RACV Insurance Ltd v Alam - [2001] VSC 503

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7585 of 2001

RACV INSURANCE PTY LTD (ACN 004 208 084)	Appellant
v
TERESA ALAM	Respondent

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JUDGE:	Balmford J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 November 2001
DATE OF JUDGMENT:	19 December 2001
CASE MAY BE CITED AS:	RACV Insurance v Alam
MEDIUM NEUTRAL CITATION:	[2001] VSC 503

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Appeal by an insurance company – motor vehicle insurance claim – renewal of an insurance contract – where the insurance company refused to indemnify the insured for damage under the insurance policy – where a “regular driver” of the insured vehicle was charged with offences before renewal of the insurance contract and this was not disclosed by the insured upon renewal –insured’s duty of disclosure – whether the insurance company informed the insured of her duty of disclosure.

Insurance Contracts Act 1984 – sections 11, 13, 14, 21, 22 and 28.
Magistrates’ Court Act 1989 – section 109.

Popovski v Ericsson Australia Pty Ltd [1998] VSC 61.
Spurling v Development Underwriting (Vic) Pty Ltd [1973] VR 1.
Suncorp General Insurance Limited v Cheihk [1999] NSWCA 238.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr AM Donald	Blake Dawson Waldron
For the Respondent	Mr DA Klempfner	Plotkins

HER HONOUR:

Introduction

This is an appeal under section 109 of the Magistrates’ Court Act 1989 (“the Magistrates’ Court Act”) which provides that a party to a civil proceeding in the Magistrates’ Court may appeal to this Court, on a question of law, from a final order of the Magistrates’ Court in that proceeding. The final order the subject of the appeal was made on 17 August 2001 by the Magistrates’ Court at Melbourne, constituted by Mr Hardy, Magistrate, whereby:

(i)there was judgment for the plaintiff (“Ms Alam”) in the sum of $8300 together with interest of $954.24 and costs fixed in the sum of $4,261.
(ii)the Court declared that the defendant (“the company”) was liable to indemnify Ms Alam against claims made by the other two damaged vehicles.

On 17 September 2001 Master Wheeler ordered that the questions of law shown by the company to be raised by the appeal were:

(a)Having regard to exhibit SAT 5 could a reasonable Magistrate properly instructed have held that [the company] did not inform [Ms Alam] clearly in writing of her duty of disclosure prior to the renewal of the relevant insurance contract or at all?
(b)Did the Magistrate [err in law] in holding that upon renewal of the insurance contract, and having regard to the provisions of section 11(10) of the Insurance Contracts Act 1984 [“the Act”], [the company] was obliged by section 22 of the Act specifically to inform [Ms Alam] clearly in writing of her duty of disclosure with respect to the renewal of the relevant insurance contract?
(c)Having regard to the whole of the evidence could a reasonable Magistrate properly instructed have held that [the company] waived the duty imposed upon [Ms Alam] by section…

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: [2001] VSC 503
Decision Date: 19 December 2001

CaseChat Overview and Summary

RACV Insurance Limited appealed against a decision of the County Court of Victoria which found that the insured, Alam, was entitled to a payment under her motor vehicle insurance policy. The dispute arose from a refusal by RACV Insurance to indemnify Alam for damage to her car, arguing that she had breached her duty of disclosure when she renewed her policy. The insured had not disclosed that a regular driver of the car had been charged with certain offences before the renewal of the insurance policy.

The central legal issue before the court was whether the insured had a duty to disclose to the insurer information regarding charges against a regular driver of the vehicle prior to the renewal of the insurance policy. The court also considered whether RACV Insurance had adequately informed the insured of her duty of disclosure. The court examined the relevant provisions of the Insurance Contracts Act 1984, including sections 11, 13, 14, 21, 22 and 28, to determine the rights and obligations of the parties. Additionally, the court looked at relevant case law, including Popovski v Ericsson Australia Pty Ltd, Spurling v Development Underwriting (Vic) Pty Ltd, and Suncorp General Insurance Limited v Cheihk.

The court found that the insured had a duty to disclose the charges against the regular driver, and that the insurer had not adequately informed the insured of this duty. Consequently, the insured was entitled to a payment under the policy. The court held that the duty of disclosure extended to charges against a regular driver, and that the insurer had failed to provide clear guidance on the scope of this duty. The court emphasised the importance of insurers clearly communicating the extent of the insured's disclosure obligations.

The final order of the court was that the appeal by RACV Insurance was dismissed, and the decision of the County Court in favour of the insured was upheld.

Orders