Colyear v CGU Insurance Limited  NSWCA 92
In this matter, the Supreme Court of New South Wales rejected a claim for double insurance brought by Lloyds against CGU Insurance.
Emibarb Pty Ltd (the tenant) managed a restaurant under a lease from the Stuart Park Reserve Trust (the landlord) which was managed by the Wollongong City Council. Under the terms of the lease (clause 8.2.4), the tenant had an obligation to reinstate the premises if they were damaged or destroyed. The tenant held an Industrial Special Risks (ISR) policy with Lloyds, which covered both it and the landlord for their respective rights and interests. The landlord also held a policy with CGU to cover its own interests with respect to damage to the premises. Importantly, the CGU policy did not insure the tenant's interests.
In January 2001, the premises were destroyed by fire and the tenant was served with written notice to reinstate the premises. The tenant's claim for indemnity from Lloyds was initially denied. However, ultimately, the tenant received $3.75 million in settlement of its claim against Lloyds.
Lloyds sought a contribution from CGU on the basis of double insurance. It argued that while the CGU policy did not insure the tenant's interests, Lloyds was still entitled to claim a contribution from CGU. They argued this was due to fact there was a congruence between the loss for which the tenant was indemnified and the loss covered by CGU's policy such as to establish entitlement to contribution.
In response, CGU argued that double insurance did not apply as the interest of the tenant, as covered by the Lloyds policy, was distinct from the interest of the landlord covered by both policies. It was submitted that the CGU policy only covered losses, not met by the tenant pursuant to clause 8.2.4. In this case, the tenant (having received payment from Lloyds) was able to discharge its liability under the lease.
CGU's position was accepted by both the primary Judge and the Court of Appeal. On appeal, the Court noted that for double insurance to apply '... each policy must insure the same person against the very loss that in the event he has sustained, or the very liability that in the event he has incurred'. As such, it was held that there was no relevant double insurance.
GIO General Limited v Insurance Australia Ltd t/as NRMA Insurance  ACTSC 38
In this case, GIO (the relevant workers compensation insurer) was successful in its claim against NRMA (the CTP insurer) on the basis of double insurance.
An employed delivery truck driver, Mr Gray, was injured in the course of his employment and duly sued his employer, alleging a failure to provide a safe system of work and a safe means of lifting heavy and awkward items.
The employer was indemnified by its workers compensation insurer, GIO. Judgment was entered in favour of Mr Gray against the employer by consent.
GIO then issued contribution proceedings against NRMA claiming contribution for 50% of the judgment sum on the basis that Mr Gray's injury 'arose out of the use of a motor vehicle', and that therefore the employer was entitled to indemnity from both GIO and NRMA in respect of the claim.
NRMA submitted that, even if it was held that the injury arose out of the use of the truck (and the Court ultimately held that this was the case), NRMA had no liability as Mr Gray's action had been framed purely as an unsafe 'system of work' claim and he had not made any allegations of negligence arising out of the use of the motor vehicle itself.
However, the Court was of the view that the manner in which the claim is framed is immaterial to the issue of whether or not double insurance applies.
The application by GIO was granted. The Court noted, that for double insurance to apply, it was essential that each policy indemnified the same insured for the same loss - and liability need not arise from the same type of policy.
Yang & Anor v America n International Assurance Company (Australia) Ltd  FCA 39
In this case, Mr Yang alleged that he was induced to enter into insurance agency arrangements by misrepresentations on the part of American International Assurance Company Pty Ltd (AIA). He also alleged unconscionable conduct by AIA in relation to the termination of these agreements.
Mr Yang agreed to act as an agent for AIA in December 1996. In October 1998, he then entered into a new agency agreement on behalf of his company, Aulian Enterprises Pty Ltd (Aulian) as well as an agency supervisor's agreement.
In 2001, AIA launched an investigation into the conduct of Mr Yang with respect to a cash payment received by him from a client, Mr Xu, in October 1999. The cash payment was for certain premiums that Mr Yang did not present to AIA until some 13 months later following a complaint by Mr Xu.
Following this investigation, Mr Yang resigned his agency and supervisor positions and as such, the agreements were terminated. Mr Yang and Aulian then commenced proceedings against AIA, alleging that they were induced to enter contractual relations with AIA by false representations made by AIA. It is alleged that such representations included 'your income will be secure for life'. It was claimed that as a consequence of such representations, the effective termination of their contracts by the forced resignation of Mr Yang was unlawful and a breach of section 51AA and 51AC of the Trade Practices Act 1974 (Cth). It was also submitted that AIA had engaged in unconscionable conduct in breach of the Act.
AIA denied making the alleged representations and further argued that it was justified in seeking the resignation of Mr Yang, as he had breached the terms of the contract by not paying premiums to AIA within five days of receipt. AIA submitted that, but for Mr Yang's resignation, it would have been entitled to terminate the agreement because of his conduct. The application made by Mr Yang and Aulian was dismissed with costs.
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