Weir Services Australia Pty Limited v AXA Corporate Solutions Assurance [2017] NSWSC 259

Supreme Court New South Wales

Medium Neutral Citation: Weir Services Australia Pty Limited v AXA Corporate Solutions Assurance [2017] NSWSC 259 Hearing dates: 1, 2, 6, 7, 8, February 2017 Decision date: 17 March 2017 Jurisdiction: Equity - Commercial List Before: Hammerschlag J Decision: Proceedings are dismissed Catchwords: INSURANCE LAW – EQUITY – ESTOPPEL – Where insurance policies covered the insured for amounts it became legally liable to pay by way of compensation or damages to a third party – Where insured was sued in arbitral proceedings for damages for breach of contract and misleading or deceptive conduct – where insured entered into a "cap and collar" arrangement with the third party under which the third party would be paid an amount dependent on the outcome of the arbitral award – whether the arrangement constituted a settlement establishing liability to the third party and quantum for the purposes of the policies – Construction of policies – Meaning of Property Damage, Occurrence and Product – Whether policies responded to the third party's claim – Indemnity for defence costs – Whether policies responded to the insured's claim for costs of defending the arbitration – Whether insurer agreed or is estopped from denying indemnity for defence costs – Damages – Whether insured would be entitled to its full defence costs as opposed to only reasonable costs in face of insurer's denial of indemnity – Defence of failure to comply with giving of notice condition where English law governs such defence – HELD – Cap and collar arrangement did not establish liability or quantum – Policies did not respond to third party's claim – Policies do not respond to claim for defence costs – Agreement or estoppel to pay defence costs not made out – If insured was entitled to damages they would not exceed reasonable defence costs – Late notification defence established. Legislation Cited: Competition and Consumer Act 2010 (Cth) Insurance Contracts Act 1984 (Cth) Trade Practices Act 1974 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Allianz Australia v Bluescope Steel (2014) 87 NSWLR 332 Aspen Insurance UK Ltd v Pectel Ltd [2009] 2 All ER (Comm) 873 Astrazeneca Insurance Co Ltd v XL Insurance (Bermuda) Ltd [2014] 2 All ER (Comm) 55 Australian Rail Track Corporation Ltd v QBE Insurance (Europe) Ltd [2013] NSWCA 175 AXA Corporate Solutions Assurance S.A. v Weir Services Australia Pty Limited [2016] EWHC 904 (Comm) Chappel v Hart (1998) 195 CLR 232 Chubb Insurance Co of Australia Ltd v Robinson [2016] FCAFC 17 Distillers Co (Bio-Chemicals) (Aust) Pty Ltd v Ajax Insurance Co Ltd (1974) 130 CLR 1 Fitzpatrick v Job (2007) 14 ANZ InsCas 61-731 Friends Provident Life & Pensions Ltd v Sirius International Insurance [2005] 2 All ER (Comm) 145 GIO General Limited v Newcastle City Council (1996) 38 NSWLR 558 HLB Kidsons v Lloyd's Underwriters [2009] 2 All ER (Comm) 81 J Rothschild Assurance plc v Collyear [1998] CLC 1697 Laker Vent Engineering Ltd v Templeton Insurance Co Ltd [2009] 2 All ER (Comm) 755 McCann v Switzerland Insurance Australian Ltd (2000) 203 CLR 579 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 Pioneer Concrete (UK) Ltd v National Employers Mutual [1985] 1 Lloyd's Rep 274 Ronnoc Finance v Spectrum Network Systems Ltd (1997) 45 NSWLR 624 Rosenberg v Percival (2001) 205 CLR 434 Siegwerk Australia Pty Ltd v Newplex Industries (Australia) Pty Ltd (2013) 305 ALR 412 The Commonwealth v Verwayen (1990) 170 CLR 394 Wenham v Ella (1972) 127 CLR 454 Wilkie v Gordian Runoff Ltd (2005) 222 CLR 522 Zurich Australian Insurance Ltd v GIO General Limited [2011] NSWCA 47 Texts Cited: Justice Michael L. Ball, David St. L. Kelly, LexisNexis, Kelly and Ball Principles of Insurance Law (at service 51) Category: Principal judgment Parties: Weir Services Australia Pty Limited - Plaintiff AXA Corporate Solutions Assurance - Defendant Representation: Counsel: R.A. Dick SC with P.Flynn and A.O'Brien - Plaintiff S.R. Donaldson SC with J. Hough QC [with leave] and M.R. Elliott - Defendant