Brunskill v Sovereign Marine & General Insurance Co Ltd

[1985] HCA 61

HIGH COURT OF AUSTRALIA

Gibbs C.J., Wilson, Brennan, Deane and Dawson JJ.

HERBERT BRUNSKILL AND ANOTHER v. SOVEREIGN MARINE AND GENERAL INSURANCE COMPANY LIMITED AND OTHERS

25 September 1985

Decision

GIBBS C.J., WILSON, BRENNAN, DEANE, DAWSON JJ.: The appellants, who carried on the business of hauliers and were the owners of a motor truck No. ISO-533, claim that the respondents, three insurance companies, are liable to indemnify them against the loss which they suffered when the truck was extensively damaged in a collision on 11 March 1981. The respondents had, through their agent Tresidder &Co. Pty Limited ("Tresidder"), issued a policy of motor vehicle insurance by which they agreed to indemnify the appellants against loss of or damage to the truck sustained between 7 October 1980 and 7 October 1981, but the policy, when issued, contained an endorsement (endorsement No. 101) which declared that the policy would be inoperative when the insured vehicle "is engaged on a journey to or from any place outside a radius of 400 kilometres from the insured's present address as shown on the proposal form". It is now common ground that the truck was engaged on such a journey when the collision occurred. The question for decision in the case is whether endorsement No. 101 remained part of the policy at the date of the collision.

2. The policy was issued in the following circumstances. The appellants approached a Mr Wardrop, whose company carried on the business of an insurance broker, and asked him to arrange the insurance of the truck. Mr Wardrop then spoke to a Mr Harrison, an employee of Tresidder, and arranged for a policy to be issued. It is clear that the policy which Mr Wardrop sought was "a short haul policy", that is, a policy which did not cover loss occasioned when the vehicle was used outside a radius of 400 kilometres from its home base. The policy, when issued, was sent to the first appellant who discovered that it contained endorsement No. 101 and realized that the endorsement was inappropriate because the truck was sometimes used on journeys between its home base, Lockhart, a town in New South Wales, and Adelaide or Brisbane and because those cities are places beyond the radius of 400 kilometres from Lockhart. The first appellant, Mr Brunskill, then saw Mr Wardrop and instructed him to have the endorsement deleted. At the same time he instructed Mr Wardrop to secure insurance cover in respect of a new truck which the appellants were in the course of purchasing. Mr Wardrop gave evidence that in December 1980 he telephoned Tresidder and spoke to a Mr Manicom and transmitted both instructions to him. His version of the conversation with Mr Manicom was as follows:

"During my conversation with John Manikin (sic), I said 'My client wants the endorsement deleted from the policy'. John Manikin said to me 'Yes. O.K. There will be an extra premium payable'. I said to John Manikin 'O.K. Let me know what it is. Send me the endorsement'. During my conversation with John Manikin, I gave him the particulars of the new truck and asked him the premium for insurance cover over that truck. John Manikin gave me the premium for the insurance over the new truck and the cover note number."

There is no doubt that Mr Manicom was asked to arrange the insurance on the new truck and did so. The policy issued in respect of that insurance did not contain the terms of endorsement No. 101 - they were struck out from the printed form.

3. For his part, Mr Manicom denied that he had been asked to delete the endorsement from the original policy. He said, in an affidavit read at the trial, that he had no recollection that Mr Wardrop, or anyone else, telephoned him in December 1980, or on any other occasion, and requested that endorsement No. 101 be removed from the policy. In his oral evidence he said that when he swore the affidavit he had had no access to Tresidder's files and that he could now say that he had never received the request. However, in answer to a question put by the learned trial judge, he agreed that he could now say that no request was made because he could not find a note to that effect in Tresidder's files. In fact, the files contain no note of a conversation relating either to the deletion of the endorsement or the cover of the new vehicle. Mr Manicom was then asked, "It is equally possible, is it, that it was on the note that you threw away?" and he replied, "It could have been if that was the case".

4. The issue in this appeal, which is purely one of fact, is whether Tresidder, through its agent Mr Manicom, agreed to vary the insurance by deleting the endorsement. The determination of this issue depends on whether the relevant evidence of Mr Wardrop should be accepted. It is common ground that if Mr Wardrop's account be accepted the necessary variation of the contract was effected. The appellants instituted proceedings in the Supreme Court of New South Wales. The matter was heard at first instance by Rogers J., who accepted the evidence of Mr Wardrop. On appeal, it was held by a majority of the Court of Appeal (Hutley and Samuels JJ.A., Mahoney J.A. dissenting) that on the evidence it should be concluded that no agreement to delete the endorsement had been reached between Messrs Wardrop and Manicom. The appeal was accordingly allowed. The appellants now bring an appeal to this Court as of right.

5. Counsel for the respondents, in submitting that the majority of the Court of Appeal were correct in their conclusion, placed heavy reliance on the evidence of events which occurred after December 1980. Mr Wardrop said that a few days after his first conversation with Mr Manicom he received a telephone call from the manager of the appellants' bank who asked whether the endorsement had been deleted. He said that he then telephoned Mr Manicom who, in answer to an inquiry whether the endorsement had been deleted, replied, "It's being attended to" and who agreed to deliver "the endorsement to the first policy (sic) and the second policy" to the head office of the bank. Mr Wardrop agreed that he did not follow the matter up, although at the time he used to speak to Mr Manicom two or three times a day.

6. On 12 March 1981, the day after the collision, Mr Brunskill saw Mr Manicom and completed a claim form. Mr Manicom said in evidence that all seemed well with the claim. According to the evidence of Mr Brunskill, Mr Manicom then told him that the claim would be met within a few days. Some time later, Mr Wardrop had a conversation with Mr Tresidder and told him that the appellants had been operating within the 400 kilometre radius. He said in evidence that he believed from his study of an N.R.M.A. map that this was so. In cross-examination he was asked to explain why he mentioned the radius when that was irrelevant if the policy was a long haul policy. The learned trial judge said to him, "What Mr Coombes is saying to you, at the time when the claim was made, the question of radius was quite irrelevant. Why then did you put that statement in your telex?" Mr Wardrop replied, "Well, because Mr, or one of the chaps from the office there, told me that the thing had never been changed, and that they had to submit it to London on that basis". The judge further asked, "Who said that to you?" Mr Wardrop replied, "Oh, that I am not too sure of, but it was some chap from Tresidder". He went on to say that he was told that Tresidder would have to submit the claim to London on the basis that it was a short haul policy and that all he was trying to do was to get the claim finalized. Mr Wardrop also said in evidence that in the course of a conversation with either Mr Manicom or Mr Inwood, another employee of Tresidder, he was told that the claim must be refused because the vehicle had been travelling more than 400 kilometres from Lockhart, and that he replied that the endorsement had been deleted. That conversation could not have been with Mr Manicom, who left his employment with Tresidder in March 1981. Mr Inwood, in his evidence, at first denied the conversation but later said that he had no recollection of it.

7. Mr Wardrop appears to have conceded that he suggested to Mr Inwood that he should delete the endorsement and backdate the premium. He also agreed that he urged Mr Tresidder to persuade the insurers to meet the claim on an ex gratia basis and that he did not mention to Mr Tresidder that the endorsement had been deleted.

8. Further, reference should be made to a letter dated 9 April 1981, written by Mr Wardrop to Mr Brunskill in circumstances that are not quite clear. The letter contains in its heading a reference to the policy, and continued:

"We refer to our recent conversation in regard to the above.

We spoke to Mr John Manikin of Tresidder &Co., to

have the above policy extended for long haul use.

We trust this information is sufficient."

9. The learned trial judge dealt with the evidence of the events that occurred after the collision in a passage which both parties regarded as critical. He said:

"Mr Coombes of Queen's Counsel for the first

defendant has forcibly drawn attention to the conduct of Mr Wardrop after the occurrence of the loss which he submitted was totally inconsistent with the stand which would be expected to be taken by a man who had made an arrangement for the deletion of the endorsement.

I think there are a number of answers to that.

I have seen Mr Wardrop in the witness box and he struck me as a person who was neither forceful nor yet self-evidently competent in the business which he followed. Without wishing to be offensive or hurtful, the force of this comment is demonstrated by the fact that having been engaged as a managing director of an insurance broking outfit, he is now working as a labourer. I am sorry to belabour the point but I do have to say that his conduct is explicable by the fact that he appears on this performance in the witness box to be more appropriately placed in the occupation he now follows. I accept him when he says that he did remonstrate on the very first occasion with an officer of Tresidder and Co Pty Limited, that there had been an arrangement for the deletion of the endorsement, and that, thereafter, he tried to negotiate a way of meeting his client's claim without involving himself in a head-on collision in a dispute about that with officers of Tresidder and Co Pty Limited."

The learned trial judge went on to conclude that Mr Wardrop did transmit to Mr Manicom the instructions which he had received from Mr Brunskill and that a note of those instructions was misplaced or thrown away, and that the instructions remained unexecuted by Mr Manicom through an oversight.

10. The authorities have made clear the distinction which exists between an appeal on a question of fact which depends upon a view taken of conflicting testimony, and an appeal which depends on inferences from uncontroverted facts. In the former case, to use the well-known words of Lord Sumner in S.S. Hontestroom v. S.S. Sagaporack (1927) AC 37, at p 47, which was cited in Paterson v. Paterson (1953) 89 CLR 212, at p 222:

"... not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case."

See also Warren v. Coombes (1979) 142 CLR 531, at pp 537 and following.

11. Although Rogers J. did not expressly say that his decision was based on the view which he had formed of Mr Wardrop's credibility, it sufficiently appears from the passage from his judgment which has been cited that the conclusion which he reached was so based. Samuels J.A. said that the assessment made by the learned trial judge of Mr Wardrop, as being neither forceful nor self-evidently competent, was merely advanced as an explanation why, after the event, Mr Wardrop failed to act consistently with the agreement to which he had deposed. It was no doubt correct to say that this explanation is not capable of supporting Mr Wardrop's credibility but it does seem to have been advanced as a reason why the judge accepted Mr Wardrop as a witness worthy of belief, notwithstanding the events that had occurred after the date of the collision. Rogers J. could have been satisfied that the arrangement to which Mr Wardrop had deposed was made only if his Honour had believed Mr Wardrop.

12. The question that then arises is whether the decision of the learned trial judge can be seen to be clearly wrong on grounds which do not depend merely on credibility; for example, on the ground that the evidence which was accepted was inconsistent with established facts or was glaringly improbable. The evidence given by Mr Wardrop, which the learned trial judge accepted, cannot be said to be inconsistent with facts incontrovertibly established by the evidence or to be glaringly improbable. Mr Wardrop's conduct can be explained as Rogers J. explained it. It was not quite right to say, as Samuels J.A. said, that there were two antagonists in the evidentiary contest, since Mr Manicom's inability to recollect the conversation can be explained by the fact that no record of it appeared in the files, but if there had been a contest it could have been resolved by a decision whether or not the evidence of Mr Wardrop should be believed, and the learned trial judge disposed of the case by believing Mr Wardrop. His conclusion has not been shown to have been affected by error and should not have been disturbed. The appeal should be allowed.

Orders

Appeal allowed with costs.

Order of the Court of Appeal set aside and in lieu thereof order that the appeal to that Court be dismissed with costs.