AFG Insurances Ltd v Andjelkovic - [1981] FCA 119

Re: A.F.G. INSURANCES LIMITED
And: ELLI ANDJELKOVIC (1981) 54 FLR 398
No. F.C. 23 of 1980
Law Reform (Miscellaneous Provisions) Ordinance 1955 (A.C.T.) - Insurance
1 ANZ Insurance Cases 60-443

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Franki(1), McGregor(1) and Kelly(1) JJ.

CATCHWORDS

Law Reform (Miscellaneous Provisions) Ordinance 1955 (A.C.T.) - ss.25(1), 26(1)(2) and (3) - Charge on insurance moneys - Applicant injured as result of fault of insured - Application for leave to commence action against insurer - Considerations affecting exercise of discretion to grant leave.

Insurance - Respondent injured due to negligence of insured - Application for leave to sue insurer - Whether leave may be granted - Whether respondent had arguable case against insurer - Law Reform (Miscellaneous Provisions) Ordinance 1955 (A.C.T.), ss. 25 (1), 26 (1), (2), (3).

HEADNOTE

The respondent sustained severe injuries due prima facie to the negligence of the insured. The primary judge granted leave to the respondent to commence an action against the appellant (insurer) pursuant to s. 25 (1) and s. 26 of the Law Reform (Miscellaneous Provisions) Ordinance 1955. The appellant appealed against this decision. Held, per curiam, upholding the appeal, that leave should be refused because the respondent had failed to present an arguable case that the circumstances under which the injury was sustained were within the terms of the policy.

HEARING

Canberra, 1981, March 25; July 23. #DATE 23:7:1981

APPEAL.

Appeal from a judgment of the Supreme Court of the Australian Capital Territory to the Full Court of the Federal Court of Australia. The facts of the case and ss. 25 (1) and 26 (1), (2) and (3) of the Law Reform (Miscellaneous Provisions) Ordinance 1955 are set out in full in the judgment which follows.

R. S. Hulme, for the appellant.

T. J. Higgins, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Dare Reed.

Solicitors for the respondent: Higgins.

E. F. FROHLICH

ORDER

1. The appeal be upheld.

2. The order granting leave to commence proceedings against the appellant is rescinded.

3. The respondent pay the appellant's costs of the application to the Supreme Court and of this appeal.

JUDGE1

Section 25(1) of the Law Reform (Miscellaneous Provisions) Ordinance 1955 of the Australian Capital Territory ("the Ordinance") provides for a charge on certain insurance moneys in the following terms:-

"25. (1) If a person (in this Part referred to as 'the insured') has, whether before or after the commencement of this Ordinance, entered into a contract of insurance by which he is indemnified against liability to pay any damages or compensation, the amount of his liability is, on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of the liability may not then have been determined, a charge on all insurance moneys that are or may become payable in respect of that liability".

Sub-sections 26 (1)(2) and (3) of the Ordinance are as follows:
"26. (1) Subject to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1981] FCA 119
Decision Date: 23 JULY 1981

CaseChat Overview and Summary

AFG Insurances Ltd, an insurer, appealed against a decision of the Supreme Court which had granted the injured party, Andjelkovic, leave to commence proceedings against AFG. The dispute centred on the interpretation of sections 25(1), 26(1)(2) and (3) of the Law Reform (Miscellaneous Provisions) Ordinance 1955 (A.C.T.) and whether the insurer could be held liable for damages when the injury was due to the fault of the insured person. The court was required to decide whether the discretionary power under the statute allowed the granting of leave to the injured party to sue the insurer when the fault lay with the insured.

The court examined the statutory provisions and the relevant case law. It considered the discretionary nature of the statute and whether the court could grant leave to the injured party to commence proceedings against the insurer when the insured party was at fault. The court found that the statutory provisions did not permit the granting of leave in such circumstances, and the Supreme Court had erred in exercising its discretion. The appeal was upheld on the basis that the Supreme Court had misinterpreted the statutory provisions.

Consequently, the appeal was upheld, the order granting leave to commence proceedings against the appellant was rescinded, and the respondent was ordered to pay the appellant's costs of the application to the Supreme Court and of this appeal.

Orders

Orders of the court

1. The appeal be upheld.

2. The order granting leave to commence proceedings against the appellant is rescinded.

3. The respondent pay the appellant's costs of the application to the Supreme Court and of this appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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