Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd

(2009) 226 FLR 306; [2009] WASCA 31

Western Australia Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Insurance
2. › Double insurance
3. › Other insurance clauses
4. › Whether void by operation of s 45(1) of the Insurance Contracts Act 1984 (Cth)
5. › Whether whole clause avoided or only part with stipulated effect
6. › Whether severance permissible
7. › Insurance Contracts Act 1984 (Cth), s 45
1. Statutes
2. › Construction
3. › Section rendering void a provision with certain effect
4. › Whether section renders void provision entirely or only insofar as provision has relevant effect
5. › Whether statute excludes severance
6. › Insurance Contracts Act 1984 (Cth), s 45(1)
1. Insurance
2. › Subrogation
3. › Double insurance
4. › Contribution between co-insurers
5. › Whether payment of contribution by one insurer to another gives contributing co-insurer right of subrogation to claims of insured
6. › Requirement of full indemnification before right of subrogation arises
1. Insurance
2. › Indemnity insurance
3. › Double indemnity
4. › Whether payment by one indemnifying party discharged liability of other indemnifying party
5. › Whether one liability primary and one secondary
6. › Effect of merger of cause of action in judgment

Quick Take

Section 45(1) of the Insurance Contracts Act 1984 (Cth) avoids only that part of an 'other insurance' clause which has the stipulated effect of limiting cover by reference to contracts entered into by the insured as a party; the remainder of the clause may be severed and remain valid. In cases of double insurance, only the insurer who indemnifies the insured obtains a right of subrogation; a co-insurer who subsequently pays contribution does not acquire subrogation rights. Where a judgment requires two parties to indemnify a third, payment by one discharges the other's obligation to indemnify, and the question is determined by reference to the judgment rather than the underlying causes of action.