Smeltink v Insurance Australia Limited ACN 000 016 722 Trading as NRMA Insurance (Appeal)

[2021] ACAT 108

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

SMELTINK v INSURANCE AUSTRALIA LIMITED ACN 000 016 722 TRADING AS NRMA INSURANCE (Appeal) [2021] ACAT 108

AA 13/2021 (XD 386/2020)

Catchwords:               APPEAL – civil dispute – home and contents insurance claim – claim for theft of three rings – liability admitted – dispute as to quantum – consideration of insurer’s obligations under the policy to replace with rings of “the same or similar type and quality” or to pay what it would cost insurer to replace with rings of the same or similar type and quality – insurer not liable to replace rings or pay cost of replacing rings from original supplier – method of manufacture a material factor regarding similar quality – compensation varied to reflect added value for a handmade ring – no practical injustice arising from the appellant’s difficulty hearing in original hearing – save for variation of compensation payable for one ring, appeal dismissed

Cases cited:B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners – Units Plan 3324 [2013] ACTSC 219

Capic v Ford Motor Company of Australia Ltd (Adjournment) [2020] FCA 486
Coutts v Close [2014] FCA 19
Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275
Harada v Barnes & Anor [2021] ACAT 66
Legal Practitioner v Council of the Law Society of the ACT [2011] ACTSC 207
Oliver v Registrar, Domestic Animals Act 2000 [2021] ACAT 93
Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6
R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 11) [2020] NSWSC 382
Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021)

Tribunal:Presidential Member G McCarthy

Senior Member D Kerslake

Date of Orders:  11 November 2021

Date of Reasons for Decision:      11 November 2021

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          AA 13/2021

BETWEEN:

JOHN SMELTINK

Appellant

AND:

INSURANCE AUSTRALIA LIMITED ACN 000 016 722 TRADING AS NRMA INSURANCE

Respondent

APPEAL TRIBUNAL:         Presidential Member G McCarthy

Senior Member D Kerslake

DATE:11 November 2021

ORDER

The Tribunal orders that:

1. Order 1 made on 21 January 2021 in proceeding XD 386/2020 is set aside.

2. The respondent pay the appellant $19,850.69 within 28 days.

   ………………………………..

Presidential Member G McCarthy
For and on behalf of the Tribunal

REASONS FOR DECISION

Background

1. On 30 October 2018, three rings belonging to the appellant’s wife were stolen from the appellant’s home. The rings were insured under a policy of insurance with the respondent, the details of which were set out in a document entitled “NRMA Product Disclosure Statement and Policy Booklet” (the Policy).

2. The respondent admitted liability, but a dispute arose as to quantum.

3. The appellant claimed $24,980 as the replacement cost for the three rings (plus interest), based on quotations he obtained from Creations Jewellers of Manuka (Creations). Alternatively, the appellant claimed $23,482 based on quotes that the respondent obtained from Creations for replacement of the stolen rings.

4. The respondent offered $15,830, based on quotations for replacement rings that it obtained from other jewellers.

5. Noting that the dispute related to three separate rings, we set out in the following table the respective offers of settlement made by the respondent and the corresponding amounts claimed by the appellant:

Respondent’s offer	Appellant’s claim
Engagement ring	$3,750	$5,790
Eternity ring	$4,500	$9,190
Solitaire ring	$7,580	$10,000
Total	$15,830	$24,980

1. The appellant’s claims regarding the engagement ring and the eternity ring were based on an insurance replacement quotation from Creations to him dated 6 November 2018 that quoted $5,790 for replacement of the engagement ring and $9,190 for replacement of the eternity ring.

2. The appellant’s claim regarding the solitaire ring was based on an insurance replacement quotation from Creations to him dated 21 November 2018 that quoted $16,000 for replacement of the ring. The appellant accepted that the respondent was not liable for the replacement cost of the solitaire ring beyond the limit under the Policy, per stolen item, of $10,000.

3. The respondent’s offers were based on quotes to replace the three rings, as provided by alternative jewellers. The descriptions of the rings that it provided to alternative nominated jewellers ‘matched’ the descriptions provided by the appellant.

4. In summary, the differences between the respondent’s offer and the appellant’s claim arose from their different approaches regarding the respondent’s obligations under the Policy to replace, or pay the cost of replacing, the rings with rings of “the same or similar type and quality.”

5. The relevant terms of the Policy were as follows:

   How we may settle your claim

   If we agree to settle your claim under Contents Insurance, then we can choose to pay your claim through any of these ways:

   ·        repair an item, or

   ·        replace an item with the same or similar type or quality, or

   ·        pay you the reasonable costs of what it would cost us to repair or replace the items, or

   ·        provide you with store credits to replace an item from one of our nominated suppliers, or pay you the sum insured or provide you with store credits from one of our nominated suppliers to the value of the sum insured that applies to:

   -General Contents

   -Valuable Contents

   -Portable Contents

   Conditions

   ·        we can nominate the repairer or supplier and claims settlement method

   ·        we may enter into any contract with the repairer or supplier on your behalf

   ·        if you don’t agree with the method of settlement we choose, we will pay you what it cost us to repair or replace the item.[1]

   [1] NRMA Product Disclosure Statement and Policy Booklet, page 60

6. Regarding a cash payment, the appellant contended that if the respondent chose to pay cash rather than replace the rings, it must pay (by way of replacement cost) the amount that it would cost the appellant to replace the rings from Creations who supplied the rings, subject to the $10,000 policy limit for the solitaire ring: $24,980. Alternatively, the respondent must pay the appellant the amount that it would have cost the respondent to replace the rings from Creations: $23,482.

7. Regarding replacement of the rings, the appellant submitted that the quotations obtained by the respondent from other jewellers to “replace” the rings were not for rings of “the same or similar type or quality” because the stolen rings were made by Mr Preston-Black of Creations, as noted by a marking on the rings to signify that they were made by “Creations”, and only rings designed and made by Mr Preston-Black met the description of “the same or similar type of quality”.

8. The original tribunal rejected both submissions, with reliance on the relevant provisions of the Policy.

9. Regarding the appellant’s first submission, the original tribunal pointed out that the Policy “clearly does not say what the applicant contends”.[2] The Policy obliged the respondent to pay the reasonable costs of “what it would cost us to … replace the items” (emphasis added), which could be (and was) less than what it would have cost the appellant.

   [2] Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021) paragraph 21

10. Regarding the appellant’s second submission, the original tribunal accepted that Mr Preston-Black is an acclaimed and award-winning designer and maker of jewellery but noted that the markings on the rings were not a registered trademark. They “simply identified the retail outlet from which the rings were purchased”.[3] The original tribunal accepted that the rings could never be “precisely or exactly replicated”, and acknowledged that the appellant and his wife would be disappointed at not being able to recover the cost of rings as made by Creations and Mr Preston-Black, but noted that the respondent did not have an obligation under the Policy to do so. Its only obligation was to replace the rings with rings of “the same or similar type and quality” [emphasis added].

    [3] Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021) paragraph 32

11. The original tribunal accepted the evidence provided by specialist jewellery valuers from Independent Validation Advisory Australia (IVAA), engaged by the respondent for the purpose of determining the appellant’s claim, that the design of each ring could be copied, almost exactly, and that rings could be made “to a similar type and quality by a suitably qualified jeweller”.[4] The original tribunal also accepted that IVAA instructed suitably qualified jewellers to quote on making replacement rings and that IVAA gave them “accurate descriptions of the quality of materials, gems and the like and the quality of manufacture” for the purpose of them providing quotes to make rings “of comparable quality to the ones stolen”.[5]

    [4] Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021) paragraph 34

    [5] Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021) paragraph 36

12. On 21 January 2021, the original tribunal ordered that the respondent pay the appellant $17,148 in settlement of the claim. This equated with the respondent’s settlement offer, plus $1,318 in interest to reflect the respondent’s delay in paying the appellant the amount it would have cost the respondent to replace the rings.[6] 

    [6] Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021) paragraphs 43-46

13. The appellant appealed against the original tribunal’s assessment of the primary amount that the respondent is liable to pay under the Policy.

The appeal

1. On appeal, the appellant sought an order that the original decision be set aside and that the Appeal Tribunal order the respondent to pay the appellant “the sum of $23,482 plus costs and interest”. The sum of $23,482 was drawn from the quotes that the respondent obtained from Creations to replace the rings, subject to the $10,000 limit on the respondent’s liability for loss of the solitaire ring.

2. On 15 March 2021, the appeal tribunal made orders regarding the conduct of the appeal including an order that the appeal proceed as a review of the original decision unless the Appeal Tribunal orders otherwise. On appeal, we did not order otherwise. To proceed as a review of the original decision was a reference to section 82 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act), which permits the appeal Tribunal to deal with an appeal “as a new application (under section 82(1)(a) of the ACAT Act) or as a review of all or part of the original decision (under section 82(1)(b) of the ACAT Act).

3. The principles governing an appeal by way of ‘review’, or ‘rehearing’ as that term has been construed,[7] are well settled.[8] In short, for the appeal to succeed the appellant must establish a material error of fact or law that affected the result.

   [7] Legal Practitioner v Council of the Law Society of the ACT [2011] ACTSC 207 at [13]-[14]; Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275 at [36]-[37]; B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners – Units Plan 3324 [2013] ACTSC 219 at [12]

   [8] See generally Harada v Barnes & Anor [2021] ACAT 66 at [8]-[10] and Oliver v Registrar, Domestic Animals Act 2000 [2021] ACAT 93 at [10]-[17]

4. The grounds of appeal were not precisely stated, and were spread across the application for appeal, the appellant’s affidavit affirmed on 8 April 2021 and a six-paragraph document headed “Applicants Submission” (sic, undated). Some grounds were abandoned during the appeal hearing. However, from the documents, we discerned five grounds of appeal that were pressed, which we have dealt with in turn.

Ground 1: The insurer’s purchasing power

1. The appellant’s first ground of appeal centred on the original tribunal’s comment[9] that because of their increased purchasing power, large insurers (such as the respondent) are able to obtain discounted prices and are thus in a position to replace items at a lower cost than might be possible for an insured. Mr Stretton SC, counsel for the appellant, submitted that this was an error on the original tribunal’s part in that there was no evidence to support this conclusion.

   [9] Smeltink v Insurance Australia Ltd ACN 000 016 722 Trading as NRMA Insurance (ACT Civil and Administrative Tribunal, Senior Member Lancken, 21 January 2021) paragraph 22

2. Mr Murray, solicitor for the respondent, acknowledged that evidence in relation to ‘purchasing power’ was not presented, but submitted that the original tribunal could take ‘judicial notice’ of the fact that large insurers can obtain discounts. He also contended that, in any event, the respondent had satisfied its obligations under the Policy by obtaining quotes for replacement of the stolen rings and presenting those quotes to the insured. In that regard, he referenced the three quotes obtained from jewellers other than the original supplier which were all lower than the quotes obtained from Creations.

3. The common law notion of ‘judicial notice’ indicates that in legal proceedings evidence is not required to support information which is common knowledge, or is at least uncontroversial and easily verified. That said, in our view it would have been incumbent on the original tribunal, if it intended to place strong reliance on insurers’ buying power, to provide the parties with the opportunity to make submissions on how that information might properly be assessed and applied. We did not consider, however, that anything turned on this point. 

4. We accept that there was no evidence before the original tribunal regarding the perceived purchasing power of large insurers, but there was evidence that the respondent obtained quotes from three different jewellers to replace the rings with rings of the same or similar quality (subject to our response to ground 5 of the appeal grounds) all of which were for amounts less than the quotes provided by Creations. The original tribunal’s comment that the respondent had better purchasing power than the appellant is incidental to that outcome. To put it another way, the reason why the respondent was able to obtain lower quotes has no bearing on the determinative evidence: the quotes obtained. We see no error in the original tribunal reaching its decision that the respondent could have replaced the items in question for lesser amounts. Why it was able to do so is irrelevant and did not affect the result. Ground 1 therefore fails.

Ground 2: The respondent should have provided store credits from the original supplier

1. The appellant’s submissions in support of this ground relied upon the clause in the Policy which stated that one of the options open to the respondent if it agreed that the claim was covered under the Policy is to:

   Provide you [the insured] with store credits to replace an item from one of our nominated suppliers.

2. The appellant contended that on this basis the insurer should have offered him store credits with Creations, the original supplier, to the value of the replacement cost for each ring which they had quoted, and that the original tribunal erred by not considering this option. 

3. This submission overlooks the clear wording in the Policy, which states that if store credits are provided, they will be “from one of our nominated suppliers” (not from a supplier nominated by the insured). There was no evidence that Creations is a “nominated supplier” for the purpose of the Policy. Also, it ignores the words “we can choose” at the beginning of the provision regarding settling of a contents claim, meaning the provision of store credits was not an obligation on the respondent: it was an option available to it in response to the appellant’s claim. The fact that the respondent chose not to offer “store credits” is therefore irrelevant. Ground 2 therefore fails.

Ground 3: Inadequate audio quality at the original hearing

1. The original hearing was conducted online (via Webex), rather than with the parties present in person, as a necessary precaution against the risk of COVID-19 infection. The appellant accepted the appropriateness of proceeding in this way for this reason but noted that on many occasions he had difficulty hearing what was said, mainly in the first part during presentation of his submissions. He submitted that he had been disadvantaged – in comparison with the respondent – because he was denied the opportunity to hear all details of the respondent’s submissions and to respond to them. He contended that the original tribunal erred by not adjourning the hearing to ensure he was able to present his submissions in an adequate setting. 

2. Mr Stretton submitted that the disadvantage could be remedied only by conducting a rehearing. He relied upon R v McDonald (No 11) 2020 NSWSC 382 (R v McDonald) in support. We construed this submission to mean a new hearing, meaning the tribunal needed to start afresh.

3. The respondent acknowledged that there were issues with audio quality, but submitted that these were ‘part and parcel’ of a hearing conducted online and were to be expected in the COVID-19 environment.  The respondent relied upon observations of the Federal Court, per Perram J, in Capic v Ford Motor Company Australia Ltd,[10] who pointed out that technology problems often occur when conducting a hearing on an online platform which can be aggravating but tolerable in the circumstances.

   [10] Capic v Ford Motor Company of Australia Ltd (Adjournment) [2020] FCA 486

4. The transcript of the original hearing records many instances where the appellant and the original tribunal were expressing their difficulty hearing what was being said. However, we were not persuaded that the disadvantages were not remedied as the hearing went along. While problems with audio quality were apparent, no issues relevant to the dispute, as raised by either party during the hearing, were left unaddressed as a result. On each occasion when the appellant expressed difficulty in hearing what had been said, either the original tribunal or the person who had spoken repeated what had been said. On each occasion when the words were repeated, the appellant acknowledged by one means or another that he had now heard and understood what had been said.

5. Also, nowhere in the transcript is there any suggestion from the appellant that his difficulty hearing in some way prejudiced his conduct of his case or meant he could not continue. Nor is there any reference, on appeal, to anything that had a bearing on the outcome of the case that, by reason of his difficulty hearing, the appellant did not have an opportunity to address. In particular, the case turned almost entirely on the documentary evidence.

6. In Coutts v Close,[11] citing the High Court’s decision in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam,[12] the Federal Court said:

   It is also now settled that procedural fairness is not an abstract issue; rather, attention needs to be focused on the question whether conduct which is said to be procedurally unfair produced some practical injustice.[13]

   [11] [2014] FCA 19

   [12] Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6 at [37]; (2003) 214 CLR 1, 14

   [13] Coutts v Close [2014] FCA 19 at [120]

7. We were not persuaded that the appellant’s inability to hear what was being said, from time to time, materially prejudiced the outcome or worked any practical injustice in circumstances where words that the appellant had not heard were repeated; where he acknowledged that he now understood what had been said; and where there was no objection (by reason of the appellant’s difficulty in hearing) to the original tribunal proceeding to determine the matter.

1. The decision of the Supreme Court of NSW in R v McDonald, on which the appellant relied, does not assist. That case concerned criminal proceedings brought against Edward Obeid, Moses Obeid and Ian Macdonald. The Court endeavoured to conduct the proceedings in a “virtual court room” via a web link but experienced difficulty doing so by reason of the quantity of lawyers involved (at least 12), the quantity of documents that were before the Court (exceeding 7,500 pages) and the need for cross examination of witnesses by reference to documents. The Court acknowledged the many difficulties that were occurring in an effort to conduct the hearing with the existing technology.

2. Arising from many technical and personal difficulties caused by necessary COVID-19 health measures, Mr McDonald filed a notice of motion with a supporting affidavit sworn by his counsel, Mr Martin, seeking an order that the trial adjourn part-heard to a date to be fixed. The Court, per Fullerton J, granted the application, stating her view that:

   a trial of the accused in a virtual courtroom is impractical. I have further resolved to the view that the accused’s right to a fair trial would be at risk were I to order that it continue at this time.[14]

   [14] R v Macdonald; R v Edward Obeid; R v Moses Obeid (No 11) [2020] NSWSC 382 at [29]

3. Those circumstances did not exist in this case. The appellant’s difficulty hearing, from time to time, was remedied each time he expressed difficulty and there was no application to adjourn.

4. On balance, we are satisfied that both parties were able to convey their submissions in a way that could be noted and understood by each other and by the original tribunal, and that no aspect of practical injustice occurred arising from the appellant’s difficulty hearing that affected the result.  Ground 3 therefore fails.

Ground 4: The original tribunal did not correctly interpret the terms of the Policy

1. With reliance on the second option quoted above, per the second dot point, by which the respondent could settle a claim under the Policy, the appellant submitted that the original tribunal erred in its conclusion that the respondent was entitled to engage another suitable jeweller to replace the rings with rings of “the same or similar quality”. The appellant submitted that to meet the requirement of “same or similar quality”, the rings needed to be made by the original supplier, Creations. 

2. Applying this reasoning to the third option which entitled the respondent to pay the appellant “the reasonable costs of what it would cost to replace the items” (inferentially, items of the “same or similar type and quality”), it followed, the appellant said, that the original tribunal erred in assessing the replacement cost for the three rings at $15,830 rather than Creations’ quoted cost: $23,482.[15]  

   [15] The appellant accepted that Creations’ quoted cost for replacing the solitaire ring needed to be reduced from $16,000 to $10,000, consequent upon the limit per item under the Policy.

3. In support of this contention, the appellant drew on the fact that the stolen rings were made by Mr Preston-Black who is an “award winning jeweller”, submitting that because of Mr Preston-Black’s reputation the rings had a “special value” that could only be recognised by Creations re-making the rings or the respondent paying the appellant compensation by reference to the cost of Creations doing so. The appellant submitted that replacement rings made by any of the other suppliers chosen by the respondent would not produce rings of the same or similar quality.

4. In reply, the respondent repeated its submission at the original hearing that the second option under the Policy is written in plain language and is clear and unambiguous: the replacement rings did not have to be exact replicas of the originals, and that items made by another reputable supplier could be of “the same or similar type and quality”, thus meeting the description of the ‘replacement option’ or the ‘cost of replacement option’ under the Policy.

5. In accordance with that interpretation, the respondent offered to pay $3,750 and $4,500, respectively, in settlement of the claims for the engagement ring and the eternity ring. Alternatively, the respondent offered to authorise a company called Unique Diamonds to replace the rings.

6. The respondent offered $6,500 in settlement of the claim for the solitaire ring, which it later increased to $7,580, that equated with the highest amount that nominated suppliers quoted to replace the ring.   

7. The competing arguments obliged us to consider the meaning of the words “same or similar type and quality”. We first noted, by reason of the word ‘or’, that the replacement rings did not need to be of the ‘same’ type and quality: ‘similar’ is sufficient. But what of the meaning of the words ‘similar type and quality’?

8. ‘Similar’ is relevantly defined to mean “1. having likeness or resemblance, especially in a general way”.[16] ‘Type’ is relevantly defined to mean “1. a kind, class, or group as distinguished by a particular characteristic. …3. the general form, style or character distinguishing a particular kind, class or group”.[17] ‘Quality’ is relevantly defined to mean “1. a characteristic, property, or attribute. 2. character or nature, as belonging to or distinguishing a thing. 3. character with respect to excellence, fineness etc., or grade of excellence: food of poor quality; silk of the finest quality. 4. high-grade; superior excellence: goods of quality. 5. inherent excellence or superiority”.[18]

   [16] Macquarie Dictionary ( 8^th ed, 2020)

   [17] Macquarie Dictionary (8^th ed, 2020)

   [18] Macquarie Dictionary (8^th ed, 2020)

9. Applying the ordinary meaning of these words, we were not persuaded that the original tribunal erred in its conclusion (and we agree with its conclusion) that replacement of the stolen rings with rings of ‘similar’ type and quality made by an alternative nominated jeweller would be sufficient to satisfy the replacement option and, inferentially, the ‘cost of replacement option’ under the Policy. 

10. We accept that the rings were of significant sentimental value to the appellant and his wife, and we can understand why the appellant therefore wished to have the replacement rings made by the original supplier or be compensated for the cost of it doing so. That does not mean of itself, however, that items of similar quality could not be produced by another supplier, assuming those suppliers were reputable jewellers. 

11. Whilst we heard submissions that Creations employed an ‘award winning jeweller’, and questions were raised about the manner of manufacture (which we deal with in ground 5 below), no evidence was led to suggest that the respondent’s nominated suppliers were not reputable firms in their own right. Ground 4 therefore fails. 

Ground 5: Method of manufacture

1. The appellant contended that the method of manufacture is a material consideration when deciding whether a replacement ring is of the same or similar type and quality. He contended that the original tribunal erred by not taking this into account when determining whether the quoted replacement rings would be of the same or similar quality to the stolen rings.

2. Whilst the method of manufacture was not pursued by the appellant in the original hearing in any great detail, it was nevertheless raised in evidence when the appellant referred to an email he had received from another jeweller stating:

   In short, yes, the weight and method of manufacture does determine the value of an item.[19] [emphasis added]

   [19] See email dated 30 November 2020 from, Olivia Keppie, Diamond Boutique Jewellers, filed with the tribunal on 2 December 2020.

3. Mr Murray submitted that the appellant’s submission should be rejected because the description of the rings provided by the appellant to the respondent in 2018 matched the descriptions that the respondent (via IVAA) gave to the nominated suppliers.

4. For the engagement and eternity rings, we see no error. The appellant described the rings as “handmade”, for example in his report to the Police[20] and in his complaint to the Australian Financial Complaints Authority (AFCA).[21] In its insurance replacement quotation for these rings dated 6 November 2018, Creations states that the stolen rings “were designed and handmade” by them.

   [20] Appellant’s submissions to the original tribunal, attachment 1.1.5

   [21] Appellant’s submissions to the original tribunal, attachment 1.1.2

5. IVAA, when obtaining quotes for replacement of the engagement and eternity rings, adopted that aspect of the description by specifying that the replacement rings were to be handmade[22] or “custom made”.[23] Given that this corresponded with the method by which the original rings were made, we were satisfied that the terms of the Policy were met in relation to method of manufacture.  Ground 5 therefore is unsuccessful with respect to these two rings.

   [22] See the respondent’s written submissions to the original tribunal, IVAA report pages 105-106

   [23] See the respondent’s written submissions to the original tribunal, IVAA report pages 140-141

6. The solitaire ring was more open to question. In summary, the appellant contended that the respondent should have obtained quotes (via IVAA) on the basis that the replacement ring would be handmade but, instead, obtained quotes on the basis that the replacement ring would be “cast/hand assembled”.

7. The respondent contended that when IVAA requested nominated suppliers to provide quotes to replace the rings, “each description” provided to the nominated suppliers “set down to the exact specifications” the description provided by the appellant. We accept the respondent’s submission, but it did not answer the appellant’s ground of appeal.

8. We accept that the appellant gave a description of the solitaire ring which the respondent used for the purpose of obtaining replacement quotes, but (as best we can ascertain) the description did not state that it was handmade. For example, the appellant’s report to the Police and his complaint to AFCA did not state that the solitaire ring was handmade. Creations did not state that the solitaire ring was handmade. Its quote was “based on the customer’s description”.

9. In her witness statement dated 5 November 2020, the appellant’s wife described the engagement and eternity rings as “bespoke designed and handcrafted” but, in relation to the solitaire ring, said only that it was “inherited from my late mother and bought by my late father from Creations”.

10. None of this is to suggest anything untoward. It might be that the appellant and his wife were not sure (or did not know) how the solitaire ring was made and so did not give a description about method of manufacture.  Nor did Creations in its description of the ring that the respondent used for the purpose of obtaining quotes.

11. In the absence of any stated method of manufacture, the respondent’s nominated suppliers “assumed” that the replacement ring would be “cast/hand assembled” and quoted accordingly. We are comfortably satisfied that that was a fair and appropriate approach by the respondent and its nominated suppliers.

12. However, at hearing, the respondent accepted that the stolen solitaire ring was handmade. For example, when the original tribunal asked Mr Murray if there was any dispute that “the three rings were made by Creations Jewellers and they were handmade”, Mr Murray stated “[t]hat’s admitted”.[24] During the hearing, the appellant took issue with the proposed method of manufacture of the replacement ring, in terms of it being a cast/hand assembled ring,[25] and said that if the quotes were from “well credentialled jewellers that were using a handmade process… we would accept the replacement from that jeweller”.[26] The respondent never took issue with the premise that the solitaire ring was handmade.

    [24] Transcript of proceedings 14 December 2020, page 32, lines 40-43

    [25] Transcript of proceedings 14 December 2020, page 35, lines 19-36

    [26] Transcript of proceedings 14 December 2020, page 53, lines 6-8

13. In other words, the fact that the description of the ring given to the nominated suppliers matches the description provided by the appellant is not a sufficient answer in circumstances where the respondent, at hearing, accepted that the solitaire ring was handmade but had obtained quotes for its replacement that proposed a different method of manufacture: cast/hand assembled. This casts doubt on whether the solitaire ring was to be replaced with an item of the same or similar quality, as required under the Policy.

14. It is also evident that the significance of different methods of manufacture was canvassed by the appellant before the original tribunal, but it does not appear that the original tribunal took account of the evidence in relation to the proposed manufacturing method for the ring to replace the solitaire ring. This calls into question the conclusion of the original tribunal, that it was satisfied:

    that IVAA instructed the jewellers who quoted to make the replacement rings with accurate descriptions of the quality of materials, gems and the like and the quality of manufacture that would oblige the suppliers to make rings of comparable quality to the ones stolen. [our emphasis]

15. Taking into account other material presented, we concluded that the original tribunal erred in not taking into account the assumed method of manufacture for the proposed replacement solitaire ring.  It then turned to us, on appeal, to consider the weight that should attach to this error. 

16. In that regard, we reached the following conclusions based on the material accepted into evidence in the original tribunal and the submissions put to us in the course of the appeal proceedings:

    (a)The Policy makes clear reference to replacement with items of ‘the same or similar type or quality’.

    (b)The nominated jewellers were not asked to quote on the basis that the replacement of the solitaire ring be handmade.

    (c)A distinction must be made between items that are ‘handmade’ and ‘cast/hand assembled’.

    (d)That distinction led us to conclude that the proposed replacement for the solitaire ring would be of a lesser quality than the original.

    (e)In respect of the solitaire ring (but only the solitaire ring), the Policy terms and conditions were therefore not met.

    (f)The original tribunal erred by not reaching this conclusion. Therefore, Ground 5 succeeds in respect (only) of the solitaire ring.

17. It remains for us to quantify, if possible, the amount that the original tribunal should have awarded on the basis that the solitaire ring was handmade. In that regard, the amount could not exceed the limit payable under the Policy for a single item: $10,000.

18. Unfortunately, there was little evidence to quantify the difference between ‘handmade’ and ‘cast/hand assembled’ because the nominated suppliers were not asked to quote on the basis that the replacement ring be handmade. We have only the quote from Creations ($16,000), which we were told was a quote to handmake the ring, and the quotes from Dimitries Jewellers ($7,580), Unique Diamonds and Village Jewellers (Canberra).[27] The quote from Unique Diamonds was not given because it exceeded the policy limit. Village Jewellers (or IVAA on its behalf) suggested the policy limit be applied because it could not replace the ring.

    [27] See the respondent’s written submissions to the original tribunal, IVAA report page 142

19. Where the difference between the respondent’s offer and the policy limit is comparatively small, we concluded that there is sufficient evidence to be satisfied on the balance of probabilities that it would have cost the respondent at least $10,000 to replace the solitaire ring with a handmade ring of the same type and quality. We concluded that we should therefore increase the amount awarded for that ring by the sum of $2,420 with additional interest on that amount of $282.55 (calculated by reference to the period 27 April 2019 to 11 November 2021).

20. Where the appellant was unsuccessful in relation to all other grounds of appeal and has not been paid the awarded compensation or interest by reason of his decision to appeal, we decided not to increase the interest ($1,318.14) awarded by the original tribunal on the original sum awarded.

21. We will therefore set aside the original award and order the respondent to pay the appellant the sum of $19,850.69.

22. The Appeal Tribunal has a discretion also to order the respondent to pay the applicant’s filing fee in the original proceeding and in the appeal proceeding. For two reasons, we decided not to do so. First, the appellant was wholly unsuccessful in the original proceeding and successful on appeal only in one small respect. Second, there is no suggestion that the appeal would have been resolved by offer or acceptance of the further amount that we have concluded should be paid.

    ………………………………..

Presidential Member G McCarthy

For and on behalf of the Tribunal

Date of hearing	26 May 2021
Counsel for theAppellant:	Mr G Stretton SC
Solicitors for the Respondent:	Mr L Murray, Turks Legal