The Victorian Supreme Court recently re-examined the right of
contribution between insurers in light of the Insurance
Contracts Act 1984 (ICA) and some tricky
policy terms.
Lumley General Insurance Ltd (Lumley) commenced
proceedings against QBE Insurance (Aust) Ltd (QBE)
seeking a rateable contribution from QBE for an amount that it paid
to a common insured. The accident which underpins the dispute
occurred during the course of fit out works undertaken for premises
to be occupied by Mallesons Stephen Jaques
(Mallesons) in Melbourne. The principal contractor
was Probuild Constructions (Aust) Pty Ltd
(Probuild). Commercial Interiors Australia Pty Ltd
(Interiors) was subcontracted by Probuild to carry
out the fit out works. During the course of the works, a
director/employee of Interiors accidentally dislodged a flush
sprinkler head in the ceiling of the premises. The sprinkler was
activated for 50 minutes, discharging water at a rate of 20 litres
per second, causing
