CIC INSURANCE LTD v BANKSTOWN FOOTBALL CLUB LTD

INSURANCE - insurance contracts Insurance Contracts Act 1984 (Cth), s58 operation of - observations by Priestley JA supplementary to those of earlier reasons.

PRACTICE AND PROCEDURE - Court of Appeal - reopening of argument of completed appeal - orders not entered - whether Court could and should reopen argument - whether member or members of the Court failed to address issues raised by unsuccessful party - whether orders earlier proposed should be varied - held: (1) The Court of Appeal has power to reopen argument and to amend orders before any final orders are entered. Wentworth v Rogers and Ors [No 9] (1987) 8 NSWLR 388 (CA), applied; (2) In the present case, Kirby P, with one variation, affirmed his earlier conclusions and reasons; so did Powell JA; Priestley JA, to avoid uncertainty and confusion in the conduct of the retrial, withdrew his reasons insofar as they conflicted with those of Kirby P and adopted Kirby P's views to the extent necessary to support the declarations and orders of the Court; (3) The original orders as to costs failed to provide for the respondent's costs of the appeal. As it had substantially succeeded, it should have two-thirds of the costs of the appeal and the originally published orders should be varied to so provide.

INSURANCE - insurance contracts - Insurance Contracts Act 1984 (Cth), s58 - whether inapplicable in a case of purported avoidance where the validity of the avoidance had not been ruled upon prior to the date on which the policy would otherwise have expired - held (per Kirby P): Not necessary to decide; (per Priestley JA): The words of s58 do not reasonably support the submissions of the appellant; (per Powell JA): Not necessary to decide. Insurance Contracts Act 1984 (Cth), s58.

Kirby P The Court delivered its opinion and published its proposed orders in this matter on 14 December 1994.

Subsequently, and before formal orders were entered, the appellant applied to relist the proceedings. It requested that the Court reconsider certain arguments and provide supplementary reasons.

The Court is fully empowered to do as requested. There was nothing improper in the motion asking it to do so. Indeed, by its earlier orders, the Court reserved liberty to the parties to relist the proceedings for variations of the orders, or for further orders or directions, provided such liberty was exercised within 28 days of the publication of the judgment of the Court. Entry of, and execution upon, the final orders of the Court was, in the meantime, stayed. I think it may be assumed that the appellant's motion was within the terms of that liberty reserved. But in

any case, as no formal orders have been entered, this Court can and should address the issues raised. Wentworth v Rogers and Ors [No 9] (1987) 8 NSWLR 388 (CA), 392f.

Specifically, the appellant sought supplementary reasons upon the issue of whether s58 of the Insurance Contracts Act 1984 (Cth) is inapplicable to a case of an insurer's purported, but invalid, cancellation of a policy.

It is clear from my reasons in the original judgment that this issue was not essential to my ultimate conclusion. I will not elaborate what I there said.

In my opinion, I need say no more on this point than appears in my original reasons. I adhere to those reasons.

A second issue, which arose during the course of the further argument, related to the general damages which the respondent alleges are continuing to accrue because of the fact that its premises have been, and remain, destroyed. The respondent requested that this Court make an order providing, in effect, that the sum of $500,000 already paid to it by the appellant was not to be taken to be in reduction of its right to a claim that it is suffering continuing general damage until the reinstatement of the club premises. I sympathise with the predicament of the respondent. However, this is not a matter which is appropriate for the Court to determine incidentally to the exercise of its appellate jurisdiction. If there is a dispute about this matter, it must be resolved in the Commercial Division.

The final issue relates to the costs of the appeal. The respondent pointed out that the original orders of the Court on the costs of the trial and of the appeal were that the appellant pay the respondent's costs before Cole J and that the respondent pay one-third of the appellant's costs of the appeal. These orders left the respondent unprotected in respect of its own costs in the appeal. That was unjust because, upon the majority's approach, reflected in the ultimate orders of this Court, the respondent substantially defeated the appellant's attempts to escape liability. It retained (although for different reasons) most of the victory which it had won before Cole J.

I agree that the earlier orders failed properly to provide for the respondent's costs of the appeal. They should be provided for. The oversight can be cured simply by adding to para4 of the orders previously proposed the words "and two-thirds of the respondent's costs of the appeal". I so propose.

As Priestley JA has now withdrawn such of his original reasons as conflicted with mine, and has supported the declarations and orders originally proposed by me and my reasons, this Court should, in my view, refuse the application to amend its reasons. It should reaffirm the orders made on 14 December 1994, with the small correction subsequently made by the corrigendum note of 15 December 1994 and with the addition of the costs order to which I have referred.

The appellant must pay the costs occasioned by the additional hearing.

Priestley JA Kirby P has set out in his further reasons how this matter came before the court again for further consideration. Amongst other things, the appellant sought clarification of two concerns connected with the opinions I had expressed, published along with those of Kirby P and Powell JA when the court made orders on 14 December 1994. The three sets of reasons differed on a number of points.

It was submitted that since, on the approach that I had taken, the construction of s58 of the Insurance Contracts Act 1984 was basic to my opinion, I should have dealt more fully with the submissions the appellant had made concerning s58. One justification for this submission was that the appellant was seeking

URJCIC INSURANCE LTD v BANKSTOWN FOOTBALL CLUB LTD [No 2] (Powell JA) 3

special leave to appeal in the High Court, wished to put the same s58 submissions in that court as it had in this court and wished to avoid any possibility that it might be said the arguments had not been put to this court.

The two s58 arguments were that the appellant had complied with s58(2) of the Insurance Contracts Act 1984 by a letter of 22 July 1992 and that in any event "s58 should be construed so as to be inapplicable in a case of purported avoidance at any rate where the validity of the avoidance had not been ruled upon prior to the date on which the policy would otherwise have expired."

I do not think I need say any more than that, in my opinion, the words of s58 do not reasonably support either submission.

The appellant's other matter of concern was that declaration 3(a)(iv) and 0.3(b)(i) did not follow from the opinion I had formed that the appellant's statements that it would not pay reinstatement costs when incurred should be treated as breaches of both the actual contract made and the statutory contract so that any damage that could be proved to flow from them would be payable by the appellant to the respondent.

In agreeing to declaration 3(a)(iv) and the orders dependent on it, I was of the view that the figure produced at a new trial pursuant to such orders would be sufficiently close to that which would flow from implementation of the opinions I had formed as to warrant my joining in the order.

Although I still think the result would be much the same as that flowing from Kirby P's reasoning, I realise that the differing reasons upon which the orders of the court of 14 December 1994 presently rest could create real problems for the conduct of the new trial ordered by the court. As matters stand, the parties and the judge would be confronted with two separate approaches to the question of damages, and although each approach would in my opinion produce very similar results, both means of getting to those results would have to be accommodated in the conduct of the trial, an unnecessary and perhaps impossible burden for all concerned.

Since the President's course of reasoning, although in material respects different from mine, leads to what, as I have said, seems to me to be very much the same result as would follow from my own opinion, and since that result is quite different from the one favoured by Powell JA, I think the simplest solution is for me to say that for the sake of reaching what seems to me to be the substantially correct result, I withdraw such of my reasons as conflict with those of the President leading to the declarations and orders he proposed, and adopt his views to the extent necessary to support those declarations and orders.

As to the further matters raised by the appellant on the reconsideration argument, they have been dealt with by Kirby P in his further reasons, with which I agree.

I concur in the President's proposal for disposition of the matters raised at the reconsideration hearing.

Powell JA The circumstances in which this matter came before the Court for further consideration are set out in the further Judgment which has been prepared by Kirby P. As will be apparent from what Kirby P has written, the matters sought to be raised on the motion call for no further response from me. That being so, I do no more, on this occasion than record that nothing which was put on the hearing of the motion has caused me to change the views which are set out in my earlier Judgment.

1. Subject to O.2, orders and declarations of the Court, as published on 14 December 1994 and corrected on 15 December 1994 confirmed;

2. To the orders previously announced add to O.4 the words: "and two thirds of the respondent's costs of the appeal'; and

3. The appellant to pay the additional costs occasioned by the further hearing.

Counsel for the Appellant: BW Rayment QC / JW Duncan

Instructed by: Abbott Tout Counsel for the Respondent: JB Simpkins / B Debuse