HIH Claims Support Ltd v Insurance Australia Ltd (No M24 of 2011) - Final instalment coming soon!

In our November alert we discussed the case of HIH Claims Support Ltd v Insurance Australia Ltd [2010] VSCA 255 which was on appeal from the Supreme Court of Victoria.  The case involved the allocation of liability following damage to a large and valuable video screen at the time of the 1998 Grand Prix event.

At first instance, Hollingworth J held that the liability of HIH Claims Support Ltd (HCSL) (the administrator of the HIH Claims Support Scheme) was not coordinate with Insurance Australia Ltd’s (IAL) indemnity obligation and thus HCSL had no entitlement to contribution from IAL.  The Court of Appeal dismissed the appeal.  It agreed that HCSL and IAL’s liabilities were not coordinate but for different reasons to Hollingworth J (see the reasons for the Court of Appeal’s finding in our November alert).  The case has now been appealed to the High Court.

The issue was whether the Court of Appeal was correct in finding that HCSL and IAL’s liabilities were not coordinate.  The Appellant (HCSL) emphasised that “it would be inequitable to allow the respondent [IAL] to escape liability in this case because its co-insurer collapsed and a third party picked up the responsibilities, not through novation or assignment from an insolvent insurer, but by way of an assignment from the insured.”

The appeal was heard at the High Court on 2 June 2011.  We will provide an update once the decision is handed down.