Hird v Chubb Insurance Company of Australia Ltd [2016] VSC 174 (3 May 2016)

Last Updated: 3 May 2016

AT MELBOURNE

COMMERCIAL COURT

S ECI 2015 00285

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INSURANCE – Directors and Officers liability policy – Formal investigation relating to conduct of insured and others – Insured attended interview by investigative body and produced his mobile phone for forensic examination – Insured had responsible legal advice that investigative body had acted beyond its powers – Insured unsuccessfully challenged the legality of the investigation by Court proceedings – Insured claimed indemnity under policy for legal representation expenses of challenge to investigation – Whether legal representation expenses incurred ‘on account of’ attendance at interview or production of mobile phone – Whether investigation constituted a demand for ‘non-pecuniary relief’ or ‘a proceeding’ against the insured for an alleged Wrongful Act (as defined) – HELD: Insured not entitled to indemnity. Proceeding dismissed.

WORDS AND PHRASES – ‘on account of’, ‘non-pecuniary relief’, ‘proceeding’.

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TABLE OF CONTENTS

HIS HONOUR:

Introduction and background

1 James Hird was a famous player for the Essendon Football Club in the Australian Football League (the ‘AFL’). Between September 2010 and August 2015, he was contracted to Essendon as its coach. As a registered AFL coach, Mr Hird was contractually bound by the AFL’s rules and regulations, including the ‘AFL Regulations’, the ‘AFL Player Rules’, and the ‘AFL Anti-Doping Code’ in force from time to time.

2 Essendon’s players and support staff were also bound. The AFL Anti-Doping Code applied to ‘all persons involved in any capacity or manner in Anti Doping Rule Violations’ within the meaning of that code.

3 Clauses 12.6, 12.7 and 12.8 of the AFL Anti-Doping Code provided in effect that the AFL could investigate any actual or alleged anti-doping violation and ‘immediately advise ASADA [the Australian Sports Anti-Doping Authority] of the matter’. Essendon players and officials, including Mr Hird as coach, were required to fully co-operate with any investigation, including by providing full and truthful answers to questions for the purposes of such investigation and providing relevant documents. Sanctions were imposed for providing incomplete, false or misleading information. Clause 1.5A of the AFL Player Rules gave the AFL similar powers and, in addition, the power to ‘stand down any Person subject to an inquiry or investigation from participating in or in connection with the AFL Competition’.

4 In February 2013, the AFL and ASADA commenced a joint investigation into, in the AFL’s words:

the production, distribution, purchase and use of prohibited substances in the AFL (Investigation). Without limiting the scope of the Investigation, some particular substances being investigated include Growth Hormone Releasing Peptide 2 (GHRP-2), Growth Hormone Releasing Peptide 6 (GHRP-6) and CJC 1295.

5 In ASADA’s words, the joint investigation involved:

an allegation that AFL athletes and support persons may have used prohibited substances including, but not limited to, growth hormone releasing peptides and human growth hormones. It is also alleged that some AFL athletes and support persons may have engaged in prohibited methods.

6 The use of the substances mentioned by the AFL and ASADA was prohibited by both the AFL Anti-Doping Code and the World Anti-Doping Code, which I will collectively refer to as the ‘anti-doping codes’.

7 By joining with the AFL in this joint investigation, ASADA gained the benefits it did not then enjoy under its authorising legislation and regulations. Specifically, ASADA did not have the power to compel Essendon players and personnel to attend interviews and truthfully answer questions, or to produce documents, under threat of sanction. The AFL had those powers.

8 One of the causes of the joint investigation was information received by the AFL that Essendon had engaged in a ‘supplements program’ in 2011 and 2012, which may have involved the use of prohibited substances.

9 Arrangements were made for Mr Hird to be interviewed by representatives of the AFL and ASADA on 16 April 2013, as part of the joint investigation. Mr Hird appointed legal advisors to represent him, including Anthony Nolan SC. By email dated 10 April 2013, an ASADA representative provided Mr Nolan with a copy of an ‘explanatory document’, which he described as a document which ‘we provide to persons being interviewed by ASADA’, and asked Mr Nolan to bring the document to Mr Hird’s attention before the scheduled interview.

10 The explanatory document was clearly intended to relate to the joint investigation. It set out ASADA’s view of the purpose of the joint investigation, as set out above, and informed Mr Hird:

(1) of his obligations under the anti-doping codes;

(2) that he was required to keep the contents of the interview confidential except for the purpose of legal representation;

(3) that he was entitled to be represented at the interview by a legal practitioner;

(4) that failure to comply with the requirements of an interview notice could lead to sanctions under the AFL Anti-Doping Code;

(5) that there were potential benefits for him in co-operating, as each of the anti-doping codes provided for a reduction in sanctions where ‘substantial assistance’ was provided; and

(6) (by providing a copy of div 137 of the Commonwealth Criminal Code) that there were criminal sanctions for providing incomplete, false or misleading information to ASADA. As appears above, ASADA did not at that time have the power to compel attendance at interviews or production of documents. The AFL had those powers under its rules and regulations.

11 By letter dated 12 April 2013 from the AFL to Mr Hird, Mr Hird was notified that he was required to: (1) attend an interview with AFL and ASADA investigators on 16 April 2013; and (2) bring with him documents in his possession or control relevant to the joint investigation. The letter informed Mr Hird of: the AFL’s view of the purpose of the joint investigation, as set out above; the AFL’s powers under its rules and regulations to compel Mr Hird to attend an interview and provide relevant documents and information; and the AFL’s power to impose sanctions for breach.

12 By letter dated 16 April 2013, the AFL requested Mr Hird to produce his mobile phone for examination by Deloitte Forensic. The letter relevantly stated:

Dear Mr Hird

AFL/ASADA investigation

As a result of information provided to me during this investigation, I have formed the opinion that there is a reasonable suspicion that a breach of certain AFL Rules & Regulations may have occurred during 2012 in relation to the sports science program at the Essendon Football Club...

I have also formed the view that relevant records may be located on your mobile telephone.

... I hereby direct you to produce for inspection your mobile telephone for the purpose of allowing the AFL to obtain production of any relevant records contained therein.

The AFL has retained the services of Deloitte Forensic to assist in this process. ...

13 I will refer to the 12 and 16 April 2013 letters and the explanatory document as, collectively, ‘the interview notice’.

14 Mr Hird attended the interview as requested and provided hard copies of some relevant text messages. In his witness statement, he gave the following evidence about what transpired during the interview:

7. On 16 April 2013, I attended the interview conducted by the AFL investigator, Abraham Haddad, and the ASADA investigators, John Nolan and Aaron Walker. I was accompanied by my lawyers, Steven Amendola (partner Ashurst Australia), Tony Nolan QC of counsel and Nicholas Harrington of counsel. I answered more than 1300 questions. The ASADA investigator asked the vast majority of the questions. The AFL investigator asked only 16 questions. The subject matter of the interview was, as set out in the Notice for interview dated 12 April 2013, whether, as senior coach [of Essendon], I had any knowledge of or involvement in any use of prohibited substances. The interview commenced at about 8.50am and concluded at about 5.10pm.

15 Other than giving evidence about the general subject matter of the interview as described in his witness statement, Mr Hird gave no evidence about the questions he was asked, the answers he gave or as to any other information he provided to those conducting the joint investigation. After the interview, however, Mr Hird produced his mobile phone for examination as requested,[1] and 7,000 text messages were retrieved by Deloitte Forensic.

16 The joint investigation continued, with Essendon players and support staff being interviewed and other information collected. From the AFL’s perspective, the focus of the joint investigation was Essendon’s internal governance concerning compliance with its rules and regulations, in particular the AFL’s Anti-Doping Code.[2] In this respect, Mr Hird was a target of the AFL in the joint investigation. For example, on 13 June 2013, an ASADA representative was told of views expressed by an AFL representative, in respect of Essendon support staff including Mr Hird, that the ‘AFL will go them’.[3]

17 Under cover of a letter dated 2 August 2013, ASADA provided the AFL a copy of its interim report ‘into the investigation at [Essendon]’. The covering letter noted that the interim report was ‘the culmination of our joint investigation to date and the starting point for further investigation.’ The letter discloses that, from ASADA’s viewpoint, the focus of the investigation was on anti-doping rule violations by one or more Essendon players.[4] The interim report was based on information obtained in the course of the joint investigation, including information provided in the various interviews of Mr Hird, Essendon players and others.[5]

18 The AFL used the interim report as a basis for laying a disciplinary charge against Mr Hird.[6] On 13 August 2013, the AFL charged Mr Hird with the following offence against the AFL Player Rules:

Contrary to Rule 1.6 of the Rules, in the period from about August 2011 to about July 2012, you engaged in conduct unbecoming or likely to prejudice the interests or reputation of the Australian Football League or to bring the game of football into disrepute.

19 The offence charged did not involve any violation of the anti-doping codes.

20 Mr Hird and the AFL settled the charge against him by a deed of settlement dated 27 August 2013. Relevantly, the recitals to the deed of settlement acknowledged that:

(1) from October 2010, Mr Hird had been the senior coach of Essendon;

(2) the joint investigation had been conducted between February and August 2013 ‘into [Essendon’s] program relating to the administration of supplements to its players in preparation for, and during, the 2012 AFL Premiership Season (the Program)’;

(3) the notice of charge against Mr Hird was based on an attached statement of grounds which referred to his ‘alleged conduct ... in connection with the Program.’ The statement of grounds was based on information gathered in the course of the joint investigation to that time from a variety of sources.

21 By the deed of settlement:

(1) Mr Hird agreed with the AFL that Essendon implemented the Program while he was the club’s senior coach, and that the Program ‘was inadequately vetted and controlled’ (clause 2.1).

(2) Mr Hird agreed with the AFL that:

(a) he contributed to [Essendon’s] failure to take sufficient steps to ensure the health, welfare and safety of players in relation to the Program;

(b) when he became aware of facts that suggested that unsatisfactory practices were occurring, the action he took was not sufficient to stop those practices;

(c) he did not take sufficient steps to avoid there being a risk that players may have been administered substances that were prohibited by the [anti-doping codes], and any such risk is an unacceptable risk;

(d) as Senior Coach, he shares responsibility for the inadequate governance within [Essendon’s] football department,

and in consequence of the matters in paragraphs 2.2(a) to 2.2(d), [Mr] Hird accepts that [Essendon] breached Rule 1.6 of the AFL Player Rules (March 2011).

(clause 2.2)

(3) Mr Hird agreed to a 12 month suspension from the AFL, and that he would not work with any AFL club in any capacity during that period (clause 3.1).

(4) The AFL acknowledged that no breaches of the AFL’s Anti-Doping Code had been established to that date and that Mr Hird had not ‘set out to implement a supplements program that would result in players being administered WADA [World Anti-Doping Agency] prohibited or harmful substances’ (clause 4.1).

(5) Mr Hird acknowledged that the AFL could not and did not give him any assurance ‘as to any further action which may or may not be taken by ASADA or WADA in relation to the Program or any future obligation of the AFL under its Anti-Doping Code or the National Anti-Doping Scheme’ (clause 5.4).

22 In March 2014, Mr Hird became concerned ‘that individuals who were employed by [Essendon] during the 2012 season could be issued show cause notices by ASADA’. This concern caused his solicitor to obtain a written opinion from senior and junior counsel to the effect that ASADA had exceeded its powers by conducting the joint investigation with the AFL and that, as a consequence, Mr Hird had grounds for seeking relief against ASADA in the Federal Court.

23 Mr Hird’s reference to ‘show cause notices’ was a reference to the scheme under the Australian Sports Anti-Doping Authority Act 2006 (Cth) and the Australian Sports Anti-Doping Authority Regulations 2006 (Cth) (‘ASADA Act’ and ‘ASADA Regulations’), under which:

(1) the Chief Executive Officer of ASADA (‘CEO’) is required to give notice of possible anti-doping rule violations to affected athletes or ‘support persons’;

(2) the Anti-Doping Rule Violation Panel must, before deciding whether or not to enter the athlete or support person on the ‘Register’ of findings of anti-doping rule violations, consider submissions in response to the notice; and

(3) if adverse findings are made and recorded in the Register, the CEO may present the finding and the Panel’s recommendations as to the consequences of such findings at hearings of the Court of Arbitration for Sport or other sporting tribunals, such as the AFL Tribunal.[7]

24 The relevant chronology of facts is thereafter recorded in Mr Hird’s witness statement which, for convenience, I will set out in full below with some additional facts:

9. I then proceeded to have various discussions with Mr Amendola throughout March and April 2014 regarding the advice received from counsel and the action I could take. I received further advice from Mr Amendola in those discussions which, together with the advice from counsel, resulted in me deciding that, if it became apparent that the investigation would lead to ASADA issuing show cause notices against me or against the [Essendon] players, I would issue proceedings challenging the investigation to protect my reputation and position as coach of [Essendon]. Prior to being coach of [Essendon] I had been an [Essendon] player, captain of [Essendon], Brownlow Medallist, Norm Smith Medallist and inducted into the AFL Hall of Fame. My primary source of income was through my continued employment related to the AFL.

[Mr Hird expanded on this evidence in his cross-examination, by specifically linking the issue of show cause notices to the Essendon players with the potential for him to lose income:

One of the reasons was reputation. Another reason was that I feared I wouldn’t have a job because I had been told if the players received show cause notices by the club, that there was a very good chance I wouldn’t have a job and also I wouldn’t have a team to coach because 34 players may not be able to play.]

10. During the March and April conversations, Mr Amendola told me that if I took legal action successfully against ASADA, I would not obtain orders preventing it from re-conducting the investigation. He also advised me, and I agreed, that it was most unlikely that ASADA would re-conduct the investigation if it was found to have obtained information improperly. I believed that ASADA did not have enough information to support the show cause notices and that, if not permitted to draw upon the AFL’s powers to compel information from players and support staff, ASADA was likely not to re-conduct the investigation without those powers. At the very least, I expected the AFL would not assist the same way in a re-investigation as it had in the original investigation. This was subsequently borne out by the position the AFL took in the WADA proceedings.
11. On around 12 May 2014, an article appeared in The Age newspaper which suggested ASADA was planning to issue show cause notices against up to 40 [Essendon] players from [Essendon’s] 2012 squad ‘imminently, possibly even as early as this week’. ... That prompted me to ask Mr Amendola to seek urgent advice from counsel about whether I had standing to seek relief if the notices were issued to the players. At that time I was due to return to coach [the Essendon players] ... at the end of August 2014.
12. Mr Amendola obtained an advice from Peter Hanks QC and Nicholas Harrington dated 14 May 2014 to the effect that I did have standing to seek declaratory and injunctive relief in the event that ASADA issued show cause notices to the players (but not to me). I read the advice. ...
13. Late in the evening of 14 May or early on 15 May 2014, I spoke to Mr Amendola by phone and instructed him to prepare to issue proceedings in the event that ASADA issued show cause notices.
14. On around 12 June 2014, ASADA served on 34 [Essendon] players notices under Clause 4.07A of the National Anti-Doping (NAD) Scheme established under the [ASADA Act] [ie ‘show cause notices’].

[On 30 May 2014, prior to the issue of the show cause notices, Elen Perdikogiannis, a lawyer for ASADA, had provided to the CEO a 97 page report concerning the alleged use by Essendon players of a prohibited substance, Thymosin Beta 4, in violation of anti-doping rules (the ‘show cause pack’). The show cause pack attached documents provided by ASADA investigators to each affected player and his legal representative, and the transcripts of interviews conducted during the joint investigation. Those interviews formed ‘a significant and material basis for the recommendations made to the CEO’.^[8]

15. [Essendon] issued proceedings in the Federal Court on 13 June 2014. I instituted my own proceeding against ASADA on the same day. ...

[By his amended statement of claim in the Federal Court proceeding, Mr Hird claimed that ASADA lacked any power to conduct the joint investigation with the AFL, to rely on information collected during the joint investigation as a basis for any show cause notice, or to refer show cause notices to the Panel for consideration. On this basis, Mr Hird alleged that the show cause notices given to the Essendon players, and any other show cause notices which may be issued relying on information obtained in the joint investigation, were or would be unlawful and likely to damage his reputation and business interests. He claimed declarations of invalidity, and injunctions restraining the issue of a show cause notice to him, or any further notices to other Essendon players, relying on the information collected during the joint investigation.]

16. Judgment was handed down in the Federal Court proceeding on 19 September 2014. The Court dismissed [Essendon’s] and my applications and ordered us to pay ASADA’s costs. ...
17. In the course of the Federal Court proceeding, I was advised by Mr Amendola and Mr Harrington to issue a subpoena to the AFL in order to access documents relating to its role in the investigation, and I instructed them to issue the subpoena accordingly. ... I was ordered to pay the AFL’s costs of responding to the subpoena in the course of the Federal Court proceeding. Those costs were $32,470.15. ... I paid those costs in full on 3 June 2015.
18. I also became obliged to pay my own legal costs of the trial in the amount of $572,691.25. My solicitors presented me with various invoices which I paid ...
19. Immediately after receiving judgment in the Federal Court proceeding, I sat in on a meeting between [Essendon’s] legal team and my legal team at the court. Peter Hanks QC was overseas and not in attendance. Neil Young QC had appeared in the proceeding as [Essendon’s] senior counsel. He was present at the meeting between the two legal teams. He expressed the view at that time that the decision handed down by the court was ‘untenable’.
20. On 21 September 2014, Peter Hanks QC sent Mr Amendola a bullet point summary of his opinion about the Federal Court decision. It was strongly critical of key aspects of the decision. ...
21. Peter Hanks QC sent a further email to my solicitor later in the day on 21 September 2014 in which he stated that there were good grounds for the appeal. ...
22. Mr Amendola conveyed the content of the bullet point summary and the email referred to in paragraphs 21 and 22 to me by way of a phone conversation on 21 September 2014.
23. At around 3am on 22 September 2014 (Melbourne time), Peter Hanks QC emailed an updated version of his bullet point summary to Mr Amendola, who in turn forwarded it to me that afternoon. ... Mr Hanks specifically addressed and disagreed with the court’s finding that no useful purpose would be served by setting aside the notices or granting injunctive relief.
24. I spoke with Mr Amendola by phone sometime around 6am on 22 September 2014 during which he informed me that he had spoken to Peter Hanks QC by phone over the weekend and reiterated to me the view Peter Hanks QC had expressed about there being good grounds for appealing. On around 25 September 2014, I instructed Mr Amendola to arrange for counsel to prepare the appeal documents.
25. On around 26 September 2014, Mr Amendola also obtained a copy of an opinion given to [Essendon] by Neil Young QC and Catherine Button of counsel about the Federal Court decision and the prospects of appealing it. Mr Young and Ms Button advised that the reasons for judgment were deeply flawed, that the judgment contained numerous appellable errors, that [Essendon] had strong prospects of prosecuting an appeal and that the appeal would succeed. Mr Amendola rang me the same day or the following day and conveyed the content of the Young/Button advice to me, and told me that it reinforced my position. He advised me to appeal. ...
26. Mr Amendola filed appeal documents in the Full Federal Court on my behalf on 2 October 2014. ...
27. The Full Court of the Federal Court dismissed my appeal on 30 January 2015 and ordered me to pay ASADA’s costs of the appeal. ...
28. I became obliged to pay my own legal costs of the appeal in the amount of $86,828.57. My solicitors presented me with various invoices which I paid ...
29. I have not been indemnified by [Essendon] for any of my costs referred to in paragraphs 18 and 28 or the AFL subpoena costs referred to in this witness statement. I have no rights to obtain any of these amounts from [Essendon] or any other person.

25 As appears above, Mr Hird paid $572,691.25 for his legal costs of the Federal Court proceeding at first instance, $32,470.15 in respect of the AFL’s costs of the subpoena, and $86,828.57 for his own legal costs of the appeal. These costs total $691,989.97. As they relate to Mr Hird’s challenge to ASADA’s powers in the Federal Court proceeding, I will refer to them collectively as ‘the challenge costs’.

26 Some of the above facts have been sourced from the first instance reasons for judgment in the Federal Court proceedings, which I have described in footnotes as Essendon and Hird v ASADA. The parties agreed in argument that facts found by the trial judge in those reasons were in evidence in this proceeding,[9] and each party relied on some of those findings.

27 In this proceeding, Mr Hird claims the challenge costs from the defendant, Chubb Insurance Company of Australia Ltd, under the terms of the Directors & Officers Liability Coverage Section of a policy of insurance issued by Chubb to Essendon for the period 31 October 2012 to 1 November 2013 (‘the policy’). In summary, Mr Hird claims that he is an Insured Person under that section of the policy and is entitled to have the challenge costs paid by Chubb pursuant to the terms of the policy. In order to consider the issues which arise for determination, it is necessary to set out the applicable principles of contract interpretation.

Applicable principles of interpretation

28 In OZ Minerals Holdings Pty Ltd & Ors v AIG Australia Ltd,[10] I summarised the applicable principles of interpretation in the following terms:

18. It is necessary to construe the relevant provisions of the policy in accordance with general principles of contractual interpretation.^[11] This requires the Court to consider what reasonable persons in the position of the parties would have understood the words to mean by reference to the text of the agreement, the surrounding circumstances known to the parties and the purpose or object of the transaction.^[12] In interpreting the words and resolving any ambiguity, the Court should proceed in a common sense and non-technical way and give the agreement a commercially sensible construction.^[13] The Court should have regard to all of the words used in the agreement ‘so as to render them all harmonious with one another’^[14] and to ensure the ‘congruent operation of the various components as a whole.’^[15]
19. As this case involves the interpretation of an exclusion clause, the principles stated in Darlington Futures Ltd v Delco Australia Pty Ltd apply.^[16] In that case, the High Court stated that:

the interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in the case of ambiguity.^[17]

20. The Court does not strain to find ambiguity in exclusion clauses.^[18] It is only appropriate to apply the contra proferentem principle when ambiguity remains after applying accepted principles of contractual interpretation.^[19]
21. In giving contracts a businesslike interpretation, the Court approaches the task on the assumption that the parties intended to produce a commercial result and, accordingly, a commercial contract is to be construed so as to avoid ‘making commercial nonsense or working commercial inconvenience.’^[20] Accordingly, if an exclusion clause is reasonably open to two competing constructions, the preferred construction is the one that avoids capricious, unreasonable, inconvenient or unjust consequences.^[21]
22. As the Insurer emphasises, however, the task of interpreting a contractual term, including an exclusion clause, begins with the words. If they are unambiguous and do not give rise to commercial nonsense or commercial inconvenience, the Court must give effect to them, notwithstanding that it may be guessed or suspected that the parties intended something different.^[22] As to whether a proffered construction of a term produces commercial nonsense or inconvenience, the Court must, in accordance with the objective approach to interpretation of contracts, assess those matters by reference to what persons in the position of the parties would have reasonably understood at the time the contract was made.

29 On appeal, the parties accepted this statement of the applicable law and the Court of Appeal proceeded in accordance with it.[23]

30 Further, on the issue of commercial purpose for a particular clause in an insurance policy, Kyrou JA stated as follows:

12. A decision by an insurer to insert a particular exclusion in its D & O policy and the insurer’s choice of language to delineate the scope of the exclusion may be informed by a multiplicity of commercial considerations. Where, based on well publicised empirical evidence, it is generally accepted within the business community that a particular risk has a high degree of probability and a large potential monetary exposure, the commercial rationale for an exclusion for that risk will be readily apparent. However, it cannot necessarily be assumed from the fact that an exclusion in the D & O policies of different insurers deals with the same subject-matter that all of the insurers were actuated by exactly the same commercial considerations in inserting the exclusion in their policies.
13. An insurer may choose to exclude cover for a particular risk even though other insurers provide cover for it and the commercial rationale for the exclusion is not obvious. The exclusion may simply reflect an underwriting decision made by the insurer (or its reinsurers) that it will not provide cover for particular losses or for claims made by particular individuals associated with the company. As long as the wording of the exclusion in its natural meaning clearly reflects such an underwriting decision, the insurer is not required to demonstrate that the exclusion has an objectively justifiable commercial rationale before it can rely upon it. ...^[24]

31 As stated by the High Court most recently, in State of Victoria v Tatts Group Ltd,[25] the task of contractual interpretation involves consideration of the ‘text, context and purpose’ of the relevant contractual provision.[26]

32 In the light of the above facts and legal principles, I turn to consider the structure and terms of the policy and to define the issues for determination.

Structure and material terms of the policy

33 The policy contains three principal sections:

(1) General Terms and Conditions Section (the ‘General Section’);

(2) Directors & Officers Liability Coverage Section (the ‘D&O Section’); and

(3) Internet Liability Coverage Section. This section is not relevant to the issues.

34 The policy contains many defined words and phrases, each of which is in bold font and begins with a capital letter. References in these reasons to words and phrases from the policy beginning with a capital letter are intended to refer to the corresponding definition in the policy.

35 The General Section contains some definitions which apply to all sections of the policy. The parties agree that Essendon is an Organisation and that Mr Hird is an Essendon Executive, an Insured Person and an Insured within the meaning of the policy.

36 The defined terms which are central to the determination of this proceeding are, however, all defined by reference to ‘the meaning ascribed to that term in the relevant Liability Coverage Section’. There are also some terms of the General Section which were relied upon by the parties. These are referred to below.

37 Mr Hird’s claim is made under the D&O Section of the policy. It is first necessary to note that this section contains five Insuring Clauses, designated (A), (B), (C), (D), and (E). Insuring Clause (D) is marked in the policy schedule as ‘Not Insured’. The relevant Insuring Clauses for the purposes of this proceeding are Insuring Clause (A) and Insuring Clause (C). I will, however, set out all applicable Insuring Clauses — as the Court is required to construe the relevant terms of the policy in the context of the policy as a whole, and because Chubb places reliance on the structure of the policy in support of its defence.

38 The relevant parts of the Insuring Clauses are set out below:

(A) Executive Liability Coverage

[Chubb] shall pay, on behalf of each Insured Person, Loss for which the Insured Person is not indemnified by [Essendon] on account of any Executive Claim first made during the Policy Period ... for a Wrongful Act occurring before or during the Policy Period.

(B) Company Reimbursement Coverage

[Chubb] shall pay, on behalf of [Essendon], Loss for which [Essendon] grants indemnification to each Insured Person, as permitted or required by law, on account of any Executive Claim first made during the Policy Period...for a Wrongful Act occurring before or during the Policy Period.

(C) Legal Representation Expenses

[Chubb] shall pay, on behalf of each Insured Person, Legal Representation Expenses on account of any Formal Investigation commenced during the Policy Period.

(D) Corporate Liability Coverage

[Chubb] shall pay on behalf of [Essendon], Loss on account of any Organisation Claim first made during the Policy Period...for a Wrongful Act occurring before or during the Policy Period.

(E) Compensation for Court Attendance and Staff Disruption

[Chubb] shall pay on behalf of [Essendon], Attendance Compensation on account of any Attendance of an Insured Person.^[27]

39 The General Section provides that the headings to each Insuring Clause ‘are solely for convenience and form no part of the terms and conditions of coverage’.

40 The principal Insuring Clause is Insuring Clause (A), which relevantly provides cover in the following terms:

[Chubb] shall pay, on behalf of each Insured Person, Loss for which the Insured Person is not indemnified by [Essendon] on account of any Executive Claim first made during the Policy Period ... for a Wrongful Act occurring before or during the Policy Period.

41 The parties agree that Mr Hird is an Insured Person, that the interview notice was served during the Policy Period, and that Mr Hird is not indemnified by Essendon in respect of the challenge costs. Mr Hird contends, and Chubb denies, that the interview notice constituted an Executive Claim and that he has suffered Loss on account of that claim. The issues which arise for determination under Insuring Clause (A) are:

(1) whether the interview notice falls within the definition of Executive Claim;

(2) whether the challenge costs fall within the definition of Loss; and

(3) whether the challenge costs were incurred by Mr Hird ‘on account of an Executive Claim’.

42 These questions can only be answered by reference to the defined terms Claim, Executive Claim, Wrongful Act, Loss and Defence Costs. It is necessary to set out the relevant parts of each of these definitions:

(1) ‘Claim means for purposes of coverage under:

(a) Insuring Clauses (A), (B), (C) and (E), any Executive Claim...’

(2) ‘Executive Claim means:

(a) With respect to Insuring Clauses (A) and (B) only:

(i) a written demand for monetary damages or non-pecuniary relief;

...

(v) ...; or

(vi) a formal administrative or formal regulatory proceeding commenced by the filing of a notice of charges, formal investigative order or similar document,

against any Insured Person, individually or otherwise, for a Wrongful Act, including any appeal therefrom.

(b) With respect to Insuring Clause (C) only, a Formal Investigation.

(c) With respect to Insuring Clause (E) only, an Attendance.’[28]

(3) ‘Wrongful Act means any act or omission, including but not limited to any error, misstatement, misleading statement, neglect, breach of trust or breach of duty committed, attempted, or allegedly committed or attempted by:

(a) for purposes of coverage under Insuring Clauses (A) and (B): an Insured Person, individually or otherwise, in his Insured Capacity, or any matter claimed against such Insured Person solely by reason of serving in such Insured Capacity ...’[29]

(4) ‘Loss means the amount which an Insured becomes legally obligated to pay on account of any covered Claim including, but not limited to:

(a) Defence Costs;

(b) Legal Representation Expenses;

(c) awards of damages or orders made by any court or tribunal to pay compensation;

(d) judgments;

(e) sums payable due to settlements to which the Company has consented;

(f) awards of claimant’s costs;

(g) pre-judgment and post-judgment interest;

(h) punitive, exemplary or aggravated damages unless the Company is legally prohibited from paying such damages in the jurisdiction in which the Claim is determined; and

(i) the multiple portion of any multiplied damages award unless the Company is legally prohibited from paying such damages in the jurisdiction in which the Claim is determined;

(j) Pecuniary Penalties; and

(k) Attendance Compensation.

Loss does not include:

(i) ...

(v) any amount incurred by an Insured in relation to a demand, proceeding or investigation which is not a Claim notwithstanding that such demand, proceeding or investigation subsequently gives rise to a Claim unless otherwise agreed to by the Company, in its sole discretion.’

(5) ‘Defence Costs means that part of Loss consisting of reasonable costs, charges, fees (including but not limited to legal counsels’ fees and experts’ fees) and expenses (other than regular or overtime wages, salaries or fees of the directors, officers or employees of the Organisation or office overheads, travel costs unrelated to a Claim or other administration costs) incurred in defending, investigating, settling or appealing any Claim and the premium paid for appeal, attachment or similar bonds. For the avoidance of doubt, Defence Costs shall include reasonable costs, charges or fees resulting from an Insured Person lawfully opposing, challenging, resisting or defending against any request for or any effort to obtain the Extradition of such Insured Person; or appealing any order or other grant of Extradition of such Insured Person.’[30]

43 Based on these definitions, and the contentions advanced at trial, Mr Hird’s claim under Insuring Clause (A) involves consideration of the following questions :

(1) Was the interview notice a demand or formal proceeding against Mr Hird for a Wrongful Act?

(2) Was the interview notice a demand for non-pecuniary relief?

(3) Was the interview notice a formal administrative or regulatory proceeding?

(4) Were the challenge costs incurred on account of any such demand or proceeding?

(5) Were the challenge costs reasonably incurred?

44 I turn to Insuring Clause (C), which is in the following terms:

[Chubb] shall pay, on behalf of each Insured Person, Legal Representation Expenses on account of any Formal Investigation commenced during the Policy Period.^[31]

45 In addition to the above definitions which also relate to Insuring Clause (C), it is necessary to consider the definitions which apply solely to Insuring Clause (C), namely, the definitions of Formal Investigation and Legal Representation Expenses:

(1) ‘Formal Investigation means a formal administrative or formal regulatory inquiry by a governmental, regulatory, self-regulatory, professional, statutory or official body or institution that is empowered by law to investigate the affairs of an Insured Person or an Organisation, including for the avoidance of doubt, a royal commission.’[32]

(2) ‘Legal Representation Expenses means reasonable Defence Costs which an Insured Person incurs on account of the attendance and/or provision of documents or information by such Insured Person in an Insured Capacity at or to any Formal Investigation.’[33]

46 The parties agree, or I am satisfied on the evidence, that:

(1) the joint investigation was a Formal Investigation commenced during the Policy Period;

(2) Mr Hird co-operated with the joint investigation, attended the interview in an Insured Capacity, produced his mobile telephone for forensic examination, and was interviewed at length about the matters set out in the interview notice; and

(3) Mr Hird was accompanied during the interview by his solicitor, senior counsel and junior counsel. The expenses incurred by Mr Hird for their attendance (including, I infer, their preparation expenses before the interview) were incurred on account of his attendance and/or provision of documents or information at or to the joint investigation and thus fall within the definition of Legal Representation Expenses. I was informed from the bar table that these expenses were paid by Chubb. They do not form part of Mr Hird’s claim in this proceeding. The fact these expenses were paid is inadmissible subsequent conduct and cannot be used to interpret the policy.

47 Having regard to the terms of Insuring Clause (C) and the relevant definitions, agreements and findings above, the issues for determination in respect of Mr Hird’s claim under Insuring Clause (C) may be summarised as follows:

(1) were the challenge costs incurred on account of Mr Hird’s attendance and/or provision of documents or information to the joint investigation?

(2) if so, were the challenge costs reasonably incurred?

The structural division

48 Before turning to the specific questions concerning Mr Hird’s claim under Insuring Clauses (A) and (C), it is necessary to return to the structure of the policy. The D&O Section of the policy comprises five separate Insuring Clauses, each of which addresses a different subject matter. In substance:

(1) Insuring Clause (A) provides cover to Insured Persons for Loss, which is not indemnified by Essendon, on account of any Executive Claim for a Wrongful Act, including a claim constituted by a written demand or formal administrative or formal regulatory proceeding.

(2) Insuring Clause (B) provides Essendon with cover for Loss for which it indemnifies an Insured Person in respect of an Executive Claim covered by Insuring Clause (A).

(3) Insuring Clause (C) provides cover for Defence Costs incurred by an Insured Person on account of the attendance and/or provision of documents or information by an Insured Person at or to any Formal Investigation. Formal Investigation is defined as a formal administrative or formal regulatory inquiry.

(4) Insuring Clause (D), although not chosen by Essendon as a form of required cover, concerns Loss to Essendon on account of claims directly against it for Wrongful Acts committed by it.

(5) Insuring Clause (E) provides an agreed amount of cover ($150) to Essendon in respect of each Attendance by an Insured Person in connection with a Claim. Given the low amount of fixed cover, and the lack of any need to justify it by a concept of reasonableness or actual expenditure, this cover is obviously additional to the cover for Defence Costs and Legal Representation Expenses.

49 The definition of Formal Investigation, relevant to Insuring Clause (C), refers to ‘a formal administrative or formal regulatory inquiry’. That definition must be contrasted with paragraph (a)(vi) of the definition of Executive Claim for the purposes of Insuring Clause (A), which includes ‘a formal administrative or formal regulatory proceeding’. The intention to differentiate between the subject matter of the cover provided by Insuring Clauses (A) and (C) respectively is reinforced by the following words in each definition:

(1) A ‘proceeding’ for the purposes of paragraph (a)(vi) of the definition of Executive Claim must be ‘commenced by the filing of a notice of charges, formal investigative order or similar document’ and must be ‘against’ an Insured Person ‘for a Wrongful Act’.

(2) On the other hand, the definition of Formal Investigation is concerned only with a formal ‘inquiry’, however commenced, by a body ‘empowered by law to investigate the affairs of an Insured Person or an Organisation’, and without the need for the inquiry to involve an alleged Wrongful Act by the Insured Person.

50 Reading the D&O Section of the policy as a whole, I conclude that the parties intended to differentiate between the cover provided in relation to:

(1) a formal administrative or regulatory investigative inquiry by a legally constituted body or institution engaged in gathering evidence for the purpose of either:

(a) deciding whether to make an Executive Claim for the purposes of Insuring Clause (A); or

(b) reporting or making recommendations in accordance with its mandate. The example given in the definition of Formal Investigation is a Royal Commission, which is usually established to report and make recommendations to government; and

(2) a written demand or formal administrative or regulatory proceeding by which an Executive Claim is made against an Insured Person for a Wrongful Act.

For convenience I will refer to this intention as the ‘structural division’.

51 I turn to consider Mr Hird’s claim under Insuring Clause (A).

CLAIM UNDER INSURING CLAUSE (A)

Was the interview notice an Executive Claim under Insuring Clause (A)?

52 Mr Hird contends that the interview notice constituted an Executive Claim for the purposes of Insuring Clause (A) because it was either: (1) a ‘demand for non-pecuniary relief’ under sub-paragraph (a)(i); or (2) a formal administrative or regulatory proceeding under sub-paragraph (a)(vi), of the definition of Executive Claim for the purposes of Insuring Clause (A). Mr Hird’s contentions in this regard first considered whether each of these sub-paragraphs, taken alone, was satisfied, and only then turned to consider whether, as required by the concluding words of paragraph (a), any such demand or proceeding was ‘against’ him ‘for a Wrongful Act’. In my opinion, that was an artificial approach. The meaning of each of the sub-paragraphs must be determined in the context of the definition in paragraph (a) as a whole, and in the context of the D&O section of the policy as a whole, including the intention manifested by the structural division.

53 When viewed in this way, it is clear that the definition requires that there be a written demand or formal proceeding against Mr Hird for a Wrongful Act, and not merely an inquiry which may lead to such a demand or proceeding. For the reasons given below, there was no such demand or proceeding against Mr Hird.

Was the interview notice a demand or formal proceeding against Mr Hird for a Wrongful Act?

54 In my opinion, neither the interview notice, nor the joint investigation of which it formed part, was a demand or formal proceeding against Mr Hird for a Wrongful Act. This position can be contrasted with the notice of charge against him by the AFL, which was clearly a formal proceeding against him for a Wrongful Act; but he does not seek any relief in connection with his Defence Costs incurred on account of that charge.

55 Wrongful Act is defined in the D&O Section of the policy as including alleged acts or omissions, including attempted acts or omissions. Mr Hird contends that the evidence establishes that, prior to the notice of charge against him, the joint investigation was more than a ‘mere inquiry’ as to whether he, among others, had been involved in the use of prohibited substances contrary to the anti-doping codes — it involved a ‘specific allegation being pursued [against him] by way of an inquiry’. In support of that submission, Mr Hird relied upon the contents of the two letters and the explanatory document constituting the interview notice and the evidence in paragraph 7 of his witness statement.

56 I do not accept that this evidence, even if taken alone, establishes that any Wrongful Act was alleged against Mr Hird prior to the AFL charging him with an offence against the AFL Player Rules on 13 August 2013. Until that time, both the AFL and ASADA were merely investigating whether the Essendon players and support persons, including Mr Hird, may have engaged in Wrongful Acts. On ASADA’s part, it never moved from investigating Mr Hird’s conduct to alleging any Wrongful Act against him. This conclusion is reinforced by ASADA’s interim report in August 2013. My reasons for reaching this conclusion follow.

57 First, in ordinary language, an ‘allegation’ involves an assertion of fact against a person without proof or, in the case of a legal proceeding, an assertion of fact which a party undertakes to prove.[34] An ‘assertion’ involves a positive statement that a fact is true.[35] A statement that a person ‘may have’ done something, even if described by the maker as an allegation, is no such thing. It is speculation.

58 Second, there is no allegation or assertion against Mr Hird in the letters and explanatory document constituting the interview notice. Read as a whole, these documents make it plain that the joint investigation involved a mere inquiry into the conduct of Essendon players and other support staff. In ASADA’s words: an investigation involving ‘an allegation that AFL athletes and support persons may have used prohibited substances ... [or] may have engaged in prohibited methods ... [which] may constitute a breach of the [anti-doping codes]’.[36]

59 Mr Hird’s contentions focussed on the following statements by the AFL and ASADA:

(1) Paragraph 1(d) of the AFL’s 12 April 2013 letter, which refers to the AFL’s power to ‘investigate the facts and/or circumstances surrounding any actual or alleged Anti-Doping Rule Violation, or any actual or alleged other breach of the Code.’ I do not accept that this statement, taken in the context of the letter as a whole, constitutes an allegation that Mr Hird, or indeed any person, has committed a breach of the anti-doping codes. The statement is contained in the preliminary part of the letter, which sets out the subject matter of the investigation and the powers under which Mr Hird was being required to attend an interview.

(2) The preliminary statement in the ‘explanatory document’ by ASADA that the joint investigation ‘involves an allegation that AFL athletes and support persons may have used prohibited substances ... [and] ... [it] is also alleged that some AFL athletes and support persons may have engaged in prohibited methods.’[37] This language does not contain an assertion that prohibited substances or prohibited methods had been used by Mr Hird or any other person. The language is consistent only with the existence of an investigation as to whether or not prohibited substances or methods were used.

(3) The statement in the 16 April 2013 letter that the AFL’s Intelligence Co-ordinator had, as a result of information provided to him during the joint investigation, ‘formed the opinion that there is a reasonable suspicion that a breach of certain AFL Rules & Regulations may have occurred during 2012 in relation to the sports science program at the Essendon Football Club.’[38] Again, the language does not contain an assertion that a breach had occurred, only that there was a reasonable suspicion it may have. Moreover, the letter does not identify Mr Hird as the subject of the reasonable suspicion.

60 None of these statements contains a positive statement that any person in fact used prohibited substances or engaged in prohibited methods.

61 Paragraph 7 of Mr Hird’s witness statement does not assist his contention. His bland statement that ‘[t]he subject matter of the interview was, as set out in Notice for interview dated 12 April 2013, whether, as senior coach at [Essendon], I had any knowledge of or involvement in any use of prohibited substances ...’[39] is consistent with an investigation. Mr Hird gave no evidence that any allegation or assertion was made against him during the course of the interview.

62 Third, other evidence supports a conclusion that the only allegation made against Mr Hird was the AFL’s charge against him. ASADA made no allegation against Mr Hird at any stage. Its only allegations were made against the Essendon players. In its interim report to the AFL on 2 August 2013, ASADA made no allegation that Mr Hird had engaged in a Wrongful Act. To the contrary, ASADA referred to its interim report as ‘the culmination of our joint investigation to date and the starting point for further investigation.’[40] ASADA continued in its interim report that:

...at this stage ASADA does not consider that it has sufficient evidence to establish to the comfortable satisfaction of a hearing panel that specific players were in fact administered Thymosin Beta 4.

ASADA’s investigation into these matters is continuing ...

Should ASADA take the view that anti-doping rule violations can be established against one or more players in relation to the use of these substances, ASADA intends to proceed with these violations. ...

...

Should ASADA, following the conclusion of its investigation, make an assessment that it is possible that an individual or individuals have committed anti-doping rule violations, those persons will be given the opportunity to respond to those allegations at that point in time, in accordance with the scheme provided for in the Australian Sports Anti-Doping Authority Act 2006.^[41]

63 At this stage, ASADA was expressly acknowledging that it had insufficient evidence to issue show cause notices to any person in connection with the subject matter of the joint investigation. No show cause notice was ever issued to Mr Hird.

64 I conclude that the interview notice did not involve any allegation that Mr Hird engaged or attempted to engage in a Wrongful Act within the meaning of the policy. At the time it was given, the joint investigation was an inquiry into whether Mr Hird, other Essendon support staff or the players contravened the anti-doping codes. In contrast to the Essendon players, the position was never reached that ASADA alleged a contravention against Mr Hird.

65 If my conclusion on this issue is wrong, I nevertheless reject Mr Hird’s contentions that the interview notice constituted either a demand under sub-paragraph (a)(i) or a formal proceeding under sub-paragraph (a)(vi) of the definition of Executive Claim. My reasons follow.

Was the interview notice a demand for non-pecuniary relief?

66 I will first deal with the claim under sub-paragraph (a)(i). Mr Hird’s contention in this regard is based on a series of cases decided in various jurisdictions, state and federal, in the United States of America. Mr Hird contends that these cases support the general proposition that, when used to define a ‘claim’ in a directors and officers liability policy, the words ‘a written demand for ... non-pecuniary relief’ have a settled meaning — which includes compulsory notices to attend interviews or to provide documents or information to formal investigative bodies, such as ASADA or the AFL.[42]

67 For the following reasons, I do not accept Mr Hird’s contentions based on these United States decisions.

68 First, the words of each insurance policy must be construed in the context of the whole policy at issue. Although similar words are used in the United States cases relied on, the policies in those cases were not the same. In particular, none of the policies contained a structural division such as that between Insuring Clause (A) and Insuring Clause (C) in the policy at issue here. Moreover, Insuring Clause (C) defines Executive Claim differently from Insuring Clause (A). In contrast, each of the United States cases relied on contains either a single definition of ‘claim’ or no definition at all.

69 Second, the decisions relied upon are in any event from different jurisdictions and thus apply a variety of principles of contractual interpretation, some of which are materially different from the principles applying in Australia. For example, some of the jurisdictions have a strict contra proferentem rule for interpreting any provision in an insurance policy which is capable of more than one meaning.

70 Third, there is other United States authority to contrary effect,[43] including a Federal decision of the United States Court of Appeals for the 6th Circuit (the most authoritative of the United States decisions drawn to this Court’s attention) in Employers’ Fire Insurance Company v ProMedica Health Systems, Inc.[44] ProMedica involved the application of Ohio law to the interpretation of the policy at issue. The Court summarised that law in a manner broadly consistent with Australian law.[45]

71 The Court in ProMedica considered a policy which defined ‘claim’ in a manner relevantly similar to paragraph (a) of the definition of Executive Claim applying to Insuring Clause (A) in this case, as follows:

(1) a written demand for monetary, non-monetary or injunctive relief (including any request to toll or waive any statute of limitations); or

(2) a civil, criminal, administrative, regulatory or arbitration proceeding for monetary, non-monetary or injunctive relief commenced by:

(a) the service of a complaint or similar pleading;

...

(c) the filing of a notice of charges, formal investigative order or similar document,

against an Insured for a Wrongful Act ...^[46]

72 In this context, the Court in ProMedica declined to apply cases relied on by Mr Hird (Polychron, Minuteman or Richardson), on the basis that those cases did not define ‘claim’ in the same terms or at all,[47] because there was no requirement in those cases for a claim to be ‘against an Insured for a Wrongful Act’[48] — which is also a requirement under the policy in this case.

73 The Court in ProMedica also considered the meaning of ‘relief’ in the definition of claim. It noted that the word should be given its ‘common, ordinary, usual meaning’ under Ohio law and that, as it was used in a legal context, ‘relief’ meant ‘the redress or benefit, esp. equitable in nature (such as an injunction or specific performance), that a party asks of a court.’[49]

74 In this case also, I must interpret the words ‘demand for non-pecuniary relief’ by reference to the plain meaning of the words, their context in the policy as a whole and any discernible purpose of including sub-paragraph (a)(i) of the definition of Executive Claim for the purposes of Insuring Clause (A). In that context, it is clear that the words refer to demands for legal relief other than damages, such as demands that the recipient Insured Person cease acting in a particular way (an injunction) or act in a particular way (specific performance) or acknowledge a certain state of affairs (a declaration). These kinds of non-pecuniary relief, if granted, may result in an Insured Person becoming legally obligated to pay money on account of a covered Claim or, if not, incurring Defence Costs. Sub-paragraph (a)(i) is directed at demands made before formal proceedings for such relief, of the kinds specified in sub-paragraphs (a)(ii) to (vi), are commenced. In other words, letters of demand which give notice of a Claim made against the Insured Person and which, when made, fix the time at which he or she is obliged to give Chubb notice under the General Section of the policy and determine whether a Claim is made within the policy period. This interpretation is consistent with the structural division in the policy.

Was the interview notice a formal administrative or regulatory proceeding?

75 I turn to consider Mr Hird’s contention that the interview notice falls within the definition of Executive Claim for the purposes of Insuring Clause (A) because it is a formal administrative or regulatory ‘proceeding’ within the meaning of sub-paragraph (a)(vi) of the definition. This contention is also based on United States cases.[50]

76 Of the cases relied upon by Mr Hird, MBIA is the most authoritative, being a decision of a United States Court of Appeals. Once again, however, although similar words are used to those in paragraph (a)(vi) of the definition of Executive Claim for the purposes of Insuring Clause (A), the actual words used and the structure of the policy at issue in that case are different than here. The relevant definition of ‘Securities Claims’ included:

a formal or informal administrative or regulatory proceeding or inquiry commenced by the filing of a notice of charges, formal or investigative order or similar document.^[51]

77 As the emphasised words indicate, the single definition of claim included both formal and informal proceedings or inquiries. This is inconsistent with the structural division between Insuring Clauses (A) and (C) in this case. This difference alone is enough to distinguish MBIA from this case. Further, in MBIA there was no additional requirement that ‘Securities Claims’ be ‘against’ the insured ‘for a Wrongful Act’, which is also a requirement of the policy in this case.

78 I note, however, that the Court in MBIA held that the requirement for the relevant proceeding or inquiry to be commenced by the ‘filing’ of a particular kind of document was satisfied on the facts in that case. There is a similar requirement in this case, but there is no evidence of any such document. The evidence establishes only that ASADA decided to conduct an investigation focussing on possible anti-doping violations by Essendon players, with the assistance of the AFL and using those of the AFL’s compulsory powers which ASADA lacked. There is no evidence of any particular document of the kind required which records the agreement or understanding between ASADA and the AFL to conduct such a joint investigation.[52]

79 Accordingly, the terms of paragraph (a)(vi) of the definition of Executive Claim for the purposes of Insuring Clause (A) should be given their ordinary meaning in the context of the D&O section of the policy as a whole.

80 In my opinion, ASADA’s involvement in the joint investigation was to gather information and to consider what future steps to be taken in light of that information, including the possible commencement of a formal proceeding against Mr Hird and/or others. The interview notice was clearly given for those investigative purposes. It was part of a Formal Investigation as defined, and was not a formal proceeding commenced by the filing of any document of the kind required by sub-paragraph (a)(vi) of the definition of Executive Claim — such as, for example, the AFL’s formal notice of charge against Mr Hird.

Were the challenge costs incurred on account of any such demand or proceeding?

81 Having regard to my conclusions above, it is unnecessary to consider this issue.

Were the challenge costs reasonably incurred?

82 It is also unnecessary to consider this issue, which relates to both Insuring Clauses (A) and (C). However, on the basis of Mr Hird’s evidence on this issue, which I accept, and the advice he received, I find that:

(1) Mr Hird had a reasonably based fear that his reputation and income earning capacity would be adversely affected by the show cause notices he was challenging, as those notices may lead to findings that the Essendon players had contravened the anti-doping codes, and any show cause notice which might subsequently be given to him;

(2) Mr Hird had positive legal advice as to his prospects of success in the Federal Court proceeding and on appeal. To the extent that Chubb criticised the strength of the advice given to Mr Hird for appeal purposes, I accept that Mr Hird had indirect access to stronger advice given by counsel for Essendon and that he was entitled to rely upon that advice in making his decision to appeal; and

(3) Mr Hird had a reasonable basis to believe, including advice from his solicitor, that there was a prospect that ASADA would not re-conduct the joint investigation if it was found to have obtained the information on which the show cause notices were based improperly or, if it did, that the AFL would not assist in the same way it had previously assisted ASADA in the joint investigation.

83 I turn to consider Mr Hird’s claims under Insuring Clause (C).

CLAIM UNDER INSURING CLAUSE (C)

Were the challenge costs incurred on account of Mr Hird’s attendance at, and/or provision of documents or information to, the joint investigation?

84 The definition of Legal Representation Expenses expressly imports the definition of Defence Costs. The parties agree that the definition of Legal Representation Expenses unambiguously imports that part of the definition of Defence Costs which requires the costs be reasonable in amount and that it must have been reasonable to incur them.

85 Mr Hird contends that the definition of Legal Representation Expenses also imports that part of the definition of Defence Costs which includes costs ‘incurred in defending, investigating, settling or appealing any Claim’. On this basis, Mr Hird contends that the definition of Legal Representation Expenses includes reasonable defensive action to a Formal Investigation — such as by Mr Hird’s Federal Court application and appeal. This is the central issue for determination in respect of Mr Hird’s claim under Insuring Clause (C). Mr Hird’s contentions involved the following steps.

86 First, the plain meaning of the definition of Legal Representation Expenses is that it ‘means reasonable Defence Costs’. Subject to the limitation discussed below, this requires all costs falling within the definition of Defence Costs to be included in Legal Representation Expenses.

87 Second, although the incorporation of the definition of Defence Costs is limited by the subject matter of the words which follow — ‘which an Insured Person incurs on account of the attendance and/or provision of documents or information ... at or to any Formal Investigation’ (the ‘limiting words’) — the phrase ‘on account of’ is of the widest import. On this basis, Mr Hird contends that the challenge costs were plainly incurred on account of defending, investigating or appealing the joint investigation, because:

(1) ‘defending’ a Formal Investigation could involve a number of different courses. For example, the Insured Person could submit to the investigation, by attending an interview or examination and producing documents. On the other hand, properly advised, an Insured Person may choose to defend an investigation which may result in adverse consequences for him or her, by challenging the legality of the whole investigation, as Mr Hird did here;

(2) ‘investigating’ a Formal Investigation could involve considering whether the investigation is legally constituted, by taking appropriate legal advice as Mr Hird did here; and

(3) ‘appealing’ a Formal Investigation also falls within the plain meaning of challenging the legality of the investigation, as Mr Hird did here.

88 Put this way, the submission ignores the attendance and provision requirements of the limiting words, and treats the definition of Legal Representation Expenses as requiring only that the costs be incurred on account of a Formal Investigation. The submission in this wide form must therefore be rejected. If it was accepted it would make the limiting words, indeed the whole definition of Legal Representation Expenses, otiose; as Insuring Clause (C) would need only refer to Defence Costs instead of Legal Representation Expenses.

89 Third, in support of his submissions, Mr Hird relies upon the fact that legal challenges to formal administrative or regulatory investigations, examinations and inquiries are commonplace and such challenges are a legitimate means of ‘defending’ such inquiries where they may result in adverse consequences for an insured person and are based on legal advice that the challenge is reasonably open.[53]

90 Fourth, Mr Hird relies upon the second sentence of the definition of Defence Costs, which, ‘[f]or the avoidance of doubt’, expressly includes the reasonable costs of ‘challenging ... Extradition’ of an Insured Person from one country to another for trial or otherwise to answer a criminal accusation. Mr Hird contends that the words ‘for the avoidance of doubt’ are consistent with, and reinforce, a wide meaning being given to the phrases ‘on account of’ and ‘defending, investigating or appealing’ — so as to include challenges to a Formal Investigation.

91 Fifth, Mr Hird contends that the commercial purpose of providing Defence Costs cover in Insuring Clause (C) was to indemnify Insured Persons for their reasonable costs in relation to administrative and regulatory processes ‘that could lead to adverse outcomes for them’. He contends that, if the challenge costs are not covered, there is a ‘gap’ in the cover which reasonable persons in the position of the parties would not have understood from the words of the policy — because Legal Representation Expenses would be limited to ‘merely submitting to the investigation’ by cooperating with it to provide information as requested. Such limited cover would be wholly uncommercial for an Insured Person who did not, like Mr Hird, have the resources to pay for a legal challenge to the Formal Investigation.

92 Before considering Mr Hird’s sixth contention, it is convenient to deal with his contention above — that a wide meaning should be given to the phrase ‘on account of’ in the definition of Legal Representation Expenses.

93 Mr Hird relies on dictionary meanings of the phrase ‘on account of’. For example, the Macquarie Dictionary defines the expression as ‘because of, by reason of; for the sake of’;[54] and the Shorter Oxford Dictionary defines the expression as ‘because of’.[55]

94 Authority also supports this wide meaning. For example, in O’Sullivan v Lunnon,[56] Gibbs CJ (Mason and Dawson JJ agreeing) considered the meaning of ‘on account of’ in s 5(1)(c) of the Electricity (Continuity of Supply) Act 1985 (Qld). That section referred to an act or omission which is ‘calculated to harass, annoy or cause harm or distress to any person on account of’ amongst other things his or her performance of certain duties. Gibbs CJ stated:

As the Shorter Oxford English Dictionary shows, the phrase ‘on account of’ means ‘because of’. Mr Callinan, who appeared for the respondent, submitted that in s 5(1)(c) the phrase means ‘in respect of’, but that is not its natural meaning. In the section the expression ‘on account of’ appears clearly enough to be used in its ordinary sense of ‘because of’ and to indicate the reason the person charged did or omitted to do the act in question.^[57]

95 Brennan and Deane JJ agreed with Gibbs CJ that the primary meaning of ‘on account of’ was ‘because of’. [58] Brennan J also stated relevantly:

The primary meaning of the phrase ‘on account of’ is ‘because of’: Shorter Oxford Dictionary. Counsel for the respondent submitted that the statutory phrase means ‘in respect of’, but that phrase does not reflect the notion of causality which inheres in ‘on account of’. Giving ‘on account of’ its primary and natural meaning, the third element requires that the doer of the harassing act should do it because of the harassed person's performance of his duties. This element relates to the state of mind of the doer of the act, namely, his motive.^[59]

96 As O’Sullivan v Lunnon demonstrates, however, there is an essential element of causation in the phrase ‘on account of’. For action to be taken on account of a specified matter, there must be a causal link between the matter and the action. In this case, that requires a causal link between Mr Hird’s attendance at the interview, and/or his production of his mobile phone for forensic examination, and his decision to commence and maintain the Federal Court application and his appeal and thus to incur the challenge costs. In this context, I turn to consider Mr Hird’s sixth contention.

97 Sixth, Mr Hird’s submissions also endeavoured to grapple with the limiting words. He contended that they extended to include Defence Costs incurred on account of defending, investigating or appealing notices to attend or produce documents or other information to a Formal Investigation, or on account of the fact of attendance or provision of documents or information. Specifically, Mr Hird contended that, because ‘the core’ of his Federal Court challenge was the allegedly unlawful gathering of evidence by ASADA’s use of the AFL’s powers to compel attendance at interviews and the provision of documents or information, the challenge costs were incurred on account of such attendances and the provision of documents and information. In its terms, this contention was not limited to Mr Hird’s own interview or the production of his mobile phone and thus did not address the limiting words. Mr Hird nevertheless contended that there was a ‘sufficient nexus’ between his attendance at the interview, and/or his provision of the information contained in his mobile phone, and his Federal Court application. His submissions did not, however, seek to demonstrate that link by evidence.

98 I turn to consider Chubb’s contentions, which involved the following steps.

99 First, Chubb contends that the definition of Legal Representation Expenses does not, on a proper construction of the policy, incorporate the whole of the definition of Defence Costs. Although this contention was raised as an alternative to its principal contention, which is considered next, I will deal with it first because, if accepted, it would alter the words to be construed.

100 Chubb contends that the limiting words in the definition of Legal Representation Expenses are inconsistent, or ‘do not sit easily’, with the concept of reasonable costs ‘incurred in defending, investigating, settling or appealing any Claim’ in the definition of Defence Costs. I will refer to these words in that definition as ‘the specified reasons for incurring Defence Costs’. On this basis, it contends that a ‘businesslike construction’ is that the definition of Legal Representation Expenses only incorporates that part of the definition of Defence Costs concerning reasonableness of the costs — with the effect that the specified reasons for incurring Defence Costs do not form part of the definition of Legal Representation Expenses.

101 I reject that submission. In my opinion, the definition of Legal Representation Expenses incorporates the whole of the definition of Defence Costs. Construed in the context of the D&O Section as a whole, it was plainly intended that the definitions in bold type would, wherever used in the D&O Section, including in the definitions, have the defined meanings. For the reasons given below, the specified reasons for incurring Defence Costs are capable of sensible application to the definition of Legal Representation Expenses. They would not make commercial nonsense or work commercial inconvenience,[60] and so should not be rejected on that account.

102 Second, Chubb contends that the natural meaning of the specified reasons for incurring Defence Costs is, given the limiting words in the definition of Legal Representation Expenses, incapable of extending to challenges to the legality of the underlying Formal Investigation. I do not accept that submission. Taking one example of the specified reasons, ‘defending’, the ordinary meaning of the word ‘defence’ includes ‘resistance against attack’,[61] ‘the practice or art of defending oneself ... against attack’,[62] and ‘a plan or system of defending’.[63] Similarly, the ordinary meaning of the word ‘defend’ includes ‘to ward off attack from’[64] or ‘to contest (a legal charge, claim, etc)’.[65] Further, ‘defensive’ is an adjective to describe actions ‘made or carried on for the purpose of resisting attack’,[66] or ‘something that serves to protect or defend’.[67] In my opinion, construed in the context of the D&O Section of the policy as a whole, the specified reasons for incurring Defence Costs should be interpreted as including positive defensive action, as in the aphorism ‘attack is the best form of defence’.

103 It must be remembered that the specified reasons for incurring Defence Costs apply also to Insuring Clause (A), which provides Defence Costs cover for a wide range of Claims, including civil proceedings. In civil proceedings, it is commonplace for challenges to be made to a claim which do not involve merely defending the allegations which are made. For example, within the context of the proceeding itself, applications to strike out the allegations or to dismiss the proceeding as an abuse of process. Challenges may also be made outside the context of the proceeding. For example, an application for an anti-suit injunction, made in another jurisdiction, seeking to restrain continuation of the proceeding in the Court in which it was issued. Provided they are reasonable applications to make, they fall naturally within the concept of ‘defending’ a civil proceeding.

104 Mr Hird relied on another example of defensive action outside the subject civil proceeding. He referred to dicta of the Full Federal Court in Solicitors’ Liability Committee v Garrick Lewis Gray & Michael Frederick Winter,[68] in which a broad meaning was given to a policy providing cover to solicitors ‘in defending any proceedings arising out of a claim’. The case involved a motion by the plaintiffs for judgment pursuant to terms of settlement and a cross-application, made in a separate proceeding, by the solicitors to set aside the terms of settlement for misrepresentation or fraud. Beaumont and Burchett JJ considered that the costs of the separate proceeding to set aside the terms of settlement were covered by the policy because authority suggested that a separate proceeding was the ‘procedurally appropriate’ course and, in those circumstances, ‘the costs should be seen as incurred in defending the principal proceedings’.[69]

105 Examples can be given of reasonable defensive action by an Insured Person when served with a notice such as the interview notice in the context of a Formal Investigation:

(1) The Insured Person may challenge the legality of the notice, thus avoiding the need to either attend the interview or to provide documents or information at all if the challenge is successful. That challenge could be by negotiation with the investigative body conducting the inquiry (perhaps leading to a settlement of the interview notice by an agreed withdrawal) or by court proceedings.

(2) The Insured Person could comply with the notice and attend the interview with legal representation. During the course of the interview, a number of circumstances could occur giving rise to a reasonable basis to challenge the interview process. For example, the investigative body may deny the Insured Person procedural fairness, ask questions or demand documents or information falling outside the scope of the investigation and thus exceed its power, or its conduct may give rise to a reasonable apprehension of bias. Each of these circumstances could form a reasonable basis for the Insured Person to challenge the conduct of the investigation by seeking relief from a Court.

(3) The Insured Person may comply with the notice by attending the interview and providing the requested documents or information. Having done so, however, he or she may receive legal advice to the effect that the information provided during the interview, or by production of documents or information, is likely to give rise to an Executive Claim being made against him or her within the meaning of Insuring Clause (A). In those circumstances, the Insured Person may ask his or her legal advisers to investigate whether there is any legal basis to prevent the investigative body conducting the inquiry from relying upon the information which he or she has provided. If advice is received that there is a reasonable basis to obtain relief from a court preventing the investigative body from using the information as a basis for making such a claim, the Insured Person may act reasonably in seeking such relief from a court.

106 In my opinion, if an Insured Person incurred legal costs in bringing court proceedings of the kind postulated in examples (2) and (3) above, those costs would fall within the meaning of the limiting words; as they would properly be described as having been incurred ‘on account of the attendance and/or provision of documents or information by such Insured Person in an insured capacity at or to any Formal Investigation’. There would in each case be a causal link between the Insured Person’s attendance at the interview, and/or his or her production of documents or information, and the decision to commence the court proceedings. In example (2), the costs would be incurred because of the course of events during attendance at the interview or in relation to the provision of documents or information. In example (3), the costs would be incurred because of the Insured Person’s reasonable fear that the information provided would form the basis of an Executive Claim under Insuring Clause (A). These examples sit comfortably with the specified reasons for incurring Defence Costs. It is unnecessary to decide whether, in the circumstances described in example (1), the Insured Person’s costs of a negotiation or court challenge would be covered under Insuring Clause (C).

107 This outcome does not, as Chubb contends, lead to an unbusinesslike interpretation. In that regard, I note that Chubb did not contend that Insuring Clause (C) had any identifiable commercial purpose beyond providing cover in the terms provided. I do not, however, accept Mr Hird’s wide formulation of the commercial purpose, which was put as indemnifying Insured Persons for their reasonable costs in relation to administrative and regulatory processes ‘that could lead to adverse outcomes for them’.

108 First, by referring to ‘adverse outcomes’ rather than the specific circumstances in which coverage is provided, Mr Hird’s formulation ignores the limiting words. The limiting words are inconsistent with attributing a commercial purpose to provide cover in the broad terms postulated by Mr Hird.

109 Second, it is not necessary in every case involving contractual interpretation for the Court to isolate a particular commercial purpose.[70] Sometimes the language of the contract as a whole, and/or admissible evidence of context, will reveal a discernible purpose of a particular provision. But this is not always so. All that can be said in this case is that the purpose of the D&O Section of the policy was to provide cover in the circumstances specified in each Insuring Clause. Accordingly, unless the ordinary meaning of the words in the context of the policy as a whole leads to any commercial absurdity or inconvenience, or would lead to disharmony with the policy as a whole, that meaning should be given effect.[71] It is on this basis that I have construed Insuring Clause (C) as including positive challenges of the kind set out above. Where reasonably made, such challenges are commercially sensible and could potentially limit Chubb’s exposure by avoiding an Executive Claim under Insuring Clause (A).

110 This leads me to Chubb’s third contention. To guard against an interpretation of Insuring Clause (C) as I have found above, Chubb contends that Mr Hird has not proved a causal link between his attendance at the interview, or his production of documents or other information to the joint investigation, and his decision to commence and maintain his Federal Court application and appeal and thus incur his challenge costs (the ‘necessary causal link’). For the following reasons, I accept that contention.

111 First, Mr Hird gave no evidence as to: (1) questions he was asked or what answers he gave to the questions during the interview; (2) what may otherwise have been said by him during the interview concerning the subject matter of the joint investigation; (3) apart from three text messages referred to in the AFL’s statement of grounds, the content of the 7,000 text messages or other information recovered from his mobile phone; or (4) any other documents or information provided by him or on his behalf to the joint investigation (collectively ‘Mr Hird’s information’ or ‘his information’ as the context requires).

112 Second, Mr Hird did not tender in evidence the transcript of his interview, the ‘show cause notices’ or the ‘show cause pack’ referred to in his statement of claim. Mr Hird’s statement of claim alleges that those documents are subject to confidentiality orders in the Federal Court proceeding. There is no evidence of those orders in this proceeding. Chubb’s non-admission defence on this issue required Mr Hird to prove that there were such documents if he wanted to rely on their contents, and no submission was made or explanation given as to why they could not be tendered in evidence in this proceeding.

113 Third, Mr Hird did not give direct evidence that his information caused him to commence and maintain his Federal Court application and appeal and thus incur the challenge costs. Mr Hird’s counsel made no submission that the court should infer the necessary causal link and, in any event, I would not draw such an inference in circumstances where Mr Hird was called as a witness but did not give evidence about the content of his information or the necessary causal link.[72]

114 Fourth, Mr Hird’s own evidence establishes only that he decided to commence his Federal Court application and appeal because he wanted ‘to protect [his] reputation and position as coach of [Essendon]’, to protect or advance his ‘continued employment related to the AFL’, and thus to protect his primary source of income at that time and in the future. In other words, Mr Hird’s motive in commencing and maintaining his Federal Court application and appeal was his fear of damage to his reputation and economic interests arising from the show cause notices served by ASADA on the players and the events consequent on those notices. That motive does not establish the necessary causal link. Moreover, Mr Hird did not adduce evidence that his information contributed to ASADA’s decision to issue the show cause notices to the players, may lead to ASADA giving him a show cause notice, or may assist ASADA to prove anti-doping violations against any of the players.

115 Fifth, by his Federal Court proceeding, Mr Hird sought declaratory and injunctive relief on the basis that all the information obtained in the joint investigation was unlawfully obtained. His claims were not limited to his information and there is in any event insufficient evidence before the Court in this proceeding as to the content of his information to find the necessary causal link.

116 In the absence of evidence proving the necessary causal link, Mr Hird’s claim under Insuring Clause (C) must fail.

Conclusion

117 For the above reasons, Mr Hird’s claim will be dismissed.

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^[1] Essendon Football Club & Anor v Chief Executive Officer of the Australian Sports Anti-Doping Authority (2014) 227 FCR 1, 28 [142] (‘Essendon and Hird v ASADA’).

^[2] Ibid 41–42 [220], 51 [256(o)].

^[3] Ibid 32 [179].

^[4] Ibid 37–39 [206].

^[5] Ibid 41 [219].

^[6] Ibid 39 [209].

^[7] See generally: ASADA Act ss 9, 13; ASADA Regulations div 4.2.

^[8] Essendon and Hird v ASADA (2014) 227 FCR 1, [249]-[254], 49.

^[9] The judgment in Essendon and Hird v ASADA was initially included in the Court Book for this purpose.

^[10] [2015] VSC 185 [18]–[25] (citations in original).

^[11] McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579, 589 [22]; Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522, 528-9 [15].

^[12] Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451, 461-2 [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, 179 [40].

^[13] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, 656-7 [35], adopting the observations of Arden LJ in Re Golden Key Ltd [2009] EWCA Civ 636 [28].

^[14] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109.

^[15] Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522, 529 [16].

^[16] [1986] HCA 82; (1986) 161 CLR 500.

^[17] Ibid 510. See also, Selected Seeds Pty Ltd v QBEMM Pty Ltd [2010] HCA 37; (2010) 242 CLR 336, 344 [29], a case involving the construction of an exclusion clause in an insurance policy.

^[18] Ibid 507-11.

^[19] Ibid 507. See also, CE Heath Underwriting & Insurance (Australia) Pty Ltd v Edwards Dunlop & Co Ltd [1993] HCA 21; (1993) 176 CLR 535, 548; GL Nederland (Asia) Pty Ltd v Expertise Events Pty Ltd [1999] NSWCA 62 [27]; Bank of Queensland Ltd v Chartis Australia Insurance Ltd [2013] QCA 183 [71].

^[20] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640, 656–7 [35], adopting the observations of Arden LJ in Re Golden Key Ltd [2009] EWCA Civ 636 [28].

^[21] Australian Broadcasting Commission v Australasian Performing Rights Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109; Bank of Queensland Ltd v Chartis Australia Insurance Ltd [2013] QCA 183 [70].

^[22] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109.

^[23] OZ Minerals Holdings Pty Ltd v AIG Australia Ltd [2015] VSCA 346 [1]–[2] (Maxwell P), [52] (Robson AJA).

^[24] Ibid [12]–[13] (Kyrou JA).

^[25] [2016] HCA 5.

^[26] Ibid [51].

^[27] Emphasis added.

^[28] Emphasis added.

^[29] Emphasis added.

^[30] Emphasis added.

^[31] Emphasis added.

^[32] Emphasis added.

^[33] Emphasis added.

^[34] Macquarie Dictionary (Macquarie Dictionary Publishers Pty Ltd, 6^th ed, 2013), ‘allegation’.

^[35] Ibid, ‘assertion’.

^[36] Emphasis added.

^[37] Emphasis added.

^[38] Emphasis added.

^[39] Emphasis added.

^[40] Essendon and Hird v ASADA (2014) 227 FCR 1, 37 [206].

^[41] Ibid 38–39 [206] (emphasis omitted).

^[42] Reliance was placed upon Minuteman International, Inc v Great American Insurance Company 2004 WL 603482, an unreported decision of the United States District Court for the Northern District of Illinois; Agilis Benefit Services LLC v Travelers Casualty and Surety Company of America 2010 WL 8573372, an unreported decision of the United States District Court for the Eastern District of Texas; Polychron v Crum & Forster Insurance Companies 916 F.2d 461 (8^th Cir. 1990), a decision of the United States Court of Appeals for the 8^th Federal Circuit, applying Arkansas law; Syracuse University v National Union Fire Insurance Company of Pittsburgh, PA 2013 WL 3357812 (N.Y.Sup.), an unreported decision of the Supreme Court in the State of New York; Protection Strategies, Inc v Starr Indemnity and Liability Co 2013 WL 10724338, an unreported decision of the United States District Court for the Eastern District of Virginia; Richardson Electronics, Ltd v Federal Insurance Company 120 F.Supp.2d 698 (N.D.Ill. 2000), a decision of the United States District Court for the Northern District of Illinois.

^[43] For example, Diamond Glass Companies, Inc. v Twin City Fire Insurance Company 2008 WL 4613170, an unreported decision of the United States District Court for the Southern District of New York; RSUI Indemnity Company v Akshay M Desai 2014 WL 4347821, an unreported decision of the United States District Court for the Middle District of Florida.

^[44] 524 Fed. Appx. 241, *243.

^[45] Ibid *246.

^[46] Ibid *243.

^[47] Ibid *250.

^[48] Ibid.

^[49] Ibid *251. See also, Diamond Glass Companies, Inc. v Twin City Fire Insurance Company 2008 WL 4613170, *4.

^[50] Reliance was placed upon National Stock Exchange v Federal Insurance Company 2007 WL 1030293, an unreported decision of the United States District Court for the Northern District of Illinois; MBIA Inc v Federal Insurance Company 652 F.3d 152 (2^nd Cir. 2011), a decision of the 2^nd Circuit of the United States Court of Appeals, applying the laws of New York and Connecticut; and Ace American Insurance Company v Ascend One Corporation 570 F.Sup.2d 789 (D.Md. 2008), a decision of the United States District Court of Maryland.

^[51] MBIA Inc v Federal Insurance Company 652 F.3d 152 (2^nd Cir. 2011), 155 (emphasis added).

^[52] Essendon and Hird v ASADA (2014) 227 FCR 1, 8 [9](d), 9 [11], 20-22 [87]–[100].

^[53] Reliance was placed upon examples such as: Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd [2015] HCA 7; (2015) 89 ALJR 382; Independent Commission Against Corruption (NSW) v Cunneen [2015] HCA 14; (2015) 89 ALJR 475; Patrick Stevedores Holdings Pty Ltd v DPP & Anor (2012) 216 IR 422; Cahir v Jamieson & Ors [2010] VSC 285; Nelson Bros Funeral Services Pty Ltd v Victorian WorkCover Authority (2000) 101 IR 303; Firman v Lasry [2000] VSC 240; Royal Women’s Hospital v Medical Practitioners Board of Victoria [2005] VSC 225; YG v Chief Examiner (2012) 225 A Crim R 66.

^[54] Macquarie Dictionary (Macquarie Dictionary Publishers Pty Ltd, 6^th ed, 2013), ‘on account of’.

^[55] Shorter Oxford English Dictionary (Oxford University Press, 6^th ed, 2007), volume 1, ‘on account of’ [a].

^[56] [1986] HCA 57; (1986) 163 CLR 545.

^[57] Ibid 549. Emphasis added.

^[58] Ibid 553, 556 (Deane J also refers to ‘by reason of’).

^[59] Ibid 553. Emphasis added.

^[60] Electricity Generation Corporation v Woodside Energy [2014] HCA 7; (2014) 251 CLR 640, 656–7 [35]; Morton Bay Regional Council v Mekpine Pty Ltd [2016] HCA 7 [58].

^[61] Macquarie Dictionary (Macquarie Dictionary Publishers Pty Ltd, 6^th ed, 2013), ‘defence’ [1].

^[62] Ibid [6.a].

^[63] Ibid [6.c].

^[64] Ibid ‘defend’ [1].

^[65] Ibid [4].

^[66] Ibid ‘defensive’ [2].

^[67] Ibid [5].

^[68] (1997) 77 FCR 1.

^[69] Ibid 51. Emphasis added.

^[70] OZ Minerals Holdings Pty Ltd v AIG Australia Ltd [2015] VSCA 346 [12]–[13].

^[71] Ibid; Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109.

^[72] Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389, 418.