Selected Seeds P/L v QBEMM P/L - [2009] QSC 70

SUPREME COURT OF QUEENSLAND

CITATION:

Selected Seeds P/L v QBEMM P/L & Anor [2009] QSC 70

PARTIES:

SELECTED SEEDS PTY LTD ACN 009 826 016
(Plaintiff)

v

QBEMM PTY LIMITED ACN 087 142 569

QBE INSURANCE (AUSTRALIA) LIMITED ACN 003 191 035
(Defendants)

FILE NO/S:

BS 7020 of 2008

DIVISION:

Trial Division

PROCEEDING:

Hearing

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

8 April 2009

DELIVERED AT:

Brisbane

HEARING DATE:

30 March 2009

JUDGE:

McMurdo J

ORDER:

Declare that under the insurance policy referred to in the pleadings the plaintiff is entitled to:

1. Indemnity for the sum of $150,000; and

2. Payment of such costs and expenses as were reasonably incurred in its defence of the Federal Court proceedings.

CATCHWORDS:

INSURANCE – GENERAL – POLICIES OF INSURANCE – CONSTRUCTION – where insured supplied wrong seed – where insured was sued in respect of damage suffered from wrongful supply and settled out of court – where insurer will indemnify ‘in respect of … Property Damage … caused by an Occurrence’ – where the policy ‘does not cover any liability arising from or caused by ‘the failure of any Product to correctly fulfil its intended use or function’ – whether the Occurrence was the supply of the seed or the planting of the seed – whether an Occurrence can cause instantaneous Property Damage – whether the liability arose from the failure of the Product to fulfil its intended use or function – whether there was a claim from which the insured could become legally liable in respect of Property Damage so that the insurer is obliged to reimburse the insured for expenses incurred in connection with the defence of a legal claim

GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558

John Wyeth & Bros Ltd v Cigna Insurance Company of Europe SA/NV & Ors [2000] EWHC 192 (Comm)

John Wyeth & Bros Ltd v Cigna Insurance Company of Europe SA/NV & Ors [2001] EWCA Civ 175

Nittan (UK) Ltd v Solent Steel Fabrication Ltd [1981] 1 Lloyd’s Rep 633

Distillers Company Bio-Chemicals (Australia) Pty Limited v Ajax Insurance Company Limited (1973-1974) 130 CLR 1

Transfield Services (Australia) v Hall [2008] NSWCA 294

Wesfarmers Federation Insurance Ltd v Stephen Wells trading as Wells Plumbing [2008] NSWCA 186

Windsurf Pty Ltd v HIH Casualty and General Insurance Ltd (1999) ANZ Insurance Cases 61-447

COUNSEL:

R S Ashton for the plaintiff

K F Holyoak for the defendants

SOLICITORS:

Carne Reidy Herd for the plaintiff

Barry & Nilsson for the defendants

This case involves three questions as to the proper construction of an insurance policy. It is convenient to first discuss the relevant facts, which are now agreed, before going to the relevant terms.

The facts

The plaintiff carries on business as a grain and seed merchant. In late 2002, it purchased a quantity of seed from a supplier in the Northern Territory, which represented that it was Jarra grass seed.

In truth this seed was, for the most part, Summer grass…

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.

Keep reading for free

Create a free CaseChat account to read Selected Seeds P/L v QBEMM P/L and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2009] QSC 70
Decision Date: 8 April 2009

CaseChat Overview and Summary

Selected Seeds P/L sought to recover indemnity and costs under a policy of insurance against QBEMM P/L. Selected Seeds was the supplier of seeds which were alleged to be unsuitable for the purpose for which they were intended. The seeds were supplied to a third party, who in turn supplied the seeds to a farmer. The farmer alleged that the seeds were unsuitable for the intended purpose, and subsequently suffered significant financial loss. Selected Seeds settled the matter with the farmer outside of court. Selected Seeds then sought indemnity from QBEMM P/L under the policy, which included a clause excluding liability for failure of a product to correctly fulfil its intended use or function. QBEMM P/L declined to pay indemnity or costs. The court was required to determine whether the exclusion clause applied, and if not, whether indemnity and costs were payable.

The court found that the exclusion clause did not apply because the failure of the seed to correctly fulfil its intended use or function was not the cause of the loss, but rather the supply of the seed itself. The court found that the planting of the seed was not an occurrence that could cause instantaneous property damage, and therefore the supply of the seed was the occurrence that triggered the insurance policy. The court also found that the exclusion clause did not apply to the failure of the product to fulfil its intended use or function, but rather to the liability arising from that failure. The court found that there was a claim from which Selected Seeds could become legally liable in respect of property damage, and therefore the insurer was obliged to reimburse the insured for expenses incurred in connection with the defence of a legal claim.

The court found in favour of Selected Seeds, and ordered that QBEMM P/L pay indemnity and costs to Selected Seeds. The court found that Selected Seeds was entitled to indemnity in the amount of $150,000, and that QBEMM P/L was liable for all costs and expenses reasonably incurred by Selected Seeds in defending the Federal Court proceedings. The court also found that QBEMM P/L was liable for interest on the amount of indemnity from the date of the settlement until the date of the judgment. The court declared that under the insurance policy, Selected Seeds was entitled to indemnity and costs, and QBEMM P/L was liable to pay those amounts.

Orders

Orders of the court

Declare that under the insurance policy referred to in the pleadings the plaintiff is entitled to:

1. Indemnity for the sum of $150,000; and

2. Payment of such costs and expenses as were reasonably incurred in its defence of the Federal Court proceedings.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Selected Seeds P/L v QBEMM P/L & Anor [2009] QSC 70
PARTIES:	SELECTED SEEDS PTY LTD ACN 009 826 016 (Plaintiff) v QBEMM PTY LIMITED ACN 087 142 569 QBE INSURANCE (AUSTRALIA) LIMITED ACN 003 191 035 (Defendants)
FILE NO/S:	BS 7020 of 2008
DIVISION:	Trial Division
PROCEEDING:	Hearing
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	8 April 2009
DELIVERED AT:	Brisbane
HEARING DATE:	30 March 2009
JUDGE:	McMurdo J
ORDER:	Declare that under the insurance policy referred to in the pleadings the plaintiff is entitled to: 1. Indemnity for the sum of $150,000; and 2. Payment of such costs and expenses as were reasonably incurred in its defence of the Federal Court proceedings.
CATCHWORDS:	INSURANCE – GENERAL – POLICIES OF INSURANCE – CONSTRUCTION – where insured supplied wrong seed – where insured was sued in respect of damage suffered from wrongful supply and settled out of court – where insurer will indemnify ‘in respect of … Property Damage … caused by an Occurrence’ – where the policy ‘does not cover any liability arising from or caused by ‘the failure of any Product to correctly fulfil its intended use or function’ – whether the Occurrence was the supply of the seed or the planting of the seed – whether an Occurrence can cause instantaneous Property Damage – whether the liability arose from the failure of the Product to fulfil its intended use or function – whether there was a claim from which the insured could become legally liable in respect of Property Damage so that the insurer is obliged to reimburse the insured for expenses incurred in connection with the defence of a legal claim GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558 John Wyeth & Bros Ltd v Cigna Insurance Company of Europe SA/NV & Ors [2000] EWHC 192 (Comm) John Wyeth & Bros Ltd v Cigna Insurance Company of Europe SA/NV & Ors [2001] EWCA Civ 175 Nittan (UK) Ltd v Solent Steel Fabrication Ltd [1981] 1 Lloyd’s Rep 633 Distillers Company Bio-Chemicals (Australia) Pty Limited v Ajax Insurance Company Limited (1973-1974) 130 CLR 1 Transfield Services (Australia) v Hall [2008] NSWCA 294 Wesfarmers Federation Insurance Ltd v Stephen Wells trading as Wells Plumbing [2008] NSWCA 186 Windsurf Pty Ltd v HIH Casualty and General Insurance Ltd (1999) ANZ Insurance Cases 61-447
COUNSEL:	R S Ashton for the plaintiff K F Holyoak for the defendants
SOLICITORS:	Carne Reidy Herd for the plaintiff Barry & Nilsson for the defendants