Rosano v Karalis
[2017] VSC 472
•18 August 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 05050
| ANTHONY ROSANO | Appellant |
| v | |
| HELENI KARALIS | Respondent |
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JUDGE: | BONGIORNO JA |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 July 2017 |
DATE OF JUDGMENT: | 18 August 2017 |
CASE MAY BE CITED AS: | Rosano v Karalis |
MEDIUM NEUTRAL CITATION: | [2017] VSC 472 |
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APPEAL – Appeal of order of the Magistrates’ Court – Negligence – Whether the appellant failed to mitigate his loss – Whether the appellant had legal title to make a claim on an insurance policy taken out by his mother – Appeal allowed.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr P. G. Cawthorn QC with Mr T. J. McLean | John Curtain & Associates |
| For the Respondent | Mr M. Thompson QC with | Russell Kennedy Lawyers |
HIS HONOUR:
On 25 January 2016, the appellant, Mr Anthony Rosano, was driving his Alfa Romeo motor car in Sydney Road, Fawkner when he was involved in a collision with another vehicle driven by Ms Heleni Karalis. As a result of the collision Mr Rosano’s vehicle was rendered a total loss.
Ms Karalis was insured by insurance company CGU. Mr Rosano made a claim against Ms Karalis for the value of his vehicle. The insurer conceded that the collision was the fault of Ms Karalis and, after considerable negotiation, settled Mr Rosano’s claim in the sum of $6,211.99. That sum was paid to Mr Rosano on 30 May 2016.
Mr Rosano was, at all material times, a student at Monash University. He lived in Thomastown and had used his car, not only to travel to Clayton to attend university but also for social and work purposes. He was financially unable to replace his car until Ms Karalis’ insurer paid the sum referred to – some four months after the accident.
In order to continue his ordinary activities before he received the payment from Ms Karalis’ insurer he hired a car from a car hire firm, Regent Rentals, at a cost of $115 per day. He ceased hiring that car almost immediately CGU paid the sum referred to above, which enabled him to replace his wrecked car. By then he had had the hire car for 122 days and accrued a debt to Regent Rentals of $14,030.
On 18 July 2016, Mr Rosano commenced an action in negligence in the Magistrates’ Court against Ms Karalis for damages, quantified at the sum he owed the car hire firm, namely $14,030. Although, as it subsequently turned out, offers were made by CGU to Mr Rosano, no settlement was reached so that the matter proceeded to trial. In Ms Karalis’ written defence to Mr Rosano’s claim, her insurer admitted negligence on her behalf but asserted four ways in which Mr Rosano had failed to mitigate his loss. However, by the time the case got to trial that insurer relied only upon one allegation concerning a failure to mitigate his loss, couched in the following terms:
‘4.The Defendant says that the Plaintiff has failed to mitigate loss arising from the collision resulting in the claim for excessive hire vehicle costs. The Plaintiff is (sic) required to, among other things:
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(d)make a claim on any applicable policy of insurance in respect of the Plaintiff’s vehicle to enable the Plaintiff to purchase a replacement vehicle as soon as practicable.’
In the Magistrates’ Court, counsel for the appellant asserted that the onus of proof with respect to a failure to mitigate fell upon the respondent. That assertion, which is correct,[1] was not challenged by the respondent’s counsel. In this Court both parties accepted that proposition.
[1]Marinko v Masri (1999) NSWCA 364, [22]; Geest plc v Lansiquot [2002] UKPC 48.
On the trial of this action Mr Rosano deposed to his motor vehicle being insured with RACV but that the policy had been taken out not by him but by his mother. He said she had paid all the applicable premiums, notwithstanding that the car belonged to him. However, he was also adamant that his mother would not permit him to make a claim for his wrecked motor car on that policy. He attributed this attitude to his then estrangement from his mother and her concerns as to his prior bad driving history. He said that he accepted this situation because he acknowledged that the RACV policy was his mother’s and not his. His evidence as to insurance was generally vague and uncertain but when asked, in cross-examination, whether he was aware that ‘…you can make a claim on your insurance…’(emphasis added) he agreed that he was so aware. Counsel asking the questions did not make clear to what insurance he was referring.
After Mr Rosano had completed his evidence, counsel for Ms Karalis’ insurer called evidence from Mr Gilbert Bontemps, who described himself as a consultant to IAG – Insurance Australia Group, which he said was the owner of RACV Insurance. In the course of his evidence he was shown a bundle of documents and the following exchange took place:
You’d agree with me that it’s the policy that was in place over the motor vehicle being used by Mr Anthony Rosano at the time of the collision on 25 January of this year?---That’s correct.
It’s a comprehensive motor vehicle policy. Is that correct?---That’s correct.
It runs for – I think it was due for renewal on 22 April of each year. Is that correct?---That is correct, yes.
The bundle consisted, in fact, of three documents. These documents can be outlined as follows.
Document 1
The first document is of 5 pages and is entitled:
2016-2017 Certificate of Insurance
Prime Cover Comprehensive Motor Renewal
Of particular significance, for present purposes, are the following extracts from those pages.
On page 1 of 5, under the heading ‘Your policy summary’ a policy number is recorded, as is an annual premium and a due date, being 11.59pm, 22 April 2016 (sic) and a current policy expiration as being 11.59pm on 22 April 2016. It describes a vehicle as a 2002 Alfa Romeo 156 sedan registration number SNB 399 and, most importantly, describes ‘the insured’ as Mr R Rosano and Mrs P Rosano. There is no reference to the appellant.
Page 2 of 5 contains the following:
Your policy details
The following pages list your Policy details. Please keep this certificate, along with your motor insurance Product Disclosure Statement and Policy Booklet (PDS), and any applicable Supplementary (PDS), in a safe place. On full payment these documents will form your Motor Insurance Contract. (emphasis added).
The contract is said to be valid from 11.59pm on 22 April 2016 to 11.59pm on 22 April 2017. This page then repeats the names of the insured, describes the vehicle insured, its registration and the fact that the vehicle is kept at 7 Chelsea Court, Thomastown Vic 3074. It refers to ‘important changes to your policy’ and to the ‘important changes’ section of this document and the supplementary PDS.
Page 3 is of no present importance.
Page 4 of 5, under the heading ‘Owner and Driver history’, sets out the age, driving experience and insurance claims experience of both Mr R Rosano and Mrs P Rosano. It includes the following statement:
Details of insurance and driving history for each insured and driver are listed here. We need to know their driving history, including accidents and their insurance history. (emphasis added)
Then follows driving history details of Mr and Mrs Rosano. There is no reference to any other owner or driver. In particular, there is no reference to the appellant.
Page 5 of 5 is of no present importance.
Document 2
The second document in the bundle is of two pages, each of which is headed:
Motor Insurance
Supplementary Product Disclosure Statement
Page 1 of 2 contains the following:
This Supplementary PDS updates, and should be read with, the Motor Insurance Product Disclosure Statement and Policy Booklet (PDS) edition 1 and any other applicable supplementary PDS. These documents, together with your current certificate of insurance make up the terms and conditions of your insurance contract with us. (emphasis added)
Page 2 of 2 is of no current importance.
Document 3
The final document is a single page. This document describes various matters connected with RACV Insurance products and is of no current importance.
The bundle of documents discussed above was admitted into evidence by the Magistrate as ‘Exhibit D2 – Comprehensive motor vehicle policy’, following leading questions to that effect by counsel for Ms Karalis’ insurer. However, it was patently clear that that bundle of documents did not constitute a comprehensive insurance policy, unless it was read with a number of other documents referred to and incorporated by reference in those documents which were tendered.
Although, in the course of his evidence, Mr Bontemps referred to a ‘policy booklet’, no such document was ever produced – although the Magistrate appears to have been aware of its existence. The following passage is recorded in the transcript of Mr Bontemps’ cross-examination by counsel for the appellant:
I’ve only had a couple of minutes to look at that policy, I can’t see anywhere in there that it says that. Does it say that in your policy?---Yes it does.
Where does it say that? Can you lead me to a section?---Well, if you’ve got a policy booklet there.
I believe we have one. Well, the policy’s been tendered. Could I have that?
HIS HONOUR: The policy has. The terms are on the booklet usually. They accompany the policy.
MR JAMES: Yes, but the book’s not here. Well, if it’s not here, I’ll leave it at that…..
Later in the transcript there are other references to the ‘policy booklet’ which had still not been produced. Whether the ‘policy booklet’ was the Product Disclosure Statement already referred to is not clear.
Exhibit D2 was, at best, what it purported to be; part of a motor vehicle insurance contract (or policy) which recorded the policy number, the period of insurance, the premium, the names of the insured, a description of the vehicle insured and similar matters. Importantly, it contained a driving offence history of each of the appellant’s parents. Without the documents incorporated by reference, referred to above, it is impossible to ascertain the terms of the contract (or policy) consisting of Exhibit D2 and those documents.
Further, in this particular case Exhibit D2’s relevance to the issues in this proceeding is even more remote. Exhibit D2 relates to a period which commenced some three months after the motor vehicle the subject of this litigation was destroyed. Whilst it was clear from the exhibit that there had been in existence a prior insurance policy, there was no evidence before the Magistrate as to what constituted that policy, which would have been in force on 25 January 2016, the date of the collision. There was no evidence before the Magistrate as to whose name or names appeared as the ‘insured’ or the ‘owner and driver’ in such earlier document. Much less was there evidence as to relevant product disclosure statements, without which any policy created similarly to that already discussed would also be of unknown consequence.
There was no evidence whatsoever before the Magistrate of privity of contract between the appellant and RACV Insurance in respect of any insurance policy, nor that the appellant was a third party beneficiary in respect of any policy within the meaning of the Insurance Contracts Act 1984 (Cth). Nor was there any evidence that the appellant’s mother (and/or father) was an agent for the appellant in taking out a policy, or evidence that she (or they) held the benefit of such policy as trustee(s) for him.
Mr Bontemps, to whom reference has already been made, was called by counsel for the respondent. His evidence appeared to be mainly concerned with the time required to assess a claim for a destroyed vehicle, although he also proffered the opinion that Mr Rosano’s prior driving history would not have mattered had he made a claim. In giving his evidence, Mr Bontemps assumed that the appellant was entitled to make a claim on the insurance policy taken out by his mother. He gave no reason for acting on this assumption, but proceeded to describe RACV’s claims process and how it would have been applied in a case where the person entitled to claim was a ‘not at fault’ driver, as was the case here. He gave no evidence relevant to the question of the appellant’s entitlement to make a claim on the policy referred to, but did acknowledge that it was not possible for a person who did not have an insurance contract with a particular company to make a claim on that company. How much Mr Bontemps knew of the Exhibit D2, its effect, its period of operation and similar matters was also not the subject of evidence. The Magistrate regarded his evidence as being of ‘little value’.
For it to be even arguable that the appellant, Mr Rosano, had an obligation to make a claim on an insurer in respect of the loss of his motor vehicle, as alleged, there had to be an ‘applicable policy of insurance in respect of the (appellant’s) vehicle…’ as pleaded in the respondent’s defence. Although the existence of a prior policy, operative at the date of the collision, could be deduced from the contents of Exhibit D2, there was no evidence whatsoever before the Magistrate that such a policy would have been available to the appellant in the particular circumstances of this case.
In the absence of evidence of the terms and conditions upon which the policy was issued it is impossible to ascertain the insurer’s liability to the appellant, if any. Whether it was an ‘applicable policy’ could only be determined after examination of all of its constituent documents. Thus the respondent failed to discharge the onus of proof of the existence of an ‘applicable policy’ available to the appellant .
The Magistrate delivered an ex tempore oral judgment at the end of the trial. In doing so he commenced by defining the issue to be determined as whether it was reasonable or unreasonable for the appellant not to make a claim on his mother’s insurance policy. Later in his judgment he reduced this question to whether the appellant was obliged to ‘make enquiries through his mother’ which, he said, would have led to a claim being made which would have been processed promptly resulting in ‘a payout’ for the insured value of his motor vehicle. Thus he would be enabled, with the proceeds, to obtain another vehicle and mitigate the loss he had suffered. However he did not explain what those enquiries related to, nor how they would have necessarily resulted in a successful claim. He concluded that the appellant should have made the enquiries referred to with the consequences described.
All of the Magistrate’s conclusions are dependent upon a finding, unexpressed, that the appellant was legally entitled to make a successful claim on his mother’s insurance policy. For the reasons I have already given there was no or no sufficient evidence that the appellant had such a legal entitlement. The respondent did not discharge the onus of proof referred to in paragraph [6] above. Thus it was not open to the Magistrate on the evidence before him to reach a conclusion that the appellant had any such entitlement, whether ‘through his mother’ or otherwise. However, he also found that the appellant was entitled to recover some of his expenditure on the hired vehicle because, although he found that his claim would have been paid promptly he would still incur some recoverable loss. He assessed the appellant’s damages at $3,450. Because an offer of compromise had apparently been made before trial, which offer was less than this amount, there were costs orders against the appellant.
Had the respondent been successful in demonstrating that the appellant had legal entitlement to make a claim on an insurer for the loss of his vehicle, it would have been necessary to examine the major issue argued in this proceeding: whether, if there was an applicable policy of insurance available to the appellant to claim the cost of replacing his motor vehicle quickly and thus mitigate his loss, he would have been legally obliged, in all the circumstances, to make such a claim. On the conclusion I have reached, whether he had such an obligation or not is no longer relevant.
The consequence of the determination I have reached is that the appellant’s appeal will be upheld and he will be awarded damages as claimed in the Magistrates’ Court; the respondent’s defence to that claim having failed.
The orders made by the Magistrates’ Court were as follows:
1. That Heleni Karalis pay Anthony Rosano $3,450 (without interest) and $1,124.70 costs. Stay 30 days.
2. That Anthony Rosano pay Heleni Karalis $6,035.40 costs. Stay 30 days.
The orders of this Court are as follows:
1. That the judgment and orders of the Magistrates’ Court of 10 November 2016 in the action brought by Anthony Rosano against Heleni Karalis (No. G11954065) be wholly set aside.
2. That in lieu thereof there be judgment for the appellant against the respondent in the sum of $14,030.
3. That the question of interest on the amount referred to be reserved.
4. That the respondent pay the appellant’s costs in the Magistrates’ Court and in this Court, such costs to be taxed.
5. That there be liberty to apply.
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