XL Insurance Co SE v BNY Trust Company of Australia Limited [2019] NSWCA 215

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: XL Insurance Co SE v BNY Trust Company of Australia Limited [2019] NSWCA 215 Hearing dates: 27 June 2019 Decision date: 02 September 2019 Before: Bell P at [1] Gleeson JA at [2] Emmett AJA at [121] Decision: (1) Appeal allowed.

(2) Set aside orders 1-8 made by Schmidt J on 14 February 2019, and in place, order that:

(a) In relation to each of the first, second and third cross-claims, the separate questions the subject of orders made by Davies J on 13 July 2018, are both answered: "Yes";

(b) Each of the first, second and third cross-claims is dismissed;

(c) The respective cross-claimants to the first, second and third cross-claims are to pay the cross-defendant's costs of such cross-claims, including the costs of and incidental to the application heard by Davies J on 26 June 2018.

(3) The respondents to pay the appellant's costs in this Court. Catchwords: CIVIL PROCEDURE – appeal from determination of separate questions – where concession in agreed facts as to causation of loss suffered by claimant against the insureds – whether primary judge erred in attaching significance to appellant's concession when deciding construction of contract of insurance

CONTRACTS – construction – proper construction of a contract of insurance – professional indemnity policy for property valuer – contract comprised in standard policy wording, schedule and endorsements – where exclusion clause in endorsement for valuations undertaken for specified category of lenders – where literal or grammatical meaning must be evaluated against the text, context and purpose of the contract – whether ambiguity arising from requisite causal nexus between subject matter of the exclusion clause and the loss – business commonsense approach to construction – exclusion clause to be interpreted according to its natural and ordinary meaning – where absence of ambiguity precludes recourse to the contra proferentem rule – whether insurer entitled to deny indemnity and refuse to pay defence costs