Bridgecorp appeal allowed

Authors: Simon Lusk

In the Bridgecorp case ((Steigrad & Ors v BFSL 2007 Limited & Ors [2011] NZHC 1037) the High Court of New Zealand ruled that third party claimants have a statutory charge (under section 9 of the Law Reform Act 1936 (NZ)) over all monies payable under a directors and officers liability insurance policy, and that that charge took priority over any claim by the directors to defence costs. In a judgment handed down on 20 December 2012, the New Zealand Court of Appeal overturned that decision and held that:

  • section 9 does not by its terms apply to insurance monies payable in respect of defence costs, even where such cover is combined with third party liability cover and made subject to a single limit of liability; and
  • section 9 has limited effect and is not intended to rewrite or interfere with contractual rights as to cover and reimbursement.

Significant cases, legislation or articles referred to

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