Ritchie v Insurance Australia Ltd

[2022] NSWCA 278

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Ritchie v Insurance Australia Ltd [2022] NSWCA 278

Hearing dates:

31 October 2022

Date of orders:

19 December 2022

Decision date:

19 December 2022

Before:

Ward P at [1];
Meagher JA at [2];
Mitchelmore JA at [35]

Decision:

1. Grant leave to appeal.

2. Dismiss the appeal.

3. Applicant to pay the respondent’s costs.

Catchwords:

INSURANCE – liability insurance – exclusions – where endorsement excluded cover for liability arising out of specified cutting or welding activities unless carried out in compliance with relevant Australian Standard – where those activities included use of “spark producing equipment” – where use of power cutter to cut steel produced sparks which caused bushfire – whether primary judge erred in concluding power cutter was within description “spark producing equipment”

Legislation Cited:

Civil Liability (Third Party Claims against Insurers) Act 2017 (NSW), ss 4, 5

Supreme Court Act 1970 (NSW), s101(2)(r)

Cases Cited:

Cody v JH Nelson Pty Ltd (1947) 74 CLR 629; [1947] HCA 17

McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65

Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17

Category:

Principal judgment

Parties:

Margaret Ritchie (Applicant)
Insurance Australia Ltd t/as CGU Insurance (Respondent)

Representation:

Counsel:

P Braham SC with D Birch (Applicant)
S Donaldson SC with C Coventry (Respondent)

Solicitors:

Maddens Lawyers (Applicant)
McCabe Curwood (Respondent)

File Number(s):

2022/119934

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2022] NSWSC 330

Date of Decision:

31 March 2022

Before:

Davies J

File Number(s):

2017/126664

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 17 February 2017, two employees of Advanced Plumbing & Drains Pty Ltd (in liq) (APD) were engaged in the installation of reinforcing steel into trenches, as part of residential building works at a site in Carwoola in New South Wales. One was using a Husqvarna K970 power cutter fitted with a cutting blade to cut reinforcing steel. That use involved frictional abrasion between the cutting blade and the steel, which produced sparks. Those sparks were directed (unwittingly) to nearby dry grass and resulted in a bushfire.

The applicant commenced proceedings for herself and on behalf of group members who suffered loss or damage to property or personal injury as a result of that bushfire. After APD went into liquidation, the applicant sought and was granted leave to proceed directly against its insurer CGU.

CGU’s policy contained a Welding Endorsement. That endorsement provided that cover would not extend to liability arising out of or in any way connected with listed activities, including the use of “spark producing equipment”, unless that activity was conducted in strict compliance with Australian Standard AS 1674, Part 1 - 1997 ‘Safety in Welding and Allied Processes – Fire Precautions’.

The question for the primary judge was whether the use of the power cutter fell within the description…