FAI General Insurance Co Ltd v McSweeney, Brian Albert & Ors Travel Compensation Fund v FAI General Insurance Co Ltd [1998] FCA 1142

FAI General Insurance Co Ltd v McSweeney, Brian Albert & Ors Travel Compensation Fund v FAI General Insurance Co Ltd [1998] FCA 1142

Insurers (FAI) were not entitled to avoid the professional indemnity policies, which remained enforceable according to their terms; costs to follow the event without deduction for specific issues as claims of dishonesty need not have been conceded, and unsuccessful applications for extension of costs to lost earnings/out of pocket expenses for legally represented parties were not granted; orders for damages and legal costs to be separately assessed at further hearings.

Jurisdiction
Australia
Judgment Date
15 September 1998
Procedural Posture
Insurance—professional Indemnity, Costs, Declaratory Relief, Cross Claims, Application for Leave / Post Trial—final Orders and Costs Following Liability Judgment
Outcome
Applications largely dismissed; declaratory and indemnity relief granted against FAI; costs ordered generally in line with success, exceptions for specific hearings; further hearing directed on quantification of damages and legal costs.
Legal Topics
['indemnity Under Insurance Policy' 'repudiation of Policy' 'cross Claims and Declaratory Relief' 'costs Allocation for Issues Within Proceeding' 'application for Further Submissions Between Reasons and Orders']
['insurance Law' 'civil Procedure' 'costs'] ['indemnity Under Insurance Policy' 'repudiation of Policy' 'cross Claims and Declaratory Relief' 'costs Allocation for Issues Within Proceeding' 'application for Further Submissions Between Reasons and Orders']

Case Brief

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Procedural Posture

Insurance—professional Indemnity, Costs, Declaratory Relief, Cross Claims, Application for Leave / Post Trial—final Orders and Costs Following Liability Judgment

Legal Issues

  1. 1 ['Whether insurers were entitled to avoid professional indemnity policies' 'Whether policies were enforceable and indemnity due' 'Appropriate allocation of costs for issues within proceedings, including partial successes and failures' "Whether 'out of pocket' expenses and loss of earnings can be ordered as costs for successful, represented parties" 'Whether further submissions should be allowed between reasons and orders (adequacy of hearing)']

Ratio Decidendi

Insurers (FAI) were not entitled to avoid the professional indemnity policies, which remained enforceable according to their terms; costs to follow the event without deduction for specific issues as claims of dishonesty need not have been conceded, and unsuccessful applications for extension of costs to lost earnings/out of pocket expenses for legally represented parties were not granted; orders for damages and legal costs to be separately assessed at further hearings.

Court Disposition

Applications largely dismissed; declaratory and indemnity relief granted against FAI; costs ordered generally in line with success, exceptions for specific hearings; further hearing directed on quantification of damages and legal costs.

Orders

  • ['FAI not entitled to avoid relevant professional indemnity policies and those policies enforceable according to their terms.' 'Applications by FAI and TCF dismissed where indicated.' 'Costs of respondents and second cross-claimants (except for hearings on 18, 22 and 26 May 1998 and associated written submissions)...