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Horsell International Pty Ltd v Divetwo Pty Ltd

Horsell International Pty Ltd v Divetwo Pty Ltd

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Case Copied 1 November 2013 80 min read

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Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368
Hearing dates: 18 March 2013
Decision date: 01 November 2013
Before: Beazley P at [1]; McColl JA at [2]; Meagher JA at [244]
Decision:
(1) Confirm the leave given to Horsell on 18 March 2013 to amend the amended notice of appeal to include ground 8 in terms of the further amended notice of appeal.
(2) Appeal and cross-appeal dismissed.
(3) Appellant pay the costs of the respondents (Dive Two, Mr Todd and Liberty) of the appeal and cross-appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
INSURANCE - construction of insurance policy - insuring clause - whether first and second respondents entitled to indemnity from third respondent - policy cover for claims arising "in connection with the Insured's Business" - injury and damage caused during recreational boat trip - whether trip in connection with insured's business

INSURANCE - construction of insurance policy - exclusion clause - dangerous navigation - Crimes Act 1900 s 52B - whether second respondent's conduct "criminal act or omission" for purposes of exclusion clause - whether act needs to be intentional
NEGLIGENCE - insurance broker - duty of care - retainer - whether insurance broker failed to advise of deficiencies in policy
Legislation Cited: Civil Liability Act 2002
Crimes Act 1900
Crimes Act 1958 (Vic)
Insurance Contracts Act 1984 (Cth)
Motor Traffic Act 1909
Cases Cited: Australian Associated Motor Insurers Ltd v Wright (1997) 70 SASR 110
Australian Aviation Underwriting Pty Limited v Henry (1988) 12 NSWLR 121
Australian Breeders Co-Operative Society Ltd v Jones [1997] FCA 1405; (1997) 150 ALR 488
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
BHP Billiton Iron Ore Pty Ltd v National Competition Council [2008] HCA 45; (2008) 236 CLR 145
Burrows v Rhodes [1899] 1 QB 816
Caldwell v JA Neilson Investments Pty Ltd [2007] NSWCA 3; (2007) 69 NSWLR 120
CGU Insurance Ltd v Porthouse [2008] HCA 30; (2008) 235 CLR 103
Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101
Charter Reinsurance Co Ltd v Fagan [1997] AC 313
Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337
Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389
Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; (1986) 161 CLR 500
Elkateb v Lawindi (1997) 42 NSWLR 396
Fanhaven Pty Ltd v Bain Dawes Northern Pty Ltd [1982] 2 NSWLR 57
Fire and All…

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: [2013] NSWCA 368
Decision Date: 01 November 2013

CaseChat Overview and Summary

Horsell International Pty Ltd appealed to the Court of Appeal of New South Wales against a decision concerning an insurance policy. The dispute involved whether the first and second respondents, Divetwo Pty Ltd and Mr Todd respectively, were entitled to an indemnity from the third respondent, Liberty Mutual Insurance Company, under a policy issued by Liberty. The core of the dispute centred on an injury and damage that occurred during a recreational boat trip, and whether this event fell within the scope of the policy's coverage for claims arising "in connection with the Insured's Business".

The Court of Appeal was required to determine two primary legal issues. Firstly, it had to construe the insuring clause of the policy to ascertain whether the recreational boat trip was sufficiently connected to Divetwo's business to trigger indemnity. Secondly, the Court needed to consider an exclusion clause within the policy relating to "criminal act or omission", specifically whether Mr Todd's conduct during the boat trip constituted a criminal act or omission for the purposes of that exclusion, and whether intent was a necessary element of such an act or omission. The Court also considered a claim of negligence against an insurance broker for failing to advise of deficiencies in the policy.

The Court of Appeal dismissed the appeal and cross-appeal. It reasoned that the recreational boat trip was not sufficiently connected to the insured's business to fall within the insuring clause. Furthermore, the Court found that Mr Todd's conduct, while potentially negligent, did not amount to a "criminal act or omission" as contemplated by the exclusion clause, as it did not involve the necessary criminal intent. The Court confirmed leave for Horsell to amend its notice of appeal to include a specific ground. Consequently, Horsell was ordered to pay the costs of the respondents for the appeal and cross-appeal.

Orders

Orders of the court

(1) Confirm the leave given to Horsell on 18 March 2013 to amend the amended notice of appeal to include ground 8 in terms of the further amended notice of appeal.

(2) Appeal and cross-appeal dismissed.

(3) Appellant pay the costs of the respondents (Dive Two, Mr Todd and Liberty) of the appeal and cross-appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

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.

Medium Neutral Citation:	Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368
Hearing dates:	18 March 2013
Decision date:	01 November 2013
Before:	Beazley P at [1]; McColl JA at [2]; Meagher JA at [244]
Decision:	(1) Confirm the leave given to Horsell on 18 March 2013 to amend the amended notice of appeal to include ground 8 in terms of the further amended notice of appeal. (2) Appeal and cross-appeal dismissed. (3) Appellant pay the costs of the respondents (Dive Two, Mr Todd and Liberty) of the appeal and cross-appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	INSURANCE - construction of insurance policy - insuring clause - whether first and second respondents entitled to indemnity from third respondent - policy cover for claims arising "in connection with the Insured's Business" - injury and damage caused during recreational boat trip - whether trip in connection with insured's business INSURANCE - construction of insurance policy - exclusion clause - dangerous navigation - Crimes Act 1900 s 52B - whether second respondent's conduct "criminal act or omission" for purposes of exclusion clause - whether act needs to be intentional NEGLIGENCE - insurance broker - duty of care - retainer - whether insurance broker failed to advise of deficiencies in policy
Legislation Cited:	Civil Liability Act 2002 Crimes Act 1900 Crimes Act 1958 (Vic) Insurance Contracts Act 1984 (Cth) Motor Traffic Act 1909
Cases Cited:	Australian Associated Motor Insurers Ltd v Wright (1997) 70 SASR 110 Australian Aviation Underwriting Pty Limited v Henry (1988) 12 NSWLR 121 Australian Breeders Co-Operative Society Ltd v Jones [1997] FCA 1405; (1997) 150 ALR 488 Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 BHP Billiton Iron Ore Pty Ltd v National Competition Council [2008] HCA 45; (2008) 236 CLR 145 Burrows v Rhodes [1899] 1 QB 816 Caldwell v JA Neilson Investments Pty Ltd [2007] NSWCA 3; (2007) 69 NSWLR 120 CGU Insurance Ltd v Porthouse [2008] HCA 30; (2008) 235 CLR 103 Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389 Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; (1986) 161 CLR 500 Elkateb v Lawindi (1997) 42 NSWLR 396 Fanhaven Pty Ltd v Bain Dawes Northern Pty Ltd [1982] 2 NSWLR 57 Fire and All…