Murray's Transport v CGU Insurance

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.