JSM Management Pty Ltd v QBE Insurance (Australia) Ltd

JSM Management Pty Ltd sought compensation from QBE Insurance (Australia) Ltd for damage to a hardstand caused by an overweight forklift truck. The dispute arose from the construction of an industrial special risks insurance policy and whether the damage fell within the exclusion for “wear and tear.” The case was heard in the Supreme Court of Victoria, with an appeal from the Victorian Civil and Administrative Tribunal.

The court had to decide whether the damage to the hardstand was due to “wear and tear,” which was excluded from the policy, or if it resulted from an accidental occurrence that was covered. The court also had to determine the meaning of “wear and tear” and whether the policy’s exclusion for “wear and tear” applied to this situation. A further issue was whether the insured had taken reasonable precautions to prevent loss, as required by the policy.

The court found that the damage to the hardstand was not due to ordinary wear and tear but rather the overweight forklift operating on a surface not rated to support it. The court held that the exclusion for “wear and tear” was intended to exclude ordinary wear and tear, not damage caused by an accidental occurrence. The court also found that the insured had failed to take reasonable precautions by not ensuring the forklift was not overweight and was not operated on a surface not rated to support it. The court held that the exclusion for “wear and tear” was not applicable to this situation and that the insured had a potential partial defence. The case was remitted for a further hearing to determine the extent of QBE Insurance’s liability.

The court ordered that the appeal be dismissed, and the case be remitted to the Victorian Civil and Administrative Tribunal for further hearing to determine the extent of QBE Insurance’s liability.