Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance [2018] NSWCA 100

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance [2018] NSWCA 100 Hearing dates: 23 and 24 October 2017 Decision date: 16 May 2018 Before: Meagher JA at [1] White JA at [9] Barrett AJA at [40] Decision: 1. Appeal dismissed. 2. Cross-appeal dismissed. 3. Judgment of the court below affirmed. 4. That Weir Services Australia Pty Ltd pay the costs of AXA Corporate Solutions Assurance. Catchwords: INSURANCE – legal liability insurance – scope of cover – scope of exclusions – appellant contracted to refurbish semi-autogenous grinding mill – refurbished mill failed after a short period of normal operation when a circumferential weld disintegrated – mill owner brought arbitration proceedings against appellant on causes of action in contract and for misleading or deceptive conduct – the parties to the arbitration entered into a "cap and collar" agreement the operation of which depended on the outcome of the arbitration – arbitration resulted in a finding of no liability of appellant – appellant nevertheless liable to pay contracted "collar" amount and for its own costs – whether these liabilities are within the insurance cover under a broadform liability policy – whether appellant legally liable to make "collar" payment by way of "compensation" for "property damage" suffered by mill owner – meaning of "occurrence" in liability policy – distinction between "occurrence" and damage – whether disintegration of the weld was an "occurrence" – whether cyclic loading in normal operation of the mill was an "occurrence" – whether faulty work by appellant was an "occurrence" – policy exclusion for professional services – whether faulty welding work within scope of professional services – whether making of actionable representations within scope of professional services – policy exclusion for product defect – whether applicable – WORDS AND PHRASES – "compensation" – "occurrence" – "continuous or repeated exposure to substantially the same general conditions" – "professional advice or service" – "product" Legislation Cited: Trade Practices Act 1974 (Cth) Cases Cited: Allianz Australia Insurance Ltd v BlueScope Steel Ltd (2014) NSWLR 332; [2014] NSWCA 276 American Family Mutual Insurance Co v American Girl Inc 673 NW 2d 65 (2004) Amex Assurance Company v Allstate Insurance Company 112 Cal App 4th 1246 (2003) Attorney-General v L D Nathan & Co Ltd [1990] 1 NZLR 129 Australian Rail Track Corporation Ltd v QBE Insurance (Europe) Ltd [2013] NSWCA 175; (2013) 17 ANZ Ins Cas 61-971 Axa Reinsurance (UK) Plc v Field [1996] 1 WLR 1026 Bradley v Eagle Star Insurance Co Ltd [1989] AC 957 Cacciola v Fire & All Risks Insurance Co Ltd [1971] 1 NSWLR 691 Chubb Insurance Company of Australia Ltd v Robinson (2016) 239 FCR 300; [2016] FCAFC 17 Cincinnati Insurance Co v Motorists Mutual Insurance Co 306 SW 3d 69 (2010) Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500; [1986] HCA 82 Distillers (Bio-Chemicals) (Aust) Pty Ltd v Ajax Insurance Co Ltd (1974) 130 CLR 1; [1974] HCA 3 Edwards v Insurance Office of Australia Ltd (1933) 34 SR (NSW) 88 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Energy Insurance Mutual Ltd v Ace American Insurance Company 14 Cal App 5th 281 (2017) FAI General Insurance Company Ltd v Gold Coast City Council [1995] 2 Qd R 341; [1992] QCA 433 Fitzpatrick v Job [2007] WASCA 63; (2007) 14 ANZ Ins Cas 61-731 Greenclose Ltd v National Westminster Bank Plc [2014] WLR (D) 173; [2014] EWHC 1156 Hennessy Glass Aluminium Systems Pty Ltd v Eagle Star Trustees Ltd; sub nom White Industries Qld Pty Ltd v Hennessey Glass & Aluminium Systems Pty Ltd [1999] 1 Qd R 210 Hollingsworth v Commercial Union Insurance Co 208 Cal App 3d 800 (1989)) Hurlock v Council of the Shire of Johnstone [2002] QCA 256 Impact Funding Solutions Ltd v AIG Europe Insurance Ltd [2017] AC 73; [2017] UKSC 57 Kyriackou v ACE Insurance Ltd [2013] VSCA 150 Major Engineering Pty Ltd v CGU Insurance Ltd (2011) 35 VR 458; [2011] VSCA 226 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65 McDermott v Black (1940) 63 CLR 161; [194] HCA 4 Metricon Homes Pty Ltd v Great Lakes Insurance SE [2017] VSC 749 MLC Nominees Pty Ltd v Daffy [2017] VSCA 110 National Union Fire Insurance Co of Pittsburgh v Turner Construction Co, 119 AD 3d 103 (2014) North Counties Engineering Inc v State Farm General Insurance Company 224 Cal App 4th 902 (2014) Omega Proteins Ltd v Aspen Insurance UK Ltd [2010] EWHC 2280 Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14; [2003] NSWCA 331 Parker v Lewis (1873) L.R. 8 Ch App 1035 Penrith City Council v Government Insurance Office (1991) 24 NSWLR 564 Pickford & Black Ltd v Canadian General Insurance Co (1976) 64 DLR (3d) 179 Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363 QBE Insurance Ltd v Nguyen (2008) 100 SASR 560; [2008] SASC 138 Quintano v B W Rose Pty Ltd [2008] NSWSC 793 Selected Seeds Pty Ltd v QBEMM Pty Limited (2010) 242 CLR 336; [2010] HCA 37 Siegwerk Australia Pty Ltd v Nuplex Industries (Aust) Pty Ltd [2013] FCAFC 130; (2013) 303 ALR 412 Suncorp Metway Insurance Ltd v Landridge Pty Ltd (2005) 12 VR 290; [2005] VSCA 223 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603; [1998] HCA 38 Vero Insurance Ltd v Baycorp Advantage Ltd [2004] NSWCA 390; (2004) 23 ACLC 119 Vero Insurance Ltd v Power Technologies Pty Ltd [2007] NSWCA 226; (2007) 14 ANZ Ins Cas 61-745 Weedo v Stone-E-Brick Inc 405 A 2d 788 (1979) Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance [2017] NSWSC 259 Windsurf Pty Ltd v HIH Casualty & General Insurance Ltd [1999] QCA 360; [1999] ANZ Ins Cas 61-447 Woodlawn Capital Pty Ltd v Motor Vehicles Insurance Ltd [2016] NSWCA 28; (2016) 111 ACSR 377 Texts Cited: Christopher C French, "Revisiting construction defects as 'occurrences' under CGL insurance policies" (2016) 19 University of Pennsylvania Journal of Business Law 101 J E Marshall SC and J A C Potts, "Indemnity for Settlements: Proof of underlying liability" (2008) 19 ILJ 97 Category: Principal judgment Parties: Weir Services Australia Pty Ltd (Appellant/Cross-Respondent AXA Corporate Solutions Assurance (Respondent/Cross-Appellant ) Representation: Counsel: Mr R A Dick SC, Mr P W Flynn (Appellant/Cross-Respondent) Dr A S Bell SC, Mr M R Elliott SC (Respondent/Cross-Appellant)