Cassa Bedding Pty Ltd v Insurance Australia Ltd - [2022] QSC 1

SUPREME COURT OF QUEENSLAND

CITATION: Cassa Bedding Pty Ltd v Insurance Australia Ltd [2022] QSC 1
PARTIES: CASSA BEDDING PTY LTD
ACN 168 144 803
(plaintiff)
v
INSURANCE AUSTRALIA LTD
ABN 11 000 016 722
(defendant)
FILE NO/S: BS 8778 of 2016
DIVISION: Trial Division
PROCEEDING: Trial
ORIGINATING Supreme Court at Brisbane
COURT:
DELIVERED ON: 18 January 2022
DELIVERED AT: Brisbane

HEARING DATE:

16, 17, 18, 19, 20, 23, 24, 25, 26, 27 November 2020; 9 December 2020; supplementary submissions on behalf of the plaintiff dated 14 December 2020; supplementary written submissions on behalf of the defendant dated 15 December 2020; further submissions by email on behalf of the parties dated 22 March 2021; supplementary submissions on interest calculations dated 17 September 2021
JUDGE: Burns J
ORDER: THE ORDERS OF THE COURT ARE THAT:

1. The claim is dismissed.

2.

Judgment is entered for the defendant on the whole of the claim.

3.

The parties are directed to file and serve submissions (not exceeding five pages) as to the appropriate order for costs within fourteen days.
CATCHWORDS: INSURANCE – property insurance – factory fire – where the

plaintiff claimed indemnity for property and other economic loss occasioned by the fire under a policy of insurance with the
defendant – where the claim was denied by the defendant –
where the denial of indemnity was based on an allegation that
the sole director of the plaintiff deliberately started the fire –
whether the fire was deliberately started by the sole director of

the plaintiff – whether the claim for indemnity was excluded under the terms of the policy of insurance – whether the claim
for indemnity was made fraudulently
Insurance Contracts Act 1984 (Cth), s 54(2), s57
Insurance Contracts Regulations 1985 (Cth), reg 32.
Allied Pastoral Holdings Pty Ltd v Federal Commissioner of
Taxation [1983] 1 NSWLR 1; 44 ALR 607, cited
AMP Fire & General Insurance Co Ltd v Collie (1991) 6 ANZ
Ins Cas 61-082, cited
Beaven v Wagner Industrial Services Pty Ltd [2018] 2 Qd R
542, cited
Belhaven & Stenton Peerage (1875) 1 App Cas 278, cited
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1, cited
Briginshaw v Briginshaw (1938) 60 CLR 336, followed
Browne v Dunn (1893) 6 R 67, applied
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, cited
De Gruchy v The Queen (2002) 211 CLR 85, followed
Forster v Hunter New England Area Health Service (2010) 77
NSWLR 495, cited
Gugliotti v Commercial Union Assurance Co of Australia
(1992) 7 ANZ Insurance Cases 61-104, cited
Helton v Allen (1940) 63 CLR 691, cited
Leigh v Bruder Expedition Pty Ltd [2020] 6 Qd R 475,
followed
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705,
cited
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110
ALR 449, cited
NRMA Insurance Limited v Collier & Anor (1997) 9 ANZ Ins
Cas 61-337, cited
Palmer v Dolman [2005] NSWCA 361, cited

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.

Keep reading for free

Create a free CaseChat account to read Cassa Bedding Pty Ltd v Insurance Australia Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2022] QSC 1
Decision Date: 18 January 2022

CaseChat Overview and Summary

Cassa Bedding Pty Ltd (Cassa) sought to recover from Insurance Australia Ltd (IAL) the sum of $1.7 million in respect of losses arising from a fire at the Yeerongpilly factory on 19 January 2015. The case was heard by Justice Brereton in the Supreme Court of Queensland. The primary issue for determination was whether the fire was covered by Cassa’s policy with IAL, given that Cassa had only acquired the factory on 11 June 2015, six weeks after the fire.

The court found that the policy in question did not provide cover for the fire because Cassa had not been the insured party at the time of the incident. The policy was issued to Stromatas Bedding Pty Ltd, the previous owner of the factory, and Cassa had not been in existence at the time of the fire. Moreover, the court held that the transfer of ownership did not retroactively extend the coverage to Cassa. The court relied on the principle that insurance contracts are based on the status of the insured party at the time of the loss, and not on subsequent changes in ownership.

Justice Brereton concluded that Cassa’s claim must be dismissed, and judgment was entered for IAL together with costs. The court determined that Cassa was not entitled to any recovery from IAL for the losses arising from the fire.

Orders

Orders of the court

THE ORDERS OF THE COURT ARE THAT:

Background

Background to the litigation

Cassa’s claim must be dismissed, and judgment entered for IAL together with costs. Background to the fire At the time of the fire, Mr Cassimatis was 54 years of age and resided with his wife, Mrs Jinhwa Cassimatis, and their children at an address in Mount Ommaney, a 20 to 25 minute drive from the Yeerongpilly factory. Mr Cassimatis has a long history in bed manufacture and sales, stretching back to 1992. Until late 2013, he worked in a succession of different roles in the bed industry including as account executive, factory manager, operations and logistics manager, manufacturing manager, manufacturing consultant, general manager, group general manager and managing director. Along the way he was employed by several national brands including Sealy, Fantastic Furniture and Sleepeezee. Mattress Innovations Pty Ltd From early 2007, Mr Cassimatis was also the sole director and shareholder of his family company, Mattress Innovations Pty Ltd. That company was the owner (as trustee for the Rocklea Property Trust) of a factory situated on Ipswich Road, Rocklea, vacant land situated on nearby Franklin Street (with planning approval for the construction of an automated truck wash) and a two-block residential subdivision on the Brisbane River at Fig Tree Pocket. On 25 April 2007, the factory at Rocklea was destroyed by fire. The insurer (Suncorp Metway) answered the policy, paying a claim of approximately $1.6 million to Mattress Innovations in or about August 2007, after which the factory was re-built. When the Global Financial Crisis became manifest in 2008, the builder of a house that had been partially constructed on one of the blocks at Fig Tree Pocket went into receivership and, by the time the house was completed by another builder, the property proved difficult to sell in the drastically changed market. In addition, the subdivision as well as the re-built factory at Rocklea were inundated with water in the January 2011 floods. The insurer of the factory (Allianz) paid for the cost of repairing the flood damage but its market value, like the Fig Tree Pocket property, was adversely affected by the floods. According to Mr Cassimatis, the combined value of the two properties dropped from approximately $4 million to approximately $2.2 million. Both were mortgaged to the National Australia Bank and the mortgage debt was further secured by a personal guarantee from Mr Cassimatis. NAB required Mattress Innovations to either reduce its borrowings or sell the properties. The properties were sold but a significant shortfall was left owing. Ultimately, on 11 June 2015 Mattress Innovations entered into what Mr Cassimatis About 18 months earlier, in December 2013, Mr Cassimatis became aware that a mattress manufacturing business conducted in part of an industrial precinct on the southern side of Station Road, Yeerongpilly was in financial difficulty. The owner of the business was Stromatas Bedding Pty Ltd and it was the lessee of the part of the precinct used by the business. Although Mr Cassimatis was employed at the time as

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.