FEDERAL COURT OF AUSTRALIA

Todd v Alterra at Lloyds Ltd (on behalf of the underwriting members of Syndicate 1400) (No 2) [2016] FCAFC 55

ORDERS

THE COURT ORDERS THAT:

1.    The orders made on 19 February 2016 be vacated and in lieu thereof the following be ordered.

2.    The appeal be allowed with costs.

3.    Order 1 of the Court made on 6 March 2015 dismissing the Appellant’s cross-claim be set aside and in lieu thereof:

(a)    declare that the Financial Services Errors and Omissions Insurance Policy B 0309 WP 120250b (the “Policy”) issued by the Fourth to Seventh Respondents and Cross-Respondents, responds to the claim made by the Applicants below against the Second Respondent (Mr Todd) and that the Second Respondent (Mr Todd) is entitled to indemnity with respect to the liabilities identified at [3] of the Court’s Reasons for Judgment published on 6 March 2015, subject to any applicable excess and any applicable Self-Retained Aggregate;

(b)    declare that pursuant to the Policy, the Fourth to Seventh Respondents and Cross-Respondents are obliged to indemnify the Second Respondent (Mr Todd) for:

(i)    the Second Respondent’s (Mr Todd’s) liability to the Applicants below for the liabilities identified at [3] of the Court’s Reasons for Judgment published on 6 March 2015;

(ii)    the Second Respondent’s (Mr Todd’s) defence costs with respect to the claims of the Applicants below; and

(iii)    the Second Respondent’s (Mr Todd’s) liability to pay the Applicants’ costs of their claims against Mr Todd below, as agreed or taxed,

subject to any applicable excess and any applicable Self-Retained Aggregate;

(c)    order that the Fourth to Seventh Respondents and Cross-Respondents pay the Applicants:

(i)    the sum of $700,000 (being the amount they are liable to pay pursuant to paragraph (b)(i) above, less $300,000 already paid to the Applicants by or on behalf of Mr Todd), in reduction of the Second Respondent’s (Mr Todd’s) liability to the Applicants; and

(ii)    the costs of the Applicants’ claims against Mr Todd below, as agreed or taxed (being the amount they are liable to pay pursuant to paragraph (b)(iii) above), in reduction of the Second Respondent’s (Mr Todd’s) liability to the Applicants;

(d)    order that, within 28 days of the final determination of the separate questions referred to in paragraph (f) below, the Fourth to Seventh Respondents and Cross-Respondents pay to the Second Respondent (Mr Todd):

(i)    the sum of $300,000 (being the balance of the amount they are liable to pay pursuant to paragraph (b)(i) above), together with any interest thereon; and

(ii)    the Second Respondent’s (Mr Todd’s) defence costs with respect to the claims of the Applicants below (being the amount they are liable to pay pursuant to paragraph (b)(ii) above), together with any interest thereon; less

(iii)    any applicable excess and the remaining balance (if any) of any applicable Self-Retained Aggregate.

(e)    order that the Fourth to Seventh Respondents and Cross-Respondents pay the Second Respondent’s (Mr Todd’s) costs of the proceedings on the cross-claim; and

(f)    order that the separate questions described at [7] of the Court’s Reasons for Judgment published on 6 March 2015 be referred for further hearing.

REASONS FOR JUDGMENT

THE COURT:

1    The Court delivered its reasons for judgment on 19 February 2016.

2    In that judgment, the Court made certain orders. The parties have agreed on an amended set of orders to give effect to the Court’s reasons.

3    The amendments are to take account of the fact that the appellant has already discharged some (but not all) of his liability to the Applicants under the Settlement Agreement coupled with the ongoing disputes regarding both the quantum of the Defence Costs incurred by the appellant and the balance (if any) of the Self-Retained Aggregate

4    In these circumstances, the Court agrees that the orders should be varied.

5    For ease and convenience, it is appropriate to make the new orders in substitution for those previously made. Thus the orders of 19 February 2016 will be vacated and the orders proposed by the parties will be put in their place.

Associate:

Dated:    5 April 2016