Allianz Australia Ltd v Taylor
[2018] VSC 78
•26 February 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 04407
| ALLIANZ AUSTRALIA LIMITED | Appellant |
| - and - | |
| DANIELLE TAYLOR and HAYASHEAM TAYEH | Respondents |
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JUDGE: | Mukhtar AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 29 May 2017 |
DATE OF JUDGMENT: | 26 February 2018 |
CASE MAY BE CITED AS: | Allianz Australia Ltd v Taylor & Anor |
MEDIUM NEUTRAL CITATION: | [2018] VSC 78 |
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INSURANCE — Motor car insurance — Insured’s statutory duty of disclosure to insurer —Additional driver nominated as beneficiary of policy — Insured person’s statutory duty of disclosure of known matter relevant to risk before insurance contract is made or renewed —Renewal effected by beneficiary with knowledge of matter relevant to risk — Matter unknown to insured ― Non disclosure by beneficiary — Whether renewal was effected by beneficiary as agent for insured ― Whether agent’s knowledge of disclosable matter is imputable to insured as principal ― Insurance Contracts Act 1984 (Cth) s 21, s 48
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr T Messer | Hall & Wilcox |
| For the First Respondent | Mr Kenyon | Nick Logan + Co |
| For the Second Respondent | Mr P McDermott | RS Chase Lawyers |
HIS HONOUR:
This appeal, on a question of law from the Magistrates’ Court, concerns the legal duty on an insured person under s 21(1)(a) of the Insurance Contracts Act to disclose to an insurer or proposed insurer ‘… every matter that is known to the insured, being a matter that: the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms’. That duty visits the insured ‘before the relevant contract of insurance is entered into’, an expression which includes the renewal of an insurance policy.[1]
[1]See s 11(9) of the Act.
The question on this appeal is whether knowledge of a disclosable matter by a person taking the responsibility for renewing a contract of insurance can be imputed to the insured under the law of agency, so that if the matter is not disclosed, it will be a non-disclosure by the insured which entitles the insurer to avoid the contract or reduce its liability.[2] The question arose in a motor car collision case of anything but the typical ‘crash and bash’ variety. And the facts underlying the non-disclosure are quite peculiar. The Magistrate held there was non-disclosure but no agency, and the insurer was bound to indemnify.
[2]See s 28 of the Act.
On appeal by the insurer, I have come to the view this appeal must be allowed. The Magistrate’s orders will be set aside. I think internal to his Honour’s reasons there has been error in the legal analysis by which it was held that the person who took responsibility for renewing an insurance policy was not an agent of the insured. Had the matter been disclosed, there was unchallenged evidence that the insurer would not have insured. In the result, the insurer is entitled to refuse indemnity to a claim under a motor car insurance policy. The case calls for an extensive account of the facts.
The trial
The plaintiff in the Magistrates’ Court, Hasheam Tayeh, sued the defendant Danielle Taylor for damage done to his car, a 2005 Porsche Cayenne when a car being driven by her, a Jeep Patrol wagon, collided at night with the Porsche, from behind, when it had stopped in Williamsons Road in Doncaster. The extensive damage to the plaintiff’s car was assessed as a total loss of $55,581. The total claim in the court Complaint was for $55,933 although eventually that was reduced and agreed at a quantum of $38,000.
The Jeep being driven by the defendant was insured by the appellant, Allianz, under a policy first obtained through an intermediary, a car dealership known as Melbourne’s Cheapest Cars in Moorabbin. The ‘Dealer Prestige Motor Insurance’ policy was issued in June 2011. It was a comprehensive motor car insurance policy that said, ‘We will cover you for your accidental loss including theft or damage to your vehicle.’ The word ‘You’ or ‘Your’ was defined to mean the person named in the current schedule as the insured. The policy also covered ‘…your legal liability to pay compensation for loss and damage to someone else’s property caused by a motor vehicle accident which is partly or fully your fault.’ In addition to that third party cover, the policy said ‘We will also cover the legal liability for loss and damage to someone else’s property of ‘… any person who is driving, using or in charge of your vehicle with your permission’.
The policy schedule named the sole insured as Miss Diana Post. She is the mother of the defendant Danielle Taylor. (For ease of narration, I shall now refer to them as ‘the mother’ and ‘the daughter’). The schedule identified the mother and the daughter as ‘Nominated Drivers’ defined to mean drivers ‘you have advised us will drive your vehicle’. The policy schedule identified the ANZ Banking Group as ‘Interested Parties’. The bank had financed the purchase of the Jeep.
The Jeep was registered in the mother’s name. The purchase, registration and insurance arrangements of the Jeep are critical facts, and the evidence on those matters at trial was given without any controversy. The daughter (who was about to have her second child at the time) explained that she needed a bigger car but as she was about to finish work she would be in no position to obtain finance under her own name. She discovered the car at the dealership. The Magistrate’s written reasons recount the arrangement reached between mother and daughter to enable her to have the Jeep:
3.… The insured vehicle had been purchased through a finance arrangement entered into between a finance company, and Ms Post [the mother]. That arrangement required that the registered owner of the vehicle be Ms Post and that the vehicle be comprehensively insured.
4.The evidence of both Ms Post and the defendant [the daughter] was that this arrangement was entered into of necessity insofar as the defendant daughter was not then in a position to acquire or borrow the funds necessary for the purchase of the vehicle. The mother therefore agreed to take on responsibility for the finance contract until she [the mother] could pay it out, as she subsequently did, in return for which, there was a private arrangement between mother and daughter to reimburse the mother. In reality, the vehicle was always to be and in fact was acquired for and owned by the daughter, the defendant. Except for a few occasions in succeeding years the vehicle was driven by the defendant and her partner.
5.The insurance premiums along with all other necessary expenses for the maintenance and operation of the vehicle were met directly by the defendant [daughter].
Thus, by intent, the Jeep really belonged to and was kept by the daughter. As an incident of that ownership, she took the responsibility for the insurance on the car and the renewals. The Magistrate made this finding:
20.The evidence of both Ms Post and Ms Taylor, which I accept, was that all matters and expenses concerning the running, maintenance, registration and insurance of this vehicle were carried out by Ms Taylor as the actual owner of the vehicle. It was Ms Taylor who paid the insurance premiums to Allianz, just as she repaid the purchase money of the vehicle to her mother. The evidence of Ms Post which I accept, was that any correspondence coming from the insurer of which she was aware was given by her to her daughter; this includes the renewal notices addressed to her at the Altona North address. The evidence of Ms Post was that it was her daughter who then dealt with any requirements made by the insurer including the returning of any correspondence. Ms Post denied, and I accept, that at no time did she ever personally return any correspondence or respond to any correspondence from the insurer, and at no time did she have any telephone conversations with any of the personnel of the insurer.
Whatever the practical realities of this domestic arrangement, it cannot obscure the rigid fact that the legal relationship of insured and insurer under the contract of insurance was between the mother and Allianz. The mother had an insurable interest as the borrower under a loan agreement for the purchase money for the car. As a nominated driver under the policy, the daughter was covered not as the insured and not as a party to the contract of insurance, but as a third party beneficiary. That is defined under the Act to mean a person ‘…who is not a party to the contract but is specified or referred to in the contract, whether by name or otherwise, as a person to whom the benefit of the insurance cover provided by the contract extends.’[3] That gave the daughter under s 48(1) of the Act ‘ a right to recover from the insurer, in accordance with the contract, the amount of any loss suffered by the third party beneficiary even though the third party beneficiary is not a party to the contract.’
[3]Section 11 of the Act.
The daughter and her partner Adrian Sorietto, lived at 163 Mills Street in Altona North. That was a property owned by the mother. But the mother was living mainly in Werribee where the daughter’s grandmother lived. The mother did stay overnight at the Altona North address from time to time and used that address as her residential and mailing address. That was the address to which all mail from Allianz was sent to her as the insured and was her address on the policy schedule. In essence the evidence at trial from the mother and the daughter cohered to show that any envelope conspicuously from Allianz addressed to the mother was taken and dealt with by the daughter without reference to the mother as it was the daughter’s responsibility under their arrangement. Or, the envelope might have been seen by the mother and, immediately upon sighting, and without opening, was handed over by her to the daughter for her attention.
This handling arrangement, and the mother’s use of the Altona North address brought with it associated problems. It was also, necessarily, the address used by the authorities to send mail to the mother as the person in whose name the Jeep was registered. This mail included the service of any infringement notices for driving offences committed in the driving of the Jeep. In that regard, the evidence was that the daughter’s partner often drove the car too.
Notification from State authorities and agencies concerning road traffic infringements in the driving of a photographed vehicle are sent to the person in whose name the vehicle is registered —who may or may not have been the driver. As is commonly known by motorists, under the penalties system the registered owner can notify the authorities that someone else was the driver in which case, upon further processing and action on the notification, the driver is identified and no penalty is incurred by the registered owner. Otherwise, the imposition and accumulation of demerit points for infringements in the registered vehicle can result in automatic suspension of the licence of the person in whose name the car is registered. And that is what happened.
The salient facts as found by the Magistrate are that: as a result of traffic infringements in the Jeep, and after warnings were sent by VicRoads to the Altona North address, on 20 November 2012 (that is, after the first renewal of the policy in June 2012) the mother’s driving licence was suspended, by notification, for three months. The mother did not know this. The daughter did. It was the fact established at trial that when the daughter administered and effected the renewals of the policy with Allianz in June 2013 and again in June 2014, she did not disclose the licence suspension to Allianz.[4] No-one is concerned to say she was dishonest; the fact is she did not disclose the suspension. The Magistrate’s written reasons stated these findings (with my underlining) which are not being disturbed on appeal:
[4]See Reasons for Decision [3].
13.There is no doubt and no issue that at the time of the renewal of the insurance policy, there was a requirement to disclose to the insurer the licence status of both the insured mother, and the nominated beneficiary and driver, daughter. It is a fact that at the time the insurance was renewed on the occasion prior to the accident, the insured mother’s licence had been suspended through the accumulation of demerit points. It is not to the point or relevant to any issue between the defendant and the insurer, as to whether VicRoads should have suspended the licence, the simple fact was that it had been suspended for a period of three months commencing 20 November 2012.
14.When the contract of insurance was entered into by Ms Post her address was 163 Mills Street Altona North. It was to this address that any correspondence, including insurance renewal notices, was sent to Ms Post by the insurer. At the time of the suspension of Ms Post’s licence, and indeed for some time prior to that, and up to and including the time of the 2013 insurance policy renewal, Ms Post did not ordinarily live at that address even though it was in fact her property. Primarily because she had to care for a very ill mother, and also because she had a partner who lived over two hours’ drive away. She visited the Altona North address approximately once per week over the relevant period.
The evidence of the daughter Ms Taylor was that a good many of her mother’s belongings remained at the Altona North address and that her mother would attend on a regular basis in order to catch up with Ms Taylor and to collect any mail addressed to herself at those premises. In the circumstances, Ms Post did not advise any change of address to VicRoads and saw no necessity to do so.
15.The evidence of Ms Taylor, was that for some time prior to the suspension of her mother’s licence and subsequently, she shared the Altona North premises with her then partner who was a drug addict, and it seems otherwise dishonest. Her evidence was that this partner drove the vehicle in question on a regular basis and incurred fines; he was in the habit of intercepting mail which arrived at the premises, including mail addressed to Ms Post. The evidence of both the mother and her daughter was that eventually, some considerable time later, after the partner left the premises, a number of items addressed to Ms Post were located in the bungalow at the rear of the premises which he had occupied.
Ms Post denied receiving any more than two or three fine notices via the mail, and these she directed her daughter to deal with, as Ms Post was not the party who had incurred the fines. None of the fines which ultimately led to the suspension of Ms Post’s licence were fines incurred by Ms Post as the driver of the vehicle.
16.Ms Post denied ever receiving any follow-up letters, warnings, election notices, or notice of suspension from VicRoads. I accept the evidence of Ms Post that she did not in fact do so. Her evidence was that not until 2015 did she ever discover that her licence had been suspended for the period I have referred to.
17.The beneficiary under the policy, the defendant Ms Taylor, however was aware in my opinion that her mother’s licence had been suspended. She became aware of an election notice addressed to Ms Post and unsuccessfully attempted to have the fines the cause of the notice, assigned to her by nomination. I do however accept Ms Taylor’s evidence that a good many of the fines which caused the accumulation of demerit points on her mother’s licence were not known to her. Be that as it may, I am satisfied that it is more likely than not that Ms Taylor did know that her mother’s licence had been suspended for that period of three months. I am also satisfied that she did not inform her mother of this.
Then this crucial finding:
18.As I have indicated, Ms Post and indeed Ms Taylor were aware that at all relevant times any suspension imposed upon either of their licences was a relevant matter for the purpose of a decision by the insurer to enter into or renew a policy of insurance.
Before Tayeh commenced legal proceedings for damage to his Porsche, in September 2014 Allianz paid the mother $14,056 as the market value of the Jeep. I gather that after the proceedings were commenced, Allianz conducted private investigations into the claim that led it to question whether the collision was a ‘staged’ collision, and not truly an accident. It denied liability to indemnify, hence the daughter as defendant brought third party proceedings against Allianz for a declaration of indemnity. Nothing turns on the fact that Allianz had already paid the $14,056 for the damage to the Jeep.
In the Magistrates’ Court proceeding, the defence filed by Allianz did not plead that the daughter’s claim for indemnity was fraudulent. Nor did it affirmatively allege any facts, or facts from which inferences may be drawn which if proved would sustain such an allegation. Such facts would have to show collusion between Tayeh, the driver of Tayeh’s car and the daughter. Rather, Allianz put the defendant to proof that the insured event, an ‘accident’, had truly occurred. Whilst it might be thought in effect to be saying the same thing, such a form of defence is not an illegitimate course.[5] But, it was a disadvantageous course as Allianz had no direct or circumstantial evidence to positively adduce that the accident was staged. At trial, Allianz was confined to exposing some oddities and coincidences; testing Tayeh’s probity; and testing the daughter’s explanation of the collision which appeared to occur in easily avoidable circumstances. Taking that course meant that, as a matter of evidence, Allianz were stuck with the answers and denials of the daughter, the driver of Tayeh’s car, and Tayeh. As this position created a sensational forensic setting for the three-day trial, it is worthwhile saying a little about the alleged incident for completeness because the daughter’s case conceded she had been negligent without any contributory negligence of the driver of Tayeh’s car.
[5]See Hammoud Brothers Pty Ltd v Insurance Australia [2004] NSWCA 366.
According to the evidence at trial, at about 9:30 pm on 9 September 2014, Tayeh’s Porsche was being driven with his permission by his personal assistant, Julie Smart. After being with Tayeh at a coffee lounge at the Doncaster shopping centre, Smart said she left him there to collect her sister from a house in Doncaster and to then return to the coffee lounge. A few minutes later, as she drove alone along Williamsons Road in Doncaster (a two-lane carriageway) she said she experienced the car chugging. She pulled over; turned off the engine; and tried to call Tayeh on her mobile phone but could not get reception. So, she switched on the hazard lights, got out of the car, and walked away trying to get phone reception. She denied getting out of the car and away from it for her own safety because she knew, as was put to her, that something was going to happen. She said she did not get very far up the road when there was a ‘big bang’. She said that a car had ‘driven up the rear of my car, and it was laying on its side, pretty much blocking the road off.’
On the night of the collision the daughter and her partner Adrian Sorietto went for a drive in the Jeep to talk some things over, she said, and headed coincidentally for the Doncaster shopping centre. Sorietto knew the way because he had worked there. As the daughter was driving along Williamsons Road, she said she was arguing with Sorietto who she described as a violent and volatile ‘ice’ (methamphetamine) addict. She was crying and upset. There was no other traffic. There were no impairments to visibility. When she was about 50 metres away from the Porsche she saw hazard lights. She slowed down, but before she could move into the right-hand lane (which was clear of traffic) she said she ‘clipped’ the right hand rear corner of the stationary Porsche, and her car flipped over on its side. There were no witnesses to the incident. The police and ambulance service attended.
Allianz sought to impeach the claim by questioning how a collision could have occurred in such visible and benign conditions and by casting doubt on the evidence and the honesty of Smart, Tayeh and the daughter. Sorietto was not called as a witness. The mobile telephone records of Julie Smart were adduced in an attempt to show suspicious timing and destination of calls by her. There was no evidence that Tayeh and the daughter and mother were known to each other. Cross examination of Tayeh established that: he had moved to South Australia but was in Victoria on business at the date of the collision; he drove the Porsche from Adelaide to Melbourne on a regular basis; he ran a convenience store and car rental business here; he bought the car in South Australia a few months before the collision; the asking price was $34,500 and he paid about that much; the car was advertised for sale with an odometer reading of 162,856 kilometres; at the time of the collision the odometer reading was 70,110 (which Tayeh said had been wound back by mechanics when installing a changeover transmission so that his odometer reading matched the odometer reading of the car from which the transmission had been obtained); he registered the car in South Australia but only for three months at his declared value of $15,000; and the driver of the Porsche on the night was his personal assistant with whom he denied having a personal relationship. Other matters were put to him (including a refusal of insurance claims of someone known to him) in an endeavour to impugn his honesty and cast suspicion about whether this truly was an accident.
As I read the evidence, the insinuation by Allianz seemed to be that the person driving the Jeep was not the daughter but was her troubled partner Sorietto. That was denied by the daughter. The upshot was to show that the market value of the Porsche had been exaggerated in Tayeh’s claim.
It is enough to say that the Magistrate found no evidence to support the allegation of a staged collision, saying that ‘To describe such a defence as weak, would in my opinion be to seriously overstate its merits.’ But as I say, that was the forensic setting of the insurance question now on appeal. Thus, it came down to the non-disclosure defence, the facts and findings of which I have already recited. For Allianz, there was evidence from an underwriter given according to written underwriting rules and guidelines that had the licence suspension been disclosed, Allianz would have refused to renew the cover. That evidence was not contradicted.
The case for Allianz was that even though the daughter was not the insured for statutory disclosure purposes, as a matter of law she was an agent for the mother when renewing the insurance contract which is a contract. Even in a non-commercial context, Allianz contended, on the specific facts present here, on agency principles the knowledge of the agent is the knowledge of the principal where the task of renewal on the facts had been delegated to the daughter. The daughter knew the mother’s licence had been suspended, but did not disclose it on the two renewals when she knew it had to be disclosed. How could it be, counsel for Allianz expostulates, that the insurance arrangement is entirely for the benefit of the daughter; arranged and actually effected by her; yet the daughter is relieved from any duty to disclose something that is known to be disclosable by her to the insurer as something directly relevant to the decision whether to insure; and despite all that, she is given indemnity under the policy ?
The case for the daughter was that there was no duty of disclosure on her as she was not the ‘insured’ for the purposes of s 21 of the Act. That is so. Her rights were under s 48 of the Act which gave her as a nominated driver a right to recover loss from the insurer ‘in accordance with the contract notwithstanding that the person is not a party to the contract’, but which imposed no duty of disclosure on her as a third party beneficiary. Nor, it was said, was the daughter an agent of the mother because it was no more than an informal arrangement and she was doing no more than making sure in her own interests that the insurance was effected in her interests as a beneficiary which are discrete and independent of the insured. In any event, it was said that in an unsettled area of the law, the knowledge of the insured under s 21 meant it had to be known personally by the insured and could not be construed to include the knowledge of an insured’s agent.
On the question of agency and imputation his Honour stated (with my underlining):
22.The third party submits that the knowledge of the daughter Ms Taylor should be imputed to the insured mother Ms Post. This should be done, says the insurer because in dealing with the insurer the daughter was acting as the agent of the insured, her mother.
23.A number of relevant decisions were referred to touching upon the liability of an insured for the conduct of the insured’s agent. In this case, Ms Taylor was of course certainly not a professional agent in the sense of being a broker or consultant and was not acting for reward. The insurer’s position is that Ms Post effectively delegated her contractual obligations to the daughter including the obligation to make proper disclosure. This delegation, or authorisation as the insurer puts it, created the relationship of principal and agent.
24.It is clear that in some circumstances an insured will be fixed with the knowledge of his agent. In one particular case, the owner of a block of units had given the management and control of those units, including compliance with the statutory obligations cast upon the owner, to a professional agent. In circumstances where the agent was aware of an illegal use of the premises, but the owner was not, the owner was fixed with the knowledge of the agent.
25.It is trite law that a principal may be liable for the actions of his agent when in the exercise of actual or ostensible authority given to the agent by the principal, the agent acts in the interests, benefit, or at the direction of the principal, within the scope of such agency.
26.The insurer says that actions taken by the defendant daughter to renew the insurance policy are in accordance with this. In my opinion, this is not so. It was the daughter Ms Taylor who was the actual owner of the vehicle, and clearly a beneficiary under the policy. In dealing with the insurance company she was acting in her own interest and for her own benefit, in maintaining insurance upon what was in fact her asset. While it is true that in part her conduct had the effect of maintaining the contractual status quo as between the insurer and the insured, Ms Taylor as owner and beneficiary under the policy, had a direct and personal interest in the maintenance and renewal of the insurance. The defendant was not, when engaging in such conduct, dealing with the insurer as an agent of her mother.
27.In those circumstances, the knowledge of Ms Taylor cannot be imputed to Ms Post for the purpose of s 21 of the Act. There was therefore no nondisclosure on the part of the insured Ms Post. There was as I have found no fraud on the part of anybody. In the circumstances therefore the third party does not have a defence to the claim by Ms Taylor.
On 29 September 2016 the Magistrate ordered that that there be judgment for the plaintiff Tayeh for damages of $38,000 and ordered that Allianz indemnify the defendant daughter for the plaintiff’s judgment and for the plaintiff’s costs on the principal claim. The plaintiff’s costs were ordered to be paid by Allianz on an indemnity basis. His Honour said that although Allianz had a meritorious defence on the agency and non-disclosure issue, the ‘fraud’ defence ‘was bad to the point of being an abuse’.[6] Allianz were also ordered to pay the defendant’s costs, but not on an indemnity basis.
[6]Transcript 29 June 2016, 283-6.
The basis of the appeal
The grounds of appeal are expressed as an attack on erroneous findings by the Magistrate, intended I think to mean an erroneous legal conclusion from the facts as found. But, Counsel for Tayeh submitted on the authority of Craig v South Australia [7] that the Magistrate’s determination about agency was a finding of fact and beyond appeal unless Allianz could show the finding was so perverse that it constituted an error of law. I think reliance on Craig was misplaced. That is a seminal case in the jurisprudence on judicial review for jurisdictional error. An agency is a legal relationship, having legal features and effects. The question whether an agency has been created by agreement, or by necessity, or by estoppel or otherwise does depend on specific facts, but the conclusion to be made by construing those facts is a legal one. Accordingly, there can be no objection to the competence of the appeal.
[7](1995) 184 CLR 163.
The Magistrates’ distinct basis for disallowing Allianz’ defence to the daughter’s claim for indemnity was that ‘In dealing with the insurance company she was acting in her own interest and for her own benefit.’ His Honour has reasoned that if the daughter was acting in her own interests then ipso facto that means she was not acting on behalf of, or to carry out the interests of her mother as the principal. That led to the conclusion there was no agency and therefore the daughter’s knowledge was not to be imputed to the insured, her mother. In turn, as the mother did not know her licence had been suspended, there was no breach of section 21, and Allianz was bound to indemnify.
The theoretical conception of agency in the common law is a fiduciary relationship between two people ‘… one of whom expressly or impliedly manifests assent that the other should act on her behalf so as to affect relations between third parties, and the other of whom similarly manifests assent to so act or acts pursuant to the manifestation’, so that the agent’s acts are treated as if they were performed by the principal.[8] The agent’s duty is to act in the principal’s interests, and to not acquire improperly for herself a benefit from a third party, at least not without the principal’s agreement or without accounting to the principal for any benefit obtained. The agency principles apply to domestic and other non‑commercial situations. There is no requirement that the agent pursue a commercial function at all and certainly none that the agent pursue a commercial function of a recognised type.[9]
[8]See Peter Watts and FMB Reynolds, Bowstead and Reynolds on Agency (Sweet & Maxwell, 21st ed, 2018)1–001. See also International Harvester v Carrigan’s Hazeldene’s Pastoral Co (1958) 100 CLR 644, 652.
[9]See Peter Watts and FMB Reynolds, Bowstead and Reynolds on Agency (Sweet & Maxwell, 21st ed, 2018) 1–010.
In the present context, there is no question of the daughter’s conflict of interest or accountability because under the contract of insurance between the mother and Allianz, the daughter was named as a nominated driver and beneficiary of cover. It is in that sense, and that sense only, that the daughter was acting ‘in her interests’ to renew the policy. But the issue here concerns the formation (renewal) of the contract of insurance and the duties of disclosure before formation and assumption of risk by an insurer. A contract had to come into existence for the daughter to benefit. The renewal was not done by the conduct of the mother. By design, it was done entirely by the conduct of the daughter under an arrangement where everything concerning the insurance was delegated to her.
The case for Allianz on this appeal accepts the Magistrate’s central and expectable finding that in dealing with the insurance company the daughter was acting in her own interest and for her own benefit to renew the insurance over the Jeep which really belonged to her. But it does not follow that the daughter was therefore not acting as agent. The contract of insurance being renewed by the daughter was between the insurer and the mother as named insured. The daughter’s interests could only be pursued and covered by the renewal of the insurance contract to which she was not a party, but under which she stood to benefit as a third party beneficiary. So, as Allianz contends, I think correctly, the fallacy intrinsic to the Magistrate’s legal conclusion lies in seizing on the fact that the daughter was acting in her own interests to say therefore there was no agency by legal definition. His Honour has bypassed the domineering legal position that her interests could only be met by the formation of a contract between Allianz and the mother as insured which in this case was done by the daughter taking responsibility for the renewal.
In reasoning as he did, the Magistrate did not concern himself with the facts and his own findings about the arrangement between mother and daughter for effecting and renewing the insurance. It was enough to dispel the agency by saying she was acting in her own interests. The reasons do not postulate the outcome if there was an agency, although it seems his Honour accepted that the daughter’s knowledge would be imputed if she was the agent. To be sure, Allianz’ case on appeal is that the evidence and the Magistrate’s findings about the arrangement between mother and daughter and how it was carried out lead irresistibly to the conclusion that there was an agency relationship. I agree. By the very arrangement, the mother had expressly assented to the daughter taking responsibility to carry out all that needed to be carried out to effect and renew the policy for the mother as the insured. The daughter had authority to act and in so acting was exercising a power to affect her mother’s legal relations with Allianz. On the facts as found, she not only undertook the entire responsibility for creating those legal relations, but her actions were effective to create those legal relations. I need not say that the daughter was by necessity the agent of her mother. I prefer to say that the mother had expressly consented to the daughter acting on her behalf to bring about the insurance policy under which the daughter would take a benefit. To my mind, it is a paradigm example of the instrumental role of an agent as acting so as to bring into existence binding relations between the insured and Allianz as third party. In the paradigm example, the agent then ‘drops out’. All that has happened here is that the agent, by express arrangement and under the policy, obtains a benefit of the contract. That helps understand how the daughters pursuit of her interests here does not therefore mean she could not be an agent. A false dichotomy, or a mutual exclusivity, was created by the Magistrate between being a beneficiary and an agent. On the facts and the findings the daughter was both.
On closer analysis, to adhere to the Magistrate’s reasoning logically brings about a situation that serves to expose the internal error. If the daughter was not an agent of the insured, then how has a contract of insurance ever come into existence between the insured and Allianz? Nothing at all was done by the mother to renew and therefore bring about a contract of insurance. She left it all to the daughter, found by his Honour not to be the agent. If the answer is that the daughter renewed it, by hypothesis not as agent, that can only mean logically that the daughter did so acting as principal. To say otherwise means there was no contract ever created. Or, perhaps this whole arrangement between mother and daughter should be seen in another inverted way: that the mother was lending her name and presenting herself only nominally to Allianz as the insured, which meant she was the agent for her daughter as the undisclosed principal. Either way, if the logical consequence of the Magistrate’s reasoning is that the daughter is to be taken to be acting as the principal, then she is to be taken as being a co‑insured. That necessarily carries with it the consequence that more than one person was insured under the policy, in which case the duty to disclose imposed by s 21(1) would extend to each of mother and daughter, and each is under a joint obligation to disclose to the insurer because the reference in s 21 to ‘an insured’ is a reference to each and every insured: see Advance (NSW) Insurance Agencies Pty Ltd v Matthews.[10]: In that situation, whether as co-insured or undisclosed principal the upshot would be the daughter has breached her duty of disclosure.
[10]166 CLR 606.
For the daughter, the argument on appeal was first, that the daughter’s knowledge of her mother’s suspended driving licence was irrelevant. It was irrelevant because the driver was not the insured and therefore had no duty of disclosure under s 21, and, there was no duty of disclosure on her as a beneficiary under s 48. Secondly, the daughter’s conduct was referable only to her s 48 interests which are independent and discrete and not the same rights as an insured holds. The second step was an emphatic re-assertion of the contention that by paying for the insurance and facilitating the contract between the insured and the insurer she was doing no more than protecting those interests as a third party beneficiary, and therefore it was not erroneous to conclude there was no agency. That argument was an emphatic reassertion of the Magistrate’s reasoning. It was also said that the arrangement here lacked the usual features of a commercial agency where the agent has a duty to report to the principal. The case was: she was acting for no one but herself because the car was hers; she was the one maintaining the insurance, maintaining the vehicle, paying registration, and driving the car.
I am afraid to say these arguments do not grapple with the issue. It may be assumed the daughter was acting in her own interests. And it is a given that she has a right to claim under the policy as a beneficiary. Despite all that, the issue is whether there was a formation of the contract of insurance by means of her agency. For completeness, it is just as well I consider the interrelationship, between s 21 and 48 and consider the authorities concerning whether knowledge of the insured under s 21 includes knowledge of an insured’s agent.
Before the contract is formed and before it may be later renewed, the insured has a duty of disclosure to the insurer under s 21 of the Act. The relevant parts of that section state:
(1)Subject to this Act, an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured, being a matter that:
(a)the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or
(b)a reasonable person in the circumstances could be expected to know to be a matter so relevant, having regard to factors including, but not limited to:
(i)the nature and extent of the insurance cover to be provided under the relevant contract of insurance; and
(ii)the class of persons who would ordinarily be expected to apply for insurance cover of that kind.
(2)The duty of disclosure does not require the disclosure of a matter:
(a)that diminishes the risk;
(b)that is of common knowledge;
(c)that the insurer knows or in the ordinary course of the insurer’s business as an insurer ought to know; or
(d)as to which compliance with the duty of disclosure is waived by the insurer.
…
More than one person can be insured as a party to the contract of insurance; that is there can be co-insurance or joint insurance, for example where the insured asset is jointly owned. That was not the case here. Only the mother was the insured. But a person, such as the daughter in this case, who is a non- party to the contract of insurance as an insured may be named as having the benefit of cover under the policy in which case a right to claim on the policy is given under s 48 of the Act. At the date relevant to this case, that section provided[11]:
[11]Section 48 was amended by the Insurance Contracts Act 2013 which came into effect on 28 June 2014.
48. (1)Where a person who is not a party to a contract of general insurance is specified or referred to in the contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends, that person has a right to recover the amount of his loss from the insurer in accordance with the contract notwithstanding that he is not a party to the contract.
(2)Subject to the contract, a person who has such a right –
(a)has, in relation to his claim, the same obligations to the insurer as he would have if he were the insured; and
(b)may discharge the insured’s obligations in relation to the loss.
(3)The insurer has the same defences to an action under this section as he would have in an action by the insured.
…
The legal operation of s 48 was stated by the High Court in Zurich Australia v Metals & Minerals Insurance Pte Ltd[12] in this way:
Section 48 confers a statutory right of recovery upon a non-party referred to or specified in a general contract of insurance as a person insured or to whom cover extends. It does so directly. Its enactment predated the extension, by the decision of this court in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [citation omitted] of common law rights of recovery for non-party insured persons under an insurance policy. Section 48 does not deem such a person to be a party to the insurance contract thus attracting the rights conferred on a party. It does not purport to confer contractual or equitable rights upon such a person. There is therefore no basis in s 48 for assimilating the position of a non‑party insured to that of a person who has ‘entered into’ a contract of insurance. …
[12](2009) 240 CLR 391, 403.
The interrelationship between sections 21 and 48 was considered by the New South Wales Court of Appeal in CE Heath Casualty & General Insurance Limited v Grey,[13] which decided that the Act does not impose any pre‑contractual duty of disclosure on a person covered by a contract but not a party to it, and an insurer could not rely upon such a person’s failure to disclose as a defence under s 48(3). In the judgment of Clarke JA (with whom Meagher JA agreed) his Honour stated:[14]
The first observation which should be made is that the Act in using the words ‘insurer’ and ‘insured’ is talking about the parties to the contract of insurance or the persons proposing to enter into the contract. There is, in my opinion, a clear dichotomy drawn in the act between a party and a person who is not a party but who is entitled to benefit under the policy. Accordingly where s 21 speaks of the duty of an insured to disclose the matters set out in s 21(1) it is talking about the party who proposes to enter into a contract of insurance in the context of those provisions in the Act which spell out the consequences of a failure by a person who has entered into the contract to comply with that duty. A similar approach is taken in those sections which deal with misrepresentation.
The remedies offered to an insurer where an insured fails to comply with the duty of disclosure, or makes a misrepresentation before entering into the contract, are contained in s 28. …
What is clear from these provisions is that the obligation to disclose, and not to make misrepresentations, is cast upon a person intending to enter into a contract of insurance and the consequences of non‑compliance are visited only upon persons who actually enter into such a contract. What is of greater importance is the fact that there is no obligation to disclose, or not misrepresent, before a contract is entered into, imposed upon a person entitled to recover the amount of a loss pursuant to s 48(1). Nothing in s 28 provides that anything he or she does, or fails to do, before the contract is concluded in any way disentitles him or her from successfully maintaining a claim.
[13](1993) 32 NSWLR 25.
[14]45F – 46D.
On that basis, the Court in the CE Heath case held that when s 48(3) states that ‘The insurer has the same defences to an action under this section as he would have in an action by the insured’, the position of the insured cannot be equated with the third party beneficiary because the obligation to disclose was never imposed by s 21 on the third party beneficiary. It might be a different situation in the case of acts or omissions after the policy of insurance had been entered into. In that situation, without going into details as they are not relevant for present purposes, there are statutory provisions which give the insurer the right to refuse to pay a claim by reason of some act of the insured ‘or of some other person’. What s 21 is concerned with is the formation of the contract of insurance and the assumption of risk by the insurer after proper disclosures.
The Full Court of the Federal Court in ABN Amro Bank NV v Bathurst Regional Council,[15] adopted what was said by Clarke JA in the CE Heath case and held that the expression ‘in relation to the person’s claim’ in s 48(2)(a) were not referable to the pre‑contractual obligations of the insured under s 21 of the Act. [16] That is, it is only the insured that has the duty under s 21 and the obligations referred to in s 48(2) concerned obligations after the contract was made and arising out of the making of the claim.
[15][2014] 224 FCR 1.
[16]That phraseology is slightly different to ‘in relation to his claim’ as appeared in the section at the relevant time, but not different in any effect.
On the authorities then, the submission made emphatically on behalf of the daughter that she, as a third party beneficiary under s 48, did not have a duty of disclosure under s 21 can be accepted. But it goes nowhere. The daughter was the mother’s agent. The pertinent question then becomes whether under s 21 a matter that is ‘known to the insured’ includes a matter that is known to the insured’s agent. The situation is very peculiar because the matter in question, the suspension, is personal to the mother and but for the strange facts, is something she would be told directly or find out for herself.
This Court does not have the benefit of a determination of the question of imputation under s 21, although his Honour seems to have assumed that the knowledge could be imputed. This case does not call for an exegesis of the common law’s basic presumption that the knowledge of (or notice to) an agent is imputed to the principal. In Dal Pont, Law of Agency[17] the learned author says:
The main justification for the presumption equates to that which informs the doctrine of ostensible authority [footnote omitted] namely to protect third parties who bona fide deal with an agent. Thus an innocent third party may presume an agent will fulfil his or her duty and report all facts that affect the principal’s interests. It may also be justified as an incentive ‘for principals to design and implement effective systems through which agents handle and report information’, and to reduce ‘incentives to deal through agents as a way to avoid the legal consequences of facts that a principal might prefer not to know’.
[17]G E Dal Pont, Law of Agency, (LexisNexis Butterworths, 3rd ed, 2014) 22.49.
But we are concerned with words of a statute. The duty to disclose under s 21(1)(a) of the Act of ‘every matter that is known to the insured’ is qualified by the expression ‘being a matter that the insured knows … ‘ In the case of corporations, which can only act through its employees and agents, questions of attribution and aggregation of knowledge arise so as to ensure that a corporation cannot deny knowledge. In such cases questions can also arise whether the knowledge is known by the person forming part of the directing mind and will of the corporation and whether or not that person was under any duty to communicate the information to those persons forming part of the directing mind and will of the corporation.
The question whether knowledge has to be personal to an insured arose in Lindsay v CIC Insurance Ltd.[18] It was a claim for indemnity for damage done by fire to a building which as far as the insurer was concerned, consisted of shops on the ground floor and offices on the first floor. The day to day management of the premises was put in the hands of a managing agent who, the Court found, knew that in fact the premises were used as a brothel. The owners as insured accepted that the managing agent truly was their agent but contended that the facts known to the agent were not ‘known’ to the owners within the meaning of s 21. Rogers CJ Comm D held on a purposive interpretation of s 21 that the matter required to be disclosed is what is ‘known’ either to the proponent personally or to a relevant agent of the insured.[19] His Honour said:
In accordance with the now accepted principles of statutory interpretation, the act is to be given a purposive interpretation. In my view, the matter required to be disclosed is what is “known” either to the proponent personally, or to a relevant agent of the proponent.
Let it be assumed that all matters of insurance are delegated by the proponent to an employee. The proponent is not involved in any way with effecting the insurance. The employee knows facts calling for disclosure. The proponent does not. Surely it cannot be accepted that the proponent is relieved from disclosing, through the employee, highly relevant matters concerning the risk and known to the employee. To hold otherwise would defeat the whole principle to which the edifice of full disclosure is structured. I am satisfied that the section [s 21] cannot be confined to the actual knowledge of the proponent alone. Nor, in my opinion, is the knowledge confined to that of the agent charged with effecting insurance.
[18](1989) 16 NSWLR 673.
[19]Ibid 681B.
The delegation in Lindsay of all matters of insurance is precisely what occurred in this case, albeit in a domestic context. The question arose in a domestic arrangement in the New South Wales Court of Appeal in 1996 in Macquarie Bank Limited v National Mutual Life Associate Australia Limited.[20] In that case a proposal for life insurance was submitted by a wife over the life of her husband, with whom she was in partnership in a firm of solicitors. The wife’s insurance was found to have been effected through the agency of her husband, who the trial Judge found was obliged as agent to make disclosure that he had been guilty of defalcations. At first instance, a trial court held that the wife was subject to a duty to disclose to the insurer that her husband had been guilty of significant defalcations in the course of his practice as a solicitor, which was relevant to the proposal. Although that was not known to her, it was known to her husband who was her agent for the purpose of effecting the insurance and who had failed to disclose it.
[20](1996) 40 NSWLR 543, 611.
On appeal in that case, one of the issues concerned squarely the meaning of ‘matter that is known to the insured’ in s 21 of the Act. The submission was that the expression means just that; that is, knowledge of the insured and there was no basis for importing notions of imputed or constructive knowledge. The Act was said to be a statutory code which replaced the common law.
Powell JA, with whom Priestley and Meagher JJA agreed, accepted that the intention of the Act was to replace the antecedent common law regulating matters such as non‑disclosure and misrepresentations before entry into the contract, and accordingly there was limited scope to have legitimate resort to the antecedent content of the common law for the purpose of interpreting the statute. However, his Honour rejected the submission that the statute could only be construed to mean the knowledge of the insured personally, and only personally. It included agents. His Honour stated:
It would be sufficient, in my view, to point to the fact that, if the submission be correct, the provisions of s 21 of the Act would apply only to natural persons seeking to obtain insurance who were under no legal incapacity, and would not apply to natural persons whose affairs being managed by an attorney under power, or to natural persons whose affairs were, by reason of their incapacity, were being managed by an attorney appointed under an enduring power of attorney or by a manager appointed pursuant to the provisions of the Protected Estates Act 1983, or by a company or other like body which can act only by an agent or agents. However, if more be thought necessary, one can point to the fact that s 24 of the Act, by referring to ‘a statement made by or attributable to the insured’, clearly envisages statements made by others on behalf of, and thus as agents for, an insured. I should add that, in Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Australia) Ltd, Brooking J (as he then was) held that, when a director of the plaintiff company, who signed a proposal for insurance on behalf of that company, failed to disclose that he had been convicted of being knowingly concerned in the importation into Australia of prohibited imports and with possession of prohibited imports, the plaintiff company failed to comply with the duty of disclosure, which failure he held, in the circumstances, to have been fraudulent.
Another issue in Macquarie Bank v National Mutual concerned whether what existed in that case was an agency. The argument was that imputation of knowledge does not extend to all knowledge in the possession of the agent but only knowledge that the agent required in the course of agency while preparing to effect the particular insurance. In a statement apposite to the facts of this case to fortify the conclusion that on the findings the daughter was the agent, His Honour said -
…it also being clear that Mrs Kandy left it to Mr Kandy to do whatever was necessary in order that such a policy might be obtained, it seems to me to be inescapable, both, that Mr Kandy must be regarded as Mrs Kandy’s agent for the purpose of obtaining the insurance, and, that whatever knowledge Mr Kandy had as to a relevant matter was to be regarded as the knowledge of, and the subject to the duty by disclosure, by Mrs Kandy, or by Mr Kandy as her agent.[21]
[21]Ibid 611E-F.
The question of the imputation of knowledge under s 21 arose in 2003 in the High Court in Permanent Trustee v FAI General Insurance.[22] It is noticeable that the case involved an ‘insurance intermediary’, defined under the Act to mean a person who for reward arranges contracts of insurance as an agent for an insurer or an intending insured. The majority (McHugh, Kirby and Callinan JJ) did not consider it necessary to decide the imputation point but in obiter dicta suggested (with my underlining):
The first matter to notice about s 21(1)(a) is that ‘every matter that is known to the insured’ is qualified by the expression ‘being a matter that the insured knows … ‘. The word ‘knows’ is a strong word. It means considerably more than ‘believes’ or ‘suspects’ or even ‘strongly suspects’. And the matter, to answer the description that par (a) of the sub-section states, must be a matter that is not only ‘relevant to the decision of the insurer whether to accept the risk, and if so, on what terms’, but also one that the insured knows to be such a matter. The alternative for which par (b) of the sub-section provides, is also important: if the insured does not ‘know’, the question becomes, whether a ‘reasonable person in the circumstances’ would ‘know [the matter] to be a matter so relevant’. It is also noteworthy, particularly if it should become necessary to deal with the other grounds of appeal, that the knowledge of which the sub-section speaks, either actual or constructive, is the knowledge of the insured, and not of any insurance intermediary, a term defined by the Act and clearly embracing an agent of the kind that Sedgwick was. This is at least to suggest that the reference to the insured is intended to be a reference to the insured personally and not to its agent or broker. However, it is not essential to our reasons to determine this point.
[22](2003) 214 CLR 514.
The minority, Gummow and Hayne JJ took a different view which was not expressed to be obiter dicta and made supportive reference to Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd. Their Honours said in a passage which ought be fully reproduced [omitting citations] as it also considers some of the arguments made on behalf of the daughter in this case about the agent’s duty to report to a principal and the consistency of the section with the operation of the common law:
The Permanent companies had delegated to Sedgwick Australia the task of securing an extension of the professional indemnity insurance. The trial judge found that the Permanent companies had wholly delegated to Sedgwick Australia the performance of their duty of disclosure in relation to that extension. The Court of Appeal made the same finding. There is no reason to disturb those findings.
That being so, it follows that the knowledge of Sedgwick Australia, whether gathered in the course of acting as agent for the Permanent companies or otherwise, was to be imputed to the Permanent companies. Indeed, the Permanent companies appear to have accepted as much in the Court of Appeal.
In this Court, the Permanent companies submitted that earlier decisions of trial or intermediate courts, to which the Court of Appeal had referred in this connection, did not establish, as a general proposition, that the knowledge of an agent (however acquired) will be imputed to an insured who has delegated to that agent performance of the insured’s duty of disclosure. Rather, so it was submitted, they are properly understood as cases which depended upon the operation of s 21(1)(b) in circumstances where the agent was duty bound to inform the insured of the matter in question. The Permanent companies submitted that, in the present case, where the immediate question concerned knowledge of the relevance of a matter to the insurer’s decision, disclosure by Sedgwick Australia to the Permanent companies of its view of the relevance of the matter would have meant only that the Permanent companies had conflicting views of relevance – their own and Sedgwick’s. It was therefore not established (so the argument proceeded) that the Permanent companies knew or ought to have known that their conditional decision was relevant to FAI’s decision.
The analysis of the matter thus advanced by the Permanent companies puts the finding about delegation of the task of disclosure on one side. It seeks to analyse the matter on the assumption that it was for the Permanent companies to decide what would be disclosed when, on the facts that were found, this was a task they had given to Sedgwick Australia. When the fact of delegation is taken into account, the conclusion that Sedgwick Australia was bound to disclose what it knew (however it acquired the knowledge) is inevitable.
As Powell JA pointed out in Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd, s 21 cannot be confined in its operation to natural persons under no legal incapacity. It must have operation in relation to persons (including corporations) who can act and who can ‘know’ only through agents. That this is the intended operation of the Act may find some support in the reference in s 24 to statements that are made by ‘or attributable to’ the insured. The knowledge of relevant employees and agents may, therefore, be taken into account.
Where the task assigned to the agent includes the task of making appropriate disclosures, it is not to the point to inquire whether the agent is obliged to communicate the knowledge it has of the relevant matter to its principal. It is, therefore, neither necessary nor appropriate to distinguish in such a case between information which the agent has acquired in the course of executing the agency and information acquired otherwise. As Handley JA rightly said:
“Where the agent acts within his authority with the knowledge in question present in his mind, the principal should be bound by that knowledge, however acquired. I see no basis for ignoring any part of the agent’s knowledge, present to his mind, when he is doing the authorised act. The source of the knowledge seems irrelevant. What must matter is the agent’s state of mind when doing the authorised act.”
The conclusion that, in the present case, the knowledge of Sedgwick Australia, however acquired, was the knowledge of the Permanent companies, is not inconsistent with the position that obtained, before the Act, where a person was appointed, as an agent to insure, to effect insurance on another’s behalf. The conclusion about the Act’s operation does not depend, however, upon deciding that this was the previous law or upon adopting it. Rather, the conclusion is rooted in the words of the Act and, in particular, a proper understanding of what is meant by ’the insured knows’. A corporate insured can know something only through an agent. In the context of a section governing the duty of disclosure, the knowledge of an agent to effect the insurance is the knowledge of the insured.
There are writers in the field who regard that as the preferable view.[23] Gyles J in Tosich v Tasman Investment Management Ltd[24] said that pending further clarification by the High Court, the view to which I have referred in Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd [25] ought be followed. Thus I take the law to be that under s 21 the knowledge of an agent to effect the insurance is the knowledge of the insured.
[23]See Kelly and Ball, Principles of Insurance Law (LexisNexis Loose Leaf Service) Vol 1, [2.0130.2]
[24][2008] FCA 377, [93](6).
[25](1996) 40 NSWLR 543, 610-11.
Conclusion
There will be misfortune for Danielle Taylor to be refused indemnity. Tayeh’s judgment against her is for a substantial amount of money. Apart from the suggestion that the collision was staged, there was no suggestion that she was dishonest in not disclosing the suspension of her mother’s licence. But she knew it and did not disclose it, knowing that it had to be disclosed. Allianz may be a loss bearing entity, but it would not have renewed the policy had there been a disclosure, and it has the protection of the Act. The misfortune here is attributable the result of the peculiar facts concerning the arrangement, and the domestic handling of the matter.
Orders on appeal
I propose making the following orders:
1. The appeal be allowed.
2. The orders of the Magistrates’ Court of Victoria made on 29 September 2016 in Case No. E14134844 be set aside, and replaced with the following orders:
(a) The plaintiff’s claim against the defendant be allowed for damages of $38,000 together with interest.
(b) The defendant shall pay the plaintiff’s costs of the proceeding.
(c) The defendant’s claim against the third party is dismissed.
(d) The defendant shall pay the third party’s costs of the proceeding.
4. The first respondent shall pay the appellant’s costs of the appeal.
5. The Court grants the first respondent under s 4(1) of the Appeal Costs Act 1998 an indemnity certificate in respect of the costs of the appeal .
Two ancillary matters need to be considered by the parties. First there is the question of Tayeh’s costs on the appeal, and any liability Tayeh may have for Allianz’ costs on the appeal. Secondly, in the result, the proposed orders have the effect of removing the order requiring Allianz to pay the plaintiff’s costs on an indemnity basis, it seems to me the indemnity costs order would collaterally fall as any order for costs against Allianz as third party in favour of the plaintiff Tayeh was predicated upon the daughter’s claim on the policy being allowed by the Magistrate. But by this appeal, the daughter’s claim has been disallowed. There may be a question whether Allianz’ failed defence on the ‘staged accident’ is still somehow a factor on the costs orders.
Unless there is agreement on the proposed orders as stated, I would invite the parties to make written submissions on costs not exceeding three pages, to be filed with my Associate by 2 March 2018.
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