Barrie Toepfer Earthmoving and Land Management Pty Ltd v CGU Insurance Ltd

Barrie Toepfer Earthmoving and Land Management Pty Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the primary judge who had found that CGU Insurance Ltd (the insurer) was entitled to refuse indemnity under a commercial motor vehicle policy. The dispute arose from damage caused to the Hexham Bridge when an excavator being carried on a vehicle operated by the appellant's employee exceeded the bridge's low clearance height and struck its spans.

The Court was required to determine whether the insurer could rely on policy exclusions relating to damage caused by recklessness and breach of a condition requiring the taking of reasonable care. Specifically, the Court considered the onus of proof in relation to compliance with the condition, whether the employee's conduct constituted a failure to take reasonable precautions given a recognised risk, and whether the primary judge erred in finding the insurer entitled to refuse indemnity due to the employee's recklessness. A further issue was whether an obligation within the policy to comply with statutory obligations was absolute.

The Court of Appeal allowed the appeal, setting aside the primary judge's order. Their Honours reasoned that the insurer had not discharged the onus of proving that the employee's conduct was reckless or that he failed to take reasonable precautions. The Court found that the insurer had not established that the employee recognised the risk of striking the bridge and, in those circumstances, failed to take reasonable precautions. The insurer's reliance on the exclusion clauses was therefore unsuccessful.

Consequently, the Court entered judgment for the appellant against the insurer and other respondents on the amended cross-claim, ordering the respondents to pay the appellant's costs of the appeal.