Calliden Insurance Limited v Chisholm [2009] NSWCA 398

Calliden Insurance Limited v Chisholm [2009] NSWCA 398

On the proper construction of the policy, the insured's obligation to bear the $25,000 excess did not require payment of that amount as a condition precedent to the insurer's liability to indemnify. Condition 3 was not adequate to transform the policy into a pay-as-may-pay arrangement and was to be read with Clause 2.3 as dealing with the insured's responsibility for the excess, particularly in multiple excess circumstances. The insurer was therefore not entitled to disclaim liability on the basis that the insolvent insured had not paid the excess, and leave to appeal from the order granting leave under s 6(4) was refused.

Jurisdiction
Australia
Judgment Date
23 November 2009
Procedural Posture
Application for Leave to Appeal / Court of Appeal Application for Leave to Appeal From an Interlocutory Decision of the District Court, Heard Concurrently With the Appeal
Outcome
Leave to appeal refused with costs.
Legal Topics
['accident and Sickness Insurance' 'construction of Insurance Policy' 'excess Clause' 'law Reform (miscellaneous Provisions) Act 1947 (nsw) S 6' 'leave to Commence Proceedings Against Insurer' 'insolvent Insured']
['insurance' 'civil Procedure'] ['accident and Sickness Insurance' 'construction of Insurance Policy' 'excess Clause' 'law Reform (miscellaneous Provisions) Act 1947 (nsw) S 6' 'leave to Commence Proceedings Against Insurer' 'insolvent Insured']

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Procedural Posture

Application for Leave to Appeal / Court of Appeal Application for Leave to Appeal From an Interlocutory Decision of the District Court, Heard Concurrently With the Appeal

Legal Issues

  1. 1 ["Whether Condition 3 of the insurance policy required the insured to pay the $25,000 excess as a condition precedent to the insurer's liability to indemnify." 'Whether the insurer was entitled to disclaim liability under the policy for non-payment of the excess.' 'Whether leave granted under Law Reform (Miscellaneous Provisions) Act 1947 (NSW) s 6(4) to commence proceedings against the insurer should be disturbed.']

Ratio Decidendi

On the proper construction of the policy, the insured's obligation to bear the $25,000 excess did not require payment of that amount as a condition precedent to the insurer's liability to indemnify. Condition 3 was not adequate to transform the policy into a pay-as-may-pay arrangement and was to be read with Clause 2.3 as dealing with the insured's responsibility for the excess, particularly in multiple excess circumstances. The insurer was therefore not entitled to disclaim liability on the basis that the insolvent insured had not paid the excess, and leave to appeal from the order granting leave under s 6(4) was refused.

Court Disposition

Leave to appeal refused with costs.

Orders

  • ['Leave to appeal is refused.' 'The applicant is to pay the costs of the respondent of the application for leave to appeal and of the appeal heard concurrently.']