CGU Insurance Ltd v Pettit - [2009] SASC 187

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge)
CGU INSURANCE LTD & ANOR v PETTIT
[2009] SASC 187
Judgment of The Honourable Chief Justice Doyle
2 July 2009
PROCEDURE - JUDGMENTS AND ORDERS - IN GENERAL - CLASSIFICATION - FINAL AND INTERLOCUTORY
Respondent sued in tort in respect of personal injury alleged to have been caused by the gate of a trailer striking the plaintiff on the head – respondent filed third party statement of claim alleging that pursuant to a contract of insurance, appellants were liable to the respondent in respect of any liability respondent had to the plaintiff – prior to the trial of the action, respondent sought the determination of whether appellants would be liable to the respondent pursuant to the contract of insurance as a preliminary point – Judge declared that appellants would be liable to indemnify the respondent – whether judgment interlocutory so that appeal lay to single Judge of the Supreme Court.
HELD: the Judge was asked to decide the meaning of the contract on the basis of certain factual assumptions – there is a risk that there will be differences between the assumptions adopted by the Judge and the facts found at the trial of the action - judgment does not finally determine the rights of the parties – judgment an 'interlocutory judgment' – appeal against judgment to a single Judge of the Supreme Court.

INSURANCE - GENERAL - POLICIES OF INSURANCE - CONSTRUCTION
INSURANCE - THIRD-PARTY LIABILITY INSURANCE - MOTOR VEHICLES
Plaintiff alleged that she and the respondent were unloading a trailer when the trailer's gates struck the plaintiff in the head causing personal injury – the respondent owned prime mover to which the trailer was allegedly attached at the time of the injury, but did not own the trailer – respondent had a contract of insurance with the appellants which provided indemnity in respect of bodily injury to another person if caused either (1) "by you using your motor vehicle"; or (2) "by and during loading or unloading merchandise onto or off your motor vehicle..." – schedule to the contract listed the respondent's prime mover as one of the motor vehicles covered by the policy, and also a 'trailer in control', which was not identified in the schedule – whether Judge erred in finding that appellants were liable to indemnify the respondent.
HELD: the reference in the policy to 'your motor vehicle' signifies a motor vehicle in which the insured has a proprietary interest – circumstances as pleaded and assumed did not fall within second limb as the respondent had no proprietary interest in the trailer – the inclusion of liability in respect of loading or unloading a motor vehicle does not militate in favour of giving 'using' in the first limb a narrow meaning – respondent was 'using' his prime mover when he unloaded the merchandise from the trailer – circumstances as pleaded and assumed fall within first limb – appeal dismissed.
District Court Civil Rules 2006 (SA) r 241; District Court Act 1991 (SA) s3(1), s43, s43(2)(b), referred to.
Carr v Finance Corporation of Australia Ltd (No 1) (1980-1981) 147 CLR 246, applied.

WORDS AND PHRASES CONSIDERED/DEFINED
"interlocutory judgment", "using your motor vehicle", "your motor vehicle"

CGU INSURANCE LTD & ANOR v PETTIT
[2009] SASC 187
Appeals to a Single Judge

DOYLE CJ: Mr Pettit is a defendant in an action in which the plaintiff claims damages for personal injury allegedly caused by Mr Pettit’s negligence. Mr Pettit joined CGU Insurance Ltd and Vero Insurance Ltd (“the appellants”) as third parties to the action. The third party statement of claim asserted that, pursuant to a contract of insurance between the appellants and Mr Pettit, the appellants were liable to indemnify Mr Pettit in respect of any liability that Mr Pettit had to the plaintiff.
A Judge of the District Court determined as a preliminary question whether the appellants were liable to indemnify Mr Pettit pursuant to the contract of insurance. The Judge made a declaration that Mr Pettit was “entitled to indemnity from [the appellants] in relation to the plaintiff’s claim.” The appellants have appealed to the Supreme Court against the decision of the Judge.
Background
Mr Pettit and two other defendants were sued in the District Court of South Australia in respect of personal injuries alleged to have been sustained by Ms Martin (“the plaintiff”). The plaintiff alleged that she sustained personal injuries in the course of assisting Mr Pettit to unload goods from a refrigerated trailer. She alleged that she was standing on the road behind the trailer when one of the doors of the trailer “blew shut striking her forcefully from behind on the head.” The other defendants owned the trailer. The trailer had been towed to the place where the accident happened by a prime mover owned by Mr Pettit. The other defendants to the action filed a contribution notice claiming an entitlement to contribution from Mr Pettit in respect of their liability to the plaintiff.
The appellants carry on business jointly as National Transport Insurance. Under that name they provide insurance to those in the transport industry. Mr Pettit entered into a contract of insurance with them, trading as National Transport Insurance, through its manager NTI Ltd.
Mr Pettit joined the appellants as third parties. He filed a third party statement of claim claiming indemnity from the appellants in respect of any liability that he had to the plaintiff. The third party statement of claim alleged, and it was admitted by the appellants in their defence to the third party statement of claim (“the Defence”), that a policy of insurance was issued by the appellants in respect of Mr Pettit’s prime mover. The third party statement of claim alleged that at the time of the plaintiff’s injury, the trailer was attached to the prime mover. This was denied by the appellants in the Defence. Mr Pettit alleged that his actions “in unloading the said trailer amounted to the use of the Vehicle within the meaning of the Policy.” This too was denied by the appellants.
By application dated 25 June 2008, Mr Pettit sought the determination of the liability of the third parties as a preliminary point. The application was granted by consent on the same day.
The matter subsequently came on for hearing before the Judge.
The appellants and Mr Pettit provided the Judge with a book of agreed documents, including the written contract of insurance (“the Policy”). The parties were not agreed on any of the facts, but submitted to the Judge that he should decide the preliminary question on the basis that the facts alleged in the plaintiff’s statement of claim would be made out at the trial of the action. Counsel for the appellants submitted that the Judge should further decide the issue on the basis that at the time of the plaintiff’s injuries, the trailer was attached to the prime mover, a fact which the appellants denied in the Defence.
The Policy
The Policy contains the following introductory statement:
Subject to the terms, conditions and exclusions of this policy as agreed by You and Us, We agree to provide indemnity in respect of any Motor Vehicle described in the Schedule against loss damage or liability as hereafter mentioned arising out of an Accident or theft,
Provided …
(4)Your Motor Vehicle is being used in connection with Your occupation or business, or in the case of a sedan or station sedan, Your occupation, business or private use.
‘Schedule’ is defined in the definitions section of the Policy as follows:
the current policy Schedule issued by Us which shows your policy number together with details of your cover.
It appears that before the Judge, counsel for the appellants submitted that the Schedule referred to above comprised two documents headed “Policy Inquiry” and “Motor Schedule Inquiry”. Both documents appear to be computer print-outs. After the hearing of the preliminary question, the parties sent to the Judge a document headed “Policy Schedule” which stated:
The below schedule attaches to and forms part of the policy wording and is subject to all the terms conditions and exclusions as declared and agreed
On appeal, the parties agreed that it was appropriate to proceed on the basis that it is this document which forms the Schedule referred to in the Policy, rather than the computer print-outs referred to by the Judge. I agree and will decide the issues before me on that basis.
The Schedule describes or specifies two items. Item 1 is a “1995 Volvo FH12 Prime Mover”. Details of the prime mover, including registration number, serial number, and vehicle identification number are set out in the description of the first item. This is the vehicle which was involved in the incident. This item lists as the only endorsement:
ENDT 53 – REFRIGERATED VEHICLE ENDORSEMENT (ARTICULATED)
The next item in the Schedule is item 2, a “Trailer In Control”. No details which could be used to identify the “Trailer In Control” to which the Policy applies are given, other than a specification as to ‘class’. It has never been suggested by the appellants that the trailer that was involved in the incident was of a class different to that specified in the Schedule. There is an endorsement listed in relation to this item:
ENDT 69 – TRAILER/S IN CONTROL OF TOW OPERATOR
The text of endorsement 69 is printed below the text of the Schedule. It provides relevantly as follows:
Notwithstanding anything to the contrary contained in Section 2(B)(2) of the Policy we will indemnify you for loss, or damage to any one trailer which is not owned, mortgaged, leased on hire by you, provided that you are proven to be negligent and responsible for the loss, or damage to the trailer, whilst such trailer is in the lawful custody or control of you and is being used by you in conjunction with the nominated tow vehicle insured under this policy…
…
In all other respects the terms, exclusions and conditions of the Policy are to apply.
The reference to s 2(B)(2) should be to s 2(b)(2).
I have set out above the introductory statement contained in the Policy. Section one of the Policy is as follows:
SECTION 1 – Loss or Damage
We will pay for loss or damage to Your Motor Vehicle and Extras being:
-its accessories (including built-in-radio receiver/CB radio/fixed telephone/refrigerator/T.V. receiver/CD player)
-tools and spare parts (limited to $1000 any one event)
-tarps, gates, chains, chain dogs and the like, if stated in the schedule
whilst they are in / on or attached to Your Motor Vehicle.
…
Section two of the Policy deals with the cover provided in respect of legal liability for injury to others and for damage to the property of others. The section reads relevantly:
(a)We will pay any amount up to a liability limit of $25,000,000 in total for any number of claims arising out of one event, which You are held legally responsible to pay as a result of an accident, for damages in respect of:
(A) Bodily injury (fatal or non-fatal) to Another Person
(B) Damage to property of Another Person
If caused:
(1)by You using Your Motor Vehicle; or
(2)by and during loading or unloading merchandise onto or off Your Motor Vehicle direct to or from a fixed place of rest beside Your Motor Vehicle; or
(3)by merchandise or equipment / components of Your Motor Vehicle, falling on / in or from Your Motor Vehicle.
The phrase ‘Your Motor Vehicle’ is not defined in the definitions section of the Policy. The following terms are defined:
You, Your
Means the Client (or any of them) named on the Schedule
Mr Pettit is the client named on the Schedule.
Motor Vehicle
Means-      a mechanically-propelled vehicle designed for use on land only, but not a tramway or railway vehicle that is designed to run on rails, or a motorcycle.
-      a trailer
-      a non-motorised machine or implement
Competence of the appeal
The order made by the Judge is as follows:
His Honour declares that [Mr Pettit] is entitled to indemnity from [the appellants] in relation to the plaintiffs’ claim.
Neither party has had that order drawn up and sealed and entered in the District Court’s record: r 241 of the District Court Civil Rules 2006. This should be done when an appeal is instituted against an order or judgment. What I have set out is the record of the order entered into the District Court’s computer system: District Court Practice Directions PD 1.4. The significance of this is that as the order stands, it appears to establish the liability of the appellants to Mr Pettit in unqualified terms.
The right of appeal against a judgment of the District Court is regulated by s 43 of the District Court Act 1991 (SA) (“the DCA”) which relevantly provides as follows:
43- Right of Appeal
(1)A party to an action may, in accordance with the rules of the appellate court, appeal against any judgment given in the action.
(2)     The appeal lies—
(a)     in the case of a judgment given by a Master or the Court constituted of a Master—to the Court constituted of a Judge;
(b)     in the case of an interlocutory judgment given by a Judge—to the Supreme Court constituted of a single Judge;
(c)     in any other case—to the Full Court of the Supreme Court.
The respondent raised no objection to the competence of the appeal. Nevertheless, I raised with counsel the question of whether the order the subject of the appeal is an “interlocutory judgment” for the purposes of s 43(2)(b). If the declaration is a final judgment, then I have no jurisdiction to hear the appeal. I invited counsel to address me on the competence of the appeal.
“Judgment” is defined in s 3(1) of the DCA as follows:
3 - Interpretation
(1) In this Act, unless the contrary intention appears –
…
judgment means a judgment, order or decision and includes an interlocutory judgment or order;
The distinction between an interlocutory judgment and a final judgment is one that has caused courts much difficulty: see, for example, Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1980-1981) 147 CLR 246 at 248 Gibbs CJ. His Honour went on to say:
The test now applied in this Court for determining whether a judgment is final or not is whether the judgment or order appealed from, as made, finally determines the rights of the parties: Licul v Corney (1976) 50 ALJR 439, at 444. …
In my opinion the test in Licul v Corney requires the Court to have regard to the legal rather than the practical effect of the judgment.
In the end, Mr T Duggan, counsel for the appellants, has persuaded me that the judgment is an interlocutory judgment, and that the appeal to a single Judge is competent.
The form of the order suggests that it is a final judgment. However, reference to the transcript of the hearing before the District Court Judge, and to the Judge’s reasons, confirms that the Judge was asked to decide the meaning of the Policy on the basis of the allegations made by the plaintiff in her statement of claim; on the assumption that at the relevant time the trailer in question was attached to the respondent’s prime mover, and by reference to an agreed copy of the Policy and of the Policy Schedule.
Mr Duggan submits that if it transpires at trial that Mr Pettit is liable to the plaintiff, but on facts as found that differ in a material way from the facts alleged and assumed before the District Court Judge, the appellants will be able to submit that the Judge’s declaration is not binding on them in the circumstances as found. It emerged during the course of submissions before me that it is possible that there are other issues that might arise under the policy that were not resolved before the Judge. For example, the meaning of s 2(a)(B)(2) in its reference to “… unloading merchandise .. off Your Motor Vehicle direct to or from a fixed place of rest beside Your Motor Vehicle …” (emphasis added).
I reluctantly agree that Mr Duggan is correct. Indeed, the transcript before the District Court Judge discloses that the Judge expressed concern about this aspect of the matter, and properly raised the question of whether his decision would be or might be a decision on hypothetical facts. But, in the end, at the urging of both parties, the Judge agreed to decide the proper construction of the Policy.
I must say that I regard the situation as unsatisfactory. I understand the parties’ desire to know whether Mr Pettit is entitled to indemnity before the trial of the plaintiff’s claim. But, as now clearly emerges, there is a risk, probably slight but nevertheless present, that the Judge’s decision will, at the end of the day, prove to be ineffectual to settle the dispute between the appellants and Mr Pettit. The same comment applies to my decision on appeal.
The point is that the judgment of the District Court does not finally determine the rights of the parties. From a practical point of view it may well do so, but from a legal point of view it does not and cannot. At this stage the most one can say is that it might have that effect. In effect, the Judge has determined the meaning of the Policy under certain assumed circumstances, which circumstances might or might not be the circumstances as ultimately found at the trial of the plaintiff’s action.
In the light of all that, I considered whether I should decline to decide the appeal. But in the end, as both parties joined in submitting that the appeal should be decided, I have determined to proceed to decide the appeal, although with some reluctance and hesitation about the propriety of doing so.
The Judge’s reasons
The Judge found in favour of Mr Pettit on two separate bases.
The Judge held that when Mr Pettit drove his prime mover from Adelaide to Kingston, towing the trailer in question, he was using his motor vehicle for the purposes of s 2(a)(A)(1). He was using the prime mover to transport merchandise carried on the trailer. And then, at the end of the journey, he was using the prime mover when he parked it and the attached trailer and when he unloaded the merchandise from the trailer. The Judge summarised the position as follows at [32]:
The trailer could not have been transported to Kingston by [Mr Pettit] otherwise than if he had used his prime mover. He uses his prime mover to transport merchandise on the trailer. He uses his prime mover to park it, with the attached trailer, and then to unload the goods that are on the trailer, from the trailer.
Accordingly, the Judge found, the claim asserted by the plaintiff fell within s 2(a)(A)(1) of the Policy.
In the alternative, the Judge held that the circumstances alleged and agreed fell within s 2(a)(A)(2) of the Policy. The “Policy Schedule” describes two items – Mr Pettit’s prime mover and, separately, a “Trailer In Control”. The Policy defines “Motor Vehicle” to include “a trailer”. Accordingly, in the Policy a reference to “Motor Vehicle” will include or can include “a trailer”. The Policy records that the insurer provides “indemnity in respect of any Motor Vehicle described in the Schedule …”. “Trailer In Control” is therefore a motor vehicle described in the Schedule. In s 2(a)(A)(2) the reference to “Your Motor Vehicle” was not to be read as referring only to a motor vehicle belonging to the respondent. It was common in the trucking industry, the Judge said, for a prime mover to move freight on trailers not owned by the owner of the prime mover. In the Schedule, “Trailer In Control” could not have been intended to be limited to a trailer owned by the respondent. If it was, it would have been identified by registration number or in some other way, but it was not so identified. For those reasons the Judge concluded that the alleged and agreed circumstances amounted to “… unloading merchandise … off Your Motor Vehicle direct to … a fixed place of rest beside Your Motor Vehicle …”, and accordingly fell within s 2(a)(A)(2).
Consideration of appeal

Mr Duggan submits that the provision made by s 2(a)(A)(2) must be read as limiting what might otherwise be the scope of the expression “using Your Motor Vehicle” in s 2(a)(A)(1). He submits that otherwise, if “using Your Motor Vehicle” is given the meaning attributed to it by the Judge, there would be no work left for s 2(a)(A)(2). Loading or unloading merchandise would fall within “using Your Motor Vehicle”, leaving, as Mr Duggan submits, no work for the reference to loading or unloading merchandise.
I do not accept that submission. I consider that s 2(a)(A)(2) is more naturally to be read as expanding the reach of the Policy. The loading or unloading of merchandise from a motor vehicle might well involve activities which would be impossible or difficult to describe as “using Your Motor Vehicle”, even though in some circumstances loading or unloading merchandise would readily fall within the concept of “using Your Motor Vehicle”. For example, if the insured vehicle was a flat top truck, loading merchandise onto the flat top, or unloading merchandise from the flat top, might well fall within each of the relevant provisions. But it is not difficult to envisage aspects of loading or unloading which, as I have already said, would not be regarded as an aspect of using a motor vehicle, but which might fall within s 2(a)(A)(2).
Similarly, in my opinion s 2(a)(A)(3) is to be read as further extending the reach of the Policy. There are circumstances in which the events described in that provision might amount to using a motor vehicle. If an item of merchandise fell off the postulated flat top tray truck while it was being driven along the road, causing injury to a bystander, the event would fall within s 2(a)(A)(1) and within s 2(a)(A)(3). Once again, one can imagine circumstances in which an event falling within the latter provision would not amount to using a motor vehicle.
However, I accept the submission by Mr Duggan that in s 2(a)(A)(2) the reference to “Your Motor Vehicle” is a reference to a motor vehicle in which the insured has some kind of proprietary interest.
I acknowledge the force of the submission by Mr Manetta, counsel for the respondent, that in the Policy, or at least in this part of it, “Your” is used in a non-proprietary sense. At first, I was inclined to agree.
But, as Mr Duggan points out, endorsement 69 on the Policy Schedule points to a contrary conclusion.
Section 2(b) of the Policy sets out certain exclusions from the indemnity conferred by s 2(a). Relevantly, s 2(b) reads:
We will not pay:
(1) if the property damaged belongs to You
(2)if the property damaged is in Your physical or legal control. Provided however that We will pay up to $50,000 any one Accident where such property damage is to property leased or rented by You as Your business premises.
Accordingly, the indemnity in respect of “damage to property of another person” does not extend to property in the physical or legal control of the insured. But endorsement 69 provides, in effect, that despite s 2(b)(2) of the Policy, indemnity is granted for loss or damage to a trailer “not owned, mortgaged, leased on hire by you …”. So endorsement 69 is an exception to an exclusion, granting indemnity in respect of damage to property in the custody or control of the insured and in which the insured does not have, in a loose sense, a proprietary interest.
Mr Duggan then points out that s 1 of the Policy provides:
We will pay for loss of or damage to Your Motor Vehicle …
If that indemnity was not limited to a vehicle in respect of which the insured had a proprietary interest, but applied to any vehicle (or trailer) being used by the insured, there would be no need for the provision made by endorsement 69.
The Policy is not altogether clear in this respect, but in the end I am persuaded by Mr Duggan’s submission that, for these reasons, the reference in s 1 and s 2, and in particular in s 2(a)(A)(2), to “Your Motor Vehicle”, is a reference to a motor vehicle in which the insured has some kind of proprietary interest, and there is no such interest in this case.
Accordingly, and for those reasons, I respectfully differ from the District Court Judge in that respect.
As I have already said, the District Court Judge took the view that “Trailer In Control” should be read as referring to any trailer being hauled by Mr Pettit’s prime mover. But for the provision made in s 1, I would be inclined to agree with the Judge, and for the reasons that he gives. But, in my respectful opinion, when the Policy is read as a whole it points to the contrary conclusion.
However, I agree with the Judge that in the circumstances assumed and asserted, the claim made by the plaintiff against Mr Pettit falls within s 2(a)(A)(1).
I agree generally with the Judge’s approach to this aspect of the matter. As the Judge said, Mr Pettit used his prime mover to transport merchandise in the trailer from Kingston to Adelaide. He was using the prime mover when he loaded the merchandise onto the trailer for the purposes of driving to Kingston. He was using the prime mover when he parked the prime mover and trailer at the end of the journey and, on the limited facts available, when he unloaded the merchandise from the trailer.
There is no reason to read the grant of indemnity made by s 2(a)(A)(1) in a narrow or technical sense. It should be read in a practical way. The Policy in question is described as a “Commercial Motor Vehicle Policy”. An insured under such a policy, who insures a prime mover, is insuring a motor vehicle which is likely to be used for much of the time to haul a trailer, and will often be used to haul a trailer containing merchandise. The concept of use of a prime mover readily embraces its use to haul a trailer containing merchandise. As the word “using” stands alone, there is no reason to limit its scope by reference to other terms used to identify the link between the legal responsibility and the vehicle.
If, in the course of such a journey, a trailer drawn by a prime mover struck another vehicle, I see no reason to doubt that resulting bodily injury or damage to property would be said to be caused by the use of the prime mover. Likewise if, at the end of the journey, the driver inadvertently reversed the trailer into a person, causing bodily injury, or so as to collide with property of another person. Analogies cannot be taken too far. There will be a point at which, before or after a journey, activities involving a trailer attached to a prime mover would no longer be regarded as involving use of the prime mover.
But in the present case, in the circumstances postulated, there is no reason to differ from the Judge’s conclusion that bodily injury to the plaintiff was caused by Mr Pettit using his motor vehicle.
In the course of submissions Mr Duggan and Mr Manetta referred me to a number of cases, but in the end none of them are of any real assistance when considering the meaning of the Policy. As one would expect, they turn on the terms of the particular Policy. Most of them deal with a grant of indemnity in respect of liability “arising out of the use of” a motor vehicle, either standing alone or coupled with “use” of a motor vehicle. I found no case dealing with a policy in terms substantially the same as the Policy.
Conclusion
For those reasons, I dismiss the appeal.