McLennan v Insurance Australia Ltd - [2014] NSWCA 300

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: McLennan v Insurance Australia Ltd [2014] NSWCA 300
Hearing dates: 31 July 2014
Decision date: 02 September 2014
Before: Beazley P at [1];
Meagher JA at [1];
Ward JA at [1]
Decision:
(1) Appeal allowed.
(2) Set aside the judgment of the District Court given on 16 August 2013.
(3) Judgment for the appellant against the respondent in the amount of $750,000.
(4) The respondent pay the appellant interest on that judgment sum calculated in accordance with s 57 of the Insurance Contracts Act 1984 (Cth) from 27 June 2007 until the day on which payment of the judgment sum is made.
(5) Respondent pay the appellant's costs of the proceedings in the District Court.
(6) Respondent pay the appellant's costs of this 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 - fire insurance - construction of insuring clause - onus of proof - where insurance policy does not cover loss caused by fire deliberately lit - whether appellant insured has onus of proving fire not deliberately lit
Legislation Cited: Insurance Contracts Act 1984 (Cth), ss 34, 35, 57
Insurance Contracts Regulations 1985, Part II, Div 2
Workers Compensation Act 1926-1929 (NSW), s 6(1)
Cases Cited: Beresford v Royal Insurance Co [1938] AC 586
British & Foreign Marine Insurance Co Ltd v Gaunt [1921] 2 AC 41
Craig v Associated National Insurance Co Ltd [1984] 1 Qd R 209
Gordon v Australian & New Zealand Theatres Ltd (1940) 40 SR (NSW) 512
Gorman v Hand in Hand Insurance Co (1877) IR 11 CL 224
GRE Insurance Ltd v Ormsby (1982) 29 SASR 498
In re Hooley Hill Rubber and Chemical Co and Royal Insurance Co [1920] 1 KB 257
Kodak (A/asia) Pty Ltd v Retail Traders Mutual Indemnity Insurance Association (1942) 42 SR (NSW) 231
Levy v Assicurazione Generali [1940] AC 791
Midland Insurance Co v Smith (1881) 6 QBD 561
Munro, Brice & Co v War Risks Association Ltd [1918] 2 KB 78
Pye v Metropolitan Coal Co Ltd [1934] HCA 9; 50 CLR 614
Slattery v Mance [1962] 1 QB 676
Spinney's (1948) Ltd v Royal Insurance Co Ltd [1980] 1 Ll Rep 406
The Alexion Hope [1988] 1 Lloyd's Rep 311
The Captain Panagos DP [1986] 2 Lloyd's Rep 470
The Galatia [1979] 2 All ER 726
Wallaby Grip Ltd v QBE Insurance (Australia) Ltd [2010] HCA 9; 240 CLR 444
Texts Cited: Clarke, The Law of Insurance Contracts (6th ed 2009, Informa)
Stone, "Burden of Proof and Judicial Process: A Commentary on Joseph Constantine Steamship Ltd v Imperial Smelting Corporation…

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] NSWCA 300
Decision Date: 02 September 2014

CaseChat Overview and Summary

The appeal in *McLennan v Insurance Australia Ltd* concerned a dispute over a fire insurance policy. The appellant, the insured, sought to recover under the policy for a loss caused by fire, while the respondent insurer denied liability. The matter came before the Court of Appeal of New South Wales, constituted by Beazley P, Meagher and Ward JJA.

The central legal issue before the Court of Appeal was the onus of proof in relation to a fire insurance policy that excluded cover for loss caused by a deliberately lit fire. Specifically, the Court had to determine whether the insured bore the onus of proving that the fire was not deliberately lit, or whether the insurer bore the onus of proving that it was.

The Court of Appeal allowed the appeal, setting aside the judgment of the District Court. The Court reasoned that the exclusion clause in the insurance policy operated as a defence for the insurer. Consequently, the onus rested on the insurer to prove that the fire was deliberately lit to avoid liability under the policy. The Court found that the insurer had failed to discharge this onus.

The Court of Appeal ordered judgment for the appellant against the respondent in the sum of $750,000, together with interest calculated in accordance with s 57 of the *Insurance Contracts Act 1984* (Cth). The respondent was also ordered to pay the appellant's costs of both the District Court proceedings and the appeal.

Orders

Orders of the court

(1) Appeal allowed.

(2) Set aside the judgment of the District Court given on 16 August 2013.

(3) Judgment for the appellant against the respondent in the amount of $750,000.

(4) The respondent pay the appellant interest on that judgment sum calculated in accordance with s 57 of the Insurance Contracts Act 1984 (Cth) from 27 June 2007 until the day on which payment of the judgment sum is made.

(5) Respondent pay the appellant's costs of the proceedings in the District Court.

(6) Respondent pay the appellant's costs of this 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:	McLennan v Insurance Australia Ltd [2014] NSWCA 300
Hearing dates:	31 July 2014
Decision date:	02 September 2014
Before:	Beazley P at [1]; Meagher JA at [1]; Ward JA at [1]
Decision:	(1) Appeal allowed. (2) Set aside the judgment of the District Court given on 16 August 2013. (3) Judgment for the appellant against the respondent in the amount of $750,000. (4) The respondent pay the appellant interest on that judgment sum calculated in accordance with s 57 of the Insurance Contracts Act 1984 (Cth) from 27 June 2007 until the day on which payment of the judgment sum is made. (5) Respondent pay the appellant's costs of the proceedings in the District Court. (6) Respondent pay the appellant's costs of this 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 - fire insurance - construction of insuring clause - onus of proof - where insurance policy does not cover loss caused by fire deliberately lit - whether appellant insured has onus of proving fire not deliberately lit
Legislation Cited:	Insurance Contracts Act 1984 (Cth), ss 34, 35, 57 Insurance Contracts Regulations 1985, Part II, Div 2 Workers Compensation Act 1926-1929 (NSW), s 6(1)
Cases Cited:	Beresford v Royal Insurance Co [1938] AC 586 British & Foreign Marine Insurance Co Ltd v Gaunt [1921] 2 AC 41 Craig v Associated National Insurance Co Ltd [1984] 1 Qd R 209 Gordon v Australian & New Zealand Theatres Ltd (1940) 40 SR (NSW) 512 Gorman v Hand in Hand Insurance Co (1877) IR 11 CL 224 GRE Insurance Ltd v Ormsby (1982) 29 SASR 498 In re Hooley Hill Rubber and Chemical Co and Royal Insurance Co [1920] 1 KB 257 Kodak (A/asia) Pty Ltd v Retail Traders Mutual Indemnity Insurance Association (1942) 42 SR (NSW) 231 Levy v Assicurazione Generali [1940] AC 791 Midland Insurance Co v Smith (1881) 6 QBD 561 Munro, Brice & Co v War Risks Association Ltd [1918] 2 KB 78 Pye v Metropolitan Coal Co Ltd [1934] HCA 9; 50 CLR 614 Slattery v Mance [1962] 1 QB 676 Spinney's (1948) Ltd v Royal Insurance Co Ltd [1980] 1 Ll Rep 406 The Alexion Hope [1988] 1 Lloyd's Rep 311 The Captain Panagos DP [1986] 2 Lloyd's Rep 470 The Galatia [1979] 2 All ER 726 Wallaby Grip Ltd v QBE Insurance (Australia) Ltd [2010] HCA 9; 240 CLR 444
Texts Cited:	Clarke, The Law of Insurance Contracts (6th ed 2009, Informa) Stone, "Burden of Proof and Judicial Process: A Commentary on Joseph Constantine Steamship Ltd v Imperial Smelting Corporation…