclusion 198At [112], his Honour concluded that "Allianz was in breach of its contract to indemnify and that its breach entitled BlueScope to act as a prudent uninsured and to settle the claim of Mr Jackson". The "breach" to which his Honour then referred seems, in context, to be Allianz' refusal to take over the conduct of the proceedings and its declining of indemnity on 6 July 2007 (see [101], [108] and [111]). 199His Honour had earlier noted (at Red 113L) that Allianz did not contend that the quantum of the verdict paid to Mr Jackson was unreasonable nor that the amount of costs paid was unreasonable. That position was maintained on appeal: what Allianz instead contends is that what was unreasonable was for no contribution to have been sought from BHP to that settlement sum. 200His Honour then said that, if the conclusion at [112] was incorrect, then the failure of BlueScope to give notice as soon as possible caused no prejudice to Allianz and might reasonably be excused on that ground (at [113]). His Honour ordered that the failure be excused and found for BlueScope. Appeal 201By notice of appeal filed 11 June 2013, Allianz appeals from his Honour's decision pursuant to s 32 of the Dust Diseases Tribunal Act 1989 (NSW) and s 48(2)(f) of the Supreme Court Act 1970 (NSW). Such an appeal is limited to errors in point of law. 202Not all of the appeal grounds set out in the notice of appeal were ultimately pressed by Allianz. Those that were pressed may be summarised as being that his Honour erred: 1. in determining to excuse BlueScope's breaches of condition 2 of the policy, in: i. misconstruing s 18(1) by taking the term "prejudice" to mean "irretrievable prejudice"; ii. wrongly deciding that the statutory requirement of no prejudice occasioned by reason of the breaches was satisfied on the evidence; iii. (impliedly) deciding that no evidence of actual (or non-theoretical) prejudice had been adduced by Allianz; and v. wrongly deciding, in the context of an indivisible claim against two defendants for damages in respect of mesothelioma, that no prejudice for the purpose of s 18(1) of the Act could be demonstrated unless it could be inferred that if the plaintiff had been cross-examined at the hearing on 12 July 2006, in the interest of the insurer, that evidence (alone or in combination with other evidence) would have made "it plain that he was significantly exposed to asbestos" at the BHP premises. 2. in relation to the alleged breach of condition 3, in: (a) finding that Allianz was obliged at law to take over conduct of the defence of the proceedings on 20 July 2006; (b) finding, or impliedly finding, that Allianz' communication on 6 July 2007 that it declined to indemnify BlueScope with respect to Mr Jackson's claim was a repudiation of the policy by Allianz with the consequence that BlueScope was thereafter free to enter judgment in favour of BHP without giving prior notice to Allianz contrary to condition 3 of the policy; and (c) failing to exercise jurisdiction by finding, or impliedly finding, without providing reasons therefor that in consenting to the entry of the judgment in favour of BHP without prior notice to Allianz, BlueScope breached its obligation of utmost good faith to Allianz. 203BlueScope pressed only three of the grounds in its notice of contention filed 10 July 2013, those being, in summary, that: 3. Allianz' conduct in confirming its denial of indemnity of 6 July 2007 was such as to discharge BlueScope from compliance with any obligation to obtain Allianz' consent under condition 3 in accordance with the principle in Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235 5. any breach of condition 3 was such that it ought to be excused under s 18 of the Insurance Act 1902; and 6. Allianz' conduct from 20 July 2006 onwards in declining indemnity without any substantial reason was such as to amount to a breach of its obligations as insurer under the policy, and thereby to entitle BlueScope to recover its loss on the claim as damages for such breach. Ground 1 of notice of appeal - alleged error in excusing breaches of condition 2 of the policy 204What is put in issue by ground 1 of the notice of appeal is the order excusing BlueScope's breach of condition 2 of the policy by reason of its late notification to Allianz of the claim. 205Section 18 of the Insurance Act provides that: (1) In any proceedings taken in a court in respect of a difference or dispute arising out of a contract of insurance, if it appears to the court that a failure by the insured to observe or perform a term or condition of the contract of insurance may reasonably be excused on the ground that the insurer was not prejudiced by the failure, the court may order that the failure be excused. (2) Where an order of the nature referred to in subsection (1) has been made, the rights and liabilities of all persons in respect of the contract of insurance concerned shall be determined as if the failure the subject of the order had not occurred. 206Allianz accepts that what is required to enliven the discretion to excuse a breach of the policy is that it establish that real (not speculative or theoretical) prejudice was occasioned by the relevant breach(es) (referring to what was said in McPherson and Davies Shopfitters Pty Ltd v Mercantile Mutual Insurance Ltd (Supreme Court (NSW), Wood J, 26 June 1986, unrep)). 207In essence, there are three errors to which Allianz points in its four sub-grounds of appeal. I deal with those in turn. Ground 1(i) - meaning of "prejudice" in s 18(1) 208The first criticism is that his Honour misconstrued the meaning of "prejudice" in s 18(1) by taking it to mean "irretrievable" prejudice and hence misapprehended the scope of the s 18(1) jurisdictional threshold to enliven the power to determine whether breach of condition 2 of the policy could reasonably be excused. 209Allianz points to the various places in his Honour's judgment where the word "prejudice" or "prejudiced" is qualified by the adjective "irretrievable" or the corresponding adverb (see [88(10)], [101], [102] and [110]). Insofar as his Honour was there repeating submissions made to him on behalf of Allianz, Allianz says that the submission that was made by it to the primary judge was not that irretrievable prejudice was what was required by s 18; rather the submission emphasised the seriousness of the prejudice it had suffered (Appeal Transcript 10.15). 210Other than at [102], the context in which his Honour referred to the quality of the prejudice as "irretrievable" or otherwise was expressly by reference to a claim or submission made by or on behalf of Allianz to that effect. At [102], having referred in the previous paragraph to the quality of prejudice Allianz claimed to have suffered as a result of the conduct of the bedside hearing, his Honour stated his conclusion that Allianz had not suffered any "irretrievable prejudice" as a result of the conduct of the hearing by BlueScope's then legal representatives. Read in context, his Honour was there addressing the assertion that had been made by Allianz; not formulating a test of "no irretrievable prejudice". 211It is significant, in this regard, that in each of the paragraphs in which his Honour used the expression "irretrievable prejudice" (or its equivalent) his Honour employed inverted commas, consistent with this being a reference back to the claim Allianz had made. There is no other ready explanation for the use of inverted commas. 212By contrast, when his Honour (at [113]) directly addressed the question whether the failure of BlueScope to give notice as soon as possible should be excused pursuant to s 18 of the Insurance Act, and concluded that no prejudice had thereby been caused to Allianz, his Honour did not qualify the word "prejudice" by use of the adjective "irretrievable". 213True it is, that his Honour addressed in his reasons matters going to whether any prejudice that had been suffered by the late notification of the claim could be said as a practical matter to be irretrievable. His Honour made, both as a finding of fact ([88(5)]) and elsewhere (at [103]) in reference to the Browne v Dunn undertaking that had been given, the observation that the defendants were not precluded from later adducing evidence as to matters to add to or contradict anything in Mr Jackson's affidavit or oral evidence. However, there again, his Honour seems to have been addressing the particular submissions that had been made as to prejudice which were noted at [101]. 214Although his Honour clearly had regard to the possibility that evidence might have been obtained from other sources (see [88(5)]) and in that sense considered that liability to attend the bedside hearing had not caused irretrievable prejudice, his Honour's ultimate conclusion was that no prejudice had been suffered by late notification. 215When addressing (and rejecting) at [99] what Allianz submits was a false issue (namely whether counsel had deliberately refrained from asking questions about BHP) his Honour repeated his observation that Mr Jackson's answers in cross-examination were "far from clear" and "quite contradictory". 216Neither the earlier references to "irretrievable prejudice", which in effect did no more than quote the proposition that had been asserted by Allianz' solicitors in their earlier correspondence, nor the reasoning that his Honour employed in considering whether there was prejudice, persuades me that his Honour misconstrued the threshold test in s 18(1) of the Insurance Act. This ground of appeal is not made out. Grounds 1(ii) and 1(iii) - finding (or implicit finding) of no prejudice (or no evidence of actual or non-theoretical prejudice) arising from late notification 217These grounds of appeal maintain that his Honour's finding of no prejudice (or implicit finding of no evidence of actual or non-theoretical prejudice) was infected by the error of law identified in ground 1(i). To that extent, these sub-grounds necessarily suffer from the conclusion I have reached on ground 1(i), namely that his Honour did not misconstrue the threshold test in s 181(1) of the Insurance Act. However, against the possibility that the conclusion above is incorrect, I consider together these two sub-grounds of appeal. Lack of opportunity to cross-examine 218Allianz contends that the evidence established that it had suffered real (and non-theoretical) prejudice by reason of the lack of the opportunity to cross-examine Mr Jackson at the bedside hearing on 12 July 2006. Perhaps somewhat inconsistently, it argues that it is speculation for BlueScope to say that nothing could have been obtained from Mr Jackson which would have corroborated or reinforced the sworn particulars (Appeal Transcript 9/45-50). 219Allianz further contends that, in the position of the first defendant in the proceedings, it is likely that what it was denied was the forensic opportunity of questioning Mr Jackson first. The significance of this is that Allianz points to his Honour's assessment of Mr Jackson's condition during the course of cross-examination (at [15]-[16]; [26]) and notes that his Honour did not find as a fact that Mr Jackson's oral evidence was of "entirely no value". 220Mr Prentice deposed (at [24] of his affidavit) that had he been instructed to act on behalf of BlueScope in relation to Mr Jackson's claim prior to Mr Jackson's death, he would have sought to obtain evidence from Mr Jackson in cross-examination about his work at the BHP Steelworks, in particular as to the supervision of his work by officers of BHP, the identity of such officers, the provision of materials containing asbestos by BHP leading to the exposure, the circumstances, duration and extent of exposure to asbestos in the BHP premises, and the names of any fellow workers with whom Mr Jackson worked at the BHP premises. 221It is submitted that Mr Jackson was uniquely placed to give evidence of his own exposure and circumstances at the various places of work and that it was fundamental, in the interests of the insurer, that his evidence as to Mr Jackson's exposure at the BHP premises in the relevant period be adduced at its highest. Reference was made to Mr Hay's note of 11 July 2006, listing topics for inquiry of Mr Jackson, which referred to his "exposure with other employers" but which did not refer to Mr Jackson's work at the BHP steelworks (whether while employed by Simon Carves or BlueScope). Allianz also points to Mr Jackson's affidavit evidence as to his participation in asbestos lagging works to rebuild the coke ovens at the BHP Steelworks as highlighting the prejudice suffered by the lack of opportunity to cross-examine him on such matters. 222His Honour (at [78]) accepted Mr Prentice's evidence that he would have made arrangements for someone to be present to represent Allianz at the bedside hearing even if he had only had a few hours' notice. There was no issue as to whether Allianz would have made use of the opportunity to cross-examine Mr Jackson had it been notified of the claim in time. 223However, his Honour, relevantly, concluded: that Mr Jackson was at times not entirely clear about some of the answers he was giving (there referring to the cross-examination at Blue 1/203O-204C) ([15]); that Mr Jackson was not sure about some of the matters that appeared in his affidavit (there expressly referring to questions later in the cross-examination at p5 of the transcript - Blue 1/206) ([16]); that some of the answers given by Mr Jackson (both on the topic of his employment with BHP and on other topics) were not entirely clear and others were contradictory of his affidavit ([25]); and that at times it was not easy to understand what he said but at other times he appeared to be quite clear in what he said ([26]). His Honour's ultimate finding at [88(3)] was that Mr Jackson was "at times" unresponsive and "unable to say very much at all". 224At [99], his Honour stated that Mr Jackson's answers, when questioned as to his affidavit evidence were "far from clear" and "contradictory". His Honour concluded that Mr Jackson "did not give any certain evidence that would enable anybody to conclude that BHP exposed him to asbestos". By this, I understand his Honour to be referring to Mr Jackson's oral evidence and describing the quality of that evidence as uncertain, consistent with his Honour's other observations drawn from hearing the tape recording. 225Allianz accepts that if his Honour's finding was to the effect that the bedside hearing was too late to enable anyone to obtain any useful information then that would be the end of its complaint about prejudice as a result of late notification. However, it is submitted that the fact that there was some evidence obtained at the bedside hearing precludes any such conclusion. 226The window of opportunity to obtain any cogent evidence from Mr Jackson at the bedside hearing can only have been small. The only cross-examination of Mr Jackson prior to the passage of transcript to which his Honour referred at [15] comprised taking Mr Jackson through what he had said in his affidavit about working with BlueScope as an apprentice, as to which it appears, from my review of the transcript, that Mr Jackson's answers, beyond simply agreeing with propositions put to him, were by no means expansive. Even at that early point in his cross-examination, there were matters as to which he expressed uncertainty. Indeed, about the only thing Mr Jackson did seem clear about during his cross-examination was that he had worked at BHP and other premises while he was an apprentice with BlueScope, something that contradicted the contents of his sworn affidavit but that was, in any event, favourable to the conclusion that Allianz would no doubt have sought to press, namely that the relevant exposure was at BHP's premises. 227It does not appear that Mr Jackson was asked any questions during his cross-examination about the names of persons with whom he had worked or by whom he was supervised while at BlueScope or at BHP, so it is impossible to form a view as to whether, had he been asked such questions at the outset of the cross-examination, and before he became as unresponsive as he was at the conclusion of the cross-examination, Mr Jackson would have been likely to recall any such information. The highest that this can be put is that Allianz lost the opportunity to test Mr Jackson's recollection on matters that might potentially have uncovered lines of enquiry as to his employment history. 228Similarly, insofar as complaint is made in Allianz' written submissions as to the lack of evidence sought from Mr Jackson as to asbestos suppliers or the particular asbestos products used at BHP, on the basis that it could have facilitated cross-claims against suppliers, there is little from which it could be concluded that Mr Jackson would have been able at any stage to give useful evidence as to such matters. Mr Jackson did give evidence that he was using refractory bricks, but not asbestos rope or millboard, when working with Simon Carves at BHP but then seemed to contradict that by saying that he was doing acid work, with a different type of brick. Hence, his recollection of the products he had worked with, even at an early stage in his cross-examination, was not apparently reliable. 229Having regard to the whole of the transcript, and his Honour's findings as to the manner in which Mr Jackson gave his oral evidence, the conclusion to be drawn is that any evidence Mr Jackson might have given on the topics Allianz says it would have wished to explore with him was not likely to have been particularly reliable and was unlikely to have been clear. Hence, the opportunity which Allianz undoubtedly lost of cross-examining Mr Jackson (even had it been able to cross-examine him first) was of uncertain value. In those circumstances, there was no error in his Honour's finding that there was no prejudice as a result of the loss of opportunity to cross-examine Mr Jackson, whatever the order in which that cross-examination might have occurred. Appointment of contributions assessor 230For completeness, I note that in Allianz' written submissions, reference is made to the claims resolution process under the Dust Diseases Tribunal Regulation 2007, in the context of a submission that, had the matter been referred to a contributions assessor for determination (an obligation to which it is submitted the defendants failed to draw to the Tribunal's attention) there would have been a presumption that BHP was liable to contribute to the claim and the onus would then have been on BHP to rebut that presumption at the hearing or on any cross-claim between BHP and BlueScope. Allianz suggests that the failure of the defendants to advise the registrar of a lack of agreement as to contribution may have been due to a presumption that no apportionment issue arose due to the operation of the de-merger deed of indemnity. 231Clauses 48 and 49 of the 2007 Regulation require co-defendants who are alleged to be liable to contribute to any damages recovered by the plaintiff to agree among themselves as to the contribution each is liable to make to the damages claimed by the plaintiff, failing which the matter is to be referred to a contributions assessor for determination in accordance with clause 49. 232This was not the subject of any oral submissions on the appeal and did not appear to be pressed as amounting to prejudice due to the late notification of the claim. Nor was it pleaded as a breach by BlueScope of its obligation of good faith as an insured. Given that Allianz was advised of the claim well within the period in which, under the 2007 Regulation, the co-defendants were required to seek to reach agreement as to apportionment, and the fact that intervening death of Mr Jackson did not suspend the operation of the apportionment process under the 2007 Regulation unless the parties so agreed (see clause 20(3)), any prejudice or potential prejudice arising from the failure to pursue the contributions assessment process cannot have been due to late notification of the claim. Additional considerations 233Allianz' written submissions also contend that the fact that real prejudice was occasioned from late notification of the claim was clear by 17 and 18 July 2006, since it was on 17 July 2006 (at 8.19pm) that Mr Harvey advised Mr Hay that exposure at the BHP premises might be able to be disputed and Mr Jackson died the following day. However, it does not appear to be suggested that, as at the evening of 17 July 2006, BlueScope would have been in a position to re-convene the hearing in order to obtain oral evidence from Mr Jackson on this point; nor is there any suggestion that this information was available to BlueScope, or could have been obtained by Allianz, at an earlier stage. In those circumstances, the fact that BHP subsequently defended the Tribunal proceedings on the basis that Mr Jackson had not been exposed at the BHP premises, using information subsequently (in August 2006) obtained from Mr Harvey pursuant to the joint retainer, does not demonstrate prejudice arising from the late notification of the claim to Allianz. Nor does the fact that all the material annexed to Mr Harvey's report was not immediately provided to BlueScope's lawyers. Conclusion 234BlueScope argues that the breaches of condition 2 did not result in anything more than theoretical prejudice to Allianz. I agree. What it lost was an opportunity to cross-examine Mr Jackson (or, perhaps, the opportunity to cross-examine him before BHP's representatives had BHP been separately represented). From my review of the transcript and his Honour's assessment of the tape recording of that evidence as events transpired on 12 July 2006, this was an opportunity of no more than speculative value. 235His Honour's observation (at [103]) that it was open to Allianz to seek to obtain evidence elsewhere of Mr Jackson's work history and exposure to asbestos, insofar as it suggests that there was no irretrievable prejudice (responding to the submission that had been made by Allianz of irretrievable prejudice), does not bespeak error in the finding that there was no prejudice caused by the late notification. Such a finding was open whether or not Allianz could have obtained such evidence elsewhere. 236Similarly, insofar as his Honour took into account his view of the prospects of success of Mr Jackson's claim against BHP (a view which Allianz maintains could not have been reached on the evidence before the Tribunal, which included Mr Jackson's sworn pleading and particulars), the conclusion that there was no prejudice arising from late notification is one that was open irrespective of the prospects of the claim against BHP. 237Grounds 1(ii) and (iii) are not made out. Ground 1(v) - finding re evidence necessary to support mesothelioma claim 238As noted earlier, at [106], his Honour said that the claim by Mr Jackson that he had done work at the BHP premises was of no "evidentiary value" unless Mr Jackson could make it plain that he was "significantly exposed" to asbestos (at the BHP premises). 239Allianz submits that his Honour's finding that Mr Jackson's claim was of no evidentiary value was made absent any foundational evidence; that his Honour mistakenly assumed that causation could only in law be demonstrated where the frequency and/or intensity of asbestos was "significant"; and that his Honour misunderstood the cumulative exposure theory of mesothelioma induction (referring to what was said in Amaca Pty Ltd v Booth [2011] HCA 53; (2011) 246 CLR 36 at [18] to [26] and [51] per French CJ). 240It is submitted that his Honour misapprehended the accepted mode of demonstrating causation and contribution by reference to all known exposures within an acceptable latency period. In this regard, Allianz refers to decisions of the Tribunal to the effect that all asbestos exposure within an acceptable latency period makes a material contribution to the cause of mesothelioma (in particular, the judgment of Kearns DDTJ in King v Caltex Petroleum Pty Ltd [2013] NSWDDT 4 at [26], citing O'Meally P (DDT) in Eaton v Carrier Air Conditioning Pty Ltd [2004] 1 DDCR 716 at [8]). BlueScope takes issue with this statement of principle insofar as it does not take into account the exception made for exposures that are trivial or de minimis (Booth v Amaca Pty Ltd [2010] NSWDDT 8 at [59]) BlueScope points out that the onus remains on a plaintiff to establish that there has been an exposure that is more than trivial or de minimis. 241In King v Caltex Petroleum, Kearns DTTJ said at [28] that if exposure is de minimis it will not be material for the purposes of considering whether the proposition that all asbestos exposure within an acceptable latency period makes a material contribution to the cause of mesothelioma. Curtis DTTJ in Booth v Amaca said at [62] that all exposures to Chrysotile asbestos other than trivial or de minimis exposure occurring in the relevant latency period materially contributed to the cause of mesothelioma. 242It is submitted by BlueScope that what his Honour was saying (at [106]) was that, as a starting point, there would need to be evidence of some sort of exposure to elevated levels of asbestos and that the evidence before his Honour did not go that far. If that is what his Honour was addressing at [106] then the conclusion of no evidentiary value suffers from the fact that, at least in the verified pleadings and particulars, there was an allegation of exposure to asbestos dust at the BHP premises that could not on its face be dismissed as no more than trivial or de minimis. 243What his Honour was there addressing was the complaint by Allianz that Mr Hay had continued to act for BHP in the proceedings (after ceasing to act for BlueScope) and had not passed on the results of the Harvey investigation in a timely manner to BlueScope, part of the circumstances relied on by Allianz as amounting to the alleged breach by BlueScope of its obligation of utmost good faith. His Honour found that there was no detriment to BlueScope by the late provision of Mr Powell's affidavit. 244Allianz maintains that on the material before his Honour it could be established that Mr Jackson had worked as a BlueScope employee at BHP with asbestos rope and that this was not precluded by Mr Powell's evidence. 245The same particulars of negligence were alleged against both defendants. In the Statement of Particulars, Mr Jackson's alleged exposure to asbestos was particularised by reference to each of the defendants as follows: 4.5 How often were you exposed to asbestos during the period of exposure (including the number of occasions and/or the frequency with which this occurred)? A. At the Lysaghts works the Plaintiff was exposed to asbestos on many occaisions [sic] whenever he was required to do shutdown or repair work on the furnaces in the mills and/or the pots in galvanising area. B. At the BHP Steelworks the Plaintiff was exposed on a daily basis when doing the flanges around the coke oven doors. 4.6 Describe the level of intensity of exposure as you perceived it (including whether you considered the level or intensity was low, medium or high) ... A. The intensity of asbestos exposure was medium to high during shutdown or repair work at the Lysaghts work. B. The intensity of asbestos exposure was high during the rebuild of the coke oven at the BHP Steelworks. 246In the particulars (answer to question 4.7), Mr Jackson estimated that at least 90% of asbestos fibres he had inhaled throughout his life were probably inhaled during his work as a refractory bricklayer at the Lysaghts (i.e., BlueScope) works and BHP Steelworks. He described the asbestos products to which he had been exposed as: Asbestos rope. Insulation bricks often with marking "Newbolds" and often white and soft. Raw asbestos. Millboard. 247The particulars stated that the asbestos products were provided to Mr Jackson by BlueScope and/or BHP. Mr Jackson identified BHP as the occupier of the Newcastle Steelworks and stated that "in particular [BHP] provided direct supervision and instruction during the rebuild of the coke ovens" (answer to question 4.17). 248In his affidavit (at [25]-[26], [28]-[40]), Mr Jackson described the work that he had performed while employed by BlueScope, in the period from 1957 to 1961 and then from 1962 to 1966. He deposed (at [12]) that during that period he was sent by BlueScope to other premises, including BHP Steelworks and Commonwealth Steel, and that most of his work for BlueScope related to either "shutdowns" or scheduled maintenance and that when he was sent to work at other premises this was usually breakdown work caused by the failure of refractory brickwork ([13]). Mr Jackson deposed (at [36]) that he did not really recall the number of occasions he attended Commonwealth Steel because by far the majority of his time was spent either at BlueScope or BHP during the later years (presumably referring there to the time from 1962 to 1966). Mr Jackson also deposed at [36] that he did not handle much asbestos rope during those later years because he was principally working as a refractory brickworker when sent to other companies. 249At [37], Mr Jackson deposed that the work at BHP Steelworks, in addition to re-bricking, included considerable work on the coke ovens. He described that work in some detail and said that the dirtiest part of the work he undertook on the coke ovens, leaving aside the coal dust, was the replacement of the asbestos seals around the doors. Mr Jackson described how the asbestos rope had to be dug out of the groove around the doors; that this produced a considerable amount of asbestos dust and fibre in his breathing area whilst he was undertaking the task with his arms bent; and that for the part of the time he was working with his arms overhead when the dust fell directly on his face. Mr Jackson deposed that he used asbestos rope of the same type there as he had used at BlueScope. Mr Jackson's affidavit also referred to his having worked at Simon Carves as a refractory bricklayer at the new acid plant being constructed by BHP at the Newcastle steelworks (at [10]). 250BlueScope argues that for there to have been a substantial case against BHP it would have been necessary to establish more than that there had been a "more than trivial" exposure at BHP, it would have been necessary to establish that BHP was responsible in law for any disease resulting from such exposure. Nevertheless, insofar as the complaint by Allianz is that his Honour could not, on the evidence then before him, have come to the conclusion that Mr Jackson's claim to have worked at BHP was of no evidentiary value, I agree that such a finding was not open on the evidence before his Honour. 251That said, as I read what his Honour said at [106], it goes no further than a finding that the late provision of Mr Powell's statement (a matter relied upon by Allianz as one of the circumstances by reference to which breach of the obligation of utmost good faith should be found) did not prejudice BlueScope. 252Even if his Honour did wrongly conclude, when assessing whether there was prejudice as a result of the late notification of the claim, that the evidentiary value of Mr Jackson's claim to have worked at the BHP premises, for the reasons set out earlier, I am of the opinion that no more than theoretical prejudice was suffered as a result of the loss of opportunity to cross-examine Mr Jackson at the bedside hearing and hence that the conclusion as to there being no prejudice for the purposes of s 18(1) is correct. 253Ground 1(v) is not in my opinion made out. Ground 2 of notice of appeal 254Ground 2 of the notice of appeal relates to the findings by his Honour in relation to Allianz' defence on the ground of breach of condition 3 of the policy by BlueScope. 255As to condition 3, BlueScope submits that his Honour's position can be supported on three grounds: first, that Allianz' conduct discharged BlueScope from any obligation to seek its consent or otherwise that Allianz was not entitled to refuse indemnity by reason of any failure to comply with the condition; second, that there was no prejudice to Allianz from the failure to consult and that any breach should be excused; and, third, that Allianz' conduct was such as to amount to a breach of its own obligations of good faith to BlueScope, which enabled BlueScope to recover the amount of the settlement by way of damages for breach of contract. I deal with the first two of those submissions when considering grounds 2(a) and (b); the third when dealing with BlueScope's sixth ground of contention. 256Allianz raises 3 issues in relation to the alleged breach of condition 3. Ground 2(a) - obligation to take over conduct of proceedings? 257Ground 2(a) of the notice of appeal relates to his Honour's finding (at [101], [110] and [111]) that Allianz was in breach of an obligation to take over the conduct of the proceedings either upon notification of the claim or at least by 20 July 2006 (at least to the extent that it declined to do so without substantial reasons). Allianz submits that there was an implicit consequential finding that this conduct (whether alone or which breach of the obligation to indemnify) represented a contravention of the insurer's obligation of utmost good faith, entitling BlueScope to settle the proceedings without further reference to Allianz ([112]). 258It is clear, from the passages at [101] and [110] of his Honour's reasons, and from his Honour's statement at [107] that Allianz had declined to take over the proceedings for reasons that "lacked substance", that his Honour considered that there was either an obligation on Allianz' part to assume conduct of the defence on notification of the claim or that it was required, as part of its obligation of good faith as an insurer, to do so unless there were reasons of substance for it not to do so. 259However, there was no contractual obligation on the part of Allianz to assume the conduct of the defence, whether or not it agreed to accept liability to indemnify under the policy. BlueScope did not, on appeal, suggest otherwise. Condition 4 of the policy clearly confers an entitlement on the insurer, it does not purport to impose any obligation on the insurer. 260Allianz further maintains that the good faith obligation on an insurer does not impose on the insurer a prima facie obligation to take over the conduct of the insured's defence and submits that, if this were so, it would convert a right into an obligation. I agree. 261In Distillers Co Bio-Chemicals (Aust) Pty Ltd v Ajax Insurance Co Ltd [1974] HCA 3; (1974) 130 CLR 1, Stephen J said (at 24), of a public risks insurance policy containing a clause that provided that the insured "shall not without the consent in writing of the Company make any admission, offer, promise or payment in connection with any accident or claim, and the Company if it so desires shall be entitled to take over and conduct in the name of the Insured the defence or settlement of any claim", the following: The present policy, like other policies which have come before English courts, allows the insurer to stand by, neither accepting nor declining liability; it also casts upon him no obligation to defend claims made against the insured. 262That is equally the case here. 263His Honour erred in my opinion in approaching the matter on the basis that there was a contractual obligation on the part of Allianz to assume the conduct of the defence. His Honour also erred to the extent that he implicitly found that there was any breach of the obligation of good faith in declining to take over the conduct of the defence without any, or any substantial, reason. 264The allegation by BlueScope in this regard was that Allianz was in breach of the obligation of utmost good faith in failing to consider in good faith, expeditiously and reasonably, whether to take over the conduct of the claim. There was no contractual obligation to give reasons for a decision not to assume conduct of the defence; nor would that necessarily be required as part of an obligation of good faith. In any event, the reasons indicated at the time were that Allianz considered its position to have been prejudiced. It does not appear to have been suggested that there was any collateral purpose indicating a lack of bona fides in Allianz' decision not to take over conduct of the defence. It must have been entitled to take a commercial decision in its own interests not to do so, having regard to its view as to the prejudice suffered as a result of BlueScope's late notification of the claim. 265As to the allegation that it failed to consider the case expeditiously, while there was no notification of a decision as to the running of the case until 9 May 2007 it is difficult to see what damages could have been said to have flowed from the delay in notification. BlueScope's defence of the proceedings was clearly motivated by its concern to preserve its position under the deed of indemnity with BHP. It is not suggested that it would not have incurred those costs had it been aware at an earlier stage that Allianz would exercise its rights not to take over conduct of the defence. 266Ground 2(a) is in my opinion made out. Ground 2(b) of notice of appeal; grounds 3 and 6 of notice of contention - was there an obligation to indemnify? Was BlueScope discharged from compliance with condition 3 of the policy? Was Allianz in breach of its obligations in declining indemnity "without any substantial reason"? 267As Allianz notes, under an indemnity policy the insurer's indemnity obligation arises on the happening of the insured event: namely, the insurer becoming legally liable to pay damages in response to the claim (Kodak Australasia Pty Ltd v Retail Traders Association (1942) SR(NSW) 231 at 233.9; Distillers Co Bio-Chemical v Ajax Insurance at 26 and CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; (2007) 235 CLR 1 at [4] and [5]). 268The present policy is akin to that considered in Distillers where (at 25-26) Stephen J likened the policy to that considered in Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363 as one where the right to indemnity arose only upon the liability of the insured to the injured person being established by judgment of the court, award of an arbitrator or by agreement between the insured and the third party. 269In Distillers, the policy was to indemnify the insured against all sums which the insured shall become legally liable to pay as compensation in respect of loss of or damage in respect of accidental death, bodily injury and/or damage to property arising out of an accident happening during the continuance of the policy. Stephen J said at 26: In the present case the insurer is thus on good legal ground in asserting, as it has in correspondence, that as yet no obligation to indemnify has arisen; no event against which ... to indemnify has occurred; the insurer not yet having become legally liable for any sum by way of damages. Accordingly, its failure to admit liability to indemnify can in no view amount to any breach of contract. Moreover, since it is under no obligation under the policy to take over and conduct the defence of any claim against the insured its failure to do so is likewise no breach of the policy capable of excusing the insured from observance of the terms of condition 2(a). (my emphasis) 270There was no contractual obligation on Allianz to acknowledge a liability to indemnify upon notification to it of the claim. The contractual obligation to indemnify arose, subject to BlueScope's due and proper observance and fulfilment of the conditions of the policy, upon BlueScope being "liable to pay compensation under the Act to or in respect of any person who is or is deemed by the Act to be a worker of such Employer or to pay any other amount ... in respect of his liability independently of the Act for any injury to any such person". Such liability would therefore only arise on a judgment, or settlement, of Mr Jackson's claim under which BlueScope was liable to pay damages for his injury. 271It has been recognised that an insurer is permitted, consistent with its obligation of good faith to the insured, to put the insured to proof under a contract of indemnity insurance (CGU v AMP per Kirby J at [72]). Allianz, correctly, in my opinion, contends that there is no breach of policy by an indemnity insurer bona fide so doing. 272What BlueScope (at [22] of its cross-claim) had pleaded was that Allianz had breached its obligation of good faith in failing, between 14 and 20 July 2006 to consider "in good faith and with proper expedition and reasonably" whether to grant indemnity. However, in its reply, it went further in alleging that Allianz had breached its obligations under the policy by denying indemnity on 20 July 2006 and thereafter maintaining that denial ([4.1.4]). 273As to BlueScope's contention in its cross-claim that Allianz had failed to consider expeditiously whether to indemnify it, it seems unlikely that BlueScope could have succeeded on an assertion that Allianz was in breach of an obligation of good faith in not considering or making a decision as to indemnity by 20 July 2006, a mere 6 days after notification of the claim. To the extent that BlueScope's complaint related to the period up to May 2007 when a decision was finally made, his Honour made no finding that this delay amounted to a breach of an obligation expeditiously to consider whether to indemnify. It is not necessary to determine that issue on the present appeal since, even if there was a breach of an obligation of good faith expeditiously to consider whether to make a determination as to indemnity some time earlier than May 2007, it was not suggested that any damages were suffered as a result. As previously noted, BlueScope's decision to defend the proceedings seems to have been made as a consequence of its desire to act as a prudent uninsured vis a vis BHP so as to preserve its claim under the de-merger deed of indemnity. 274As to the allegation that Allianz breached an obligation to act reasonably in making the relevant decision, his Honour again did not make a finding of unreasonableness on the part of Allianz but did find that the refusal to indemnify was "without reason" or without substantial reason. It cannot be said in my opinion that Allianz made the decision not to indemnify without any, or any substantial, reason. Its letter of 6 July 2007 made clear that its refusal to indemnify was based on its belief that it was not obliged to do so having regard to what it contended was BlueScope's breach of the policy conditions. Allianz was correct in its contention that breach of condition 2 (at least until excused pursuant to s 18 of the Insurance Act) meant that it was not liable to indemnify BlueScope under the terms of the policy. In those circumstances it is difficult to see the basis on which a finding that Allianz had not acted reasonably could have been made. 275As to the allegation that Allianz was in breach of an obligation to consider in good faith whether to indemnify, it must be noted that as at both May and July 2007 no contractual obligation to indemnify had arisen. It is not clear the basis on which a lack of good faith was asserted but it was not the subject of any finding by his Honour nor was any reason (other than, perhaps, the lack of a substantial reason to decline indemnity - which cannot be maintained in the face of the finding as to breach of condition 2) given for the implicit finding that there was a breach of the obligation of good faith in denying liability to indemnify and maintaining that denial up to the hearing. 276BlueScope submitted at the Tribunal hearing, in effect, that a wrongful denial of indemnity to pay a claim denied an insurer any legal entitlement thereafter to insist on compliance with condition 3 of the policy (BlueScope there citing Edwards v Insurance Office of Australia Ltd (1933) 34 SR(NSW) 88, Distillers Co Bio-Chemicals v Ajax Insurance and, in the alternative, referring to Peter Turnbull and Co Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1953) 90 CLR 235 at 246-247 and 251). Allianz disputed this contention. 277Allianz contends that where a contract of insurance is not repudiated by the insurer but, rather, the insurer (relying on the contract terms and perceiving that the insured's conduct, in breach of clause 2 of the policy, has prejudiced its position) puts the insured to proof, the insured remains under a duty of good faith to the insurer when effecting any settlement with the claimant (referring to Kirby J, in CGU v AMP). It is submitted that discharge of that obligation required BlueScope to have the interests of the insurer in mind (which I note Ms Brewster agreed she had not done) and to comply with condition 3. 278BlueScope did not plead (nor did his Honour find) that any conduct by Allianz in denying liability to indemnify amounted to anticipatory breach or repudiation of the contract of insurance. Insofar as there might have been contended to have been repudiatory conduct on its part, Allianz notes that BlueScope's cross-claim proceeded on the premise that that it had affirmed the policy, by seeking relief referable to its claimed entitlement to indemnity under the policy (there referring to [21(e)] of the cross-claim and order 1). 279In Distillers, Menzies J said (at 9-10): The insured may make a reasonable settlement where the insurer breaches the contract by denying liability and refusing to defend or settle ... But such is not the case here for the insurer has not repudiated its obligations and is not, so far as I can see, in breach of its obligations. By acting as it has it may be that the insurer is forcing the insured to defend claims that it would prefer to settle at the partial expense of the insurer. However it seems to me that the condition is directed to giving the insurer such an advantage for its own protection. 280Stephen J (at 24) identified the dilemma for an insured when faced with a refusal by the insured to acknowledge in advance liability to indemnify, as follows: This construction of condition 2(a) [that there is conferred upon an insurer who has declined either to defend a claim or to acknowledge any liability to indemnify in respect of that claim, a power arbitrarily to withhold consent to a settlement] is prone to leave the insured in a dilemma; if he defends the action brought against him a verdict much in excess of the insurer's limit of liability may result and the insurer may ultimately turn out not to be liable to indemnify; if he settles the action, albeit for a reasonable sum, the insurer may then rely, as the present insurer has said it will, upon the fact of that unauthorized settlement as a breach of condition excusing it from all liability to indemnify. 281It was equally BlueScope's dilemma in the present case. 282As noted, BlueScope relied on what was said in Edwards v Insurance Office Australia, where Halse Rogers J found at 98 that the insured plaintiff was in the position that it had proved at trial "what is practically an anticipatory breach of contract on the part of the defendant". There, the defendant had wrongly disclaimed liability under an insurance policy on the basis of a perceived failure of the insured to notify it of certain court proceedings at the time of the motor vehicle accident the subject of the claim. His Honour concluded that the plaintiff was then clearly entitled to recover the damages resulting from the defendant's breach. In that case however, the pleading had alleged repudiation of liability and had claimed loss of the benefit of the insurance policy. His Honour said at 98: It is clear, on my reading of the evidence, that the plaintiff's evidence, as it stood at the close of his case, established the contract, the breach, and the consequent loss of the benefit of the policy, and there was a complete case to go to the jury, so long as that evidence was not cut down, for the assessment of such damages as was shown to flow from the breach. In my opinion, the plaintiff, having been put in the position of having to take all steps in connection with the litigation of the claims against him at his own risk, is entitled to recover, as damages, such sums as he paid to settle those actions, provided that he shows that he acted reasonably in making the settlement. 283In the present case, however, there was no finding by his Honour of anticipatory breach or repudiatory conduct by Allianz, nor was there any such plea. 284Allianz submits that its conduct in invoking condition 2 to decline indemnify is inconsistent with any repudiation by it of the contract because the insurer is (correctly, as it transpired, subject only to the insured being excused pursuant to s 18) invoking its contractual rights. Allianz maintains that it is not repudiatory conduct to stand on one's legal rights. Thus Allianz submits that its reliance on breach by BlueScope of condition 2 in the May/July 2007 correspondence shows that the insurer was not saying it would not indemnify whatever might be the outcome of the proceedings; it was, in effect, simply saying that there was no present obligation to do so. 285The terms of the notification of Allianz' refusal to indemnify did not add the rider that, if the breach of policy conditions were later to be excused or if it were found that it was incorrect as to its construction of the contract, it would then acknowledge liability to indemnify. However, it must be implicit in the reliance by Allianz on breach of the policy conditions for its refusal to indemnify that Allianz was objectively acting in accordance with what it understood to be its legal rights under the contract, not repudiating the contract. 286The question is as to the objective intention to be discerned from the relevant conduct when determining whether there has been an intention to renounce or repudiate a contract. By way of analogy, it is clear that if a party, objectively viewed, is willing to perform the contract on its proper construction, then the fact that it proceeded on a mistaken interpretation of the contract will not evince an intention to repudiate the contract (see DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423, where the respondent's case was pleaded as one of rescission for repudiation and renunciation for "anticipatory breach"; Kweifio-Okai v RMIT University [1999] FCA 1686, (1999) 47 AILR 4-223 at [61] per Dowsett J; Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277; Australian Stratacore Holdings Ltd (in liq) v Sanwa Australia Securities Ltd [1994] NSWCA 11). 287In Woodar, Lord Wilberforce observed (at 283) that: it would be a regrettable development of the law of contract to hold a party who bona fide relies upon an express stipulation in a contract in order to rescind or terminate a contract should, by that fact alone, be treated as having repudiated his obligations if he turns out to be mistaken as to his rights. Repudiation is a drastic conclusion which should only be held to arise in clear cases of a refusal, in a matter going to the root of the contract, to perform contractual obligations. 288BlueScope made it clear in the course of submissions, on the appeal that it does not contend that Allianz' conduct was repudiatory of the policy as a whole (Appeal Transcript 30/37). However, it argues that there was an anticipatory breach and that the communication by Allianz of its decision not to indemnify meant that BlueScope was not thereafter bound to obtain its consent to a settlement of the proceedings. There was no pleading of anticipatory breach. It is difficult to discern from the communications in May/July 2007 an intention on the part of Allianz not to be bound by and perform the contract of insurance according to its terms. Without an intention of that kind being evinced by the correspondence, there could be no finding of anticipatory breach. The position seems, instead, to be that Allianz did not repudiate its obligations under the insurance policy; rather, it acted on what was ultimately proven to be a correct view as to the consequence of BlueScope's breach of condition 2 of the policy (albeit that the Tribunal considered this was a breach that should be excused). 289The only question then is whether in some other fashion Allianz' conduct could be said to have dispensed BlueScope from its obligations under condition 3. 290BlueScope relies on the Peter Turnbull case at (246-247 and 251) for the proposition that, where a party to a contract repudiates its obligations, further performance of some or all of the other party's obligations may not be required and in that event the other party would be discharged from compliance. It is on this basis that it is asserted that Allianz' denial of indemnity discharged BlueScope's obligation to seek consent to the settlement. Allianz says that Turnbull case can be explained as one that shows that an antecedent breach may dispense a party from compliance with a subsequent obligation conditional for its performance on the earlier breached obligation but maintains that, here, there was no antecedent breach. 291In Turnbull, the plaintiff had claimed damages for non-performance by the defendant of an agreement under which the plaintiff was to purchase oats at a particular price FOB Sydney. To the knowledge of the defendant, the purchase by the plaintiff was for the purpose of re-sale. The trial judge found that the contract was subject to a condition as to delivery, namely that the oats were to be loaded, on a ship (or ships) nominated by the plaintiff, during a particular period. The plaintiff gave a tentative indication of a shipping date within the relevant period, which the trial judge inferred had become absolute. The defendant then informed the plaintiff that it could not supply the oats from Sydney but could probably supply them from Melbourne. There was some correspondence between the parties as to the possibility that the oats could be loaded from Melbourne. Ultimately, however, the defendant advised that it would not be able to load the oats from Melbourne; the plaintiff insisted on the oats being loaded from Sydney (but did not nominate another ship or shipping date); and the defendant responded to the effect, "we have not got the oats here. You cannot get blood out of a stone". The plaintiff then purchased the oats at a greater cost, losing the benefit of the agreement and the profits expected to be made under the agreement and sued the defendant. 292The trial judge found that the plaintiff was not in default at the time when the defendant stated that it would not load the oats in Sydney and that the plaintiff was entitled to accept that repudiation of the contract by the defendant and to maintain the action for a breach. An initial appeal from that decision was successful but the High Court ultimately reinstated the verdict for the plaintiff. 293In the High Court, Dixon CJ (at 240) framed the question for decision as being whether, under the terms of the contract for the sale and purchase of oats FOB Sydney, the buyer was disentitled to recover from the seller for non-delivery of the oats because the buyer had failed in the fulfilment of the condition precedent to nominate a ship. His Honour said at 243: It appears to me that by buying the oats ... against the defendant's contract and by informing the defendant of the fact, ... the plaintiff fixed or crystallized the rights under the contract, whatever they may be, of the respective parties. The plaintiff treated the refusal or failure of the defendant to deliver the oats as a breach going to the root of the contract and intimated an intention on the part of the plaintiff to regard the contract as at an end. 294As to the failure of the plaintiff to name a ship available for loading in the relevant period and to give 14 days' notice of the ship and the shipping date, at 245-247, Dixon CJ said But however this may be, I think that the plaintiff is entitled to succeed on the ground that, in so far as there was a non-fulfilment of the condition requiring the nomination of a February ship and the giving of fourteen days' notice of the ship and shipping date, the defendant dispensed the plaintiff from such fulfilment. In the Supreme Court the plaintiff failed because the case was treated as one in which the contract had been kept open by the plaintiff notwithstanding the defendant's intimation of its inability to perform it, with the consequence that the plaintiff was bound to fulfil the conditions on its part to be fulfilled. But this is not a case confined to a simple anticipatory refusal to perform or declaration of inability to perform on the part of one party followed by an election by the other not to treat the contract as discharged by breach. The course taken by the defendant involved something more than that and the additional element brings into application other principles of law. The defendant persisted up to 2nd March that it could perform the contract only in one way, namely by substituting a shipment by the same vessel in Melbourne for that in Sydney contracted for. By seeking the plaintiff's help in an attempt to effect this substitution and at the same time persisting that it could not perform the contract according to its terms the defendant clearly intimated to the plaintiff that it was useless to pursue the conditions of the contract applicable to shipment in Sydney and that the plaintiff need not do so. The fact that under the rules of law governing anticipatory breach of contract, the plaintiff might have elected to treat the defendant's intimation as a discharge by breach may be disregarded. The plaintiff did not do so and that left the contract on foot. But it left it on foot subject to a continued intimation that only by a substituted performance could the defendant carry it out, an intimation involving an attempt by all parties to effect the substitution... Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v. East India Co [(1787) 1 TR 638; 99 ER 1295]. But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention... The party must shew he was ready; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act. (my emphasis, footnotes omitted) 295His Honour considered that the defendant had unmistakeably intimated to the plaintiff that it was useless to take the steps required for the defendant to deliver the oats FOB Sydney and that the plaintiff (at 248): was excused from literal compliance with the clause requiring a February ship and fourteen days' notice thereof and was so excused at and from a time when the plaintiff could still have fulfilled it. What excused the plaintiff was the defendant's persistently maintaining that it could not ship the goods from Sydney as distinguished from Melbourne. 296Kitto J said at 250-251: The principle, which applies whenever the promise of one party, A, is subject to a condition to be fulfilled by the other party, B, may, I think, be stated as follows. If, although B is ready and willing to perform the contract in all respects on his part, A absolutely refuses to carry out the contract, and persists in the refusal until a time arrives at which performance of his promise would have been due if the condition had been fulfilled by B, A is liable to B in damages for breach of his promise although the condition remains unfulfilled. The doctrine of anticipatory breach is, of course, applicable as soon as A has communicated to B his refusal to carry out the contract. Under that doctrine B is put to his election. He may, if he chooses, treat the contract as brought to an end in consequence of A's default, and recover damages from A for loss of the benefit of the contract. Alternatively, he may treat the contract as continuing on foot, in which case it will remain in force for the benefit of both parties, just as it would if the refusal had never been declared. If A persists in his refusal, B may at any time while the refusal continues elect to treat the contract as at an end and sue for damages; but unless and until he does so the contract remains on foot, and A may withdraw his refusal and require B to perform the contract on his part, subject only to giving B reasonable notice of his change of intention ... or he may take advantage of any supervening circumstances of such a character as to discharge the contract ... But suppose that A's refusal is never retracted; that B does not elect while the period specified by the contract for performance is unexpired to treat the contract as determined by reason of the refusal; and that no event occurs during that period to discharge the contract. I am supposing, of course, a case like the present where in all the circumstances the refusal necessarily conveys to B that he need not trouble to fulfil a condition to which A's obligations under the contract are subject, because even if he does A will still not perform his obligations. ... the inescapable fact is that A's refusal was a continuing intimation that the condition need not be observed, and it did not become any the less an intimation to that effect because B chose not to determine the contract before its time. The intimation having continued until the time came when A would certainly have been in default if the condition had been fulfilled, the law, as I understand it, treats A's obligation as absolute, and holds B entitled to damages for not having got what A promised he should have in the event of the condition being fulfilled. (my emphasis) 297At 252, his Honour continued: What is meant, however, by saying that fulfilment of the condition has been dispensed with is that A's conditional obligation is to be treated, for the purposes of an action for non-performance, as if it had been made absolute by a fulfilment of the condition ... the defendants having discharged the plaintiff from doing what he had to do, he was substantially in the same position as if he had done it, not indeed for the purpose of recovering the whole purchase money, but for the purpose of recovering damages for the non-payment thereof. Conclusion 298As pointed out by Meagher JA (at [92]), the primary judge did not make findings necessary to answer the question whether Allianz had dispensed with the requirement for BlueScope to comply with condition 3. There was not a finding that Allianz had intimated that it was useless for BlueScope to comply with condition 3 because, come what may, Allianz would not indemnify it. 299Allianz was not obliged to confirm its agreement to indemnify this particular claim until a liability to indemnify was established. The fact that Allianz did not advise BlueScope, on notification of the claim or by 20 July 2006 (or indeed thereafter) that it accepted liability to indemnify under the policy, would not of itself dispense BlueScope from its obligation to comply with condition 3. For such a conclusion to follow there would need to be further factual findings, of the kind to which Meagher JA refers, that this Court is not in a position to address. Absent such findings the position appears to be akin to that considered in Distillers. 300Allianz contends that his Honour failed to address the above issues. I agree. Allianz further contends that, if his Honour did so implicitly, then his Honour failed to comply with his duty to give reasons in relation to the competing arguments that were presented on this issue (Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 431, 436 to 437 and 439 to 441). Again, I agree. 301Ground 2(b) in my opinion is made out and ground 3 of the notice of contention is not made out. I consider ground 6 of the notice of contention later in these reasons. Ground 2(c) - failing to exercise jurisdiction in failing to determine allegation of breach by BlueScope of obligation of utmost good faith in relation to consent to entry of judgment in favour of BHP 302What Allianz contends in this ground of appeal (as I read it) is, in effect, that his Honour should have found that, in consenting to the entry of judgment in favour of BHP without providing prior notice to Allianz, BlueScope breached its obligation of utmost good faith to it. However, no such breach was in terms pleaded at [10(d)] of the defence to cross claim. Rather, what was pleaded (at [10(d)(viii)]) was that Piper Alderman continued to act for BHP "securing an advantageous outcome for it to the detriment of [Allianz]". 303In oral submissions, Allianz maintained that ground 2(c) focuses, not on the obligation of utmost good faith, but on condition 3 of the policy. It complains that his Honour failed to consider the defence pleaded at [10(c)(ii)] of the defence to cross-claim and hence failed to engage in the jurisdictional task of fact finding or a constructive failure to exercise jurisdiction (referring to Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 as explained in Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [9]). 304Allianz' written submissions ([57]) focus in this regard on consent to entry of a judgment that exonerated BHP but Allianz does not seek to maintain such an argument on appeal. Instead, it contends that the breach of condition 3 was entry into the settlement with the plaintiff without notice. There is, therefore, some disjunction between the way in which Allianz pleaded its defence, the grounds of appeal, the written submissions and the oral submissions. As this particular breach was not pleaded and seems not to be pressed on appeal, it is not necessary here to deal with it. Notice of contention Ground 5 - order under s 18(1) to excuse breach of condition 3 of the policy 305His Honour did not deal expressly with the claim, in reply, by BlueScope that any breach of condition 3 should reasonably be excused under s 18(1) of the Insurance Act. 306His Honour did express the view that there was no basis for Mr Prentice's opinion that he could have expected to obtain a 25% contribution from BHP to the settlement, even on the assumption that he could have successfully objected to the plaintiff consenting to judgment in favour of BHP. His Honour also inferred that the plaintiff's counsel would not have advised that there be agreement to a judgment in favour of BHP, and an order that the plaintiff pay a defined sum of the costs of BHP, unless counsel had considered that there was no chance of success of the case against BHP ([85]). 307It is accepted by Allianz that there was no basis given by Mr Prentice for his estimate of 25% contribution but notes that this evidence was not challenged. BlueScope submits in this regard that his Honour's finding that rejection of Mr Prentice's evidence asserting a 25% contribution is a factual one and was clearly open, given his finding that Mr Jackson's claim against BHP lacked proper evidentiary basis. For the reasons explained above, that finding was itself not maintainable having regard to the verified pleading and particulars. 308Allianz contends that prejudice was occasioned by the breach of condition 3 and therefore that s 18 is not available to BlueScope. The prejudice identified in Allianz' written submissions ([59]) was the loss of the ability for Allianz to bring a claim in BlueScope's name against BHP for indemnity or contribution by way of subrogation, on the basis that the entry of the consent judgment against the plaintiff in favour of BHP had the effect of transferring the whole of BHP's liability to BlueScope (with the aim, it is contended, of sheeting that liability home to Allianz). BlueScope's response was to question whether an insured's obligation not to impair rights to which the insurer is subrogated extends to circumstances where the insurer has denied liability but that, if it does so extend, it must be limited to conduct which is unreasonable in the circumstances of the case. 309On the appeal, the prejudice was identified as the loss of an opportunity, in the context of the settlement negotiations, to seek a contribution by BHP to the settlement sum that the plaintiff accepted. Allianz maintains that it is immaterial whether or not it could have brought a cross-claim; rather its prejudice was that it was deprived of the opportunity to seek contribution as part of a commercial settlement (Appeal Transcript 3.45); to encourage BHP to contribute something towards the settlement sum that the plaintiff had agreed to accept (Appeal Transcript 4.5). 310Allianz accepts that, from 20 July 2006, BlueScope was required to act as a prudent uninsured, since it was seeking indemnity under the policy. It accepts that a prudent uninsured may arrive at an objectively reasonable settlement in light of its potential liability and pay accordingly (AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185; (2005) 146 FCR 447 at [161] per Gyles J) but it contends that reasonableness of a settlement is not dictated solely by the sum. Allianz submits that Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603 does not stand as support for the proposition that BlueScope was entitled to settle, and accede to the entry of judgment on terms that assumed full liability to the plaintiff and exculpated BHP, without regard to condition 3 of the policy and without regard to Allianz' interests. 311BlueScope argues that the exercise of power under s 18 would take into account the conduct of Allianz in response to the request for participation in relation to settlement discussions (see the correspondence referred to earlier above). That may well be a relevant factor. 312However, the claim to be excused under s 18(1) required his Honour to address the question whether no prejudice was caused by any breach of condition 3 and, if there were found to be no prejudice, to consider whether the breach should reasonably be excused. 313Insofar as his Honour implicitly held that no prejudice was occasioned by such a breach, with the result that the breach could reasonably be excused under s 18(1) of the Insurance Act, and went on implicitly to decide that such a breach should be excused, his Honour did so without providing reasons for those conclusions. 314The application for relief the subject of ground 5 of the notice of contention should be remitted to the Tribunal to consider. Ground 6 - alleged breach by Allianz by declining indemnity without any substantial reason 315This ground relates to BlueScope's claim for damages for breach of an alleged condition of the policy (namely, whether to consider in good faith and with reasonable expedition, whether to grant indemnity, and whether to take over the conduct of the claim and whether to consent to the insured incurring defence costs). It was not expressly dealt with by his Honour. 316BlueScope places emphasis on what was said in Distillers by Menzies J and by Stephen J, respectively, as to the obligation of an insurer when considering whether to withhold consent to a settlement by its insured. Menzies J said at 10, after the passage extracted earlier above: In these proceedings, there has been no argument upon the question whether in the circumstances the refusal of the insurer to give its consent in writing to the insured making any admission, offer, promise or payment in connexion without any claim lacks bona fides or is unreasonable and, if so, whether the insurer is under an obligation to consent. These are important questions of law depending on findings of fact which have not been made and which require full consideration after argument. [His Honour expressed no opinion on those issues]. 317In that case, Stephen J said at 26-27: However in my view the declaration tells but half the story; the consent to which condition 2(a) refers is not one which the insurer may arbitrarily withhold. Its power of restraining settlement by the insured must be exercised in good faith having regard to the interests of the insured as well as to its own interests and in the exercise of its power to withhold consent the insurer must not have regard to considerations extraneous to the policy of indemnity. 318His Honour noted that it was important that the making of that declaration should not be thought to confer any arbitrary power of refusal of consent upon the insurer, saying at 29: On the contrary I regard the power of the insurer as so hedged around with safeguards for the legitimate interests of the insured as to result in a situation in which the insured may be little worse off as a result of the declaration than it would have been had it been held that it might settle claims without the insurer's consent. 319At 31, his Honour said that the duty of good faith and fair dealing controlled the actions of the insurer who has taken over the insured's defence but would apply equally to the insurer's exercise of its power of granting or withholding consent to the making of admissions even if it elects not to take over the defence. (Reliance is also sought to be placed on this by BlueScope, as I apprehend it, for an argument that Allianz could not have reasonably refused consent to the settlement had that consent been sought.) 320Reference is made by BlueScope to Mr Prentice's evidence that, ordinarily, his firm would advise Allianz not to decline indemnity unless breach had given rise to irremediable prejudice (Black 150-151V, 152R). It is noted that the approach was that claims would not be refused even if there was a failure to notify promptly unless the matter had first been investigated and it had been established that the failure to notify had actually caused prejudice. It is submitted that Allianz made no attempts to demonstrate it followed those procedures before the final refusal of indemnity in May 2007. 321BlueScope submits that Mr Prentice's evidence shows that the insurer did not in good faith put the insured to proof, rather the evidence showed that Allianz considered itself to be under an obligation to give proper and reasonable consideration to taking over the conduct of the defence but did not do so. This is said to be a breach by Allianz of its obligation of good faith. 322BlueScope further submits that, in retaining Sparke Helmore to act for it after settling the proceedings, BlueScope acted reasonably so as to mitigate the loss flowing from that breach by Allianz. It is said that this allows BlueScope to recover the amounts paid to Sparke Helmore and the amount of the settlement as damages for breach of the contract. It points to his Honour's findings that the refusal of liability was wrongful and that BlueScope's actions in settling fell within the scope of acting as a prudent uninsured (at [107], [111] and [112]). 323Allianz in response submits that there was no obligation on it to investigate the consequence of the prejudice flowing from the insured's breach and that Mr Prentice's evidence in this regard was on a wrong premise. 324His Honour seems to have considered that Allianz had an obligation not to decline indemnity without giving reasons or without a substantial reason so to do. Under the policy there was no express obligation to provide reasons; nor was a failure to do so pleaded as giving rise to a breach of the obligation of good faith. However, in any event, there was a sufficient reason to decline indemnity if Allianz bona fide considered that it had been prejudiced by late notification of the claim. There is no suggestion that its statements to this effect were untrue or that its belief as to prejudice was not genuinely held. While I have difficulty seeing any breach of the obligation of good faith in this regard, it is a matter that should be determined having regard to factual findings that this Court does not have jurisdiction to make. 325The issues raised by ground 6 of the notice of contention illustrate the need for the matter to be remitted to the Tribunal. Conclusion 326His Honour did not err in his construction of the test to be applied under s 18(1) of the Insurance Act nor in its application to the breach of condition 2 of the policy. However, his Honour did not make the necessary factual findings that would have permitted a conclusion that BlueScope was dispensed from its obligation to comply with condition 3 of the policy and failed to consider, or give adequate reasons for any implicit consideration of, the consequences of such a breach, including BlueScope's claim to be excused therefrom. His Honour also failed to deal with the respective allegations of breach of the parties' corresponding obligations of utmost good faith. 327Allianz submits that the question whether prejudice was suffered by the breach of condition 3 takes the matter beyond this Court's jurisdiction under s 32. BlueScope contends that it is open to the Court to grant relief based on the findings that were made by his Honour without the need for the matter to be remitted. 328In my opinion the matter must be remitted for determination of those issues that were not determined by his Honour. If a question of law can be determined on facts found by the Dust Diseases Tribunal, then this Court can adjudicate the question. However, if there is an operative error of law, but the factual findings necessary for this Court to determine that question of law have not been made by the Tribunal, then the question should be remitted to the Tribunal, where the requisite factual findings can be made. 329Insofar as BlueScope submits that this Court can determine the issue in relation to condition 3, this is based on the fact that, the appellate jurisdiction having been invoked by the appellant in respect of alleged errors in point of law, it is open to this Court to make "such other order in relation to the appeal" as the Court thinks fit. BlueScope contends that this extends to the relief sought under the notice of contention. It was submitted that such a broad power should not be read down. 330The High Court has on a number of occasions declined to enter into the debate as to whether this Court's jurisdiction on an appeal such as this is limited to the adjudication of questions of law or, once an error in point of law has been identified, has power to decide any other matter in issue (see Amaca Pty Ltd v New South Wales [2003] HCA 44; (2003) 77 ALJR 1509 at [22], [26]; Vetter v Lake Macquarie City Council [2001] HCA 12 at [14]; (2001) 202 CLR 439 at 447; Dasreef v Hawchar [2011] HCA 21; (2011) 243 CLR 588 at [48]-[49]). 331The issue has also been considered in this Court (Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; (2009) 75 NSWLR 649; CSR Ltd v Amaca Pty Ltd [2009] NSWCA 338; Downes v Amaca Pty Ltd [2010] NSWCA 76; (2010) 78 NSWLR 451). 332In Caltex Refineries, Allsop P, as his Honour then was, said at [11] that the consequence of the limitation under s 32(1) of the Act was that: ... the task of this Court (prior to consideration of relief) is limited to the assessment of a question of law dealt with by the Tribunal, and, in practical terms, whether there is an error of law: North Broken Hill Ltd v Tumes [1999] NSWCA 309; 18 NSWCCR 412 at 421 [24]-[25]; ICM Agriculture Pty Ltd v Perry [2002] NSWCA 257 at [19]; Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1 at 49 [148]-[166]; Patrick Operations Pty Ltd v Comcare (2006) 68 NSWLR 131 at 142 [39]-[59]; and B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2009) 74 NSWLR 481. though his Honour continued at [16] to note that if, on the facts displayed by the Tribunal's reasoning unaffected by legal error, this Court was not persuaded that any other error of the Tribunal was operative in relation to the particular question of law, this Court could reach a conclusion as to the relevant question of law (there, the existence of a duty of care). However, if the facts necessary for the correct undertaking of the analysis had not been found, the matter would need to be remitted to the Tribunal for rehearing. See also the analysis of Basten JA at [239]-[240]. 333In CSR, Allsop P noted at [32] that it was not this Court's place to make factual findings (on which the final legal conclusion there depended), a conclusion echoed by Hodgson JA at [53]. Basten JA addressed the issue at [86]-[91], noting the lack of clarity as to the scope of phrases such as "question of law", "point of law" and "error of law". 334In the present case, there have not been factual findings on a number of matters relevant to whether BlueScope was dispensed from the requirement to comply with condition 3 and to the application by BlueScope to be excused from any breach of condition 3 (the threshold test as to whether there was no prejudice, as well as matters going to the exercise of the discretion to excuse any breach if there were no prejudice); nor have there been factual findings as to the alleged breach by Allianz of its duty of good faith, for which BlueScope claims damages. 335It is not a case where, on the facts as found (assuming them to be unaffected by any operative legal error), relief can be granted based on a conclusion as to the legal effect of those findings. The matter must be remitted, though in my opinion the remitter should not include the issues relating to the breach of condition 2 (as to which there was no error of law established by Allianz). 336As to the costs of the appeal, Allianz has had mixed success. It has obtained an order for the matter to be remitted on some, but not all, of the issues on which it contended the Tribunal had erred. The ultimate outcome of the dispute remains to be seen. In the circumstances there should be no order as to the costs of the appeal. 337I would therefore propose the following orders: (1)Appeal allowed in part. (2)Set aside the orders of the Dust Diseases Tribunal made on 30 May 2013. (3)Remit the cross-claim to the Tribunal for the purpose of determining: (a)whether BlueScope was dispensed from compliance with condition 3 of the Policy; (b)whether, if not, BlueScope should be excused under s 18(1) of the Insurance Act 1902 (NSW) from any breach of condition 3 of the Policy; and (c)if necessary, BlueScope's claim to damages for breach of Allianz' obligation of utmost good faith in the respects alleged in par 22(b) of BlueScope's cross-claim. (4)No order as to the costs of the appeal. ********** Amendments 22 August 2014 - Representation - Solicitor for the Respondent Amended paragraphs: Coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 August 2014