QBE Mercantile Mutual Ltd v Hammer Waste Pty Ltd

This appeal concerned a dispute between QBE Mercantile Mutual Ltd (QBE) and Hammer Waste Pty Ltd (Hammer) regarding an insurance policy for a truck. The primary issue was whether QBE was entitled to decline cover for the truck when it was driven by Mr Winstanley, a driver whose declaration had been rejected by QBE. Hammer contended that the policy did not exclude cover in such circumstances, but rather stipulated an additional excess payment.

The court was required to determine two key legal issues. Firstly, it had to ascertain the true construction of the insurance policy to decide whether QBE could refuse cover when Mr Winstanley was driving the truck. Secondly, the court needed to consider whether Hammer had a duty to disclose to QBE, prior to the policy renewal, that Mr Winstanley was a regular driver, and if so, what the consequences of any non-disclosure would be for QBE's liability.

The court rejected QBE's submission that a "rejected driver" was excluded from cover by the policy's construction. The judge found that the policy expressly provided for an additional excess of $1,000 in circumstances where a Driver's Declaration had been submitted and rejected, rather than an outright exclusion of cover. QBE conceded that none of the express exclusions in the policy applied to a rejected driver. The court also noted that it was common ground that a specific clause (cl 6.34) did not apply. The appeal was dismissed with costs.