Alessandro Zollo v National Australia Bank Ltd and Another No. SCGRG 93/1026 Judgment No. 5940 Number of Pages 16 Contracts

[1996] SASC 5940

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA DOYLE CJ, PRIOR AND NYLAND JJ

CWDS
Contracts - particular parties - principal and agent.

Contracts - general contractual principles - offer and acceptance - contract implied from conduct of parties - appeal against decision that defendant liable to indemnify plaintiff in respect of monies due on terms found by judge - plaintiff a builder - first defendant a bank plaintiff sought insurance with third defendant, an insurance company, through its agent, the first defendant - plaintiff had conversation with bank manager - sought cover for overdraft, bill facility and instalment loan - plaintiff told "it's all fixed up" - no policy sent to plaintiff- policy in fact covered only instalment loan - plaintiff believed covered for temporary total disability over all three loans - usual policy covered permanent total disability only - no oral contract, but insurer bound by conduct of bank employee - insurer bound to insure on usual terms in respect of all three loans - first defendant entitled to judgment in its favour on the claim against it, further hearing required to establish whether plaintiff entitled to recover under the policy. Insurance Contracts Act 1984 (Cth) ss 37, 22(1), 22(3); Insurance (Agents and Brokers) Act 1984 (Cwlth) s 11, referred to. City Mutual Life Assurance Society Ltd v Gates (1986) 160 CLR 1, applied. Devries v Australian National Railiuays Commission
(1993) 177 CLR 472; Lotus Manufacturing Company Limited v Sun Alliance Insurance Limited (1987) 4 ANZ Insurance Cases 60-782, distinguished.

HRNG ADELAIDE, 8 October 1996 (hearing), 20 December 1996 (decision) #DATE 20:12:1996 #ADD 29:1:1996

Counsel for appellant:     Mr D E Clayton QC with Mr N J Swan

Solicitors for appellant:    Finlaysons

Counsel for respondent:     Mr N W Morcombe QC with Mr J M Cudmore

Solicitors for respondent: Floreani Coates &; Co

ORDER

JUDGE1 DOYLE CJ

Introduction

1. The appellants, the first and third defendants in the action, appeal against a decision that they are liable to indemnify the plaintiff in respect of monies due from the plaintiff and his wife to the first defendant. The appellants denied having agreed to indemnify the plaintiff on the terms found by the judge. The defendants challenge factual findings made by the trial judge, and challenge the correctness of his decision on matters of law. This appeal is one of three appeals involving the same parties and heard at the same time.

Facts

2. I can state the facts fairly briefly. The first defendant ("the Bank") is a major Australian bank. The third defendant ("the insurer") carries on business as an insurer and is a subsidiary of the Bank. The insurer authorised the Bank to act as its agent in connection with insurance business to be written by the insurer.

3. The plaintiff was a builder. He was born in Italy in 1948 and came to Australia in 1964. He worked in the building trade, and then began to carry on business as a builder. He and his wife formed a partnership. They were also directors of a company which was involved in the building business. The plaintiff was a self-taught builder.

4. The plaintiff emerges from the transcript as a man with a slightly limited command of English, but well able to make himself understood. He also emerges as someone who would have had difficulty with, and not much interest in, the paperwork and formalities of business. The impression which one gets is that, while he was no doubt quite capable of looking after himself in a practical way in his business, he would have relied considerably on people such as solicitors, accountants, bank managers and the like, when it came to documentation relevant to their area of work. To say this is not to imply that the plaintiff was na•ve, or excessively trusting, or unaware of legal and financial and banking matters. However, his understanding seems, in some respects, to have been somewhat rudimentary.

5. Although the trial judge made no findings in these terms, I consider that what I have said is consistent with what emerges from his judgment. The evidence which he sets out supports some of what I have said.

6. The plaintiff's business seems to have done reasonably well. He became a customer of the Bank at Port Lincoln. The Bank began to finance his building projects. The plaintiff had a fair deal to do with the bank, relating to finance for various projects. He got to know the manager and a Mr Daly who was the accountant and at times acting manager. The plaintiff also met with Mr Daly through mutual sporting interests. They were on first name terms.

7. The relationship between the plaintiff and the Bank had its difficulties at times. The details do not matter. This led to the plaintiff also getting finance from a building society ("Hindmarsh").

8. I should interpolate here that, as one would expect, the plaintiff knew a certain amount about insurance. He used the services of an insurance agent. He knew about the need for workers compensation insurance, public liability insurance, property insurance and so on (T25). His experience was that the agent did the paperwork, he just signed and paid the money (T25-26). The Bank had insisted on insurance on the plaintiff's life in connection with a mortgage to the Bank. He said that he knew what a policy was, but any policies were kept by the agent or by the Bank (T26-27). It appears likely that the judge accepted the general thrust of that evidence.

9. The plaintiff gave evidence that a woman at the Hindmarsh office recommended insurance of his loan from Hindmarsh "for unemployment, sickness, accident and death" (T30). The plaintiff agreed. She gave him some papers, and a couple of weeks later he received a detailed certificate of insurance (P6). It is dated 9 October 1987. The exhibit discloses that it is a certificate of insurance in respect of a loan. It is headed "Mortgage Repayment Insurance". Benefits are payable on death, disability (temporary or permanent) and unemployment. The policy contains appropriate definitions. The benefits are in some situations payment of the monthly repayment, in other cases payment of the balance outstanding.

10. The plaintiff got from Hindmarsh a blank copy of its proposal form (P7) (presumably he had completed one of these already) and went to see Mr Daly.

11. At this time the plaintiff was indebted to the Bank. He had an instalment loan of about $150,000 secured by mortgage. He had an overdraft facility of about $50,000 and a Bill Finance facility of about $70,000. I do not need to go into the details of these loans or of the security that the Bank had.

12. The plaintiff spoke to Mr Daly about getting insurance in respect of his liability to the Bank.

13. The plaintiff said that he took the Hindmarsh proposal (P7) with him, and gave it to Mr Daly. The judge apparently accepted this evidence, fortified by the fact that P7 was discovered and produced by the Bank.

14. The trial judge found that the plaintiff told Mr Daly, referring to the document P7, that he wanted the same insurance from the Bank with respect to "the mortgage, the money that I owe you" (T35). Mr Daly said that he could not get insurance in respect of unemployment, but could get insurance for "sickness, accident and death". The plaintiff accepted that.

15. The judge's findings appear to have been that cover was sought in respect of death, disability, sickness and accident, and that Mr Zollo said that the request related to the three heads of indebtedness referred to above.

16. The judge also appears to have accepted the plaintiff's evidence (T36) that he told Mr Daly he could contact his current insurer for information about Mr Zollo's claims history, if he wanted any such information.

17. The judge found in terms that Mr Daly got the plaintiff to sign three proposal forms in blank (T164) on that occasion.

18. The effect of the plaintiff's evidence was that Mr Daly said that he would attend to the paperwork, but that he told the plaintiff that he was already covered.

19. A completed proposal was tendered as P9. It is a printed form of a common type. It was addressed to the insurer, in respect of life and permanent total disability insurance. It was addressed to another insurer in respect of temporary total disability insurance, but by a tick on the form indicated that such insurance was not sought. The form is dated, in the plaintiff's hand, 15 October 1987. The judge found that the plaintiff "did not read any documents which he signed."

20. Evidence led by the Bank provided some support for what the plaintiff said. Mr Daly had died before the trial, and had left no statement in an admissible form.

21. The plaintiff tendered a handwritten note (P8) from the Bank's records. It is a note (undated) from Mr Daly to Mr Grant, an employee in the branch. It asks Mr Grant to "get insurance quotes for all lending in ...." the plaintiff's name, including his overdraft limit. Mr Grant (who gave evidence) had then written on P8 a list of account numbers and balances for the relevant accounts. Through a computer link to the insurer, he then obtained approximate premiums, which he also wrote down, for each account (T469). He then telephoned the insurer and was told that it would accept insurance cover only on the instalment loan (T470), and so he crossed out each line of figures except the line for the instalment loan, and informed Mr Daly of the outcome, returning P8 to Mr Daly with Mr Grant's notes written on it.

22. His evidence was that Mr Daly returned P8 to him with a note dated 24 September 1987, asking him to write to the insurer to confirm cover for the instalment loan. By letter of the same date (P31) he wrote to the insurer for confirmation, and also asked it to reconsider giving cover for the overdraft facility and the Bill Finance facility.

23. By letter dated 29 September 1987 (D37), the insurer confirmed the amount of the premium for the instalment loan and confirmed its refusal to cover the other two facilities. There is no suggestion that Mr Grant communicated any of this to Mr Zollo.

24. The trial judge clearly accepted the evidence about the attempt to get cover for all three loans. There is no indication that he rejected other aspects of Mr Grant's evidence.

25. The trial judge also accepted evidence from Mr Zollo that some time after his first discussion with Mr Daly, he was told by Mr Daly that the insurance was arranged. The evidence is (T37):
    "Q. Did you return to the bank after that time.

A. I went into the bank, yes. I went back to the bank. I saw him
    in that little office. I just waved to him, said, 'Is everything
    fixed up?', and he put his finger up like that, (INDICATES) 'It's
    all done, Mr Zollo, it's all fixed up'. I wish he was live. We
    wouldn't be here."

26. A little further on (T37-38):
    "Q. Do you recall him subsequently discussing anything about
    premiums with you.

27. The premiums were - on the return in the next two weeks, when he
    said to me that everything was all right, he said 'Everything will
    cost you $980 to $1,000 a year' - that is what I can vaguely
    remember as a figure. I said 'All right, no problem'. Once
    everything was accepted he come out the front of what you call it,
    the bank, just on the front of the desk. He said, 'You need to
    sign a proposal - not a proposal, what do you call it, sorry? - an
    authority. You need to sign an authority so we can take the money
    and put it in the bank, and I said 'All right, no problem, thank
    you', 'All done', 'See you later'.

28. Now, at the time you signed that second document did you look at
    it, did you read it.

29. I can't remember, because my reading is very limited and I just
    trusted him to do the right thing for me. If I knew this was going
    to happen I would have got a lawyer involved."

30. In cross-examination, the plaintiff gave this evidence (T253-254):
    "Q. And some weeks layer (sic) you went back and signed another
    document, did you.

A. Two or a fortnight later, I went back there, once the insurance
    was accepted, I went there to sign the authority. He says 'I need
    you to sign authority where to take the money from'. I said 'Thank
    you'. 'All done'. He came out of his office, in the front of the
    little, what you call it, the service, he said 'You have been
    accepted with the insurance, it's all done, sign this because I
    have to deduct your money'. I said 'It's all right, thank you',
    and that's what happened, I never seen Mr Daly after that."

HIS HONOUR Q. You never saw who after that.

A. I never saw Mick Daly after that, I only spoke to him on the
    phone.

Q. He never gave you a policy.

A. No, everything was left with the bank."

31. Mr Zollo understood that the "paperwork" would stay with the Bank, and that the premiums would be deducted from his account.

32. On the basis of the latter part of that evidence, the judge found that he did sign an authority for the deduction of premiums, "at a later meeting with Daly". He found that, based on what Mr Daly had said, the plaintiff believed that he had insurance cover of the type sought for all three facilities.

33. The only policy in fact issued by the insurer was a policy in respect of the instalment loan, which policy did not provide cover for temporary total disability.

34. On that evidence the judge found that there was a contract struck between Mr Zollo and the Bank through Mr Daly, presumably when Mr Daly told Mr Zollo that the insurance was "all fixed up". He said:"It was a contract that the Bank would procure or provide protection by insurance indemnifying the plaintiff against inability to pay money to the Bank 'on all lending in the name of the plaintiff' (see Exhibit P8 again) which the plaintiff could not pay through inability to work at his usual work by reason of death, sickness or accident. In other words it is, on the part of the Bank, a promise to get or provide indemnity."The judge also found that Mr Daly had committed the tort of misrepresentation when he told the plaintiff that he had got all the cover that the plaintiff wanted.

35. He found that the Bank was the insurer's agent (which was admitted) and that the insurer was bound by a contract in the same terms as that which bound the Bank. He then said:
    "There should be a declaration that the first and third defendants
    indemnify the plaintiff in respect of his, or his wife's, inability
    to pay monies otherwise due to the Bank in respect of all lending
    in the name of the plaintiff, or of the plaintiff and his wife,
    that is, mortgage payments, payments pursuant to overdraft, and
    payments "under" the bill facilitiesÉIn his action the plaintiff
    would, alternatively to the declaration, be entitled to damages for
    breach of contract (the contract to get the insurance cover
    sought), for misrepresentation (ie that the insurance cover sought
    had been obtained) for negligence under the Trade Practices Act and
    under the Fair Trading Act ...But no such relief need be ordered
    ..."

Attack on the Findings

36. The appellants challenged the finding that Mr Daly had told Mr Zollo that the insurance was "all fixed up".

37. It pointed to matters on which Mr Zollo's evidence lacked truth or reliability. As to that, the judge accepted that on some matters (mainly relating to medical treatment) Mr Zollo had lied, and that on some matters he was confused. He noted Mr Zollo's "strong sense of grievance". But he found that Mr Zollo's evidence "on these vital issues has the ring of truth".

38. The appellants pointed to the unlikelihood of Mr Daly saying what Mr Zollo claimed Mr Daly said when he knew (by 24 September) that the third defendant would cover only one facility. The proposal form which Mr Zollo signed, apparently when Mr Daly told him all was arranged, was dated 15 October 1987, so by then he must have known the insurer's response. In that context, why would Mr Daly get three proposals completed? Another staff member, Ms Leyson, who processed the proposal, gave evidence that she would not process a proposal form in blank, so, it was argued, the decision not to seek cover for temporary disability must have been Mr Zollo's. She said that she "would have" sent Mr Zollo a copy of the policy in fact issued (he denied receipt), and of the statutory notices (which should in fact have been given before the proposal was completed). In this way, it was argued, Mr Zollo must have known what cover he did have, and by inference, what he did not have.

39. Although the judge did not address these points in any detail, he must have rejected them.

40. I accept the force of the appellants' argument, especially the unlikelihood of Mr Daly acting as the judge found he had acted.

41. But the trial judge was clearly alive to the critical issue of Mr Zollo's credibility, and I do not accept that he overlooked what might be called the improbability and business practice arguments.

Conclusions on Factual Findings

42. I can find no basis for overturning the findings of fact. They were based on the credibility of Mr Zollo, supported to some extent by quite cogent evidence that he sought cover, equivalent to the Hindmarsh cover, in respect of all three facilities. As to the crucial conversation when Mr Daly said it was all fixed up, I cannot say that the trial judge has misused his advantage as the one who saw Mr Zollo, or that he acted on evidence which is glaringly improbable, as distinct from surprising or unlikely: cf Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479.

43. The date on the proposal form was not referred to by the trial judge. The date, in Mr Zollo's hand, of 15 October 1987, does not fit with a conclusion that he signed the proposals on the occasion of his first discussion with Mr Daly. The likelihood is that it was signed later, but that does not undermine the judge's conclusions.

44. Accordingly, in my opinion, the factual findings should stand.

The Contract of Insurance

45. I have already set out the trial judge's conclusion.

46. The factual findings are capable of supporting the conclusion. Whatever Mr Daly intended to say, his words are to be interpreted and understood as they would be by a reasonable person: Carter &; Harland, Contract Law in Australia, (3rd ed 1996) par 110. A reasonable person could understand them in the sense found by the trial judge. Nor is it essential that a contract of insurance be in writing. It was not argued that Mr Daly lacked authority to transact business orally: cf MacGillivray and Partington On Insurance Law (8th ed., 1988) pars 274, 275 and Lotus Manufacturing Company Limited v Sun Alliance Insurance Limited (1987) 4 ANZ Insurance Cases 60-782.

47. But on Mr Zollo's own evidence, on the day of the first discussion he completed three proposal forms in blank, one of which he identified as the document P9. As his experience with Hindmarsh showed, and as he must have realised from his own experience, a proposal is intended as the preliminary to the issue of a policy. He must, to my mind, have understood that at least two further steps were required before the contract of insurance was complete. First, as Mr Daly had said, that the insurer's confirmation be obtained. Secondly, that a policy be issued.

48. Granted, as the judge found, that he completed three proposals and thought he was obtaining cover for three facilities, and treating Mr Daly as the insurer's agent in completing the proposal (cf s11 of the Insurance (Agents and Brokers) Act 1984 (Cth)), Mr Zollo must have understood that he was and must be taken to have been, submitting a formal proposal to the Bank or to the insurer. (It is clear that Mr Zollo did not distinguish between them).

49. In the light of his evidence, I do not consider that it can be said that he could reasonably have believed, or in fact believed, that the terms of the contract were completely determined when Mr Daly spoke to him about two weeks later and said it was "fixed up". The failure (as the judge found) of either defendant to provide to Mr Zollo a copy of the policy in respect of the instalment loan means that he can maintain that all three proposals were in fact accepted, having regard to the assurance which Mr Daly gave him, after (as it would have appeared to Mr Zollo) making appropriate enquiries.

50. But are the terms of the policy those found by the trial judge? Or, under the circumstances, are they to be found in the policy which the insurer in fact issued (part of D28), and which appears to contain its usual policy terms for such insurance?

51. Although the proposal form does not refer to the insurer's terms, it would be in accordance with ordinary experience that the insurer would have, would issue and would rely upon a standard form of policy. And, by completing a proposal, Mr Zollo must have envisaged that the further step of issuing a policy on the insurer's usual terms would follow: McGillivray and Parkington On Insurance Law (8th ed 1988) par220; Hardy, Ivamy, General Principles of Insurance Law (5th ed) p101.

52. Mr Zollo was entitled to assume, absent the receipt of a policy indicating otherwise, that the policy would be in the insurer's usual terms and that they accorded with the proposal. Nor is he bound by any unusual terms for that class of business in the policy, prior notice of them not having been given: Insurance Contracts Act 1984 (Cth) s37; The Law Book Company Ltd The Laws of Australia Vol 22, Insurance, par118.

53. Is Mr Zollo bound by the definition of "permanent total disablement" found in D28, or is the obligation to indemnify found, as the judge found it, in the conversation between Mr Zollo and Mr Daly? Having so found, the judge said:
    "On this finding no question of 'total disablement' as contemplated
    by any insurance policy arises. But of course any inability must
    be substantial or caused by some substantial injury."

54. I consider that it must have been plain to Mr Zollo, as it would have been to any reasonable person, that he was putting a proposal which would lead to a policy or policies on the insurer's usual terms. A limitation upon the terms upon which the insurer can rely is to be found in s37 of the Insurance Contracts Act 1984 (Cth), the effect of which is to preclude reliance upon a provision of a kind not usually included in such contract of insurance, Mr Zollo not having been given a copy of the policy before it was made nor notice of any particular terms to be found in the policy.

55. Exhibit D28 indicates that the third defendant's policy did, as would be usual, contain a definition of permanent total disablement. It is as follows:
    "Permanent total disablement means the total inability of the
    Insured as a result of the insured:
    (a) sustaining accidental injury; or
    (b) contracting sickness or disease,from carrying out all of the
    normal duties of his or her usual occupation for a period of at
    least six (6) consecutive months and the Company being of the
    opinion that the Insured is unlikely ever to be able to follow his
    or her usual occupation or any gainful occupation for which the
    Insured is fitted by training, knowledge or experience."

56. The evidence makes it quite clear that D28 is the third defendants usual form of policy (T449). There is no evidence as to a form of policy that would be usual for the two facilities other than the instalment loan. I proceed on the basis that any other policy would have contained an identical provision. The reason for the absence of evidence about the terms of a policy for the other two facilities is, no doubt, as Mr Renny said, that the insurer does not provide insurance in respect of overdrafts or bill facilities, because the debt is a fluctuating debt and there is no instalment amount (T451). Mr Renny also gave evidence that cover in respect of such facilities was not available in the market place (T451), but the judge preferred evidence to the contrary from Mr Neville (Judgment p12). Mr Neville's evidence is equivocal (T235), but I will come back to that. Despite that, on the judge's findings there was an agreement to provide cover on these borrowings, the insurer having agreed to provide cover in respect of all three facilities. In my opinion it is entitled to rely upon its usual definition of total disablement, that being one of its usual terms, not in general terms an unusual term, and not inconsistent with the proposal.

57. I therefore cannot accept the trial judge's conclusion that there was an oral contract of insurance in the terms found by him. That conclusion seems to me, with respect, to ignore the significance of the completion of the proposal forms addressed to the insurer. It also ignores Mr Zollo's own evidence that there would be "paperwork", but that it would be held by the Bank. It also ignores Mr Zollo's own recent experience with Hindmarsh, and usual business practice.

58. I do not suggest that there cannot be an oral contract of insurance. My view is that in this case the evidence points, on the judge's findings, to a conclusion that Mr Daly bound the insurer to insurance on its usual terms in respect of all three facilities.

59. I turn to the question of temporary total disability. On Mr Zollo's evidence he sought cover for that as well, because that was part of the Hindmarsh policy (see P6). On the judge's findings, Mr Daly told Mr Zollo that he had the same cover in respect of his facilities with the Bank. On the findings of the judge, the decision not to seek such cover must have been without Mr Zollo's knowledge or approval.

60. The judge made no express finding in relation to temporary disability.

61. The proposal which Mr Zollo signed indicates that in relation to temporary total disability the proposal was addressed to National and General Insurance Company Limited, the second defendant in the action. The case against that defendant was not pursued at trial, a settlement having been reached with that defendant.

62. I have already indicated that in my opinion the three proposal forms, which His Honour found were signed in blank, all presumably the same as P9, cannot be ignored. Mr Zollo must, in my opinion, be taken as having intended to make a proposal on the basis of them. In the light of that, any insurance in respect of temporary disability must, to make sense of the events, be treated as offered by the second defendant, and not by the first or third defendants. No case having been pursued against that defendant, there can be no finding of a contract in respect of temporary disability.

63. My conclusion is that any finding as to a contract must be confined to a finding that the insurer, bound by the conduct of Mr Daly, an employee of its agent the Bank, is obliged to indemnify Mr Zollo, in respect of the three liabilities to the Bank already referred to, in the event of him sustaining permanent total disablement as defined. There is no contract with the Bank.

The Claim Under The Policy

64. As I have already indicated, the trial judge did not have to consider whether, under the definition of "permanent total disablement", the plaintiff's claim should succeed. He made no findings on that.

65. Before I come to the issue of permanent total disablement, I must deal with another issue.

66. At the beginning of the trial the defendants applied for leave to amend the defence to allege, as a defence to the claim, non-disclosure by Mr Zollo of prior injuries. The application was renewed during the trial (T336 and following) and again refused. The defendants argue that His Honour erred.

67. The proceedings were issued on 4 June 1993. The trial began on 6 March 1995. The argument in support of the application was that documents had come to light disclosing previous injuries. It appears that this occurred as a result of an application by the defendants on 25 October 1994 for third party discovery by WorkCover Corporation. The documents were not received until 17 February 1995, although the order made on 23 November 1994 was for discovery within 21 days. The documents led to a chain of enquiry which led to the application.

68. No explanation was given to His Honour for the lateness of the application for third party discovery, nor was it shown that the defendants could not have sought the material sooner than they did.

69. His Honour gave brief reasons for refusing leave (T341), seeming to indicate that the material could have been obtained earlier.

70. I am unable to say that His Honour erred. The failure to show that the defendants could not reasonably have found the relevant information any earlier than they did is highly significant. While some of the relevant material appears to have come out at trial in any event, the judge was best placed to decide whether the late amendment was likely to disrupt the trial. One could not say, as I understand things, that it would not have. Nor is it shown that Mr Zollo was himself in default in relation to discovery of documents. While it is true that Mr Zollo must have had some recollection of his earlier injuries, it does not follow that his discovery was defective. I am conscious of the force of the defendant's submission that leave to amend should have been allowed, but I am, as already indicated, not prepared to say that His Honour erred.

71. There is another point which tends to support the rejection of this complaint. This point was not argued on the appeal.

72. There is a statutory obligation on an insurer to inform an insured in writing, before the contract is entered into, of the "general nature and effect of the duty of disclosure": s22(1) Insurance Contracts Act1984 (Cth). Non-compliance precludes an insurer from exercising "a right in respect of a failure to comply with the duty of disclosure unless the failure was fraudulent": s22(3). On the findings in this case, there was no such disclosure. The evidence of Ms Leyson (T354) suggests that the statutory notices were not sent until after the application was processed, and in any event His Honour found that nothing was sent to Mr Zollo.

73. It seems likely that the non-disclosure point faced a substantial obstacle, although that goes to the merit rather than the question of leave.

74. I return to the claim under the policy.

75. Whether Mr Zollo's condition satisfied the policy definition was barely touched upon on appeal. This is no criticism of the parties. The appeal raised a considerable number of factual and legal issues. It would not be satisfactory to decide the contractual claim without hearing submissions on the point. In my opinion the parties should be heard further on the issue.

Misrepresentation

76. The trial judge found that the plaintiff was, in the alternative, entitled to damages for misrepresentation, for negligence, and for misleading and deceptive conduct under the Trade Practices Act and the Fair Trading Act.

77. On my conclusions those claims are not available to the plaintiff. The findings of the judge, as applied by me, lead to the conclusion that the insurer is obliged to indemnify the plaintiff, on terms that he is bound by and accepted (in the sense explained above). He got what he wanted, to put it bluntly, by virtue of the order of the court.

78. The claim in damages arises only if there was a misrepresentation about the right to indemnity, and on the conclusions reached there was not.

79. If I am wrong in that, the damages for any negligent misrepresentation, or for misleading and deceptive conduct by Mr Daly (in informing Mr Zollo that he was covered in respect of all of his borrowings) depend upon proof of loss. The plaintiff must prove that he could have obtained the desired insurance elsewhere, had he been informed of the true position.

80. The judge found that he could have (judgment p12), accepting the evidence of Mr Neville. In my respectful opinion, that finding cannot be sustained.

81. The defendants called Mr Renny, who had long experience in the insurance industry. He was the Chief Underwriter of the insurer. He gave evidence that he was aware of no other insurer offering insurance in respect of overdrafts and bill facilities (T451). He conceded, of course, that a life and disability policy might in effect cover such liabilities (T462).

82. Evidence to a like but more limited effect was given by Mr Worley, who had worked in the field for 16 years. He was familiar with what competitors offered (T274). His company had never offered insurance in respect of overdrafts or bill facilities, but he did not say that no competitor did (T275-276). However, he did say that Hindmarsh had never offered such cover (T275).

83. Although this evidence is not compelling, the evidence of Mr Neville seems to me to take the matter nowhere. He worked in the field of general insurance. He did not claim expertise in the area of life insurance, although he undoubtedly had some general knowledge of that field. He had dealt with Mr Zollo, in the hope of getting business through him. He discussed his requirements with him. This related to "his contracts work insurance" (T231), public liability, property insurance and the like (T232). He contacted Mr Daly, who told him that his loans from the Bank were insured (TT234). Then came this evidence (T235).
    "Q. If, at the time he received this information, it was
    ascertained that in fact there were no policies of insurance
    covering the National Australia Bank loans or insufficient policies
    to cover all the loans, if you have been told that, would you have
    offered Mr Zollo insurance with respect to those loans.

A. Yes, obviously I would have offered him a quotation, but the
    quotation would have been provided by my superiors because that was
    their forte, general insurance."

84. But he did not have details of the policies referred to by the Bank, nor was he particularly concerned about mortgage insurance, that not being his field (T246-247). There is no suggestion that he directed his mind to the distinction between a term loan secured by mortgage and, on the other hand, overdraft and bill facilities.

85. In that context, it is difficult to treat his evidence as establishing, contrary to the better qualified Mr Renny, that the relevant insurance was in fact available.

86. I do not consider that, in the face of the evidence from Mr Renny and Mr Worley, such general evidence as came from Mr Neville suffices to establish that the plaintiff could have obtained insurance of a type not available from Hindmarsh and not known to Mr Renny. Mr Neville would have sought quotes from his superiors. He does not say that he knew he would get quotes for the relevant type of business.

87. This is a matter on which, in my opinion, more is required to sustain the judge's finding. He described Mr Neville as "truthful, careful and reliable". But, as I see it, it is not a matter of rejecting his evidence, but whether his evidence establishes or bears upon the relevant matter. In my opinion it does not.

88. The plaintiff not having shown that the insurance in respect of overdraft and bill facilities was available elsewhere, let alone on what terms, any claim for damages based on misstatements by Mr Daly must fail: cf City Mutual Life Assurance Society Ltd v Gates (1986) 160 CLR 1.

89. There remains the possibility of a claim for damages based on the failure to obtain insurance in respect of temporary disability. The claim against the second defendant being settled is not an insuperable obstacle to a finding in Mr Zollo's favour. It is clear that such insurance was available in respect of the instalment loan. But, the terms of settlement with the second defendant not having been disclosed, and no submissions having been made on this point, I consider it inappropriate to proceed on the basis that this claim still survives.

90. In view of my conclusions, it is unnecessary to deal with the submission that the claim under the Trade Practices Act is out of time.

Conclusion

91. For those reasons, it is my opinion that the only relief to which Mr Zollo is entitled is under a contract of insurance with the third defendant, obliging it to indemnify him against liability on his instalment loan, the overdraft and the bill facility, in respect of permanent total disablement as defined in the policy which is part of exhibit D28. I wish to hear further from the parties on the question whether the facts establish that Mr Zollo is entitled to recover.

92. The first defendant is entitled to judgment in its favour on the claim against it.

JUDGE2 PRIOR J

93. I agree with the reasons published by the Chief Justice.

JUDGE3 NYLAND J

94. I agree with the reasons of the Chief Justice.