Silbermann v. CGU Insurance Limited; Rich v. CGU Insurance Limited; Greaves v. CGU Insurance Limited [2003] NSWCA 203

Silbermann v. CGU Insurance Limited; Rich v. CGU Insurance Limited; Greaves v. CGU Insurance Limited [2003] NSWCA 203

By majority, the Policy did not draw a sharp distinction between indemnity against a Claim and indemnity against Defence Costs. Section 3's reference to indemnity against any Claim meant indemnity against the financial consequences of a Claim, including Defence Costs, and clause 2.6 was also subject to the Policy exclusions. Clause 3.1 did not require an existing external judgment before CGU could refuse indemnity or plead the exclusion; CGU could seek the necessary judgment or final adjudication in the same proceedings, but would ultimately have to establish the relevant dishonest or fraudulent conduct by a judgment or other final adjudication. Clause 2.1 gave CGU a discretion to advance...

Jurisdiction
Australia
Judgment Date
25 July 2003
Procedural Posture
Applications for Leave to Appeal in Insurance Policy Construction Proceedings / Leave to Appeal From Answers to Separate Questions in the Supreme Court, Equity Division
Outcome
In each matter, leave to appeal granted; appeal dismissed with costs.
Legal Topics
['directors and Officers Liability Insurance' 'dishonesty and Fraud Exclusion Clause' 'defence Costs' 'construction of Insurance Policy' 'utmost Good Faith' 'separate Questions' 'leave to Appeal']
['insurance Law' 'contract Law' 'civil Procedure'] ['directors and Officers Liability Insurance' 'dishonesty and Fraud Exclusion Clause' 'defence Costs' 'construction of Insurance Policy' 'utmost Good Faith' 'separate Questions' 'leave to Appeal']

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Procedural Posture

Applications for Leave to Appeal in Insurance Policy Construction Proceedings / Leave to Appeal From Answers to Separate Questions in the Supreme Court, Equity Division

Legal Issues

  1. 1 ['Whether, on the true construction of the Directors & Officers Liability Insurance Policy, CGU Insurance Limited could rely on Exclusion Clause 3.1 absent an existing judgment, order or other final adjudication adverse to the claimant.' 'Whether CGU Insurance Limited was entitled to seek a judgment, order or other final adjudication adverse to the claimant and thereby exclude liability under clause 3.1 in the same proceedings in which the claimant sought indemnity.' 'Whether exclusion clause 3.1 operated to exclude liability to pay claims for indemnity for Defence Costs under clause 2.1, clause 2.6, Insuring Agreement A and Insuring Agreement B of the Policy.']

Ratio Decidendi

By majority, the Policy did not draw a sharp distinction between indemnity against a Claim and indemnity against Defence Costs. Section 3's reference to indemnity against any Claim meant indemnity against the financial consequences of a Claim, including Defence Costs, and clause 2.6 was also subject to the Policy exclusions. Clause 3.1 did not require an existing external judgment before CGU could refuse indemnity or plead the exclusion; CGU could seek the necessary judgment or final adjudication in the same proceedings, but would ultimately have to establish the relevant dishonest or fraudulent conduct by a judgment or other final adjudication. Clause 2.1 gave CGU a discretion to advance...

Court Disposition

In each matter, leave to appeal granted; appeal dismissed with costs.

Orders

  • ['In each matter, leave to appeal granted.' 'In each matter, appeal dismissed with costs.']