Silbermann, Greaves,Rich v CGU Insurance Limited [2002] NSWSC 1195

Silbermann, Greaves,Rich v CGU Insurance Limited [2002] NSWSC 1195

Clause 3.1 of the Directors & Officers Liability Insurance Policy operates to exclude CGU's obligation to indemnify the plaintiffs for Defence Costs and other losses if dishonest, fraudulent or malicious conduct is established by judgment or final adjudication, which may be obtained in the same indemnity proceedings. The exclusion applies to Defence Costs under clauses 2.1, 2.6, Insuring Agreement A, and Insuring Agreement B, and a judgment obtained in these proceedings is sufficient to trigger the exclusion.

Jurisdiction
Australia
Judgment Date
18 December 2002
Procedural Posture
Motion for Determination of Separate Questions / Judgment on Separate Questions
Outcome
Questions answered in favour of CGU Insurance Limited; exclusion clause 3.1 applies in the manner asserted by the defendant.
Legal Topics
['directors and Officers Liability Insurance' 'exclusion Clauses' 'indemnity for Defence Costs' 'liquidation' 'fraud and Dishonesty in Insurance']
['insurance Law' 'commercial Law'] ['directors and Officers Liability Insurance' 'exclusion Clauses' 'indemnity for Defence Costs' 'liquidation' 'fraud and Dishonesty in Insurance']

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Procedural Posture

Motion for Determination of Separate Questions / Judgment on Separate Questions

Legal Issues

  1. 1 ['Whether CGU can rely on Exclusion Clause 3.1 absent an existing judgment, order or other final adjudication.' 'Whether CGU can seek a judgment in the same proceedings to exclude indemnity via Clause 3.1.' 'Whether Clause 3.1 operates to exclude liability for indemnity for Defence Costs under clauses 2.1, 2.6, Insuring Agreement A, and Insuring Agreement B of the Policy.']

Ratio Decidendi

Clause 3.1 of the Directors & Officers Liability Insurance Policy operates to exclude CGU's obligation to indemnify the plaintiffs for Defence Costs and other losses if dishonest, fraudulent or malicious conduct is established by judgment or final adjudication, which may be obtained in the same indemnity proceedings. The exclusion applies to Defence Costs under clauses 2.1, 2.6, Insuring Agreement A, and Insuring Agreement B, and a judgment obtained in these proceedings is sufficient to trigger the exclusion.

Court Disposition

Questions answered in favour of CGU Insurance Limited; exclusion clause 3.1 applies in the manner asserted by the defendant.

Orders

  • ['1. CGU Insurance Limited may rely on Exclusion Clause 3.1 absent an existing judgment, order or final adjudication.' '2. CGU may seek a judgment or adjudication in the same proceedings to exclude liability under Clause 3.1.' '3. Exclusion Clause 3.1 operates to exclude liability for Defence Costs under clauses...