Foster v QBE European Underwriting Services (Australia) Pty Limited as managing agent for Lloyd’s Syndicate 386 [2018] NSWSC 440

Foster v QBE European Underwriting Services (Australia) Pty Limited as managing agent for Lloyd’s Syndicate 386 [2018] NSWSC 440

Where two insurance policies each contain an 'excess' clause purporting to make the policy operate only in excess of any other insurance, and both purport to cover the same risk, the clauses cancel each other out, rendering both insurers liable to indemnify up to their respective policy limits. Where the insured is a third party beneficiary but not a party to both contracts of insurance, statutory voiding of 'other insurance' clauses does not apply. Both insurers are liable irrespective of excess clauses in otherwise concurrent policies.

Parties
Plaintiff: Brendan Mitchell Foster; First Defendant: QBE European Underwriting Services (Australia) Pty Limited; Second Defendant: QBE Underwriting Limited as managing agent for Lloyd's Syndicate 2999; Third Defendant: Novae Syndicates Limited (Company No. 2082070, England); Fourth Defendant: Allianz Australia Insurance Limited
Jurisdiction
Australia
Judgment Date
11 April 2018
Procedural Posture
Preliminary Determination of Insurance Liability in Personal Injury Claim / Preliminary Questions Prior to Hearing of Substantive Proceedings
Outcome
Declarations made on preliminary insurance coverage questions; costs awarded to plaintiff for the motion and preliminary question on an indemnity basis.
Legal Topics
Other Insurance Clauses, Excess Clauses, Dual Insurance, Contribution Between Insurers, Third Party Beneficiary Rights, Privity of Contract Exceptions, Rectification of Insurance Policies, Substitution of Insurer, Personal Injury Liability
Insurance Law Tort Law Civil Procedure Other Insurance Clauses Excess Clauses Dual Insurance Contribution Between Insurers Third Party Beneficiary Rights +4 more

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Parties

Brendan Mitchell Foster

Plaintiff

QBE European Underwriting Services (Australia) Pty Limited

First Defendant

QBE Underwriting Limited as managing agent for Lloyd's Syndicate 2999

Second Defendant

Novae Syndicates Limited (Company No. 2082070, England)

Third Defendant

Allianz Australia Insurance Limited

Fourth Defendant

Procedural Posture

Preliminary Determination of Insurance Liability in Personal Injury Claim / Preliminary Questions Prior to Hearing of Substantive Proceedings

Legal Issues

  1. 1 Which insurance policy obliges indemnity to the injured worker?
  2. 2 Does the existence of excess clauses in both policies affect liability?
  3. 3 Do statutory provisions (including Insurance Contracts Act s 45 & 48, Law Reform (Miscellaneous Provisions) Act s 6(4)) alter the result?

Ratio Decidendi

Where two insurance policies each contain an 'excess' clause purporting to make the policy operate only in excess of any other insurance, and both purport to cover the same risk, the clauses cancel each other out, rendering both insurers liable to indemnify up to their respective policy limits. Where the insured is a third party beneficiary but not a party to both contracts of insurance, statutory voiding of 'other insurance' clauses does not apply. Both insurers are liable irrespective of excess clauses in otherwise concurrent policies.

Court Disposition

Declarations made on preliminary insurance coverage questions; costs awarded to plaintiff for the motion and preliminary question on an indemnity basis.

Orders

  • The 2011 Allianz Policy obliges the fourth defendant to indemnify Reed Constructions Australia Pty Ltd (under external administration) in respect of any judgment to the plaintiff.
  • Questions 2, 3, and 4 do not arise.