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AIG Insurance Australia Ltd v McMurray

AIG Insurance Australia Ltd v McMurray

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Case Copied 20 October 2023 73 min read

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   AIG INSURANCE AUSTRALIA LTD -v- MCMURRAY [2023] WASCA 148
CORAM:   BUSS P
MITCHELL JA
VAUGHAN JA

HEARD:   20 - 22 DECEMBER 2022
DELIVERED          :   20 OCTOBER 2023
FILE NO/S:   CACV 93 of 2021
BETWEEN:   AIG INSURANCE AUSTRALIA LTD
Appellant
AND
FREDERICK WILLIAM MCMURRAY
First Respondent
JENNIFER GRACE MCMURRAY
Second Respondent
RUSSELL BRESLAND
Third Respondent
BRESLAND CONSULTANTS PTY LTD
Fourth Respondent
HANS BO KRISTIAN HOLGERSSON trading as HOLGERSSONS COMPLETE HOME SERVICE
Fifth Respondent
MOSMAN BAY CONSTRUCTION PTY LTD (in liq)
Sixth Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   SMITH J
Citation: McMURRAY v AIG INSURANCE AUSTRALIA LTD [No 5] [2021] WASC 300
File Number            :   CIV 2962 of 2016

Catchwords:

Contract - Construction of contracts - Contract of insurance - Insured property destroyed by fire - Insurer sought to rely on contract works exclusion clause to deny liability - Whether renovations to insured property constituted a 'structure' or 'structures' for the purposes of the contract works exclusion clause - Principles applicable to construction of insurance contracts - Consideration of purpose or object of insurance contract - Whether primary judge failed to take a background fact into account - Whether primary judge erred in applying contra proferentem principle - Construction of 'structure' by primary judge upheld

Evidence - Where insurer pleaded that the fire was caused by the self‑combustion of oily rags in a bin - Insurer claimed no conflicting or competing inference could be drawn from the evidence - Where 'intruder theory' was not pleaded by any party - Whether primary judge erred in allowing intruder theory to be advanced - Whether primary judge erred in finding that intruder theory rose above mere speculation - Whether primary judge erred in finding that both theories were equally possible so that the choice between them was mere conjecture - Whether statement made day after fire should have been admitted as evidence under business records exception in s 79C(2a) of Evidence Act 1906 (WA) - Whether statement should have been admitted as part of the res gestae - Whether primary judge erred in failing to draw Jones v Dunkel inferences against plaintiffs for failure by fourth-party to call witnesses - Turns on own facts

Interest - Challenge to interest award made pursuant to s 57 of Insurance Contracts Act 1984 (Cth) - Determination of date from which it was unreasonable for insurer to withhold payment - Finding by primary judge that overlapping insurance policies complicated assessment in error - Error established in primary judge's interest determination - Consideration of time required for investigation and determination of claim - Redetermination of date from which withholding payment became unreasonable - Turns on own facts

Legislation:

Evidence Act 1906 (WA), s 79C(2a), s 79C(6)
Insurance Contracts Act 1984 (Cth), s 57

Result:

Appeal dismissed
Cross-appeal allowed in part

Category: B

Representation:

Counsel:

Appellant	:	M T McCulloch SC & C P K Russell
First Respondent

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: [2023] WASCA 148
Decision Date

CaseChat Overview and Summary

The appeal by AIG Insurance Australia Ltd against the primary judge's decision in McMurray v AIG Insurance Australia Ltd was dismissed. The primary judge's construction of the contract works exclusion clause was found to be correct. The court found that AIG had not established material error in terms of the appeal grounds concerning the cause of the fire. The plaintiffs' cross-appeal was allowed in part, and interest should be payable from 8 August 2016 rather than the 16 June 2017 as allowed by the primary judge. The appeal dismissed the first aspect of the cross-appeal, meaning that the challenge to the order that the plaintiffs' claims against the Bresland parties be dismissed does not arise if AIG's appeal fails. The court allowed the second aspect of the cross-appeal, which concerns the time from which interest on the judgment amount should be recoverable. The court found that the primary judge erred in concluding that 16 June 2017 was the day as from which it was unreasonable for AIG to have withheld payment of the amount it was liable to pay to the plaintiffs under the home insurance policy. Instead, the requisite unreasonableness for the purpose of s 57 of the Insurance Contracts Act existed as and from 8 August 2016.

Orders