American Home Assurance Company v Saunders - [1988] HCATrans 22

IN THE HIGH COURT OF AUSTRALIA
Office of the Registry

Sydney No Sl25 of 1987
B e t w e e n -

AMERICAN HOME ASSURANCE COMPANY

Applicant

and
JAMES GEORGE SAUNDERS

Respondent

Application for special leave

to appeal

MASON.CJ
DEANE J
TOOHEY J

American
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON FRIDAY, 19 FEBRUARY 1988, AT 11.50 AM
Copyright in the High Court of Australia

SlTl0/1/PLC 1 19/2/88

MR T.E.F. HUGHES, QC: May it please the Court, in this matter
I appear with my learned friend, MISS C.F.T. WEIGALL,
for the applicant, the defendant below. (instructed
by B.J.R. Fudge)

MR A.J. LESLIE, QC: If the Court pleases, I appear with my
learned friend, MR D. LETCHER, for the respondent.
(instructed by Turner Freeman)

MASON CJ: Mr Hughes.

MR HUGHES: Your Honours, in an attempt to shorten the time
that the hearing of this application may take, I have
given to my friend, and if I may, I will hand up to Your Honours, an outline of what we want to say or,
perhaps rather more than an outline, but I hope that
will be helpful.

MASON CJ: Yes, I am sure it will be, Mr Hughes.

MR HUGHES: Your Honours, the matter raises questions of law
concerning the interpretation of a corrnnon form accident insurance policy or personal injuries insurance policy and it raises those question in
specific relation to the applicability of the policy
to diseases of gradual onset, in this case a
malignant disease known as mesothelioma which has
as its originating but not its only cause by any
means the inhalation of blue asbestos fibres into
the lungs.

MASON CJ: It is a form of asbestosis, is it?

MR HUGHES: Yes, Your Honour, yes. The first question is
whether the event identified by the plaintiff as a
compensable injury fell within the definition of
"injury" which we set out at a subsequent page of
this outline. The second question is whether, if so,
the plaintiff was disentitled to compensation by
reason of the operation of excusion clause, the
exclusion being number 5.

Now, we set out in paragraph 2 of this document

why we say the decision has significance beyond the
confines of the individual case; why it is to be
regarded perhaps as a test case on the applicability
of this form of policy to diseases of gradual onset.
If I may say so, I have with perhaps uncharacteristic
understatement not quite accurately specified the
number of persons who are covered by this form of

policy. Under this form of policy there are, so it
is estimated, 120,000 people covered; under another
form of policy with substantially identical wording,
in excess of 5000 and there are at least two other
underwriters,QBE and a company called Cigna, which
issued policies which contain substantially identical
wording.

SlTl0/2/PLC 2 19/2/88
American

MASON CJ: But how many of all these people could conceivably
be suffering from this form of asbestosis?

MR HUGHES: Well, that is a question that I cannot…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading American Home Assurance Company v Saunders

Details

AGLC: American Home Assurance Company v Saunders [1988] HCATrans 22
Case: [1988] HCATrans 22
Decision Date

CaseChat Overview and Summary

This matter came before the High Court of Australia concerning an application for special leave to appeal. The applicant, American Home Assurance Company, was the defendant in the proceedings below, and the respondent was James George Saunders. The dispute centred on the interpretation of a common form accident insurance policy, specifically its applicability to diseases of gradual onset.

The legal issues before the court were twofold. Firstly, whether the plaintiff's condition, a malignant disease known as mesothelioma caused by the inhalation of asbestos fibres, constituted an "injury" as defined within the insurance policy. Secondly, if the condition was deemed an injury, whether the plaintiff was disentitled to compensation due to the operation of exclusion clause number 5 of the policy. The applicant argued that the case was significant as a potential test case for the application of such policies to diseases of gradual onset, with potential ramifications for a large number of policyholders.

The applicant's counsel, Mr. Hughes QC, outlined that the case did not involve general principles of contract law or interpretation, but rather the specific wording of a common form policy. He referred to the case of *Australian Casualty Co Ltd v Federico*, where the then Chief Justice Sir Harry Gibbs noted that while numerous cases had considered the meaning of "accident" in similar policy wordings, none of those decisions were binding on the High Court, and none specifically dealt with the application of such policies to diseases of gradual onset. The court was therefore required to determine the interpretation of the policy in light of the specific facts presented.

Orders