ASPIOTI v LEIGH & 2 ORS

Georgia ASPIOTI Donna LEIGH PARTIES : Raytheon Aircraft Company Bruno KORTENHORST John DASS FILE NUMBER(S) : SC 11579/00; 20083/01 Mr J Glissan QC COUNSEL : Mr M Ashurst Mr M Neil QC with Mr S Benson Mr S Drummond SOLICITORS :

• 2 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11579/00 and 20083/01 Georgia ASPIOTI v Donna LEIGH AND RAYTHEON AIRCRAFT COMPANY

Bruno KORTENHORST v John DASS AND Donna LEIGH JUDGMENT 1 HULME J: These Reasons related to Notices of Motion in both of the above proceedings. The proceedings and the Notices of Motion have many features in common. 2 Both proceedings arise out of a crash, on 28 May 1996, of a light aircraft. Both plaintiffs were passengers in the plane at the time and both were injured. Donna Leigh is sued as the personal representative of Clifford Collins, the person who was piloting the plane at the relevant time and who was killed in the crash. Raytheon Aircraft Company is said to have been the aircraft's manufacturer. John Dass was the owner of the aircraft at the time of the crash. All three are said to have been negligent.

3 In the proceedings in which she is the First Defendant, proceedings 11579/2000, Donna Leigh has filed 2 Cross-Claims. In the first, against Australian Aviation Underwriting Pool Pty Ltd (hereinafter referred to as "AAUP"), Ms Leigh asserts that Mr Dass entered into a contract of insurance with AAUP under which that organisation undertook to indemnify the Cross-Claimant - presumably a misnomer for Mr Collins - against any liability he might have for causing accidental bodily injury or death and that AAUP has refused to make that indemnity. In the second, against HIH Casualty & General Insurance Limited (in liquidation) and Resource Underwriting Pacific Pty Ltd (hereinafter referred to respectively as "HIH" and "RUP"), Ms Leigh alleges:- (i) Mr Dass retained Corporate Insurance Management Group Pty Ltd (hereinafter referred to as "CIMG") to effect such insurances as would indemnify the Cross-Claimant against any liability he might have for causing accidental bodily injury or death; (ii) CIMG owed the Cross-Claimant a duty to exercise proper skill in relation to the retainer; (iii) CIMG put in place a cover note but negligently failed to ensure it was extended or a valid policy put in place; (iv) That, if the Cross-Claimant is held liable and does not succeed against AAUP, such failure will be by reason of negligence on the part of CIMG; (v) that CIMG has been deregistered; (vi) That HIH and RUP agreed to indemnify CIMG against any liability it might have for such negligence, and (vii) Ms Leigh seeks to proceed against HIH and RUP pursuant to s601AG of the Corporations Law and to recover indemnity for any verdict obtained by the Plaintiff against Ms Leigh. 4 The particular proceedings with which these Reasons are concerned are applications which, in their final form, appear in Amended Notices of Motion filed in court on 15 April 2003. So far as is presently relevant, the orders sought in Ms Aspioti's Notice of Motion are:- 1. Leave to join Australian Aviation Underwriting Pool Pty Ltd as a Defendant in these proceedings under Section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). 2. The time within which to join Australian Aviation Underwriting Pool Pty Ltd as a Defendant in these proceedings under Section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), to be extended up to and including such time as this Honourable Court seems fit under Section 58 and/or 60G of the Limitation Act 1969 (NSW). 5. Leave to file a Further Amended Statement of Claim in the form attached herewith within such time as this honourable court sees fit. 6. Additionally, or alternatively, a declaration that Australian Aviation Underwriting Pool Pty Ltd is liable to indemnify the First Defendant in accordance with paragraph 3B of the policy document, a copy of which is annexed hereto and marked "A". 5 In the case of Mr Kortenhorst's Notice of Motion, the second of these prayers suggested a slightly different time for the extension sought, the third of these prayers omitted any reference to an attached form and the last referred to both Defendants. Except that this last mentioned difference raises the issue of the liability of AAUP to indemnify Mr Dass, these differences between the Notices of Motion do not affect the substance of the issues debated. 6 No draft Further Amended Statement of Claim was attached to Ms Aspioti's Notice of Motion, no separate argument was addressed to its form, and there is no need for me to spend time on that prayer. Furthermore, the sixth prayer was not seriously pursued and in light of the state of the evidence, I would not be disposed to deal with it unless compelled to do so. There is no such compulsion. Nor was there any attention given during the hearing before me to the issue of extension of time. 7 In support of the first of the prayers, the Plaintiffs contended that there was in existence at the relevant time a contract of insurance issued by Australian Aviation Underwriting Pool Pty Ltd (hereinafter referred to as "AAUP") to Mr Dass and that Mr Collins was an insured or otherwise entitled to the benefit of cover provided under that Contract. Alternatively, it was submitted that there was at least an arguable case that the foregoing was the situation. 8 It was not in dispute that in respect of the relevant aircraft, AAUP on 9 April 1996 issued a cover note for the period 12 April to 11 May 1996. In issue, however, was the question whether the cover so provided had been extended so as to be current on 28 May 1996 and whether the insurance granted was such as to provide cover to Mr Collins. It was also contended that, in any event, such an extension conferred no rights on the Plaintiff against AAUP. 9 Although it seems clear that if the period of insurance was extended, that extension was effected in the course of conversation, no affidavit or oral evidence was adduced from any one a party to any such conversation(s). Enough, however, was said during the course of proceedings before me to persuade me that I should draw no adverse inference from that fact. In that connection I have had regard to the fact that some of the relevant information was said by Mr Neil QC who appeared for Mr Aspioti to have come into the possession of the Plaintiff's lawyers only very recently, to the delays which have occurred in the litigation to the time of the hearing before me, and to the fact that counsel for AAUP foreshadowed that if the Plaintiff did adduce evidence from witnesses an adjournment would very probably be necessary. Rather did the Plaintiffs place reliance on the terms of documents produced on subpoena by AAUP. 10 The proceedings before me were not the first time the issue of whether there was insurance in force at the relevant time had been canvassed in court proceedings. An action had been commenced by Mr Dass against AAUP and CIMG. Mr Dass had sued AAUP alleging the existence of insurance and, against the possibility that that was not the situation, CIMG in the alternative for negligence and misrepresentation in the course of its acting as an insurance intermediary which had been involved in seeking or obtaining insurance cover. Those proceedings were settled pursuant to an agreement to which further reference will be made below. 11 However, it seems clear that some of the documents produced under subpoena by AAUP in the proceedings before me had been received by it as a result of discovery or other interlocutory steps in the course of the earlier litigation. In those circumstances it would not be appropriate to regard them as admissions by AAUP but to the extent to which they appear to be copies of business records of CIMG, they are entitled to some evidentiary weight. A fortiori the documents do not give rise to an estoppel as contended by Counsel for Mr Kortenhorst. A summary of some events and the contents of what seem to me the more significant documents are as follows:-

(i) On what is obviously a CIMG document entitled "File Notes" referring to Mr Dass and (in an apparently different pen) his aircraft and which contains numerous dated entries, the first note records "2.2.96 Prospect rang for ABS Quote - Damian AAUP OK Premium details faxed (No answer to phone)" (ii) The next entry on that document is dated 9 April 1996. (iii) Details of the quote were faxed to Mr Dass on 2 February 1996, the facsimile transmission recording that there was included in the proposed insurance by way of an additional benefit:- "(1) personal accident extension (the pilot) $50,000."

(iii) Also on 2 February 1996 a message from Len Keehan of CIMG was left for Damien. Under the heading "Details" it included the following information:- "DETAILS John Dass CSL $2,000,000 1978 A36 VH-AFP $130,000 Base: Muwoolumbah Claims: Nil Uses: P, B&P. Sole pilot Pilot proficiency done HRS: 650T.T. In Oakland USA On TYPE 300 + HRS 18 months ago."

(iv) A quotation sheet of AAUP, which may well be an internal AAUP document, also dated 2 February 1996 repeats much of the information in that message sheet and includes the following:- "OWNER John Dass …………………………………………………………………… PILOTS Total HRS HRS on type J Dass 650 300 & pilot proficiency completed at Oakland USA 13 months ago"

(v) A document, different from that referred to in (i) above but also entitled "File Notes", refers to Mr Dass but no aircraft and records:- "2/2/96 John Dass rang wanting quote quickly obtained quote from Damian Fax sent to Dass with quote - no answer to phone 19.2.96 Nothing from Dass - no phone (Unreadable) ? stayed with Av & Gen" I would infer that this also is a CIMG document.

(vi) There is a "Provisional Cover Note" No. AV/9910 dated 9 April 1996 on the letterhead of AAUP and signed by Damian someone. The surname is indecipherable. The document shows the grant of cover from 12 April 1996 to 11 May 1996. The cover note is said to be in the name of John Dass. There is no mention of cover being given to any other person. The document also bears a notation "BROKER Private Aircraft Owners Group".

(vii) On 9 April 1996 Mr Peter Robinson of CIMG wrote to Mr Dass informing him of the commencement of insurance cover as from 12 April and asking for completion of the enclosed proposal form and payment of premium. The letter included the passage "should you allow the aircraft to be used by other pilots approved by yourself, it is important to nominate on the proposal form, names and pilot experience for the insurer's acceptance of other pilots who may use the aircraft".

(viii) The printed form of proposal included a section headed, "PILOT INFORMATION Required on ALL Pilots who will operate the aircraft." There followed columns entitled, "Name, Age, Type of Licence, Ratings, Hours & Aircraft (divided into Total, Last 12 months, and Last 90 days) and Hours this make and model (divided up into Total and Last 90 days)".

(ix) Another document on CIMG letterhead dated 9 April 1996 and addressed to Mr Dass said that "As per your instructions the following policy cover has been arranged". The period of cover was described as from "12/4/96 to 26/1/97".

(x) On 13 May 1996 Mr Keenan of CIMG wrote to Mr Dass observing that CIMG did not seem to have received the completed proposal form, asking that it be given Mr Dass' early attention "so that we may satisfy the insurers and ensure that cover does not lapse".

(xi) On the CIMG "File Notes" document referred to in paragraph (i) above, the fourth, fifth and sixth entries are as follows:- "13.5.96 called AAUP Essendon - cover extended Damien. 16.5.96 Proposal & Cheque received ppl incomplete (990-56)" (There is some unclear notation before the "990".) 17.5.96 Rang John Dass Requested replacement proposal"

(xii) The document referred to in paragraph (v) above also contains as its third and last entry:- "13.5.96 Mentioned Dass to Damian during visit to pool. Prop not yet rec'd but expected soon. Letter to go Dass reminding him."

Although the various entries on the document referred to in paragraph (i) above and the first 2 entries on this document are written on consecutive lines, on this document, there is a gap of 7 blank lines between the end of the second and the commencement of this third entry.

(xiii) A note of the arranging of cover, on CIMG letterhead and endorsed "client file copy", contains a handwritten notation "PAID 16. 5. 96".

(xiv) A fax dated 29 May 1996 from Peter Robinson to Damian of AAUP asserts that the proposal, although dated 16.4.96 was not received by CIMG until 16 May.

(xv) There is one form of proposal included in the documents. It is not obviously incomplete. It is dated 16 April 1996 and in the section of the proposal seeking details of pilots, the only person nominated is Mr Collins. Details of his experience are provided. 12 There are three other documents to which reference should be made. One of these is a letter of 30 May 1996 that Mr Robinson of CIMG wrote to AAUP. The letter included the following:- "We note that it is your intention to deny liability in respect to the claim relating to the above accident, such denial having been based on the expiry date of Cover note AV9910 (that is 11/05/96). May we point out inter alia, that on the morning of 13/05/96 that Wayne Dorgan and Len Keenan of this office visited your office to discuss the progress and ratings of the ABS scheme. You and Damien Hooper were present. At the conclusion when the meeting was breaking up, Len Keenan spoke briefly with Damien about the position of the "Tink" claim, and the proposal on "Dass", that we were awaiting. Upon his return to this office Len wrote to Dass, letter dated 13/05/96 chasing up proposal and premium. At this time Len Keenan was in no doubt that the cover was continuing. Upon receipt of the proposal form, it was noted John Dass was not nominated as a pilot and following the ordinary course of events, this aspect of the insurance was being clarified by this office." 13 This letter is headed "without prejudice". Objection was made to this letter when it was tendered but, implicitly, counsel objecting disclaimed reliance on this endorsement. 14 The second document is a file note dated 30 May in the following terms:- "Re John Dass My recollection of this insurance is that on visit to AAUP on 13/5 together with Wayne Dorgan we had discussed the ABS business generally and in particular the premiums charged for 96/97 term. There would be some RP documents issued by AAUP to balance their books with those premiums charged by us in accordance with agreed scale. At the end of meeting, as it was breaking up and as we were leaving table I spoke to Damien about 1) Tink and the claim excess 2) Dass advising prop to come. On return to office a letter was sent to Dass chasing him up - see letter of same date 13/5. Due to shortage of time there was apparently no confirmation sent to AAUP on that date. (Written by Len Keenan)." 15 The third document is a letter of 21 June 1996 from AAUP to CIMG. It asserted, inter alia, that the only proposal received was that dated 16 April 1996 and this was received on 29 May 1996. There is nothing to suggest that the proposal was passed on to AAUP earlier. 16 It should also be noted that, apart from the file note of 13 May referred to in paragraph (xi) above, there is no more or less contemporaneous note of cover having been extended at that time. A decision on the question of whether the cover originally granted was extended depends on what inferences or conclusions should be drawn from the documents to which I have referred. 17 That note of 13 May is cryptic but that is not uncharacteristic of records of insurance effected between brokers and underwriters. In its reference "call AAUP Essendon" the note suggests that there was a call to or from CIMG and AAUP. In its statement "cover extended Damien" the note is unequivocal in its terms. 18 It was suggested I could draw an inference as to the identity of the author of that file note. One difficulty with that course arises from the fact that all that is in evidence is a photocopy of the document containing the note. As a general proposition photocopies are not something on which handwriting experts are prepared to rely. On the other hand there is a distinctiveness about the writing and it does appear to accord with that on a number of documents apparently emanating from Mr Robinson. 19 But if the handwriting is that of Mr Robinson, one may wonder at its contemporaneity, given that the meeting at which it is suggested cover was extended was attended by representatives of CIMG other than Mr Robinson. 20 From the point of view of any one wishing to contend that cover had in fact been extended, the terms of the note of 13 May referred to in paragraph (xii), in their silence, are suggestive that cover was not extended and the terms of the note of 30 May and of the passage I have quoted from the letter of that date fall a long way short of what would be regarded as desirable. They do not refer to any actual request for, or consent to, the extension of cover and in that omission the documents argue against there having been an extension of cover. If in fact there had been a communication which in express terms extended the period of cover, one would have expected that communication to have been referred to in the letter of 30 May. 21 Although in totality the matters to which I have referred mean that one cannot be confident in answering the question whether cover was extended, the conclusion at which I have arrived is that there is sufficient evidence that it was and that I should proceed in an interlocutory application on that basis. 22 I am also of the view that any extension of cover was likely to have been for a period which included the date of the plane crash, 28 May. The period stated in the original cover note was 12 April to 11 May - a month. Absent any discussion as to the period of an extension, one would imply a reasonable time and the fact that the original cover was for a month argues that that is a reasonable time. 23 I turn then to the question of the terms of that cover and more particularly whether it extended to cover Mr Collins. 24 In evidence were the terms of an insurance policy produced by AAUP in response to a subpoena which required the production of:- "The printed terms and conditions of an aviation insurance policy or policies issued by (AAUP) for a single engine aircraft known as a Beechcraft Bonanza or similar thereto for both private use and charter in the period between 1 March 1996 and 30 May 1996." 25 The terms of the document produced included, in Section 3B:- "(1) We will pay, up to the relevant limit of our liability stated in the Coverage Schedule" such sums which you, or a pilot authorised by you who is within the class of pilots described in the Coverage Schedule, or any employer of such a pilot who may be held legally liable for the pilot's acts or omissions, are legally liable to pay as compensation (excluding interest and legal costs awarded and punitive or exemplary damages) for accidental bodily injury (including death) of other persons or accidental damage to the property of other persons which occurs during the policy period of cover and is caused directly by the aircraft or by any person or object falling from the aircraft." 26 There is no doubt that such a clause and the effecting by Mr Dass of insurance which in terms provided cover to Mr Collins would be effective to do so - Trident General Insurance Co Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107; Insurance Contracts Act 1984 (C'th) s48. 27 However the terms of the insurance which was effected were not appropriate to cover Mr Collins. It is clear from the quotation and proposal forms, and I would infer it in any event, that the identity or at least the experience of pilots of the aircraft was a matter material to the issues of which insurance cover would be granted and if so on what terms. The information supplied to AAUP in this connection prior to the time of the crash of the aircraft identified the pilot as Mr Dass. He was the only person identified to CIMG prior to any renewal of the cover which may have occurred on 13 May. Indeed one might go so far as to say that if it was intended that Mr Collins was to be the, or a, pilot of the aircraft, the information supplied to AAUP to the effect that the "pilots" was Mr Dass was misleading. 28 Accepting that some adaptation of the wording might be required to take account of the fact that such insurance as was current at the time of the crash was pursuant to a cover note, there is nevertheless no basis upon which it could be concluded that, prior to the crash, Mr Collins was "a pilot … within the class of pilots described in the Coverage Schedule". 29 Accordingly, Mr Collins was not a person to whom any insurance cover provided by AAUP extended. Insofar as the application for leave under s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to join AAUP is based on Mr Collins being insured pursuant to the cover note and the extension of the term of cover granted under it, the application must fail. 30 This conclusion makes it unnecessary for me to consider a number of other questions which were the subject of debate during the proceedings before me. However against the possibility that the Plaintiffs may wish to appeal, there may be virtue in my saying something about some of them. 31 As I have indicated, one of the issues was whether, even if there was insurance cover which extended to indemnify Mr Collins, such extension conferred no rights on the Plaintiffs against AAUP. In that regard, s6 of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW), so far as is relevant, provides:- "6(1) If any person (hereinafter in this Part referred to as the insured) has, whether before or after the commencement of this Act, entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability. (4) Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action of the judgment given therein the parties shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured: Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. … " 32 Mr Drummond, appearing for AAUP, drew attention to the fact that the section confers rights on persons who have "entered into a contract of insurance". He submitted that even if Mr Collins had been covered by the cover note issued to Mr Dass, and was by reason of the principle accepted in Trident General Insurance Co Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107 or pursuant to s48 of the Insurance Contracts Act 1984 (C'th), entitled to recover his loss from AAUP he was nevertheless not someone who had "entered into a contract of insurance" within s6. The first part of that proposition is plainly right as the judgments in Trident General Insurance Co Limited v McNiece Bros Pty Ltd recognise. The second follows from the words of the section. 33 There was also debate as to the effect of s51 of the Insurance Contract Act. So far as is presently material, that section, and section 48 which is relevant in this connection, provide:- 48(1) Where a person who is not a party to a contract of general insurance is specified or referred to in the contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends, that person has a right to recover the amount of the person's loss from the insurer in accordance with the contract notwithstanding that the person is not a party to the contract. (2) Subject to the contract, a person who has such a right- (a) has, in relation to the person's claim, the same obligations to the insurer as the person would have if the person was the insured; and (b) may discharge the insured's obligations in relation to the loss. 51(1) Where - (a) the insured under a contract of liability insurance is liable in damages to a person (in this section called the "third party"); (b) the insured has died or cannot, after reasonable enquiry, be found; and (c) the contract provides insurance cover in respect of the liability, the third party may recover from the insurer an amount equal to the insurer's liability under the contract in respect of the insured's liability in damages." 34 In s9 of that Act, "insured" and "insurer" are defined to "include a proposed insured and a proposed insurer respectively". 35 In light of the distinction made in s48 between the "insured" and a third party entitled to cover under a policy, and against the background of the existing legislation in s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and similar legislation in the Australian Capital Territory, it is not possible to regard the references to "insured" in s51 as intended to encompass third parties to whom cover is expressed to extend. The authors of Australian Insurance Law by Tarr, Liew and Holligan, 2nd.ed., at page 66 take a similar view. 36 In reaching this conclusion I acknowledge that it is liable to create or amount to an impediment to actual recovery by someone in the Plaintiffs' position of any verdict against such third party beneficiaries of a policy. Should the third party not be in a position to meet the verdict, but not disposed himself to sue the insurer, and an insurer be recalcitrant, a plaintiff will presumably be obliged to bankrupt the third party's estate and then induce the trustee of that estate to sue the insurer. Such a result is less than ideal but short of giving to s51 of the Insurance Contracts Act or s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), an operation which the language does not bear is, in my view, inevitable. Whether there are any other methods by which rights against the insurer may be pursued it is unnecessary for me to consider. 37 It was submitted on behalf of the Plaintiffs that CIMG was an intermediary and that accordingly it was immaterial that there had been no payment of the premium to AAUP prior to the aircraft crash. Having regard to the terms of s14 of the Insurance (Agents and Brokers) Act, that is clearly correct. As a general proposition, insurance intermediaries include insurance brokers - see s9 of that Act - and s14 does not contain the exception of general insurance brokers which is contained in s12. 38 There were also arguments whether CIMG was an agent for AAUP or a general insurance broker. A number of facsimile transmission documents emanating from CIMG had as part of their heading "Australian Bonanza Society Private Aircraft Owners Group". The cover note dated 9 April 1996 noted as the broker involved "Private Aircraft Owners Group". There were other documents referring to the "Australian Bonanza Society Insurance Program". All of these documents related to the insurance proposed for Mr Dass. 39 One document which was not so restricted was a letter of 30 May 1996 from CIMG to AAUP. It included the remark that "Overall we consider the Australian Bonanza Society business has been a profitable one with its years with the Pool …". 40 It was submitted by Mr Neil QC on behalf of Mr Kortenhorst that these documents showed a continued course of dealing whereby CIMG acted as agent for AAUP through the Australian Bonanza Society or the Private Aircraft Owners Group. They do not. They show nothing more in this connection than that CIMG had some association with, or perhaps carried on part of its business under the name or aegis of, that society or group. 41 Mr Glissan also contended that there was an arguable case that CIMG was acting as an agent for AAUP. He relied on additional documents, including letters from CIMG of 13 May and 24 June 1996. It is unnecessary for me to set these out except for one paragraph of the letter of 24 June on which Mr Glissan placed strong reliance. That paragraph reads:- "Upon receipt of the proposal form, (although named as proposer) John Dass had not completed pilot information under Question Five for his own pilot credentials apart from those of the late Mr Collins. It is also the usual practice for ABS Members to complete a supplementary questionnaire which accompany the completed proposal forms for assessment by your office. Understanding an extension of the cover note existed at this time the additional information was sourced from the Insured." 42 Mr Glissan submitted that the paragraph demonstrates that CIMG were acquiring information for transmission to AAUP as the agent of the latter. I disagree. The passage is equally consistent with a broker, on his own account, obtaining information which an insurer does or is likely to require. There is nothing else in the letters upon which Mr Glissan relied which argues for CIMG being an agent for AAUP. 43 Mr Glissan also relied on statements made in paragraph 18 of the Statement of Claim in Mr Dass's action against CIMG to the effect that:- (i) CIMG had accepted the premium from Mr Dass and advised Mr Dass that insurance would be effected; (ii) The plaintiff relied upon CIMG's advice in good faith. (iii) CIMG was authorised by AAUP to accept premiums on its behalf and to issue and/or extend cover notes. (iv) In the circumstances CIMG was acting with the authority of AAUP as AAUP's agent in affecting the insurance cover. (v) Alternatively by reason of the foregoing CIMG was deemed to be the agent of AAUP by operation of s11 and/or s12 and/or s14 of the Insurance (Agents and Brokers) Act 1984.

and the absence of denial by CIMG of these assertions. 44 The argument is easily dismissed. In circumstances where CIMG clearly have an interest in saying that they were such an agent, it is impossible to regard admissions to that effect in CIMG's pleadings as establishing an arguable case against AAUP. But in any event, the paragraph containing the 5 assertions which I have set out was headed "Particulars". One does not plead to particulars. Hence no inference can be drawn from CIMG's failure to respond to the assertions. 45 Appearing for AAUP, Mr Drummond pointed out that s10 of the Insurance (Agents and Brokers) Act requires that an insurance intermediary not arrange or hold himself out as entitled to arrange a contract of insurance unless there is in existence an agreement in writing conferring authority to arrange such a contract, that there is no evidence of any such agreement and that nowhere in the correspondence does Mr Robinson, who was the author of the letters from CIMG urging AAUP to accept the claim, assert that CIMG was an intermediary or agent of AAUP. 46 Were it necessary to do so, the conclusion at which I would have arrived was that there is no arguable case that CIMG was an agent of, or entitled to arrange a contract of insurance on behalf of, AAUP. Indeed the tenor of the internal documents and those which passed between 2 or more of AAUP, CIMG and Mr Dass would incline me to the view that CIMG was probably a general insurance broker. 47 Furthermore, that term is defined in s9 of the Act as "a person who is for the time being registered under Part III in respect of general insurance business". There was tendered and admitted into evidence subject to objection a letter from the Insurance and Superannuation Commission observing that "Corporate Insurance Management Group Pty Ltd was deemed registered as a general insurance broker for the period 1 April 1996 to 31 May 1996 under section 24 of the Insurance (Agents and Brokers) Act 1984". Section 22 of that Act requires ASIC to keep a publicly available register of General Insurance Brokers and s24 provides for persons to be deemed registered in certain circumstances. In the circumstances, it seems to me that, particularly on an interlocutory application, the letter from ASIC was admissible and leads to the view that CIMG was a general insurance broker. 48 In a further submission Mr Neil contended that Mr Collins was entitled to be indemnified by AAUP by reason of the agreement that had been entered into apparently in settlement of the proceedings Mr Dass brought against CIMG and AAUP. Clause 4 of that agreement provided:- "AAUP and CIMG agree to indemnify Dass on the terms and conditions of the document annexed and marked "A" (the "Policy") in respect of claims which may be made against Dass by either the estates of the deceased Collins or Gardener, or any person claiming through them, or the injured parties Kortenhorst and Aspioti or any other person claiming as a result of the accident or the injury to Kortenhorst or Aspioti or the death of Collins or Gardener up to the maximum sum of $2 million and will cause their solicitors to act for Dass in the defence of any such claims with the costs and disbursements incurred by those solicitors being borne by AAUP and CIMG AAUP and CIMG agree that the indemnity (including the payment of legal costs and disbursements) is not subject to any allegation of non-disclosure, misrepresentation or exclusion arising under Sections 4 or 5 of the Policy. AAUP and CIMG agree that they will not raise or rely on any such matters in any attempt to limit the indemnity granted to Dass by this Agreement." 49 Again I do not agree with the submission. The clause is an agreement to indemnify Dass. Certainly the clause extends to indemnifying Dass for any liability he may have for actions or defaults of Mr Collins but that is a proposition quite different from the claim that Mr Collins is himself entitled to be indemnified by AAUP. The fact that the annexure referred to in Clause 4 took the form of what seems to have been AAUP's standard form of policy including clause 3B which I have set out above does not turn an agreement to indemnify Dass into one whereby AAUP was obliged to indemnify Mr Collins. 50 That conclusion makes it unnecessary to consider a further submission Mr O'Neill made, viz. that the contract of indemnity is a contract of insurance for the purposes of s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), inter alia because it amounted to an agreement to indemnify in relation to the contingency that claims "may" be made. 51 Reliance was also placed by Mr O'Neill on the file notations of 16 and 17 May referred to in paragraph (xi) above, as demonstrating that a proposal was received by CIMG prior to the plane crash on 28 May. Certainly the notations justify such an inference but they say nothing about the terms of that proposal, and nothing about whether Mr Collins was referred to in it. And even if he was, the terms of the proposal cannot themselves affect the terms of the cover previously granted. In that connection s38(2) of the Insurance Contracts Act provides:- "Where: (a) an insurer has entered into an interim contract of insurance; and (b) before the insurance cover provided by the contract has expired, the insured has submitted a proposal to the insurer for a contract of insurance intended to replace the interim contract of insurance; the insurer remains liable in accordance with the interim contract of insurance until the earliest of the following times: (c) the time when insurance cover commences under another contract of insurance (whether or not it is an interim contract of insurance) between the insured and the insurer or some other insurer, being insurance cover that is intended to replace the insurance cover provided by the interim contract of insurance; (d) the time when the interim contract of insurance is cancelled; (e) if the insured withdraws the proposal - the time of withdrawal." 52 There is nothing to suggest that CIMG did anything on receipt of the proposal by way of agreeing to another contract of insurance. Thus, even if CIMG was the agent of AAUP, none of the events contemplated by paragraphs (c) to (e) occurred and insurance continued in accordance with the terms of the interim cover. 53 That is all I need say about the application to join AAUP as the insurer of Mr Collins. As I have indicated, Mr Kortenhorst's Notice of Motion sought a declaration that AAUP was liable to indemnify Mr Dass. It may be that the earlier prayers seeking joinder of, and other relief against, AAUP should be regarded as on this wider basis also. 54 However, during the course of the proceedings Mr Drummond, appearing for AAUP, said that there was "no issue that he (Mr Dass) is to be indemnified in respect to an agreement which was providing him with indemnity but not pursuant to a policy for contract of insurance" (sic) and that "There is no reason for the joinder of AAUP in those circumstances concerning Mr Dass." There was no evidence suggesting that AAUP would not indemnify Mr Dass. 55 In that situation, I am not satisfied that there is any utility in making the declaration sought or in joining AAUP on the basis of its relationship with Mr Dass or in granting the leave under s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) or in granting the extension of time which Mr Kortenhorst seeks. Accordingly, I will not grant such relief at this time. However, against the possibility that these matters may become live issues at some time, it seems to me not inappropriate to stand over so much of Mr Kortenhorst's Notice of Motion as relates to, or is dependent upon, Mr Dass' entitlement to be indemnified by AAUP. 56 Otherwise the Notices of Motion are dismissed. 57 There was no argument on the question of costs so at this stage I will reserve them. For the benefit of any judge who may have to deal with the issue of costs hereafter, I should however record that I am not conscious of any reason why there should not be an order for costs in favour of AAUP. After all the Plaintiffs as moving parties have not succeeded in obtaining the relief sought. 58 Nevertheless there are factors which argue against AAUP receiving all of its costs. The Solicitor for Ms Aspioti had, in 1996, been informed by Solicitors acting for AAUP that there was no contract of insurance in existence with AAUP and that company would not indemnify the pilot or owner. A later request by Ms Aspioti's solicitor for more information, albeit not relating to insurance or indemnity, was not replied to. Later requests for details of the settlement of the proceedings by Mr Dass against CIMG and AAUP were met, it would appear, with references to confidentiality conditions in the settlement. 59 Mr Wall, the Solicitor for Mr Kortenhorst deposed to having been informed by Mr Dass in April 2002 that AAUP had denied the existence of a policy of insurance but had agreed to indemnify him. Mr Wall further deposed that in April 2003 he had been informed by Mr Dass' Solicitor that Mr Dass was not indemnified by AAUP.

60 It was asserted in written submissions handed up on behalf of both Plaintiffs that it was only on the evening of 14 April 2003, the day before the hearing of the Notices of Motion, that AAUP advised it had agreed to indemnify Mr Dass. When I suggested to Counsel for AAUP that his client had been at least coy in disclosing its involvement in any continuing indemnity, he had little to say in response. He acknowledged that it was as the result of Notices to Produce (or perhaps subpoenae) that the situation was revealed. 61 My impression - I put the matter no more strongly in the absence of argument - is that the costs of the proceedings were increased appreciably by the actions and attitude of AAUP. Were that a concluded view, it would argue strongly in favour of any costs order in favour of AAUP being for appreciably less than would otherwise be the case. 62 In summary, my orders are:- (i) In matter 11579/2000 - (a) Dismiss the Plaintiff's amended Notice of Motion filed on 15 April 2003; (b) Reserve the question of costs. (ii) In matter 20083/2001 - (a) Stand over so much of the Plaintiff's amended Notice of Motion filed on 15 April 2003 as relates to or is dependent upon any entitlement Mr Dass may have to be indemnified by Australian Aviation Underwriting Pool Pty Ltd; (b) Otherwise, dismiss the said Notice of Motion; (c) Reserve the question of costs. **********

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