Lambert Leasing Inc. v QBE Insurance Ltd [2015] NSWSC 750

Supreme Court New South Wales

Medium Neutral Citation: Lambert Leasing Inc. v QBE Insurance Ltd [2015] NSWSC 750 Hearing dates: 30, 31 March and 1, 2, 8, 9, 10 April 2015 Date of orders: 12 June 2015 Decision date: 12 June 2015 Jurisdiction: Equity Division - Commercial List Before: Rein J Decision: See [219] Catchwords: EQUITY - Aviation insurance - Two insurance policies one issued by QBE and one issued by an overseas insurer ("Global") - The effect of s 45 of the Insurance Contracts Act 1984 (Cth) - Dual insurance - Whether claim for past costs a subrogation claim and consequence - Whether claims brought by the insured brought by and for the interest of Global - The effect of a pay to be paid clause - Whether past payments made by the overseas insurer were made by mistake - The effect of a deed entered into by the insurer with Global - The extent of cover under the QBE Policy - Whether the proceedings premature - Whether insured failed to provide information to QBE and the effect of that failure - Whether QBE has wrongfully refused to advise insured of whether indemnity will be granted - Whether QBE or insured have acted in breach of duty of utmost good faith - Contract of Sale of Aircraft - Whether indemnity provisions relied on by vendor apply - Whether lease by the purchaser to another company as operator was a "use" or operation of the Aircraft by the purchaser - Whether the liability sought to be imposed by the claimants in the Unites States arise out of the vendor's negligence and/or is to be categorised as "manufacturers product liability" within the meaning of the Contract of Sale Legislation Cited: Civil Aviation (Carriers' Liability) Act 1959 (Cth) Conveyancing Act 1919 (NSW) Insurance Contracts Act 1984 (Cth) Cases Cited: ABN AMRO Bank NV v Bathurst Regional Council (2014) 309 ALR 445 Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495 Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185 Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652 Assicurazioni Generali de Trieste v Empress Assurance Corp Ltd [1907] 2 KB 814 Attica Sea Carriers Corp v Ferrostaal Poseidon [1976] 1 Lloyd's Rep 250 Barroora Pty Ltd v Provincial Insurance (Aust) Ltd (1992) 26 NSWLR 170 Bashtannyk v New India Assurance Co Ltd [1968] VR 573 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 Bradburn v Great Western Railway Co (1874) LR10Exch 1 British Traders' Insurance Co Ltd v Monson (1964) 111 CLR 86 Browne v Dunn (1893) 6 R 67 Caledonia North Sea Ltd v London Bridge Engineering Ltd [2002] Lloyd's Rep IR 261 Calliden Insurance Ltd v Chisholm [2009] NSWCA 398 Castellain v Preston (1883) 11 QBD 380 CE Heath Casualty & General Insurance Ltd v Grey (1993) 32 NSWLR 25 CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; (2007) 235 CLR 1 CGU Insurance Ltd v Watson [2007] NSWCA 301 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 Collinge v Heywood (1839) 112 ER 1352 Conohan v The Cooperators (2002) Fed Ct App 60; 2002 Fed Ct App LEXIS 45 Cornish v Lynch (1910) 3 BWCC 343 Coshott v Woollahra Municipal Council [2008] NSWCA 176 Davies v Taylor (No 2) [1974] AC 225 Duffy v Da Rin [2014] NSWCA 270 Eddystone Marine Insurance Co, In re; Ex parte Western Insurance Co [1892] 2 Ch 423 Edwards v Insurance Office of Australia Ltd (1933) 34 SR (NSW) 88 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 F G Strang Pty Ltd v N Z I Insurance Australia Ltd [1990] VR 1016 Firma C-Trade SA v Newcastle Protection & Indemnity Association (The Fanti) [1991] 2 AC 1 General of Berne Insurance Co v Jardine Reinsurance Management Ltd [1998] 2 All ER 301 Ghadami & Anor v Lyon Cole Insurance Group Ltd [2010] EWCA Civ 767 Great American Insurance Company v Cassell 239 Va. 421, 389 S.E.2nd 476 (1990) Green v CGU Insurance Ltd (2005) 215 ALR 612 Gutteridge v Commonwealth (QSC, Ambrose J, No 586 of 1993, 25 June 1993, unreported, BC9302579) Halliday v High Performance Personnel Pty Ltd (1993) 113 ALR 637 Harold v Smith (1860) 157 ER 1229 H Cousins & Co Ltd v D & C Carriers Ltd [1971] 2 QB 230 HIH Claims Support Ltd v Insurance Australia Ltd [2011] HCA 31; (2011) 244 CLR 72 Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 Horbelt v SGIC unreported decision of Bollen J Supreme Court of South Australia 26/06/1992 Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368 Idameneo (No 123) Pty Ltd v Gross [2012] NSWCA 423 Imaging Applications Pty Ltd v Vero Insurance Ltd [2008] VSC 178 Johnston v Salvage Association (1887) 19 QBD 458 Jones v Dunkel [1959] ALR 367; (1959) 101 CLR 298 Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 Knight v Hosken (1943) 75 Ll. L. Rep. 74 Kodak (Australasia) Pty Ltd v Retail Traders Mutual Indemnity Insurance (1942) 42 SR (NSW) 231 Limit (No 3) Ltd v Ace Insurance Ltd [2009] NSWSC 514 Maclean v Maclean; Australian Aviation Underwriting Pool Pty Ltd (Third Party) (1977) 15 SASR 306 Manifest Shipping & Co Ltd v Uni-Polaris Insurance Co Ltd (The Star Sea) [1995] 1 Lloyd's Rep 651 Maintek Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184 Moss v Sun Alliance Australia Ltd (1990) 55 SASR 145 Nicholas v Wesfarmers Curragh Pty Ltd [2010] QSC 447 Parsons v John Holland-Christiani & Nielson Joint Venture [1991] 1 Qd R 137 Penn v Simmons [1971] 1 WLR 1381 Pioneer Concrete (UK) Ltd v National Employers Mutual General Insurance Association [1985] 1 Lloyd's Rep 274 Prepaid Services Pty Ltd v Atradius [2012] NSWSC 608 Protean (Holdings) Ltd v American Home Assurance Co (1985) 4 ANZ Ins Cas 60-683 Raiffeisen Zentralbank Oesterreich AG v Five Star Trading LLC [2001] 3 All ER 257 Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 Re Dixon [1994] 1 Qd R 7 Seaboard Air Line Railroad Company v Richmond-Petersburg Turnpike Authority, 202 Va. 1029, 121 S.E.2d 499 (1961) Shaw v Yarranova Pty Ltd [2011] VSCA 55 Slagle v Hartford Insurance Company of the Midwest 267 Va. 629, 594 S.E.2d 582 (2004) Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pty Ltd [2009] WASCA 31 Southern Union Insurance Co of Australia Ltd v Altinier [1969] 2 NSWR 333 Stratti v Stratti [2000] NSWCA 358; (2000) 50 NSWLR 324 Sydney Turf Club v Crowley [1971] NSWLR 724 Sydney Turf Club v Crowley (1972) 126 CLR 420 Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164 Teal Assurance Company Ltd v W R Berkley Insurance (Europe) Ltd [2013] UKSC 57 Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 Trickett v Queensland Insurance Co Ltd [1936] AC 159; [1935] All ER Rep 729 Tyco Fire & Integrated Solutions (UK) Ltd v Rolls-Royce Motor Cars Ltd [2008] All ER (D) 16 (Apr) Versicherungs und Transport A/G Daugava v Henderson (1934) 49 Ll L Rep 252 Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pty Ltd [2009] HCA 50; (2009) 240 CLR 391 Texts Cited: Mann's Annotated Insurance Contracts Act (6th ed, P Mann, Lawbook Co, 2014) Margo on Aviation Insurance (4th ed, 2014) Nigel Rein 'Utmost Good Faith in Marine Insurance' (1999) 10 Insurance Law Journal 145 Precedent in English Law (3rd ed, Rupert Cross, Oxford University Press, 1968) Sutton on Insurance Law (4th ed, RM Merkin and WIB Enright, Lawbook Co, 2015) The Law of Liability Insurance (3rd ed, DK Derrington and RS Ashton, LexisNexis Butterworths, 2013) Category: Principal judgment Parties: Lambert Leasing Inc. (First Plaintiff) Saab Aircraft Leasing Inc. (Second Plaintiff) QBE Insurance Ltd (First Defendant) Jalgrid Pty Ltd (Second Defendant) Dramatic Investments Pty Ltd (Third Defendant) Representation: Counsel: D.L Williams SC/ C.S Ward (First and Second Plaintiffs) A.J Sullivan QC/ T Brennan (First Defendant) C.R.C Newlinds SC/ J.S Emmett (Second and Third Defendants)