Murray's Transport v CGU Insurance

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SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

MURRAY'S TRANSPORT NSW PTY LTD v CGU INSURANCE LIMITED

[2013] SASCFC 100

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice Nicholson)

9 October 2013

INSURANCE - CLAIMS GENERALLY - CLAIM BY THIRD PARTY WHERE INSURED ABSENT OR DEAD

INSURANCE - THE POLICY - CONDITIONS, WARRANTIES AND EXCEPTIONS - EXCLUSION CLAUSES

EVIDENCE - BURDEN OF PROOF, PRESUMPTIONS, AND WEIGHT AND SUFFICIENCY OF EVIDENCE

TORTS - NEGLIGENCE - ROAD ACCIDENT CASES - ACTIONS FOR NEGLIGENCE - EVIDENCE - ONUS OF PROOF AND SUFFICIENCY OF EVIDENCE

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - FINDINGS ON ISSUE OF NEGLIGENCE - CONTRIBUTORY NEGLIGENCE

The appellant, Murray's Transport NSW Pty Ltd, appeals against the dismissal of its action against the respondent, CGU Insurance Limited, the insurer of the driver of a Jaguar motor vehicle which collided with, and caused damage to, one of Murray's Transport's B-Double trucks. The driver of the Jaguar, Mr McFarlane, died in the collision and his estate is bankrupt. Murray's Transport brought this action directly against the insurer, pursuant to s 51 of the Insurance Contracts Act 1984 (Cth).

The Judge dismissed Murrray's Transport's claim because he held that the damage was caused by an event which was excluded from the scope of CGU's insurance policy.  That event was that Mr McFarlane had intentionally caused the damage in that he deliberately collided with the B-Double truck in order to take his own life.  Murray's Transport appeals against that finding.

Held (allowing the appeal):

(1)  With the evidence having established that Mr McFarlane was liable to Murray's Transport because he either intentionally or negligently caused the accident, it fell on CGU to prove that the damage was intentionally caused and for that reason within the terms of the provision of the policy excluding from CGU's indemnity liability which had been intentionally incurred (at [10] (Kourakis CJ).

(2)  The Judge erred in drawing the inference that Mr McFarlane deliberately brought about the collision (at [36] (Kourakis CJ), [94] (Gray J) and [114] (Nicholson J)).

(3)  CGU has not discharged its onus to prove that Mr McFarlane deliberately caused the accident and therefore the damage to Murray's Transport's B-Double truck (at [39] (Kourakis CJ), [94] (Gray J) and [109] and [115] (Nicholson J)).

(4)  Murray's Transport has discharged its onus to prove that the accident came about as a result of Mr McFarlane's negligence (at [86]-[87] (Gray J) and [129] (Nicholson J)).

(5)  The parties consented to the Court determining the issue of contributory negligence in the event CGU was found liable.  On the issue of contributory negligence, Murray's Transport's responsibility for the damage is fixed at a 15 per cent reduction in the award of damages (at [40]-[44] (Kourakis CJ), [95] and [106] (Gray J) and [131] (Nicholson J)).

(6)  Appeal allowed; the order of dismissal in the District Court is set…

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Details
Case
[2013] SASCFC 100
Decision Date

CaseChat Overview and Summary

The appeal concerned a collision between a B-double semi-trailer owned by Murray’s Transport NSW Pty Ltd and a Jaguar motor vehicle insured by CGU Insurance Limited. Murray’s Transport brought a direct claim against CGU Insurance under section 51 of the *Insurance Contracts Act 1984* (Cth) after the driver of the Jaguar, Mr McFarlane, died in the collision. The District Court had dismissed Murray’s Transport’s claim, finding that CGU Insurance was entitled to rely on an exclusion clause in the policy because Mr McFarlane had deliberately driven into the path of the semi-trailer with the intention of committing suicide. Murray’s Transport appealed this decision.

The central legal issues before the appellate court were whether the trial judge erred in inferring that Mr McFarlane deliberately caused the collision, and consequently, whether CGU Insurance had discharged its onus to prove that the damage was intentionally caused and thus excluded from indemnity. The court was also required to determine whether Mr McFarlane’s actions constituted negligence, and if so, to consider the issue of contributory negligence, to which the parties had consented to the appellate court determining in the event CGU Insurance was found liable.

The Full Court of the Supreme Court of South Australia held that the trial judge had erred in inferring that Mr McFarlane deliberately brought about the collision. The court reasoned that while the evidence established Mr McFarlane was liable to Murray’s Transport, either through intentional conduct or negligence, the onus rested on CGU Insurance to prove the damage was intentionally caused to bring it within the exclusion clause. The court found that CGU Insurance had not discharged this onus. Conversely, the court determined that Murray’s Transport had discharged its onus to prove the accident was caused by Mr McFarlane’s negligence.

The appeal was allowed, the District Court’s order of dismissal was set aside, and CGU Insurance was ordered to pay Murray’s Transport 85% of the damage to its B-double truck. This reduction reflected a 15% apportionment of contributory negligence against Murray’s Transport, a finding to which the parties had consented.

Orders

Orders of the court

Held (allowing the appeal):

(1) With the evidence having established that Mr McFarlane was liable to Murray's Transport because he either intentionally or negligently caused the accident, it fell on CGU to prove that the damage was intentionally caused and for that reason within the terms of the provision of the policy excluding from CGU's indemnity liability which had been intentionally incurred (at [10] (Kourakis CJ).

(2) The Judge erred in drawing the inference that Mr McFarlane deliberately brought about the collision (at [36] (Kourakis CJ), [94] (Gray J) and [114] (Nicholson J)).

(3) CGU has not discharged its onus to prove that Mr McFarlane deliberately caused the accident and therefore the damage to Murray's Transport's B-Double truck (at [39] (Kourakis CJ), [94] (Gray J) and [109] and [115] (Nicholson J)).

(4) Murray's Transport has discharged its onus to prove that the accident came about as a result of Mr McFarlane's negligence (at [86]-[87] (Gray J) and [129] (Nicholson J)).

(5) The parties consented to the Court determining the issue of contributory negligence in the event CGU was found liable. On the issue of contributory negligence, Murray's Transport's responsibility for the damage is fixed at a 15 per cent reduction in the award of damages (at [40]-[44] (Kourakis CJ), [95] and [106] (Gray J) and [131] (Nicholson J)).

(6) Appeal allowed; the order of dismissal in the District Court is set aside; and, CGU is to pay Murray's Transport 85% of the damage to Murray's Transport B-Double truck (at [45] (Kourakis CJ), [107] (Gray J) and [131] (Nicholson J)).

Background

Background to the litigation

On the pleaded cases, it may be discerned that there was no dispute that at the time of collision, the Jaguar was on its incorrect side of the road. On Murray’s Transport’s case, the fact that the Jaguar was on its incorrect side of the road was a particular of negligence. On CGU Insurance’s case, the conduct of Mr McFarlane in driving the vehicle onto the incorrect side of the road was deliberate, bringing the conduct within the contractual exemption clause. The Established Facts The collision occurred on the Dukes Highway on the outskirts of Yumali, a small township about 160 kilometres south-east of Adelaide. Mr Murray was travelling east and leaving the township of Yumali, at which point the Dukes Highway rose to the crest of a small hill and then extended on a gentle decline for a distance of about 800 metres. The carriageway was sealed bitumen with gravel-bitumen shoulders. The police report indicated that the carriageway for eastbound traffic was 3.6 metres wide with a shoulder of 3.5 metres, and the carriageway for westbound traffic was 3.5 metres wide with a shoulder of 5.0 metres. Mr McFarlane was travelling west toward Yumali and Adelaide. Both vehicles were in a sound mechanical condition. No other vehicles were in the vicinity. The weather conditions were good. It was a bright, sunny day. The road surface was dry and in good condition. As Mr McFarlane approached Yumali, he traversed a left hand bend, followed by a right hand bend. As the Jaguar came out of the right hand bend, Mr McFarlane had a clear westerly view for a distance of about 400 to 500 metres. The road over this distance was essentially straight, rising slightly to the crest of a hill. There was no evidence before the Court as to the manner in which Mr McFarlane traversed these bends other than the observation made by Mr Murray that when he first saw the Jaguar, it was coming out of the right hand bend, partly on its incorrect side of the road. As the B‑double semi-trailer proceeded east from Yumali, it travelled on its correct side of the road and approached the crest of the earlier referred to hill. As the B‑double semi-trailer came over the crest, Mr Murray had a clear view to the east for a distance of about 400 to 500 metres. The collision between the vehicles occurred about halfway along the stretch of road between the crest of the hill and the earlier referred to right hand bend. The point of impact was determined to be entirely on Mr Murray’s carriageway, that is, entirely on the incorrect side of the road for Mr McFarlane’s direction of travel. Mr Murray was driving at about 90 kilometres per hour. As he drove over the crest of the small hill on leaving the township of Yumali, he observed the Jaguar approaching at a reasonable speed. He first saw the Jaguar travelling towards him and about 500 metres away. The Jaguar was straddling the broken white line in the centre of the carriageway and about two thirds on its incorrect side of the road. Mr Murray took his foot off the accelerator and covered the brake. He continued to observe the approach of the Jaguar as it proceeded to drift further to the incorrect side of the dividing line, eventually moving entirely onto its incorrect side of the road. In evidence, Mr Murray described the Jaguar as “drifting” completely onto its incorrect side of the road. In particular, he gave the following evidence:Q.As you drove on, and on your evidence kept your eye on the other car, can you explain to his Honour what it was first of all that you saw the other car doing.A.It was - it had drifted onto my side of the road and I initially thought, wondered whether it was overtaking anything but there was no vehicle there to be overtaking at all.

Evidence

Evidence Before The Court

It is settled that an appellate court is obliged to conduct a real review of the trial and the Judge’s reasons. This Court is in as good a position as the trial Judge to decide what are the proper inferences and conclusions to draw from the evidence. In Fox v Percy, the High Court summarised the position as follows:[13]Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". In Warren v Coombes, the majority of this Court reiterated the rule that:"[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it."As this Court there said, that approach was "not only sound in law, but beneficial in ... operation".[Footnotes omitted.]These observations guide the approach to be taken by this Court when resolving the issues arising on the appeal. No issue about the credibility and reliability of witnesses arose. Essentially, the primary facts were not in dispute. The matter of debate concerned the proper inferences to be drawn from those facts.[13] Fox v Percy (2003) 214 CLR 118, [25].Evidence Supporting Some Positive Inference In Girlock (Sales) Proprietary Limited v Hurrell,[14] members of the High Court discussed the approach to be taken to the issue of positive inferences. Stephen J observed:[15] This is not a case of mere competing possibilities, no instance of "a choice among rival conjectures", such as Dixon C.J. spoke of in Jones v Dunkel. Here there exists what Dixon C.J. there referred to as "evidence supporting some positive inference ... an inference which arises as an affirmative conclusion from the circumstances proved in evidence". His Honour went on to cite a passage from the unreported decision of five members of this Court in Bradshaw v McEwans Pty Ltd which is rather more fully reproduced in the report of Holloway v McFeeters; speaking of civil cases, the passage reads:"you need only circumstances raising a more probable inference in favour of what is alleged ... where direct proof is not available it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference; they must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is mere matter of conjecture: see per Lord Robson Richard Evans & Co. Ltd. v Astley. All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood".At p. 305 of Jones v Dunkel Dixon C.J. added these observations:But the law which this passage attempts to explain does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.[Footnotes omitted.][14] Girlock (Sales) Proprietary Limited v Hurrell (1982) 149 CLR 155.[15] Girlock (Sales) Proprietary Limited v Hurrell (1982) 149 CLR 155, 161-162.

Decision

Reasons for decision

It is not possible, nor is it necessary, to be precise about what may have been achieved. However, I am satisfied that both the nature of Mr Murray’s negligence and the damage he failed to avoid should result in a 15 per cent reduction in the award of damages.Conclusion I would:1 Allow the appeal.2 Set aside the order of dismissal made in the District Court. 3Order instead that CGU pay Murray’s Transport 85 per cent of the damage to Murray’s Transport’s B-Double. On 16 June 2008, at approximately 3.04 pm, a collision occurred between a B‑double semi-trailer driven by Brett Kenneth Murray and a Jaguar motor vehicle driven by Allan McFarlane. The defendant and respondent, CGU Insurance Limited, was the comprehensive motor vehicle insurer of the Jaguar motor vehicle. The plaintiff and appellant, Murray’s Transport NSW Pty Ltd, was the owner of the B‑double semi-trailer. Murray’s Transport claimed directly against CGU Insurance pursuant to section 51 of the Insurance Contracts Act 1984 (Cth).[10] [10] Section 51 provides:(1)Where:(a) the insured under a contract of liability insurance is liable in damages to a person (in this section called the third party);(b) the insured has died or cannot, after reasonable enquiry, be found; and(c) the contract provides insurance cover in respect of the liability;the third party may recover from the insurer an amount equal to the insurer’s liability under the contract in respect of the insured’s liability in damages.(2)A payment under subsection (1) is a discharge, to the extent of the payment, in respect of:(a) the insurer’s liability under the contract; and(b) the liability of the insured or of the insured’s legal personal representative to the third party.(3)This section does not affect any right that the third party has in respect of the insured’s liability, being a right under some other law of the Commonwealth or under a law of a State or Territory. Following a trial in the District Court, the Judge concluded that CGU Insurance was entitled to the benefit of an exemption clause in the relevant policy of insurance. This resulted from CGU Insurance satisfying the Judge that Mr McFarlane, its insured, had deliberately driven his motor vehicle into the path of the B‑double semi-trailer in order to commit suicide. As a consequence, Murray’s Transport’s claim was dismissed. In this appeal, Murray’s Transport challenged this conclusion. The Pleaded Cases By its amended statement of claim, Murray’s Transport pleaded as follows:4.At or about 3:04pm on 16 June 2008 the Plaintiff’s prime mover and trailer were travelling in an easterly direction on the Dukes Highway, approximately 300 metres east of Yumali, in the State of South Australia. 5.At that time and place the Jaguar was travelling in a westerly direction over the centre line approaching the Plaintiffs [sic] prime mover and trailer and collided with the Plaintiff’s prime mover and trailer.6.The collision referred to in paragraph 5 herein was caused by the negligence of the driver of the Jaguar, particulars of which are:6.1 failing to keep any or any proper look out;6.2 failing to exercise reasonable care, skill or jp@Pasudgment in the management and control of the Jaguar motor vehicle;6.3 driving without due care and attention;6.4 causing or allowing the Jaguar to cross into the path of travel of the Plaintiff’s prime mover and trailer when it was unsafe and/or dangerous to do so;6.5 failing to keep to the left of the road;6.6 failing to keep to the left of oncoming vehicles; and6.7 failing to keep to the left of the centre of the road and/or the dividing line in the middle of the road.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.