Silk v Zurich Australian Insurance Ltd

[1995] QSC 81

IN THE SUPREME COURT
OF QUEENSLAND

No. 2043  of 1994

Brisbane

[Silk v Zurich Australian Insurance Ltd]

BETWEEN

CLAYTON GEORGE SILK

Plaintiff

AND

ZURICH AUSTRALIAN INSURANCE LIMITED
  (A.C.N. 000 296 640)
  Defendant

JUDGMENT - SHEPHERDSON J.

Judgment delivered  12/5 /1995

CATCHWORDS:           PLEADING AND PRACTICE - Further and better particulars - insurance - construction of policy - "connivance".

Australian Commercial Research & Development Limited v. Commonwealth of Australia App No. 53 of 1994 (unreported) applied.

Counsel:Mrs D.A. Mullins for applicant

Mr S.C. Williams Q.C. for respondent

Solicitors:Bennett & Philp for applicant

Gadens Ridgeway for respondent

Hearing date:          26 April 1995

IN THE SUPREME COURT
OF QUEENSLAND

No. 2043  of 1994

Brisbane

[ C.G. Silk v. Zurich Australian Insurance Ltd]

BETWEEN

CLAYTON GEORGE SILK

Plaintiff

AND

ZURICH AUSTRALIAN INSURANCE LIMITED
  (A.C.N. 000 296 640)
  Defendant

JUDGMENT - SHEPHERDSON J.

Judgment Delivered   12 May 1995

The Plaintiff has made claims against the defendant for moneys and damages allegedly payable by it under a policy of insurance made between them.  The claims result from a fire which occurred on or about 23 January 1994 and which caused damage to the plaintiff's property, the subject of the insurance policy.
          Part of the defendant's defence reads:-

"4. Further or alternatively the defendant says:

(a)General Condition 7 of the said policy provided:

If a claim is in any respect fraudulent or if any fraudulent means or devices are used by the insured or anyone acting on the insured's behalf to obtain benefit under this contract, or if any loss, damage or injury is occasioned by the wilful act or with the connivance of the insured, all benefit under this contract will be forfeited.

(b)The said fire and the damage to the plaintiff's property hereinbefore admitted was deliberately lit and was:

(i)The wilful act of the plaintiff;  and/or

(ii)Effected with the connivance of the plaintiff."

The plaintiff sought from the defendant the following further and better particulars with respect to the above paragraph 4(b):-

(1)On what facts and circumstances does the Defendant rely to allege that the fire was deliberately lit?

(2)By whom does the Defendant allege that the fire was deliberately lit?

(3)How does the Defendant allege that the fire was deliberately lit?

(4)When does the Defendant allege that the fire was deliberately lit?

(5)Where in the Plaintiff's premises does the Defendant allege that the fire was deliberately lit?

(6)On what facts and circumstances does the Defendant rely to allege that the fire was the wilful act of the Plaintiff?

(7)On what facts and circumstances does the Defendant rely to allege that the fire was effected with the connivance of the Plaintiff?

The defendant by its solicitors has refused to supply the particulars on the following grounds:-

"1.the request for particulars is an attempt to interrogate our client under the guise of a request seeking particulars of the defence.

2.the request for particulars is an attempt to force our client to disclose the evidence by which it will prove its case at trial under the guise of a request seeking particulars of the defence.

3.the request for particulars is an attempt to force our client to disclose the identity of those witnesses whose evidence it will rely upon at trial to prove its case under the guise of a request seeking particulars of the defence.

4.the request for particulars is not a request designed to enable your client to know what case it will have to meet at the trial and is otherwise an improper request."

Following that refusal the plaintiff has sought an order that the defendant do provide the particulars sought.
          After hearing Mr Williams Q.C. who appeared for the defendant it became clear that paragraph 4(b) of the defence is based on the latter part of General Condition 7.  Mrs Mullins, counsel for the plaintiff had earlier based her argument on paragraph 4(b) being construed as alleging  fraud and fraud is mentioned in the first part of General Condition 7.
          It is necessary then for me to first interpret General Condition 7.  In my view General Condition 7 specifies three different possible types of events in which all benefit to an insured under the policy will be forfeited.  The first is concerned with a claim in any respect fraudulent made under the policy; the second is concerned with use of fraudulent means and devices to obtain benefit under the policy;  and the third is concerned with the occasioning of the loss, damage or injury.
          The present application concerns the third type of event and it focuses on how the loss (which is the admitted fire and resulting damage) was occasioned.
          It may well be thought that a claim under this policy for loss due to the fire, if that fire were deliberately lit by the plaintiff would be a fraudulent claim.  However, the pleadings show the defendant does not admit an allegation in the statement of claim that on or about 23 March 1994, the plaintiff made a claim under the policy in respect of losses suffered by him as a result of the fire.
          In the light of that refusal to admit, it was understandably not open to the defendant to plead, by way of a primary defence in reliance on General Condition 7, that the claim was fraudulent.
          I note that although it has not admitted the making of the claim by the plaintiff, the defendant, later in its defence, has pleaded by way of further or alternative defence that the claim was fraudulent.
          The result is that in paragraph 4(b) the defendant has made two basic allegations either of which, if made out, will cause General Condition 7 to operate and defeat the plaintiff's claim.  They are:-

"1.that the fire was deliberately lit and was the wilful act of the plaintiff;

2.that the fire was deliberately lit and was effected with the connivance of the plaintiff."

Mr Williams Q.C. in justification of his client's refusal to provide the particulars sought has relied on O.22 R.22 of the Rules of the Supreme Court which rule reads:-

"22.  When it is material to allege malice, fraudulent intention, knowledge, or other condition of the mind of any person, it is sufficient to allege the same as a fact without setting out the circumstances from which it is to be inferred."

I note that the document containing the refusal to supply particulars does not refer to that or any other rule - nor does it suggest that the plaintiff held any particular intention. Paragraph 4(b) does not overtly allege as a fact that the plaintiff had any particular intention or state of mind.
          Mr Williams submitted that the words "deliberate", "wilful" and "connivance" where they appear in paragraph 4(b) each contained an allegation as to the plaintiff's state of mind.  He relied on a number of definitions in the Shorter Oxford English Dictionary (the edition was not disclosed):

Deliberate.  "1. carefully thought out , studied; intentional, done on purpose."

Wilful.  "3.  of an action etc; done on purpose; deliberate intentional."

Connivance.  "2. the act of conniving (at or in a person's misconduct); assistance in wrongdoing by conscious failure to prevent or condemn; tacit permission."

Mr Williams expressly argued that connivance did not mean "conspiracy".
          I accept the meanings of "deliberate" and "wilful" for which Mr Williams contends.  I should add that the Shorter Oxford English Dictionary (reprinted with corrections 1975) contains definitions of "deliberate" and "wilful" very similar to those contended for by Mr Williams.  As to "connivance", the above definition taken from the Shorter Oxford English Dictionary on which Mr Williams relied shows one meaning as "the action of conniving".  In Mr Williams' edition of Shorter Oxford English Dictionary the verb "connive" when followed by "at" can bear the following meanings:-

"1.shut one's eyes to (a thing one dislikes but is resigned to); pretend ignorance of, overlook.

2.regard (an offender) sympathetically.

3.  turn a blind eye to (an action one ought to oppose, but which one secretly sympathises with);  be secretly accessory to."

Two further definitions are given but do not relate to "connive" being followed by "at".  They are:-

"4.remain inactive or dormant.

5.be in secret complicity, conspire (with)."

I note that General Condition 7 uses "connivance" in the phrase "with the connivance of".
          The Shorter Oxford English Dictionary (reprinted with corrections 1975) contains among its definitions of "connive" the following:-

"to wink at, be secretly privy (the ordinary sense)."

In my view, "connivance" where used in General Condition 7 means the action of being secretly privy to and turning a blind eye to an action one secretly sympathises with but which one ought to oppose.  Thus, the phrase, "with the connivance of the insured" appearing in General Condition 7 when the defendant translated it into paragraph 4(b) means that the defendant has alleged that the plaintiff was secretly privy to and sympathised with the deliberate lighting of the fire and took no step to prevent it.  I have already noted that in Mr Williams' edition of the Shorter Oxford English Dictionary "connive" may mean "be in secret complicity, conspire (with)."
          The Shorter Oxford English Dictionary (above 1975 reprint) in defining "conspire" includes-

"1. to combine privily to do something criminal, illegal or reprehensible (esp. to commit treason or murder, excite sedition etc.); to plot.

2.to plot, devise, contrive."

A derivative of the word "privy" is used in the first of these definition.
          "Privy" as defined by Shorter Oxford English Dictionary (1975 reprint) includes:-

"3.participating in the knowledge of something secret or private;  in the secret; accessory to some secret transaction."

A further meaning is provided:-

"2.acting or done in secret or by stealth;  clandestine, furtive, surreptitious, sly."

It is unnecessary to construe "connivance" in General Condition 7 as equating "conspiracy".  I say that bearing in mind the heavy burden of proof lying on the defendant of proving the connivance alleged.  I have concluded that the essence of "connivance" where used in General Condition 7 is that an insured person be secretly privy to or participate in the knowledge, before the event, of the particular loss, damage or injury and take no step to prevent it.
I return now to Mr William's reliance on O.22 R.22.
          The ability of a party to rely on that rule has now been restricted by the Court of Appeal in Australian Commercial Research and Development Limited v. Commonwealth of Australia  App. No. 53 of 1994  (unreported) - Judgment given 14 October 1994.
At p.4 of their reasons, McPherson JA. and Mackenzie J. in speaking of O.22 R.22 said:-

"It operates only on the allegation of intention or state of mind as such, and does not exclude the power to order particulars that are needed to identify the person or individual by whom the alleged intention or state of mind was held or entertained on behalf of someone else. Whether there was a particular intention, and if so who held it, are distinct matters of fact. The first is governed by O.22 R.22; the second is not."

In the case before me paragraph 4(b)(i) of the defence effectively alleges that the plaintiff himself deliberately and by his wilful act lit the fire.  If that were the sole allegation, the particulars sought would not be ordered. The defendant's pleading is cast much more widely.
          When subparagraph (ii) of paragraph 4(b) is considered, the defence case is in effect that some other person or persons deliberately lit the fire and that the plaintiff was secretly privy to that act being done and took no step to prevent it .  Mr Williams argues that the plaintiff knows the case alleged against him in paragraph 4(b).  With respect, I do not agree.  The function of particulars is well known and it is to "ensure that litigation between parties should be conducted fairly, openly and without surprises".  (see annotation 22.6.2 Queensland Supreme Court Practice Vol. 1 and cases there cited)  One of the roles of particulars is to prevent the other side from being taken by surprise at the trial; another is to inform the other side of the nature of the case it has to meet as distinguished from the mode in which that case is to be proved.
          In In NRNQ ( a limited partnership) v. MEQ Nickel Pty Ltd (1991) 2 Qd.R. 592 Byrne J. discussed the role of particulars. He referred to the fact that particulars are now ordered more freely than in former years (p.594).
          I would with respect adopt the following statement by Sir John Donaldson the Master of the Rolls in Naylor v. Preston Area Health Authority (1987) 1 WLR 958 at p.967:-

"Although the English Courts adhere in the main to what is known as an adversarial procedure, we have moved far and fast from a procedure whereby tactical considerations which did not have any relation to the achievement of justice were allowed to carry any weight.  This is as it should be.  Justice is not achieved by a war of attrition in which survival is a prize to be awarded to the party with the greatest determination and longest purse.  Nor is justice normally achieved by the surprise attack although it can be.  Quite different examples of this are  (a) the use of ex parte Anton Piller and  Mareva orders,  and (b) the concealment of rebutting evidence until the trial where there are real grounds for doubting the initial bona fides of one of the parties or for suspecting that the revelation of the opposing parties evidence will lead to dishonest 'trimming' of that parties evidence. 

But nowadays the general rule is that, whilst a party is entitled to privacy in seeking out the 'cards' for his hand, once he has put his hand together the litigation is to be conducted with all the cards face up on the table.  Furthermore, most of the cards have to be put down well before the hearing.  This is not the product of a change of fashion or even of a recognition that professional judges approach their duties on the basis of mental equipment, training and attitudes of mind which are far removed from those of juries.  It is the product of a growing appreciation that the public interest demands that justice be provided as swiftly and as economically as possible."

In my view, the plaintiff is entitled to know the identity of the person or persons who the defendant says lit the fire.  One does not need much imagination to envisage a situation where, it that material were not supplied, the plaintiff, on being cross-examined at trial , learned for the first time that the defendant's case is that a particular person (identified) lit the fire and that the plaintiff was secretly privy to the lighting of the fire by that person.  Doubtless an adjournment would be sought.  That type of situation can be avoided if the defendant provides now almost all the particulars which were sought by the plaintiff on 13 March 1995.  It is highly desirable that once a trial starts, it concludes as speedily as reasonably practicable and without adjournment brought about by one party having taken the other by surprise.
I order that the defendant do within seven days provide to the plaintiff the further and better particulars numbers 1, 2, 3, 4, 5 and 7 sought in the request for further and better particulars being ex. D to the affidavit of Kenneth Philp filed on 13 April 1995. I have excluded request No.6 because this relates to an allegation that the plaintiff himself lit the fire and is governed by O.22 R.22.
          I order the defendant to pay the plaintiff's costs of and incidental to this application to be taxed.