CGU Insurance Ltd v Lawless

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 1010 of 2002

CGU INSURANCE LTD
	Appellant
v
GRAEME ROBERT LAWLESS	Respondent

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JUDGES:	MAXWELL P, NEAVE and REDLICH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	25 January 2008
DATE OF JUDGMENT:	13 March 2008
MEDIUM NEUTRAL CITATION:	[2008] VSCA 38

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Insurance – Public risk indemnity – Special condition – Insured required to take reasonable precautions to prevent personal injury – Albion Insurance Co Ltd v Body Corporate Strata Plan [1983] 2 VR 339 applied – Whether a deliberate course of action by insured which insured realised created risk of injury from the recognised danger.

Practice – Whether insured discharged onus of compliance with special condition – Findings made contrary to respondent’s case – Whether respondent precluded from relying upon alternative view of facts – Suvaal v Cessnock City Council (2003) 77 ALJR 1449 distinguished – Whether sufficient circumstantial evidence to show respondent’s state of mind.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M W Thompson SC with Ms C Harris	Norris Coates
For the Respondent	Mr P F O’Dwyer SC with Mr A M J Larkin	Sullivan Braham

MAXWELL P:

1. I have had the advantage of reading in draft the reasons of Redlich JA.  I too would dismiss the appeal and, subject to what follows, I would do so for the reasons which his Honour gives.

1. As noted by Redlich JA, the insurer argued on the appeal that, once the judge had rejected the evidence of Lawless that he had not been aware that Anthony was holding the fencepost, it was not open to Lawless to contend – or to the trial judge to decide – that Lawless had nevertheless taken ‘reasonable precautions’ (in the relevant sense).  Senior counsel for the insurer argued that the question whether Lawless had taken reasonable precautions was to be determined by reference to – and only to – the state of affairs as Lawless perceived it to be.  The case put by Lawless was that he had not been aware of Anthony’s presence holding the fencepost and that, in proceeding to use the fencing machine in those circumstances, he had not wilfully exposed Anthony to risk.  In the language of the written submission:

[A]t trial it was not the case of Mr Lawless that he held a requisite state of mind in respect of Anthony’s holding of the fence post.  His case was that Anthony was not holding the post.

1. It followed, so the insurer argued, that Lawless could not show, and the judge could not find, that he had any particular state of mind with respect to a different state of affairs – the actual state of affairs – which was that Anthony was holding the fencepost.  According to the written submission:

By putting a case as to the fundamental facts necessarily alternative to those found to have existed, Mr Lawless effectively deprived himself of the ability to prove satisfaction of the condition.

1. In argument (although not in the written submission), counsel…