New Zealand Forest Products Limited v the New Zealand Insurance Company Limited: PC 21 Jul 1997

(New Zealand) Proceedings had been instituted in five causes of action against a company and its director, whose costs were both covered by an insurance policy, and in the case of one of the causes of action against a third person not so covered. All the defendants were represented by the same lawyers. It was common ground that costs not relating in any way to the insured director’s defence would not be covered, while costs exclusively related to the insured director’s defence would be covered. The issue which arose was as to defence costs which related at one and the same time to the defence both of the claim against the insured director and of the claim against the uninsured third person. The courts below took the view that there should be an apportionment.
Held: The relevant insurance. This covered ‘all loss . . which such officer has become legally obligated to pay on account of any claim made against him . . for a wrongful act’. Since this wording would cover the whole costs incurred in the defence where the insured officer was the sole defendant, the Board saw no reason why it should not cover them all, where some of them related also to the defence of an uninsured co-defendant.


Lord Goff of Chieveley, Lord Slynn of Hadley, Lord Clyde, Lord Hutton, Justice Henry


[1997] UKPC 37, [1997] 1 WLR 1237




England and Wales

Cited by:

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CitedTravelers Insurance Company Ltd v XYZ SC 30-Oct-2019
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Lists of cited by and citing cases may be incomplete.

Insurance, Damages, Costs

Updated: 04 May 2022; Ref: scu.159249