WSP Structures Pty Ltd v Liberty Mutual Insurance Company t/as Liberty Specialty Markets [2023] FCA 1157

WSP Structures Pty Ltd v Liberty Mutual Insurance Company t/as Liberty Specialty Markets [2023] FCA 1157

On the proper construction of the policy, WSP Structures was an insured because it was a subcontractor engaged by Icon to undertake engineering design work that Icon itself had contracted to perform; item 4 of the definition of Insured was not subject to item 8, and item 8 applied to engineers who were not such subcontractors. A grant or confirmation of indemnity by professional indemnity insurers, without actual payment to or at the direction of WSP Structures for the same loss, did not provide a defence to the respondents and did not amount to an election barring the claim. WSP Structures, not WSP Australia, was the party legally liable to make the WSP Payment and to incur the defence...

Jurisdiction
Australia
Judgment Date
28 September 2023
Procedural Posture
Application for Declarations and Indemnity Payments Against Insurers Under Third Party Liability and Excess Layer Policies / Reasons for Judgment; Parties Directed to File Proposed Orders to Give Effect to Reasons
Outcome
WSP Structures succeeded on the issues determined: it was held to be an insured, not already indemnified for the claimed amounts, the proper applicant for its policy claim, and not barred by the indemnity principle. Final orders, including costs, were deferred pending proposed minutes from the parties.
Legal Topics
['construction of Insurance Policy' 'third Party Liability Insurance' 'excess Layer Insurance' 'definition of Insured' 'subcontractor Coverage' 'double Insurance' 'indemnity Principle' 'professional Indemnity Insurance' 'defence Costs' 'recoupment']
['insurance Law' 'commercial Contracts'] ['construction of Insurance Policy' 'third Party Liability Insurance' 'excess Layer Insurance' 'definition of Insured' 'subcontractor Coverage' 'double Insurance' 'indemnity Principle' 'professional Indemnity Insurance' 'defence Costs' 'recoupment']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Application for Declarations and Indemnity Payments Against Insurers Under Third Party Liability and Excess Layer Policies / Reasons for Judgment; Parties Directed to File Proposed Orders to Give Effect to Reasons

Legal Issues

  1. 1 ['Whether, on the proper construction of the Liberty policy terms also used for the Chubb and Tokio Marine excess layers, WSP Structures was an insured in respect of the WSP Payment and legal costs.' 'Whether WSP Structures had already been indemnified, or had elected to claim indemnity, under its professional indemnity insurance so as to defeat its claim against the respondents.' 'Whether WSP Australia, rather than WSP Structures, was the correct applicant in respect of the WSP Payment because WSP Australia made the payment.' 'Whether payment of the WSP Payment and legal costs by WSP Australia meant WSP Structures had suffered no recoverable loss or that the indemnity principle barred recovery.' "Whether condition 5 of the Tokio Marine policy answered WSP Structures' claim."]

Ratio Decidendi

On the proper construction of the policy, WSP Structures was an insured because it was a subcontractor engaged by Icon to undertake engineering design work that Icon itself had contracted to perform; item 4 of the definition of Insured was not subject to item 8, and item 8 applied to engineers who were not such subcontractors. A grant or confirmation of indemnity by professional indemnity insurers, without actual payment to or at the direction of WSP Structures for the same loss, did not provide a defence to the respondents and did not amount to an election barring the claim. WSP Structures, not WSP Australia, was the party legally liable to make the WSP Payment and to incur the defence...

Court Disposition

WSP Structures succeeded on the issues determined: it was held to be an insured, not already indemnified for the claimed amounts, the proper applicant for its policy claim, and not barred by the indemnity principle. Final orders, including costs, were deferred pending proposed minutes from the parties.

Orders

  • ['On or before 4.00 pm AWST on 5 October 2023, the parties do provide to the Court a joint minute of orders (including as to costs) to give effect to these reasons, alternatively competing minutes together with short written submissions of no more than three pages as to why the orders proposed by the party are...