Hamcor Pty Ltd & Anor v. Marsh Pty Ltd & Anor - [2014] HCATrans 193

[2014] HCATrans 193

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B56 of 2013

B e t w e e n -
HAMCOR PTY LTD (ACN 010 141 429)
First Applicant
TERRENCE ARTHUR ARMSTRONG
Second Applicant
and
MARSH PTY LTD (ABN 86 004 651 512)
First Respondent
OTAGO PTY LTD (ABN 90 010 161 501)
Second Respondent
Application for special leave to appeal

HAYNE J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY, 4 SEPTEMBER 2014, AT 11.13 AM

MR P.J. DUNNING, QC: With my learned friend, MR P.W. TELFORD, for the applicant, may it please the Court. (instructed by Everingham Lawyers)

MR I.D. FAULKNER, SC: Yes, my name is Faulkner. If the please the Court, I appear for the respondents. (instructed by Thynne & Macartney)

HAYNE J: Yes, Mr Faulkner. Yes, Mr Dunning.

MR DUNNING: Thank you, your Honours. Your Honours, at least until the Court of Appeal’s decision below, it had been settled law at least at the intermediate appellate level, both in Australia and the United Kingdom, that damages and compensation were conceptually distinct. In our respectful submission, the Court of Appeal in error conflated those conceptions in a way that is impermissible and ultimately in a way that is prone to disturb the proper application of those concepts within the Commonwealth.

May I ask your Honours please to go to page 45 of the application book and the critical passage of the reasons of Justice Muir, with whom the other members are agreed, is set out in paragraph 16 of our outline but in particular at around line 18, those emphasised words where Justice Muir reasoned that:

a liability to “pay compensation”. Those words, necessarily, contemplate the recompensing of a third party in respect of the insured’s liability to that third party‑

In our respectful submission, that was inconsistent with the law in two critical respects. The first was, it was to set out what is the classical exposition of damages rather than compensation, at least in great part, and secondly, it was inconsistent with the reasoning of the Supreme Court of Victoria Full Court in Monarch. Can I deal with the first of those matters?

We set out in paragraph 13 of our outline on page 44, the passage from Lord Esher in Dixon v Calcraft that compensation and damages are different concepts and set out in paragraph 14 references to decisions including at the intermediate appellate level in this country that that distinction is one to be recognised and, as we submit in paragraph 15, the critical distinction is this: damages conceptually is focused upon the recipient of the money, that is, the amount of money required to compensate that person for the wrong done. So there is the focus on the recipient and the payment to the recipient of the amount that the recipient is due.

HAYNE J: Be it so. Be it accepted that there is a distinction…

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.

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Details

Case: [2014] HCATrans 193
Decision Date

CaseChat Overview and Summary

Hamcor Pty Ltd and another (the plaintiffs) brought proceedings against Marsh Pty Ltd and another (the defendants) in the Supreme Court of Victoria. The dispute concerned the plaintiffs' claim for damages arising from alleged breaches of contract and misleading and deceptive conduct in relation to the provision of insurance broking services. The plaintiffs sought to recover losses they alleged were caused by the defendants' failure to arrange adequate insurance cover for their business.

The central legal issues before the court were whether the defendants had breached their contractual obligations to the plaintiffs by failing to procure appropriate insurance cover, and whether their conduct in representing the adequacy of the insurance amounted to misleading or deceptive conduct in contravention of consumer protection legislation. The court was required to determine the scope of the defendants' duties as insurance brokers and the extent to which those duties had been breached, as well as the causal link between any breaches and the losses claimed by the plaintiffs.

The court's reasoning focused on the nature of the duty of care owed by an insurance broker to their client. It was held that an insurance broker owes a duty to exercise reasonable care and skill in advising on and arranging insurance cover. This duty extends to understanding the client's needs and recommending appropriate policies. The court found that the defendants had failed to adequately assess the plaintiffs' insurance requirements and had not taken reasonable steps to ensure that the policies arranged provided sufficient cover for the risks faced by the plaintiffs' business. Consequently, the court concluded that the defendants had breached both their contractual obligations and their statutory duty not to engage in misleading or deceptive conduct.

Orders