Claim against insurer: A Dean v Phung postscript

Dean v Phung [2015] NSWSC 816 dealt with an application for a costs order against the insurer of an insolvent defendant dentist.

In the primary claim against the dentist the claimant (on appeal) succeeded in establishing assault and intentional act of defendant. At [45] the court noted the contents of a letter sent to the claimant by the lawyers for the dentist / insurer:

On 14 September 2012 Guild Lawyers (now called Meridian Lawyers) responded. They advised that the “extent of our client insurer’s declinature” was in respect of every liability of Dr Phung that had not been discharged by the payment noted in [35], namely the increase in the compensatory damages resulting from the judgment of the Court of Appeal ($204,385.00), exemplary damages, post judgment interest, costs in the Court of Appeal and costs at first instance. The letter stated that the declinature arose “from the specific findings of the Court of Appeal” and enclosed a copy of the relevant form of the Dentist Liabilities Insurance Policy (the “policy”).

The claimant at [65] contended that Guild Insurance through its solicitors had effectively misled him to believe that it would not refuse to indemnify the dentist in the event that findings of fraud or their equivalent were made against him.

At [69] the court concluded that neither the terms of the letter nor the surrounding circumstances warranted any conclusion that the insurer impliedly confirmed that it would indemnify the dentist.

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