Collier & Anor v NRMA Insce Ltd

[1997] HCATrans 378

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S201 of 1996

B e t w e e n -

ROBERT JOHN COLLIER and MARION LOUISE COLLIER

Applicants

and

NRMA INSURANCE LIMITED

First Respondent

PAUL SHERIDAN SENGOS

Second Respondent

Application for special leave to appeal

TOOHEY J
GAUDRON J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 DECEMBER 1997, AT 11.53 AM

Copyright in the High Court of Australia

MRS M.L. COLLIER appeared in person.   My husband is here and I have a letter from him to speak for him if that is acceptable to your Honours.

MR R.W. SETON:   If the Court pleases, I appear for the first respondent. (instructed by Abbott Tout)

MR P. STONE:   If the Court pleases, I appear for the second respondent. (instructed by Holmes & Bevan)

TOOHEY J:   Mrs Collier, you and your husband are both applicants for special leave, are you?

MRS COLLIER:   Yes, that is right, your Honour.

TOOHEY J:   Yes, thank you.  Mrs Collier, you understand, do you, that like other applicants, you have 20 minutes in which to address your submissions to the Court?

MRS COLLIER:   Yes, your Honour.

TOOHEY J:   Very well.  Would you tell us anything that you want to say in addition to the written material that has been filed.

MRS COLLIER:   Yes, your Honour.  I would like to point out that I have supplied the Court with a list of authorities.  However, I notice that after speaking with the Registry yesterday, that there is no copy of the fourth cross-claim which I can provide to the Court if required to show its clear wording.  There is also, if I may - I realise I am a lay person so bear with me here - in relation to a finding last week on the second judgment which was 17 September last year which is in the appeal book which should also be in relation to the original finding of that, I would ask to add a further authority which is a case of the High Court of Australia Cameron v Cole.

TOOHEY J:   Do you have a reference there for that case?

MRS COLLIER:   Yes, I do, your Honour. I am sorry, I have got a copy for the Judges too. It is 68 CLR at 371, 500, 572 and - - -

TOOHEY J:   Yes, thank you.  And you say you have a copy of that?  What, one copy is it?

MRS COLLIER:   I have a copy for each judge.

TOOHEY J:   Yes, thank you.

MRS COLLIER:   Do you require a copy of the cross-claim?

TOOHEY J:   Yes, thank you.  Mrs Collier, what I take to be your proposition from the material that has been filed is that the insurance policy having specified a figure, although the court below held that the policy was a replacement policy, you contend that the amount specified in the insurance policy is the payout in effect.

MRS COLLIER:   I intend that plus the fact that the court below was, in fact, error in law in that it was not a replacement policy.

TOOHEY J:   I understand - at least I think I understand what you are saying, but your argument is that irrespective of the costs of making good the loss, you were entitled to be paid the amount specified in the policy.  Is that it?

MRS COLLIER:   I am on the basis, your Honour, that the involvement of the other party, that the insurer had ample opportunity to intervene and therefore, a total loss was suffered and so therefore the full amount of loss of the insured property should be redeemable by us against the insurance company.  Do you follow what I am saying?

TOOHEY J:   Yes, I understand what you are saying, yes.  But if you look, for instance, at pages 73 and 74 of the application book which is part of the judgment of Mr Justice Meagher in the Court of Appeal, he goes to the terms of the policy and speaks of “indemnity values” and “replacement values” and the like and clearly, it is on the footing that whatever you are entitled to - and this appears most clearly, perhaps, on page 75 at line 17:

But, despite the confusion, and notwithstanding the occasional use of the expression “sum insured”, I cannot see how any fair construction of the policy could result in the conclusion that it was an “agreed value” policy.

MRS COLLIER:   I am taking ‑ ‑ ‑

TOOHEY J:   Could I just read the next sentence.

It seems to assume that there are only two forms of policy: an “indemnity” policy and a “replacement” policy.

MRS COLLIER:   Yes.  I am taking it that the indemnity policy which, if we go to what the cover is, it says back on page 73, at approximately line 8:

“indemnity value is the replacement value of your home less a reasonable allowance for depreciation based on the age and condition of your home” -

describing what indemnity is.  It then goes further down and it says at line 12:

“Sum insured” is defined as:
“sum insured is the amount of insurance cover you have purchased for your home.  It is the amount shown on your current schedule” -

and I would take it, we could even go further down and read the rest, but I would take it that that means that when you purchase the insurance policy, you agree to an amount of money being the amount that you are covered for.  You cannot have a loss, be it fire or a car being stolen and then suddenly sit down with the insurance company and work out what you are insured for.

TOOHEY J:   Well that depends on the terms of the policy.  If it was an agreed value policy that might be the case but, in other circumstances, someone might specify a sum in a policy and that is, no doubt, the maximum sum that the insurer might have to pay, but the amount that the insurer has to pay depends on whether it is an indemnity policy, how much is needed to indemnify or if it is a replacement policy, how much is needed to replace and, in either of those cases, as I read the evidence, the figures came nowhere near the sum which you have specified in the policy.

MRS COLLIER:   What I am saying is that the amount of the policy is determined on the total loss of the building.  You could have a house and you could have a fire and burn a patch of carpet, or you could have a house fire and a whole room is burnt, or a whole house is burnt.  I admit that 231 or, in actual fact, it is 251 with the $20,000 depreciation, is the amount of the total loss of the building.  I am saying to the Court, which I have maintained since the fresh evidence became available at the appeal, that in actual fact, because of the evidence that is available to the Court which has been completely disputed in the actual judgment and for reasons which are not points of law but are just factual reasons, that because of that evidence, some of which first became available to me through the insurer who did not want to use it at the trial, that then puts us in the situation that the actual loss is the total property which therefore means that as, for example, in one of our cases which is British Traders Insurance Company Limited.

Even though the appeal judge has brought that up which is basically a fellow that insured a property and then found out later on that he was not going to purchase it, he was going to rent it, the fact still remained that he was entitled to the full cover of that because it was deemed by his Honour at the High Court that the contract was the insurance policy and the terms of the contract bound those people.  Now the contract being that the insured proposal form being taken up with the premium paid, it was at the time of that that the insurer should have said and, in fact, his Honour did find in his judgment - and I would have to go back to the exact page - that the appellant who was the insurer, at page 70, he did not make any attempt to dispute the fact that they were the ones who put the figures on the policy.

TOOHEY J:   But in your case, the cost of making good the damage was about $50,000, was it not?

MRS COLLIER:   No, it was not.  In my case, because the person who committed the arson had a first mortgage, and because the arson was committed after that person was, in fact, informed that a loan was approved and therefore that loan had to be cancelled because I, no doubt, would be before the Criminal Court if I did not do that, but because that loan was cancelled it could not be taken up because the property had been burnt and the person then foreclosed on the property.

I am saying that that person was in communication with the insurer from 15 May 1993 and, in fact, from about late June, early July, with the insurer’s instructing solicitor, Nicholas Matkovich of Abbott Tout.  Therefore, it was the responsibility of the insurer to intervene in that matter and to hold that matter or the Supreme Court when the application was made to have the person included as a party in this case and refused through Master Malpas and said he could only become a claimant.     I feel that then put us in the position that the entire property was lost and, therefore, the loss sustained by us was, in fact, the entire house.

TOOHEY J:   But in terms of the actual damage that was caused, it is right to say, is it not, that the cost of making good was about $50,000?

MRS COLLIER:   Well, no, it is not, because when I went and had estimations done and checked, going by what I found out from council, the damage to the upstairs structure was such that the entire upstairs should rightfully have been demolished.  It was only that the purchaser happened to be a friend of the arsonist that it has been patched up, so, no, the whole of upstairs was destroyed and this is why we are here today because I am saying that you cannot go and enter into a contract saying, “We are going to say that your place is worth this amount” and, in fact, if we go back and we go to another case of mine which is case No 3, Spina v Mutual Acceptance, it is clearly pointed out that the property should have been reinstated to the value that the property was prior to the fire.

By their own evidence at the trial of the case, the insurer has produced people who have said that there is inferior materials and inferior products in the house now.  So I am saying that by the contract which I was contractually bound to abide by, so too was the insurer.  Similarly, I am saying that it is a matter of national importance and a matter of public interest that the matter be heard by this Court and that special leave be granted, based on - I will go into why you should hear it but I will give the points that have been errors in law committed by the appeal judges and I will point out that although the appeal judges were correct in their not finding against the insured in order 1, they were however, in error in law for not using the evidence provided in the appeal books.  There were six volumes which were against the mortgagee.

In order 2, the schedule for policy HB92023332, which was issued on 26 June 1992 and expired on 26 June 1993 was for indemnity cover and was clearly in the appeal book and the appeal judges were error in law that they found against the trial judge and preferred to sight an expired policy for replacement cover HBP1594539.  Now that was from 5/12/91 to 5/12/92.  It was never renewed within the required six-months period which is required by law.

I would like to also point out that Justice Sheller made a remark on page 76 of this appeal book, at line 20, and I would like to quote.  He says that there was an expired “renewal notice” but then I will quote and it says:

I think the Court should adopt this view -

and that is in changing the policy to read “replacement policy”.

GAUDRON J:   His Honour adds, “particularly as it is more advantageous to” you.

MRS COLLIER:   Well, I do not think it is advantageous to me in the fact that it is a replacement policy, not an indemnity, but apart from that we go to the point of law and that is that the policy that was in action at the time which had been paid and which had been stamped and everything and abided by, was a totally different policy with a totally different number.  I do not think the court can just out of the blue ‑ ‑ ‑

GAUDRON J:   Were the terms the same?

MRS COLLIER:   No, the terms were not.  The terms of the new policy were the terms required by the mortgagee and I have a list of those terms here and they are terms which are not covered under replacement and they were terms of the mortgage.  

I would then go on to order 3 which we did agree with in the respect that the judge can conclude one witness’ credibility over another without giving extensive reasons and, in that respect, I would also say that their Honours were in error in that they have fallen back on accepting evidence of Maurice Norman Falls whereas it is quite clear from the transcripts of the appeal books that his Honour disregarded Maurice Norman Falls’ evidence.

I would further go on to say that I disagree entirely with order 7 in that on 17/6 there is no provision for the court to come back and change parts of orders such as it did and as in Cameron v Cole and also in that there was no notice of motion served on, not even my husband nor myself nor our instructed solicitor.  In fact, on 5/12 the instructed solicitor had supplied an affidavit.  The solicitor who was not instructed, who had received communication from the NRMA, had stated that he had not contacted us and he was not instructed and that the solicitor for the NRMA supplied the actual exhibit which showed that Mr Muir’s evidence was correct.  I feel that the trial judges were error, first of all on 17/9 but probably not in respect in the judgment in Cameron in that they did not have the power to adequately set aside that that was a matter for this Court.

I would then go back to say, if I may, I am sorry I did not realise I was over time nearly.

TOOHEY J:   You still have a few moments.

MRS COLLIER:   I will then go back to say that the appellants can show prima facie errors in the judgment given by the New South Wales Supreme Court Court of Appeal.  However, in addition, there are special features.  The appellant can show that matters applying to every other court in Australia dealing with litigation involving insurance matters has an effect on the whole commercial arena.  That (1) contractual rights of relief for the insurers and (2) assessments of correction of what constitutes the amount which should be paid or assessed as the loss is an insurance claim by any person or company in Australia and on the basis that loss should be made. 

If the New South Wales Supreme Court of Appeal makes prima facie errors in interpretation of what the insurer’s rights of relief are in regard to the insured’s contractual agreement with insurers then these discussions will be precedents in future insurance litigation and insureds will be deprived of their realistic rights to relief in any court in Australia based on these administrative errors.

It is the High Court’s role as an appellate court to review the law and to make corrections where necessary to protect not only the rights of individuals but also for the administration of justice in its lower courts.  Will I finish?  I have only got one point left.

TOOHEY J:   Yes, just finish please, Mrs Collier.

MRS COLLIER:   Where decisions of inferior courts effect the general commercial arena or, on a large scale, including individuals then the High Court has to act in the national public interest.  In this case, in particular, we are talking about amounts of hundreds of thousands of dollars taken by insurance companies which are by way of premiums on amounts of insurance coverages which they have no intention of honouring, either voluntary or involuntary, in the event of a claim because the law does not allow the claimants to recover the true loss that they sustained mainly by the interpretation of the lower courts which, we submit, is incorrect.

TOOHEY J:   Thank you, Mrs Collier.  Mr Seton.

MR SETON:   If it please the Court.  Your Honours, there is the initial aspect of - there is an application for extension of time.

TOOHEY J:   Yes.

MR SETON:   I do not wish to say anything further than what I have put in my written submissions save there is one matter that, I apologise, I should have included.  That is the judgment debt that was paid by my client on 18 October 1996 which was before this application was filed.  The application was filed on 3 December.

TOOHEY J:   How far out of time was the application?

MR SETON:   It is about nine weeks, your Honour.

TOOHEY J:   Just let us have your submissions on the substantive matters, please, Mr Seton.

MR SETON:   If your Honour pleases. Your Honours, in my submission, the only issue that is raised by the application is the construction of the policy.  One would have thought that perhaps the argument would be that it was, in fact, an agreed value policy, that that was what the applicants were contending for, being a factor.  Your Honours, it appears they are not contending that.  They appear to be saying that because of what happened after the fire, in fact, they suffered a total loss and it is for that reason that they say that they claim the full $231,000 which was the sum insured.

They do not, in fact, in their written submissions, assert it was an agreed value policy.  In fact, they deny it was an agreed value policy so if that be their case, in my submission, there is nothing further really to be said.  If, in fact, however, the Court considers that really what they are wanting to say is that it is an agreed value policy, in my submission, the policy is clearly not an agreed value policy.  The Court of Appeal’s judgment was plainly correct and, your Honours, what I would wish to do is very briefly take your Honours to the policy to explain why that is the case.

HAYNE J:   Just before you do that, at some point, if you would be good enough to deal with one matter that Mrs Collier raised which was a point about a renewal of the policy and whether that renewal was on the same terms as an earlier policy or no.

MR SETON:   Your Honour, I can deal with that now.  Mr Justice Meagher was, in fact, not Mr Justice Sheller that Mrs Collier referred your Honours to, having concluded that it was not an agreed value policy, doing the best he could, in essence, said, “I look at some renewal notices which were in evidence and they refer to a replacement policy”.  Your Honours, this policy, in fact, was never renewed.  There had been earlier policies and the policy had lapsed; indeed, as Mrs Collier just referred to a policy lapsing in December 1991.  The subject policy was, in fact, taken out in June 1992 and was in force at the time of the fire which was in May 1993 so it was nearing the full 12 months. 

Your Honours, there was, in fact, no relevant renewal notice for this policy and it is my submission that his Honour Mr Justice Meagher was in error in relying on a renewal notice which, in fact, referred to an earlier policy which had lapsed and that, in fact, the document that formed part of the contract which gave the answer to what kind of a policy it was, was both the schedule and the policy wording and the schedule which forms part of our supplementary application book which is the first document, page 1, on the supplementary application book, quite clearly says - and your Honours will see it is dated 26 June 1992:

The Policy Schedule starts from 26/06/92 -

that is at about line E.

TOOHEY J:   Where is that, Mr Seton?

MR SETON:   I am sorry, your Honour, this is page 1 of the supplementary application book which is a relatively thin document.

GAUDRON J:   Does it look like that?

MR SETON:   No, no, your Honours, it looks like this.  It is dated 22 October 1997.

TOOHEY J:   I do not seem to have that.  I have the application book, I have a list of authorities filed on behalf of the applicants, the document headed “Renewal Notice for Prior 12 months” document produced by first respondent.

MR SETON:   Your Honours, we arranged for the supplementary book to be prepared and as I understood it -your Honours I have some copies of the schedule which I - your Honours, I can hand up two copies.

TOOHEY J:   Well we will make good with those.  Thank you.

MR SETON:   Page 1 of that document, your Honours, is the policy schedule which related to this policy.  Your Honours will see at line E that it starts from 26 June 1992 ‑ ‑ ‑

TOOHEY J:   Yes.

MR SETON:    ‑ ‑ ‑consistent with it being a fresh policy.  It was not a renewed policy and then at line H it says:

Your home is insured for indemnity cover and your sum insured is $231,000.

Your Honours, that formed part of the contract.  The terms of the policy are found at page 1 of the application book.

HAYNE J:   Just before you go to that, was this policy schedule in evidence at the trial.

MR SETON:   Yes, your Honour, yes, and to explain why his Honour referred to a renewal notice there was also a renewal notice of an earlier policy in evidence as well.  I forget how it got into evidence but it was there.  In my submission, Mr Justice Meagher erroneously referred to a document which did not, in fact, bear on this particular contract.

TOOHEY J:   Mr Seton, could you tell us the circumstances in which the additional orders were made by the Court of Appeal?

MR SETON:   Yes, your Honour.  Judgment was given on 6 September last year and liberty was granted to the parties to approach for any further

orders.  On 17 September after, at least, the two represented parties approached the court, the matter was listed.  My client made an application that there be an amendment under the slip rule in that the date from which interest was to run was clearly wrong and that change was consented to by the Colliers.

TOOHEY J:   Who what - Mr and Mrs Collier being there in person?

MR SETON:   No, your Honour, they were not there.  They had a solicitor representing them, Mr Muir.  Mr and Mrs Collier were not there.  There were some further orders made in relation to costs, consequential orders, the court having dealt with the cross-claims.  In relation to my client, the only costs order that was made that affected NRMA and the Colliers was, in fact, a costs order in favour of the Colliers.  Now, your Honours, some time down the track, the Colliers put on an application to set aside those orders because they said they were not represented and that they were not there, they did not know about it.  That motion, your Honours, was heard last Friday by the Court of Appeal and Mrs Collier, at least, appeared on that occasion and the motion was dismissed.  That is the history, your Honours, that ‑ ‑ ‑

TOOHEY J:   Yes, thank you.  I do not think we need hear any more from you, thank you, Mr Seton.  We do not need to hear from you, Mr Stone.  Mrs Collier, do you want to say anything by way of reply?

MRS COLLIER:   Yes, two things:  first of all, before I get back to the agreed value, I point out that Mr Seton is, in fact, wrong, that the actual orders of 6 September do not allow for a return for any change of orders to be made, that, in fact, it only allowed that any errors in figure calculation and I will take you to pages - sorry about this - 78, 79 of the appeal book.

TOOHEY J:   I beg your pardon, Mrs Collier, which page were you taking us to?

MRS COLLIER:   Sorry, 79 of the appeal book.

TOOHEY J:   Yes.

MRS COLLIER:  

error in the calculation of any of the figures in orders 1 to 5 -

and I will also go down to point 2 and say that Mr Muir did not represent my husband nor myself and that if the papers have come up from the court below you will see that the exhibit number 2 provided by Mr Seton’s legal

representative clearly showed that Mr Muir had - his evidence, in fact, should have been accepted on the basis that his evidence was consistent with the exhibits supplied by the NRMA which showed that Mr Muir informed them he was not acting for us.  He had not, in fact, been instructed by us and at 17 September informed the court which, under the case Cole v Cameron the court would have been correct if they had dismissed or adjourned the case.  That is also part of my appeal.

I will then go over to the next point where I will say that the term “agreed value”, that is agreed to by both parties relates to the sum insured which is the realistic cost of rebuilding.  The contract covers realistic cost of rebuilding as per the proposal form at item 20 put up and what I wish to point out is - I do not wish to sound rude but I should not have to produce an English language dictionary to show that “agreed” is something that both parties agree to and, in this case, we agreed to the value of the contract.  We did not agree to anything else.  So “agreed value” is probably a terminology which could be taken to mean indemnity as to replacement in the respect that if you look at the term of what replacement is, it is only what the estimate is put on whereas indemnity covers for what is already there, such as back in the case of Spina.

Collier

TOOHEY J:   Thank you, Mrs Collier. 

This application raises no issue warranting the grant of special leave to appeal.  The decision of the Court of Appeal is not attended with doubt, both as to the claim and cross-claims.  An extension of time is granted but the application for special leave to appeal must be refused.

MR SETON:   Your Honours, I would seek costs.

TOOHEY J:   Mrs Collier, an application is made by Mr Seton for costs.  It is the ordinary practice of this Court to grant costs in the event that an application for special leave to appeal is refused.  Do you wish to say anything against the making of that order?

MRS COLLIER:   I have nothing to pay costs with, your Honour.

TOOHEY J:   The payment of any order is another matter but this Court is being asked by Mr Seton to make such an order.

MRS COLLIER:   Yes.  I would just like to say that, yes, I do object basically because I think that I met the requirements of this Court for special leave.

TOOHEY J:   I understand that.

MRS COLLIER:   And that basically, if I must say, that this Court upholds the Australian Constitution and under the Australian Constitution I am being denied my natural justice, apart from which this Court - - -

TOOHEY J:   Mrs Collier, the Court has ruled against you on the application for special leave to appeal.  As I pointed out to you, our practice is to grant costs when such an order was made, and I have just given you the opportunity to - - -

MRS COLLIER:   I object strongly because I say that this Court has overruled a lot of things such as the miscarriage of justice, the abuse of the courts’ process which has gone on in the lower courts and that I think it is a case that the Court is supposed to be sitting here for everybody not just large companies such as insurance companies.

TOOHEY J:   I understand that, but there will be an order - Mrs Collier, I have heard your objections to the making of such an order.  The application is dismissed with costs.  Are the costs sought by the second respondent?

MR STONE:   They are, your Honour.

TOOHEY J:   Yes, very well.  The application is dismissed with costs.

AT 12.29 PM THE MATTER WAS CONCLUDED