An insurer's grant of indemnity to the insured, subject to reservations, constitutes an admission of liability to indemnify but does not satisfy a condition precedent in an excess policy requiring the underlying insurer to have admitted liability to pay the full amount of its indemnity where the insured's liability to the third party has not been established. Section 51(1)(a) of the Insurance Contracts Act does not require a prior determination of the insured's liability before a third party can proceed against the insurer. A solicitor retained by a controlling shareholder to advise on a transaction between the shareholder and a controlled company is not thereby retained by the company, and the relationship of solicitor and client with the company will not be implied unless it is a necessary and clear inference from the proved facts.
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