Middleton v Aon Risk Services Australian Limited - [2007] WADC 12

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: MIDDLETON -v- AON RISK SERVICES AUSTRALIAN LIMITED & ANOR [2007] WADC 12

CORAM: MARTINO DCJ

HEARD: 18-19 APRIL 2006 & 57 DECEMBER 2006

DELIVERED : 23 FEBRUARY 2007

FILE NO/S: CIV 1659 of 2004

BETWEEN: DEBORAH ROBYN MIDDLETON
Plaintiff
AND
AON RISK SERVICES AUSTRALIAN LIMITED
Defendant
DAVID VERRYT
Third Party

Catchwords:

Insurance - Motor vehicle - Whether limited to location specified - Insurance broker - Whether view on policy honestly and reasonably held

Legislation:

Trade Practices Act 1974, s 52

Result:

Plaintiff's claim dismissed

Representation:

Counsel:

Plaintiff:     Mr A P Hershowitz
Defendant:     Mr H J Neal
Third Party  :     In person

Solicitors:

Plaintiff:     Hoffmans
Defendant:     Freehills
Third Party  :     Not applicable

Case(s) referred to in judgment(s):

Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
MGICA (1992) Ltd v Kenny & Good Pty Ltd (1996) 140 ALR 313
Pearson v Commercial Union Assurance Co (1876) 1 AC 498
Perre Apand Pty Ltd (1999) 198 CLR 180

Case(s) also cited:

Banditt v The Queen (2005) 80 ALJR 421
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Derry v Peek (1889) 14 App Cas 337
Gould v Vaggelas (1985) 157 CLR 215
Jeans v Clearly [2006] NSWSC 647
Magill v Magill [2006] HCA 51
MGICA (1992) Ltd v Kenny & Good (1996) 70 FCR 236
Prestia v Aknar (1996) 40 NSWLR 165
Tresize v National Australian Bank Ltd (2005) 220 ALR 706

MARTINO DCJ: The plaintiff, Ms Middleton, is the beneficiary of the Selwyn Francis Trust. In 1988 the trustee of the trust acquired a motor vehicle service and repair business in York. The trustee carried on that business under the name York Motor Works and Garage at 159 Avon Terrace in York.
Mr Rodney Charles Anderson is a solicitor who has an interest in motor vehicles. He provided legal services to York Motor Works and Garage and also advice on the repair and restoration of vehicles. Although Mr Anderson was a significant participant in the events that led to the dispute with which this action is concerned he was not called as a witness at the trial.
The defendant, AON, was the insurance broker for Mr Briggs and his companies. The third party, Mr Verryt, was employed by AON as Divisional Director.
The owner of the premises in Avon Terrace from which York Motor Works and Garage carried on business was York Heritage Pty Ltd. The principal of York Heritage was Mr Peter Briggs. Mr Briggs has a large collection of motor vehicles, most of which were kept in York in 1988 where they were on display at a museum. Mr Briggs was also not called as a witness at the trial.
Mr Anderson negotiated with Mr Briggs the terms upon which York Motor Works and Garage occupied the premises in Avon Terrace. Ms Middleton understood that York Motor Works and Garage occupied the premises on the basis that Mr Briggs and his companies would receive from York Motor Works and Garage a 25 per cent discount on the cost of repair and restoration work on their motor vehicles.
In 1990 York Motor Works and Garage commenced carrying out restoration work on an 1899 Renault Voiturette motor vehicle. Ms Middleton understood, again from discussions with Mr Anderson, that the Renault belonged to Mr Briggs and that Mr Briggs had asked that York Motor Works and Garage carry out the restoration work.
In early 1991 there was a dispute between York Motor Works and Garage and York Heritage about the terms upon which York Motor Works and Garage occupied its premises. The negotiations were again carried out by Mr Anderson and Mr Briggs. The negotiations were not successful and the locks on the premises were changed by Mr Briggs. This effectively resulted in York Motor Works and Garage ceasing to carry on business.
The restoration work on the Renault had been commenced at York Motor Works and Garage's premises at Avon Terrace. At some time the Renault was moved from those premises to Mr Anderson's premises in Guildford. Ms Middleton understood that Mr Anderson was carrying out work on the Renault at those premises and that he continued to carry out that work after York Motor Works and Garage had ceased to carry on business from Avon Terrace. Ms Middleton considered this restoration work to be the only work then being done by York Motor Works and Garage. The Renault was moved from Mr Anderson's premises in Guildford to the premises of Mr Paul Roberts in Osborne Park. The Renault was damaged by fire in May 1993 at Mr Robert's premises in Osborne Park. There was no direct evidence as to the date and location of the fire, but it appears not to be in dispute. It was referred to in the opening by counsel for Ms Middleton and the information was conveyed to SGIO in a report by Robertson and Co, loss adjusters, dated 24 August 2000.

York Heritage's action

On 20 December 1996 York Heritage commenced an action in the Supreme Court of Western Australia against Mr Anderson. In that action York Heritage claimed the delivery up and return of the carburettor from a 1909 De Dion Bouton veteran car and the Renault or their value and damages for detention. York Heritage claimed that the value of the carburettor and the Renault was $250,000.
Mr Briggs made a complaint to the police that the carburettor and the Renault had been stolen. Following that complaint Mr Anderson was charged with stealing. That prosecution was discontinued before it went to trial.
Mr Anderson informed Ms Middleton of the Supreme Court action commenced against him by York Heritage and that he was also involved in criminal proceedings. Ms Middleton and Mr Anderson agreed that Mr Anderson would not join Ms Middleton as a third party to the Supreme Court action and that Ms Middleton would pay all Mr Anderson's legal expenses and any judgment entered against him in the Supreme Court action.
Mr Anderson kept Ms Middleton informed of the progress of the Supreme Court action. He informed her of a proposed agreement to settle the action on the basis that the Renault be reinstated. He asked Ms Middleton to pay for the cost of the reinstatement. He told her that the cost would be $25,000. Ms Middleton considered this to be a reasonable sum. She told Mr Anderson that she would pay for the reinstatement of the vehicle provided that there was no insurance cover available to pay for it. Mr Anderson and Ms Middleton agreed that they would settle the action on that basis.
By a without prejudice letter dated 3 September 1998 Mr Anderson's solicitors wrote to York Heritage's solicitor suggesting the compromise of York Heritage's action. One of the proposed terms of settlement was that Mr Anderson would reinstate the Renault to the condition in which it was when it was handed over to the York Motor Works and Garage in 1990. There were two provisos to that proposed term of settlement:
1Mr Anderson receive approval from Ms Middleton to waive any workman's lien that York Motor Works and Garage had over the Renault; and
2it was demonstrated to Mr Anderson's satisfaction that there was no insurance policy covering the damage to the Renault.
On 4 December 1998 in the Supreme Court action York Heritage and Mr Anderson consented to orders being made that the action be stayed on the terms contained in the letter of 3 September 1998 and that each party bear its own costs.

Mr Verryt's affidavit

On 10 August 2000 Mr Verryt swore an affidavit in the action by York Heritage against Mr Anderson. In that affidavit Mr Verryt deposed:
"1I make this affidavit to confirm that no insurance policy, other than specified in paragraphs 5 and 7, covers a Renault voiturette which was housed in the York Motor Museum up to about March 1990.
2Unless otherwise stated, the facts matters and things deposed to by me herein are within my own knowledge and belief.
3I am the Divisional Director for AON Insurance Services and am familiar with insurances taken out by York Heritage Pty Ltd.
4York Heritage Pty Ltd owns a number of vintage and veteran motor vehicles, which it houses at the York Motor Museum at York.
5These vehicles are insured for damage occurring to them whilst housed at the York Motor Museum, however, they are not covered for theft or damage occurring beyond the limits of the York Motor Museum.
6I am informed by Mr Peter Briggs that the remains of an 1899 Renault Voiturette, a vehicle which was housed in the York Motor Museum were found in a factory unit in Osborne Park.
7The insurance policy covering the vehicles housed at the York Motor Museum including the Renault Voiturette did not cover any damage sustained to the vehicle whilst outside the environs of the York Motor Museum, hence no claim exists under the York Motor Museum insurance program for vehicles located at the York Motor Museum with respect to this vehicle."
In August or September 2000 Mr Anderson provided a copy of Mr Verryt's affidavit to Ms Middleton. Ms Middleton read the affidavit. It appeared to her from the affidavit that the only cover for the Renault was while it was housed in the York Motor Museum and that no damage to the car outside the museum was covered.
Ms Middleton also discussed the affidavit with Mr Anderson. She knew that Mr David Bruns, a barrister she held in high regard, was acting for Mr Anderson in the York Heritage action. She asked Mr Anderson what was his legal representatives' advice on the affidavit. Mr Anderson informed her that Mr Bruns' had said that the affidavit was conclusive and that Mr Anderson and Ms Middleton should go ahead and reinstate the Renault.
Mr Bruns gave evidence at the trial of this action. His evidence was that he did advise Mr Anderson that Mr Verryt's affidavit put the matter very clearly and that the term of the settlement of the Supreme Court action that it be demonstrated to Mr Anderson's satisfaction that there was no insurance policy covering the damage to the Renault seemed to be satisfied.
As a result of Mr Bruns' advice Ms Middleton was satisfied that there was no insurance cover on the Renault and authorised Mr Anderson to reinstate it at her cost.

Ms Middleton's enquiries

The fire damaged remains of the Renault were in the possession of the police at that time. Ms Middleton had previously told the police that York Motor Works and Garage held a lien over that property. On 12 September 2000 Ms Middleton wrote to the police authorising the release of the property to Mr Anderson.
In May 2001 Mr Anderson was still working on the Renault. Ms Middleton wished to ensure that the Renault was insured while the work was being carried out. She telephoned AON and spoke to Mr Verryt. In their telephone conversations and written communications Mr Verryt informed Ms Middleton that AON acted for Mr Briggs and his companies and that he was unable to provide her with any information about the insurance arrangements for the Renault as Mr Briggs' representative had directed him that he was not to do so.
On 11 June 2001 Mr Briggs wrote to Ms Middleton about enquiries Ms Middleton was making about the Renault. He informed her that his dealings were with Mr Anderson. He stated that Ms Middleton had nothing to do with the Renault and asked her to stop making enquiries about it. Ms Middleton replied by letter dated 20 June 2001. She informed Mr Briggs that the Selwyn Francis Trust still held a lien over the Renault and that she would protect the trust's interest and lien before releasing the car to Mr Briggs.
As a result of enquiries made of insurance companies by Ms Middleton she wrote to Mr Anderson on 12 April 2002 informing him that she believed that the Renault had been covered by a policy issued by SGIO and that she and Mr Anderson should be paid for the reinstatement of the car. Mr Anderson completed the reinstatement of the Renault in or around April 2002.
On 16 April 2002 Ms Middleton spoke to Mr Anderson and on 29 April she wrote to him confirming that conversation. In her letter she stated that the Renault was insured by SGIO under a policy held by York Heritage, that a claim had been made on 1 December 1992 for theft and that the claim had not been settled immediately but was subsequently settled. In her letter Ms Middleton confirmed that she had advised Mr Anderson that all work was to stop on the reinstatement of the Renault and that it was not to be handed over to York Heritage or anyone else.
Shortly after she sent that letter Mr Anderson informed Ms Middleton that he had already completed the reinstatement of the Renault, that he had to return the car to York Heritage under the terms of the settlement of the Supreme Court action and that he did not want he car to be in his garage any longer. He asked Ms Middleton if she wished to keep the car at her home. Ms Middleton did not. Mr Anderson returned the restored car to York Heritage.
On 3 April 2003 Ms Middleton wrote a cheque in favour of Mr Anderson in the sum of $10,000 and on 17 September 2003 she wrote another cheque in his favour in the sum of $15,000. She gave those cheques to Mr Anderson in payment of the cost of reinstatement of the Renault. In March 2004 Ms Middleton wrote another cheque in favour of Mr Anderson in the sum of $5,000. She gave that cheque to Mr Anderson in payment of his expenses of travelling to Europe to enable him to reinstate the Renault. In the same month Ms Middleton wrote another cheque in favour of Mr Anderson in the sum of $7,500 which she gave to him in reimbursement of some of his legal fees in the Supreme Court action. In June 2004 Ms Middleton wrote another cheque in favour of Mr Anderson in the sum of $5,000 which she gave to him in reimbursement of some of his legal fees and expenses. In July 2004 Ms Middleton wrote another cheque in favour of Mr Anderson in the sum of $17,500 which she gave to him in reimbursement of further legal fees and expenses. In September 2004 Ms Middleton wrote another cheque in favour of Mr Anderson in the sum of $3,230 which she gave to him in reimbursement of Mr Bruns' fees.
By this action Ms Middleton seeks to recover from AON the moneys that she paid to Mr Anderson.

The insurance policy

For the period 30 June 1992 to 30 June 1993 SGIO was the insurer of York Heritage's motor vehicles. The policy documents consisted of a renewal schedule dated 9 July 1992 and SGIO's Motor Fleet Insurance Policy. The Motor Fleet Insurance Policy wording was incorporated into the insurance contract by a provision on p 6 of the schedule which provided that SGIO policy wording form 18/02/91 applied to the period of insurance.
The renewal schedule listed the vehicles covered by the policy. There were three sections in the schedule and the cover and premium varied between those sections. The first section was for vehicles used occasionally on the road. The total sum insured for vehicles in that section was $972,800 and the premium was $8,268.81, a rate of $8.50 per $1,000 sum insured.
The Renault was listed in the next section of the renewal schedule, headed:
"ON VEHICLES, AS PER SCHEDULE BELOW, STORED ANYWHERE IN THE WORLD. COVER RESTRICTED TO FIRE AND PERILS ONLY, EXCLUDING IMPACT … DEDUCTIBLE NIL."
There were five columns in the schedule. The columns were headed Year, Description, Location, Reg. No. and Sum Insured. For most vehicles in the schedule the location was Perth or York, but for some it was UK, France, London, Vic or Sydney. For some the location was "TBA", no doubt meaning to be advised. The location of the Renault was York. The total sum insured for vehicles in that section was $3,519,395 and the premium was $7,381.13, a rate of $2.10 per $1,000 sum insured.
The schedule also contained a provision excluding the operation of some parts of SGIO's Motor Fleet Insurance Policy. One of the sections excluded was Part 7 which provided cover while a vehicle was being transported between places in Australia.
General Exclusion 9 of the Motor Fleet Insurance Policy provided that the policy did not cover loss, damage, costs or legal liability that was caused or incurred outside Australia except when the vehicle was in transit between places within Australia.
General Exclusion 16 was headed Confiscation and excluded loss or damage occurring as a result of the lawful seizure, confiscation, nationalisation or requisition of the vehicle.
General Condition 2 provided:
"Alteration of Risk
2The Insured must notify the Insurer in writing as soon as possible after the commencement of this Policy of any changes in the Insured's Business which affect the Vehicles insured or of any other circumstances affecting the state, condition or use of any Vehicle which increases the risk of loss, destruction, damage or liability. Until the Insured obtains the Insurer's written agreement to cover the alteration of risk and agrees to pay any additional Premium required the Insurer shall not be liable for loss, destruction, damage or liability caused by or contributed to by any such alteration."
Mr Verryt commenced working as an account executive at Allied Insurance Brokers in 1987. Allied Insurance Brokers later became AON. Mr Briggs and York Heritage were clients of Allied when Mr Verryt commenced employment at that firm and Mr Verryt was allocated the York Heritage account.
Mr Verryt's evidence was that when he commenced managing the York Heritage account he understood that the vehicles kept on display at the museum were insured under fire and perils cover which was restricted to specific locations only. This was generally the case for fire cover at that time.
A fire and peril policy attracts a fire service levy. Mr Verryt's evidence was that in or around 1987 Mr Briggs instructed Mr Verryt to insure the York Heritage vehicles stored at the museum at the lowest possible cost as he was suffering short term cash flow problems. Mr Verryt decided that the vehicles should be insured under a motor vehicle policy because that policy would attract only a 1% fire service levy. That levy was much lower than the levy on fire and perils policies and was generally absorbed by the underwriter.
Mr Verryt's evidence was that he had a conversation with the motor vehicle underwriter at SGIO. In an affidavit sworn on 18 April 2006 Mr Verryt deposed that he thought that the name of the person to whom he spoke was John Deepwater. The correct name of person to whom he referred in the affidavit was John Diprose who has died. His evidence was that when he told Mr Diprose that he wanted to change York Heritage's policy from a fire to a motor vehicle policy Mr Diprose said that it could be done, but that the cover would remain restricted to specified locations, as it was under the fire policy. Mr Verryt asked Mr Diprose what would occur if a vehicle was moved and Mr Diprose said that Mr Verryt would need to notify SGIO and SGIO would consider whether it would approve. Mr Verryt thought that this conversation took place in or about 1987. It may have been later but was prior to the 1992‑1993 policy year. His evidence was that he had to provide Mr Diprose with a great deal of information as to the location of the vehicles, but the documentation evidencing that has since been destroyed. Mr Verryt's evidence was that as a result of his conversation with Mr Diprose he understood that the previous fire policy was a specific location policy and that the replacement motor policy was not designed to broaden the cover and if any of the vehicles were moved from the location specified in the policy. His evidence was that he understood that the reason why the premium rate for vehicles in the section of the renewal schedule in which the Renault appeared was much lower than for vehicles in the previous section of the policy was that the risks covered were considerably less and excluded theft.
Mr Verryt's evidence was that he understood that if a vehicle listed in that section was damaged by fire at a location not stated in the policy it would not be covered unless the insurer had approved the new location. This understanding was based upon his reading of the policy, his conversation with Mr Diprose and General Condition 2 of the SGIO's Motor Fleet Insurance Policy.

Mr Verryt's evidence was that the words "stored anywhere in the world" in the renewal schedule meant, in the context of the policy, stored anywhere in the world by York Heritage at the location specified in the policy.
It was also Mr Verryt's evidence that on a number of occasions SGIO was advised that a vehicle was being moved to a from York to a restorer or lent to a shopping centre for display and that SGIO approved the move and that cover would apply.
Mr Verryt's evidence as to the swearing of his affidavit dated 10 August 2000 was that on 1 August he was contacted by Mr Peter Whyte, who told him that he was acting as Mr Briggs' solicitor in the action against Mr Anderson and asked Mr Verryt to swear an affidavit for use in that action. His evidence was that the affidavit of 10 August contains opinions which he honestly held at the time and still holds.

Mr Briggs' claim

Mr Briggs wrote a letter dated 21 November 1997 to Mr Verryt. In that letter Mr Briggs wrote that some time ago he had written to Mr Verryt regarding a potential insurance claim on the Renault. Mr Briggs informed Mr Verryt that Mr Anderson had been arrested for theft and that he had made a civil claim against him. The final sentence of the letter was: "I am unsure of the insurance situation but I do not envisage anything happening for some time yet, so perhaps if you see any problem with a claim being made, please let me know." Mr Verryt's evidence was that he could not recall and AON had not been able to find the earlier letter referred to in the letter of 21 November.
By facsimile dated 28 November 1997 Mr Verryt forwarded to SGIO a copy of the letter dated 21 November. He enquired whether SGIO had received notification of the claim direct from the client, something he said he was almost certain had occurred. By facsimile dated 12 December 1997 SGIO replied that it had no record of a claim being lodged.
By letter dated 18 December 1997 Mr Verryt asked Mr Briggs to provide a statement detailing the circumstances and approximate date of the loss so that a formal claim could be lodged with SGIO. Mr Briggs wrote to Mr Verryt a letter dated 21 January 1998 with which he enclosed a copy of his statement to police. In his letter he wrote: "Firstly, the car was stolen and then it was burned."
By facsimile dated 24 February 1998 Mr Verryt forwarded to SGIO a statement of claim by Mr Briggs. By facsimile dated 31 March 1998 SGIO replied that it had obtained its archived policy documents which showed that the Renault was covered for fire and extraneous perils only, excluding impact. That facsimile concluded: "Without determining if the loss circumstances constitute a theft we advise that no theft cover was provided under the policy."
Mr Verryt wrote to Mr Briggs a letter dated 31 March 1998 in which he informed Mr Briggs that the vehicle was insured for Fire and Perils only and that: "The issue now is to determine the cause of the damage whether it was 'theft' or as a result of fire." Mr Briggs replied by letter dated 15 April 1988 that the cause of damage was fire. On 21 April 1998 Mr Verryt forwarded a copy of that letter to SGIO.
Mr Verryt's evidence was that Mr Max Butt, a claims manager at AON, started dealing with the claim and that Mr Verryt was no longer actively involved in it. On 6 August 1999 Mr Verryt wrote to Mr Briggs. In that letter he referred to their recent discussion and informed Mr Briggs that SGIO were awaiting the outcome of the civil action against Mr Anderson and asked if Mr Briggs wished to proceed with the claim. On 11 August 1999 Mr Verryt received an email from Shannon Philbey of AON's claims department informing him that Mr Briggs had sent a fax saying he did wish to proceed with the claim and that SGIO had appointed Robertson & Co to investigate the claim.
Robertson & Co were a firm of loss adjusters. They investigated the claim and wrote to SGIO reporting on their investigations. The first report was dated 7 February 2000 and the last 25 January 2001.
By facsimile dated 9 March 2000 Mr Verryt wrote to Mr Briggs confirming that he had told Mr Briggs in a telephone conversation on the same day that no claim existed for the damage to the Renault because cover only applied to damage sustained at the premises of York Motor Museum.

Opinion evidence

Mr Russell Bresland is an insurance broker who has had 32 years' experience in the insurance industry. He is a member of professional associations in the insurance industry and holds a diploma in insurance administration which he obtained in 1982. Ms Middleton called Mr Bresland to give opinion evidence.
It is Mr Bresland's opinion that it was not reasonable for Mr Verryt to hold the view that the fire damage suffered by the Renault would not be covered under the SGIO policy. The main reason why Mr Bresland holds this opinion is that in his view there is nothing in the policy to indicate that the insured items were covered only at the location submitted. Mr Bresland also had regard to the words in the policy "stored anywhere in the world" and that the locations specified were not specific addresses but towns, cities or countries. Mr Bresland's opinion that it was not reasonable for Mr Verryt to hold the view expressed in his affidavit of 10 August 2000 is that at that time Mr Verryt knew that a claim had been made under the policy, that it had not been declined and that it was the insurer's role to decide whether to accept or reject the claim.
Mr Bresland's opinion is that the location of vehicles is specified in the policy to assess the risk, mainly for reinsurance purposes. His experience is that in a policy such as that which covered the Renault if the vehicle was moved for a short period of time, such as for repairs or to be put on show the insurance policy would continue to a cover it. If the vehicle was moved for a long period of time then the insurer would be notified but generally insurance cover would continue.
Ms Middleton also called Leonard Baxter to give evidence as to his opinion on Mr Verryt's affidavit. Mr Baxter is the managing director of Baxter Management Corporation which provides risk management and insurance consultancy services and has many years experience in the insurance industry. It is Mr Baxter's opinion that it was not reasonable for Mr Verryt to hold the view he expressed in his affidavit of 10 August 2000. Mr Baxter regards it as clear that the Renault was covered under the SGIO policy at the time it suffered fire damage in May 1993. In his view the location provided for each vehicle listed in the renewal schedule was merely to assist with identification and does not mean that the vehicle was only insured while at the location specified. Mr Baxter considered that the reference in the policy to vehicles stored anywhere in the world means that the insured could store a vehicle at a location other than that specified and continue to be covered.
If a change in location resulted in an increase in the risk then there would be an obligation under General Condition 2 to inform the insurer of the change. In Mr Baxter's opinion there is nothing to indicate that the storage of the Renault at secure premises in Osborne Park increased the risk. The increased proximity of a Fire Brigade in the metropolitan area would tend to suggest that the risk was decreased. The fact that the Renault was moved to Osborne Park by Ms Middleton or her agent and not by Mr Briggs does not alter the position in Mr Baxter's opinion. In Mr Baxter's opinion the fact that Ms Middleton's firm claimed a lien over the Renault did not mean that any claim was excluded by Exclusion 16 of the policy because the lien did not amount to lawful seizure or confiscation and in any event the damage to the vehicle was not the result the lien being claimed.
Mr Gordon Nichols is the National Technical and Training Manager of CGU Insurance Ltd. The business of SGIO is owned by CGU. AON called Mr Nichols as a witness in this trial. Mr Nichols has worked in the insurance industry for approximately 35 years. Following notification and registration of a potential claim by York Heritage in relation to the Renault on 29 July 1998 Mr Nichols had the authority to make the final recommendation on behalf of SGIO as to whether to accept the claim and was involved in providing technical advice on the claim.
In Mr Nichols' opinion the insurance cover on the Renault, being for "fire and perils only, excluding impact" did not include cover for theft. In his opinion the proximate cause of the loss on the Renault was theft which was not covered under the policy. It is Mr Nichol's opinion that the fact that the Renault was apparently damaged by fire subsequent to the theft does not alter the position that the cause of the loss was theft.
Even if the cause of the loss had not been theft but fire then it is likely that SGIO would have approached the claim on the basis that the Renault was only covered at the location specified in the policy schedule. Mr Nichols bases his opinion on the wording of part of the policy schedule in which the Renault appears, the exclusion of Part IV Fines Penalties & Infringements Notices Enforcement Act 1994 to apply 7 of the standard SGIO policy and General Condition 2 of the policy.
It is also Mr Nichols' opinion that as Ms Middleton claimed a lien over the Renault any claim would be excluded by General Condition 16.
York Heritage did not press the claim for the Renault. If it had done so it would have been rejected and a court action defended.
Mr Nichols' opinion is that there are more barriers to a claim than the reasons provided in Mr Verryt's affidavit of 10 August 2000. He agrees with the conclusion in that affidavit that no valid claim exists in respect of the Renault.

Conversation between Mr Nichols and Ms Middleton's solicitor

Mr Nicholas Dobree is Ms Middleton's solicitor in this action. On 18 April 2006, the first day of the trial, he telephoned Mr Nichols during the lunch break. Mr Dobree's evidence was that he would have followed his usual practice and introduced himself, that he asked Mr Nichols whether the claim on the Renault would have been successful if Mr Briggs had persisted with it and that Mr Nichols had replied that it was highly likely that the claim would have been successful, but that Mr Dobree had to remember that there were rights of subrogation. Mr Dobree made a note of that conversation which was:
"Will say if Briggs had put a claim in it is highly likely it would have been entertained. But equally they may have pursued their subrogated rights."
Mr Nichols' evidence was that he had spoken to Mr Dobree before April 2006 because he had telephoned Mr Dobree to ask him to ask Ms Middleton to stop contacting SGIO about policy coverage and documentation because litigation had been commenced. His evidence was that Mr Dobree did not identify himself in the telephone conversation on 18 April 2006. Mr Nichol's recollection is that he was asked in the telephone conversation whether under an ISR policy temporary removal of the insured property was permitted without the prior approval of the insurer. He told the caller that under the standard ISR policy temporary removal is allowed and that the insurer would be likely to investigate the circumstances of the loss and pursue its rights of subrogation against any negligent party that may have caused the loss.
It is my view that there was a misunderstanding between Mr Dobree and Mr Nichols. In the circumstances of Mr Nichols having previously discussed with Mr Dobree the action commenced by Ms Middleton it is unlikely that Mr Nichols would have told Mr Nichols that the claim would have been successful if pursued. Mr Nichols would have been likely to have been far more cautious in his conversation.
I conclude that Mr Nichols did not appreciate that he was speaking to Ms Middleton's lawyer and he did not understand that the enquiry was about the York Heritage policy. I conclude that Mr Nichols was speaking generally and not about the specific policy.

The claims and defences

In this action Ms Middleton claims that in March 1991 Mr Briggs re‑entered the premises from which York Motor Works and Garage carried on business and changed the locks. She claims that at that time Mr Briggs' companies owed money to York Motor Works and Garage for work done and material supplied to cars and that the Selwyn Francis Trust claimed a lien for all outstanding moneys owed. She also claims that in May 1993 the Renault was damaged in a fire at premises in Osborne Park where it was being stored on behalf of the trust.
Ms Middleton claims that Mr Verryt's affidavit of 10 August 2000 was a representation by AON that there was no insurance policy covering the damage to the Renault and that AON knew or ought to have known that representation would be passed on by Mr Anderson to others associated with York Motor Works and Garage, including Ms Middleton, who would rely upon the representation. She claims that the representation was false because the SGIO policy covered the damage to the Renault and a claim had been made on that policy for the damage. Ms Middleton also claims that she relied upon the representation to authorise the reinstatement of the Renault and has thereby suffered loss. She claims from AON damages for negligent misstatement, in deceit and for misleading and deceptive conduct. In her reply Ms Middleton admits that the Renault was not covered for theft under the SGIO policy, but denies that theft was the proximate cause of the damage. She contends that the cause of the damage was fire and that the Renault was covered for damage by fire.
AON denies all of Ms Middleton's claims. It contends that the SGIO policy did not provide any cover for the damage to the Renault and that at the time that Mr Verryt swore the affidavit of 10 August 2000 he honestly and reasonably believed it to be true.
AON claims from Mr Verryt contribution or indemnity for any liability it has to Ms Middleton. In closing submissions counsel for AON informed me that the claim is only pressed if Mr Verryt is found to have been reckless or fraudulent.

Finding as to Mr Verryt's evidence

Counsel for Ms Middleton submitted that I should reject Mr Verryt's evidence that he honestly believed what he deposed to in his affidavit of 10 August 2000. In considering the submission I bear in mind that Mr Verryt swore the affidavit for use in a Supreme Court action. I also bear in mind that Mr Verryt had been involved in the claim made by Mr Briggs after Mr Briggs' letter to him dated 28 November 1997, that at 11 August 1999 Mr Verryt knew that Mr Briggs wished to pursue the claim and that SGIO had instructed loss adjusters and that at the time of the affidavit Mr Verryt had not been informed that the claim was rejected by SGIO.
I accept Mr Verryt's evidence as to the circumstances of the motor vehicle policy having been arranged by him for Mr Brigg's vehicles and as to his conversation with Mr Diprose. The fact that there is no record of those conversations is not at all surprising as they would have taken place some fourteen years ago. The fact that Mr Verryt could not correctly remember Mr Diprose's name after that length of time is also not surprising.
The fact that Mr Verryt passed on to SGIO Mr Briggs' claim in 1997 and that the claim had not been rejected at the time that he swore the affidavit also does not detract from that conclusion. It was Mr Verryt's role as insurance broker to do that, whatever his view as to the claim. In those circumstances at that time he would have had no cause to seek to recall his communications with Mr Diprose some five or more years earlier.
SGIO did not inform Mr Verryt that the claim could not succeed because the loss did not occur in Toodyay. However the claim was made some five years after the loss. The responses from SGIO were preliminary only.
In view of the conversation with Mr Diprose I accept Mr Verryt's evidence that he honestly believed what he deposed to in his affidavit of 10 August 2000.
In an affidavit dated 18 April 2006 and tendered as his evidence‑in‑chief Mr Verryt deposed that at the time he swore his affidavit of 10 August 2000 he did not know that York Heritage's action in the Supreme Court had been settled and he had never heard of Ms Middleton.
I do not accept Mr Verryt's evidence that he had never heard of Ms Middleton, She was referred to in Mr Brigg's police statement which Mr Briggs had forwarded to Mr Verryt with his letter dated 21 January 1998. She was referred to in that statement as a person who had taken over a lease of the premises at Avon Terrace. The statement did not make any allegation against Ms Middleton.
In cross-examination Mr Verryt's evidence that he had no knowledge that Ms Middleton had any involvement in York Heritage's action. I accept that evidence. There is no evidence that he did have any such knowledge. The only people who are likely to have known at that time were Mr Anderson, Ms Middleton and people associated with them such as their legal advisors.
I also accept Mr Verryt's evidence that at the time he made his affidavit of 10 August 2000 he did not know that the action had been settled. There is no evidence to the contrary and I see no basis not to accept that evidence. There was no reason for anyone to tell him that the action had been settled.

Whether the damage to the Renault was covered under the SGIO policy

For Ms Middleton to succeed in her claim she must establish that there was insurance cover for the damage to the Renault. As I have noted it is common ground that the term fire and perils in the policy schedule did not include theft.
I am not satisfied on the evidence that the Renault was stolen. While Mr Briggs appears to have believed it was stolen the vehicle had been provided to York Motor Works and Garage for work to be done on it. After that a dispute arose. The evidence does not satisfy me that there was an intention permanently to deprive York Heritage of the vehicle or to use it without consent.
It is my view that the words "stored anywhere in the world" in the heading of the part of the policy schedule in which the Renault is listed were necessary to provide cover to vehicles stored outside of Australia because General Exclusion 9 would otherwise have excluded cover. The words do not determine whether cover was provided if a vehicle listed in that part of the schedule was stored at a location other than that nominated in the schedule.
Where movable property insured under a policy is described as being at a particular place the policy does not provide cover if the property is at another place if the description forms part of the description of the risk: McGillivray on Insurance Law, 9^th ed, p 754, General Principles of Insurance Law, E R Hardy‑Ivamy, 6^th ed, p 325, Pearson v Commercial Union Assurance Co (1876) 1 AC 498. The limitation on cover applies not because of any increase in the risk, but because the policy cover is limited to that location: Pearson per Lord Cairns, LC at p 503.
However it is my view that the policy is not limited to vehicles stored at a location. I reach the conclusion that the location does not form part of the description of the risk because the policy does not expressly provide that it only gives cover at the location specified, a location is provided for vehicles used occasionally on the road and because the locations are so large.
The conversation between Mr Diprose and Mr Verryt did not constitute a term of the insurance contract.
It is my view that General Condition 2 would not exclude the Renault being covered. The evidence does not satisfy me that the risk when the vehicle was at the location at which it was damaged was greater than the risk when it was stored in York.
Nor do I consider that General Exclusion 16 prevented the damage being covered. A lien was claimed over the vehicle by Ms Middleton and her firm, but I construe the exclusion as applying to lawful seizure or confiscation by an arm of government, not to the claiming of a lien by a private person.

The reasonableness of the contents of Mr Verryt's affidavit

I have concluded that the view expressed by Mr Verryt in his affidavit of 10 August 2000 was honestly held. I have also concluded that the view was wrong. Mr Bresland or Mr Baxter are of the opinion that it was not reasonable to hold the view expressed by Mr Verryt. I do not agree.
Whether a risk is covered by a policy requires an assessment of the policy and the forming of an opinion. Whether cover under the SGIO policy held by York Heritage was limited to the locations specified is not an easy question. It is a question on which lawyers could disagree.
Mr Verryt is an insurance broker and that fact was disclosed in his affidavit. After his conversation with Mr Diprose that lead to the policy it is my view that it was quite reasonable for him to hold the view that the policy was limited to specified locations when locations were specified for vehicles in the renewal schedule.
It is my view that the making of the affidavit was not wilfully false, reckless nor negligent. Nor do I consider that Mr Verryt owed a duty of care to Ms Middleton. He had no knowledge of her involvement in York Heritage's action or of the settlement of the action. Mr Verryt had no knowledge or means of knowledge that Ms Middleton individually or as a member of any class or group was vulnerable to harm: Perre Apand Pty Ltd (1999) 198 CLR 180.
For the representation to be in contravention of s 52 of the Trade Practices Act 1974 it must have been made in trade or commerce. That is it must have been conduct towards a person or persons which bore a trading or commercial character: Concrete Constructions (NSW) Pty Ltd vNelson (1990) 169 CLR 594. As the statement was made for use by a client in legal proceedings to recover a loss suffered on an insured vehicle it is my view that the representation did constitute conduct in trade or commerce.
However as I have concluded that the view contained in the affidavit was Mr Verryt's opinion honestly held on reasonable grounds the making of the affidavit was not misleading or deceptive conduct: MGICA (1992)Ltd v Kenny & Good Pty Ltd (1996) 140 ALR 313.