Maxwell v Highway Hauliers Pty Ltd

HIGH COURT OF AUSTRALIA

HAYNE, CRENNAN, KIEFEL, BELL AND GAGELER JJ

MATTHEW MAXWELL (THE AUTHORISED,
NOMINATED REPRESENTATIVE ON BEHALF OF
VARIOUS LLOYDS UNDERWRITERS)  APPELLANT

AND

HIGHWAY HAULIERS PTY LTD   RESPONDENT

Maxwell v Highway Hauliers Pty Ltd

[2014] HCA 33

10 September 2014

P12/2014

ORDER

Appeal dismissed.

On appeal from the Supreme Court of Western Australia

Representation

B W Walker QC with P Kulevski for the appellant (instructed by Meridian Lawyers)

B W Rayment QC with G R Hancy for the respondent (instructed by WHL Legal Pty Ltd)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

Maxwell v Highway Hauliers Pty Ltd

Insurance – Statutory construction – Where contract of insurance covered accidental damage to vehicles – Where contract of insurance required drivers to obtain satisfactory driver test score – Where drivers of vehicles involved in accidents had not completed driver tests – Where failure to complete driver test did not cause or contribute to accidents – Whether s 54(1) of Insurance Contracts Act 1984 (Cth) requires insurer to indemnify insured for loss caused by accidents.

Words and phrases – "act", "claim", "contract of insurance", "indemnity", "scope of cover".

Insurance Contracts Act 1984 (Cth), s 54.

1. HAYNE, CRENNAN, KIEFEL, BELL AND GAGELER JJ. This appeal, from a decision of the Court of Appeal of the Supreme Court of Western Australia, turns on the construction of s 54(1) of the Insurance Contracts Act 1984 (Cth) ("the Act").

2. Highway Hauliers Pty Ltd ("the Insured") owned a fleet of vehicles which it used to operate an interstate freight transport business.  The vehicles included prime movers and trailers able to be linked together in double combinations known as "B Doubles". 

3. The Insured entered into a contract of insurance with certain Lloyd's Underwriters ("the Insurers").  Under the contract, the Insurers indemnified the Insured against specified loss, damage or liability occurring to or in respect of the vehicles during the period 29 April 2004 to 30 April 2005 ("the Period of Insurance"). 

4. The contract of insurance was constituted in part by a nominated policy of an agent of the Insurers ("the Policy").  Referring to the Insured as "You" and the Insurers as "We", the Policy provided:

   "After You have paid or agreed to pay the premium ... We will Insure You against loss, damage or liability as described herein, occurring within the Commonwealth of Australia, during the Period of Insurance, subject to the terms and conditions of the [P]olicy ..."

5. Section 1 of the Policy provided in part:

   "If during the Period of Insurance Your Vehicle:

   •Incurs Accidental Damage [defined as a happening or event, not otherwise excluded, which is unexpected and unintended], or damage caused by fire, hail, flood, storm or earthquake;

   •Is lost by theft and not found; or

   •Incurs malicious damage;

   We will at Our option: 

   •Pay the reasonable cost of repairing or replacing Your Vehicle;

   •Repair or replace Your Vehicle; or

   •Pay the lesser of the Sum Insured…