Zurich Australian Insurance Limited v CIMIC Group Limited & Ors [2024] NSWCA 229

Zurich Australian Insurance Limited v CIMIC Group Limited & Ors [2024] NSWCA 229

Leighton (now CIMIC) breached its duty of disclosure under s 21 of the Insurance Contracts Act by failing to disclose the matters identified in the Iraq File Note to the 2011 Insurers; those matters were material to the risk, and a reasonable person in Leighton's circumstances could be expected to know their relevance. The 2011 Insurers were therefore entitled, under s 28(3), to reduce their liability for the Company Securities Claims to nil. The notification and continuity/limitation clauses in the 2011 Policies did not operate to waive this remedy for the Company Securities Claims. Contribution from Berkley (under the 2010 Policy) to AIG was not available for investigation costs, as...

Parties
Appellant (zurich Appeal); Seventh Respondent (berkley Appeal); Ninth Respondent (arch/dual Appeal); Eighth Respondent (chubb Appeal): Zurich Australian Insurance Limited; First Respondent (zurich Appeal); First Respondent/first Cross Appellant (berkley Appeal); First Respondent (arch/dual Appeal); First Respondent (chubb Appeal): CIMIC Group Limited; Second Respondent (zurich Appeal); Second Respondent/third Cross Respondent (berkley Appeal); Second Respondent (arch/dual Appeal); Second Respondent (chubb Appeal): AIG Australia Limited; Third Respondent (zurich Appeal); Appellant (chubb Appeal); Third Respondent/second Cross Respondent (berkley Appeal); Third Respondent (arch/dual Appeal): Chubb Insurance Australia Limited; Fourth Respondent (zurich Appeal); Fourth Respondent (berkley Appeal); Fourth Respondent (arch/dual Appeal); Third Respondent (chubb Appeal): Catlin Syndicate Limited; Fifth Respondent (zurich Appeal); Fifth Respondent/fourth Cross Respondent (berkley Appeal); Fifth Respondent (arch/dual Appeal); Fourth Respondent (chubb Appeal): Catlin Australia Pty Limited; Sixth Respondent (zurich Appeal); Sixth Respondent/sixth Cross Respondent (berkley Appeal); Sixth Respondent (arch/dual Appeal); Fifth Respondent (chubb Appeal): Liberty Mutual Insurance Company; Seventh Respondent (zurich Appeal); Appellant/first Cross Respondent (berkley Appeal); Seventh Respondent (arch/dual Appeal); Sixth Respondent (chubb Appeal): Berkley Insurance Company; Eighth Respondent (zurich Appeal); Eighth Respondent/seventh Cross Respondent (berkley Appeal); Eighth Respondent (arch/dual Appeal); Seventh Respondent (chubb Appeal): Swiss Re International SE; Ninth Respondent (zurich Appeal); Ninth Respondent/ninth Cross Respondent (berkley Appeal); First Appellant (arch/dual Appeal); Ninth Respondent (chubb Appeal): Arch Underwriting at Lloyd's Limited on Behalf of Syndicate 2012; Tenth Respondent (zurich Appeal); Tenth Respondent/tenth Cross Respondent (berkley Appeal); Second Appellant (arch/dual Appeal); Tenth Respondent (chubb Appeal): Dual Australia Pty Ltd
Jurisdiction
Australia
Judgment Date
18 September 2024
Procedural Posture
Appeals and Cross Appeals From Insurance Contract Dispute; Principal Judgment / Court of Appeal Judgment (on Appeals From Supreme Court of Nsw, Equity Division)
Outcome
Appeals allowed in part: Zurich, Berkley, and Arch/Dual Appeals allowed; Chubb Appeal dismissed; cross-appeals dismissed; significant orders of the primary judge set aside and replaced, including dismissal of claims and cross-claims with costs; parties to agree or make further submissions on remaining costs issues.
Legal Topics
Directors' and Officers' Insurance, Duty of Disclosure, Misrepresentation, Contribution Between Insurers, Declaratory Relief, Appeals Procedure
Insurance Law Contract Law Equity Directors' and Officers' Insurance Duty of Disclosure Misrepresentation Contribution Between Insurers Declaratory Relief +1 more

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Parties

Zurich Australian Insurance Limited

Appellant (zurich Appeal); Seventh Respondent (berkley Appeal); Ninth Respondent (arch/dual Appeal); Eighth Respondent (chubb Appeal)

CIMIC Group Limited

First Respondent (zurich Appeal); First Respondent/first Cross Appellant (berkley Appeal); First Respondent (arch/dual Appeal); First Respondent (chubb Appeal)

AIG Australia Limited

Second Respondent (zurich Appeal); Second Respondent/third Cross Respondent (berkley Appeal); Second Respondent (arch/dual Appeal); Second Respondent (chubb Appeal)

Chubb Insurance Australia Limited

Third Respondent (zurich Appeal); Appellant (chubb Appeal); Third Respondent/second Cross Respondent (berkley Appeal); Third Respondent (arch/dual Appeal)

Catlin Syndicate Limited

Fourth Respondent (zurich Appeal); Fourth Respondent (berkley Appeal); Fourth Respondent (arch/dual Appeal); Third Respondent (chubb Appeal)

Catlin Australia Pty Limited

Fifth Respondent (zurich Appeal); Fifth Respondent/fourth Cross Respondent (berkley Appeal); Fifth Respondent (arch/dual Appeal); Fourth Respondent (chubb Appeal)

Liberty Mutual Insurance Company

Sixth Respondent (zurich Appeal); Sixth Respondent/sixth Cross Respondent (berkley Appeal); Sixth Respondent (arch/dual Appeal); Fifth Respondent (chubb Appeal)

Berkley Insurance Company

Seventh Respondent (zurich Appeal); Appellant/first Cross Respondent (berkley Appeal); Seventh Respondent (arch/dual Appeal); Sixth Respondent (chubb Appeal)

Swiss Re International SE

Eighth Respondent (zurich Appeal); Eighth Respondent/seventh Cross Respondent (berkley Appeal); Eighth Respondent (arch/dual Appeal); Seventh Respondent (chubb Appeal)

Arch Underwriting at Lloyd's Limited on Behalf of Syndicate 2012

Ninth Respondent (zurich Appeal); Ninth Respondent/ninth Cross Respondent (berkley Appeal); First Appellant (arch/dual Appeal); Ninth Respondent (chubb Appeal)

Dual Australia Pty Ltd

Tenth Respondent (zurich Appeal); Tenth Respondent/tenth Cross Respondent (berkley Appeal); Second Appellant (arch/dual Appeal); Tenth Respondent (chubb Appeal)

Procedural Posture

Appeals and Cross Appeals From Insurance Contract Dispute; Principal Judgment / Court of Appeal Judgment (on Appeals From Supreme Court of Nsw, Equity Division)

Legal Issues

  1. 1 Whether Leighton breached its duty of disclosure under s 21 of the Insurance Contracts Act to 2011 Insurers;
  2. 2 Whether the 2011 Insurers were entitled to reduce their liability to nil under s 28(3) of the Insurance Contracts Act;
  3. 3 Construction of continuity, notification, and limitation clauses in D&O insurance policies;

Ratio Decidendi

Leighton (now CIMIC) breached its duty of disclosure under s 21 of the Insurance Contracts Act by failing to disclose the matters identified in the Iraq File Note to the 2011 Insurers; those matters were material to the risk, and a reasonable person in Leighton's circumstances could be expected to know their relevance. The 2011 Insurers were therefore entitled, under s 28(3), to reduce their liability for the Company Securities Claims to nil. The notification and continuity/limitation clauses in the 2011 Policies did not operate to waive this remedy for the Company Securities Claims. Contribution from Berkley (under the 2010 Policy) to AIG was not available for investigation costs, as...

Court Disposition

Appeals allowed in part: Zurich, Berkley, and Arch/Dual Appeals allowed; Chubb Appeal dismissed; cross-appeals dismissed; significant orders of the primary judge set aside and replaced, including dismissal of claims and cross-claims with costs; parties to agree or make further submissions on remaining costs issues.

Orders

  • Zurich's appeal allowed in part (2022/00334409).
  • CIMIC's cross-appeal dismissed.