Sudesh Sharma v Insurance Australia Limited t/as NRMA Insurance

In *Sudesh Sharma v Insurance Australia Limited t/as NRMA Insurance*, the appellant, Sudesh Sharma, appealed to the New South Wales Court of Appeal against a decision of the primary judge. Mr. Sharma held a Combined Building and Home Contents Policy with NRMA Insurance. His building was damaged during a storm in late December, and he lodged a claim on 29 December. Following assessments of the property and a subsequent injury sustained by Mr. Sharma while attempting repairs, NRMA declined liability for the claim. Mr. Sharma alleged a breach of the duty of utmost good faith under section 13 of the *Insurance Contracts Act 1984* (Cth) and sought damages for breach of contract, including damages for personal injury.

The Court of Appeal was required to determine whether NRMA breached its duty of utmost good faith by failing to determine Mr. Sharma's claim in a timely manner and without undue delay. Further, the court considered whether damages for personal injury were a reasonably foreseeable consequence of a breach of the insurance contract, applying principles of remoteness of damages. Procedural issues also arose, including whether the primary judge erred in not drawing an adverse inference against NRMA for failing to call its initial assessor, and whether special grounds were made out for leading further evidence on appeal. The admissibility and relevance of certain medical expert evidence were also in question.

The Court of Appeal reasoned that NRMA's conduct did not breach the duty of utmost good faith, as the insurer had acted with reasonable expedition in assessing the claim and communicating its decision, particularly given the complexities that arose regarding the building's compliance with standards. The court found that the personal injury suffered by Mr. Sharma was not a reasonably foreseeable consequence of any breach of contract by NRMA at the time the policy was entered into, thus the damages claimed were too remote. The court also determined that the primary judge had not erred in failing to draw a *Jones v Dunkel* inference and that the grounds for leading further evidence on appeal were not made out. The court upheld the primary judge's rejection of the medical expert reports due to non-compliance with evidentiary requirements.

Consequently, the Court of Appeal dismissed the appeal and ordered that the appellant pay the respondent's costs of the notice of motion and the appeal.