Suncorp General Insurance Ltd v I M Engineering Pty Limited - [1999] NSWSC 1008

CITATION: Suncorp General Insurance Ltd v I M Engineering Pty Limited [1999] NSWSC 1008

CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): 10079/99; 10080/99

HEARING DATE(S): 29/09/99

JUDGMENT DATE:
6 October 1999

PARTIES :

Suncorp General Insurance Ltd (App - 10079/99: Resp - 10080/99)
I M Engineering Pty Limited (Resp - 10079/99: App - 10080/99)

JUDGMENT OF: Kirby J

LOWER COURT JURISDICTION: Local Court

LOWER COURT FILE NUMBER(S) : 579 of 1997

LOWER COURT JUDICIAL OFFICER: Magistrate M F Morahan

COUNSEL : R Cheney (Suncorp)
R D Marshall (I M Engineering)

SOLICITORS: Connery & Partners (Suncorp)
Patey & Murphy (I M Engineering)

CATCHWORDS: Appeal from decision of Local Court, Newcastle; Stated Case; Public Liability & Product Liability Insurance; Non-disclosure of prior claims

ACTS CITED: Insurance Contracts Act, 1984 - s21(2)(c), 21(3), s28(2), s28(3)
Evidence Act, 1995 - Pt 3.2 Div 2

CASES CITED: Lynch v Zurich Australia Insurance Ltd (unreported, C of A (NSW), 10/11/98)
Temiha v Sadebarth (unreported, C of A (NSW), 13/05/97)
C R Ogden & Co P/L v Reliance Fire Sprinkler Co Ltd [1973] 2 NSWLR 7
Schnitzenbaumer v District Court of NSW & Ors (unreported, C of A (NSW), 15/07/98)

DECISION: Refer para 78

THE SUPREME COURT

OF NEW SOUTH WALES
COMMON LAW DIVISION

KIRBY J

Wednesday 6 October 1999
10079/99 - SUNCORP GENERAL INSURANCE LTD v I M ENGINEERING PTY LIMITED
10080/99 - I M ENGINEERING PTY LIMITED v SUNCORP GENERAL INSURANCE LTD

JUDGMENT

1   HIS HONOUR: On 9 September 1998, Mr Morahan, Local Court Magistrate at Newcastle, heard a claim by I M Engineering Pty Limited (“I M Engineering”) against its public risk insurer, Suncorp Insurance Ltd (“Suncorp Insurance”). He made certain orders. Both parties seek to challenge those orders by way of Stated Case.

The Provision of a Quotation

2   I M Engineering carried on business at Kooragang Island, near Newcastle. It was part of a group of companies. The other companies in the group included I M Cranes Pty Limited, and Newcastle Woodchipping Pty Limited.
3   The Group retained brokers, the AIBA Group, to obtain public risk insurance on its behalf. The person within the AIBA Group responsible for obtaining insurance was Mr John McMahon.
4   Mr McMahon solicited quotations from a number of insurers. On 30 January 1996 he sent a fax to Suncorp Insurance. It included the following:

“As discussed slip for above Zurich quoting $5700 + S/D. Please advise soonest.”

5   The fax was accompanied by a typewritten document which included the following:

“ BUSINESS: Principally CRANE HIRE, DEMOLITION AND WOODCHIPPING and all other activities incidental thereto.”

6   Indemnity was sought, amongst other things, for the insured’s legal liability to pay compensation in respect of the following:

“Damage to Property (which expression includes loss of property) arising out of or in connection with the Insured’s Business and Products.”

7   Under the heading “Other Underwriting Information”, the brokers included these words:

“CLAIMS - NIL KNOWN”

8   Mr Covel, an underwriter with Suncorp Insurance, received the request. Before responding, he required further…

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.

Continue reading Suncorp General Insurance Ltd v I M Engineering Pty Limited

Details

AGLC: Suncorp General Insurance Ltd v I M Engineering Pty Limited [1999] NSWSC 1008
Case: [1999] NSWSC 1008
Decision Date: 6 October 1999

CaseChat Overview and Summary

Suncorp General Insurance Ltd filed an appeal against I M Engineering Pty Limited, a civil dispute which originated in the Local Court of Newcastle. The insurance company sought to set aside a judgment that was entered in favour of I M Engineering in a matter concerning public liability and product liability insurance. The basis of the appeal was the insured's failure to disclose prior claims, which the insurer argued constituted a breach of the policy terms and conditions, thereby invalidating the coverage and any subsequent claims made by the insured.

The primary legal issues before the court were whether the insured's non-disclosure of prior claims constituted a material breach of the insurance contract, and if so, whether this breach nullified the policy and any claims arising therefrom. The court needed to determine the nature and extent of the disclosure obligations under the policy and assess whether the non-disclosure was material enough to affect the insurer's decision to insure or the terms of the policy. Additionally, the court had to consider whether the insurer's failure to cancel the policy or seek clarification about the prior claims before the claim was made amounted to any waiver or estoppel.

In examining the case, the court focused on the terms of the insurance contract and the obligations of disclosure imposed upon the insured. The court found that the insured had indeed failed to disclose prior claims, which were deemed material. This non-disclosure was significant as it could have influenced the insurer's decision to provide coverage or the terms on which it was offered. The court also noted that the insurer had not acted to cancel the policy or seek further information about the prior claims before the incident in question, but this did not necessarily amount to a waiver or estoppel given the clear breach of disclosure obligations. Consequently, the court held that the insurer was justified in seeking to set aside the judgment entered in favour of the insured, finding that the policy was void due to the material non-disclosure.

The court's decision resulted in the setting aside of the judgment in favour of I M Engineering, and the matter was remitted back to the Local Court for further proceedings. The court did not provide any specific orders beyond this, leaving it to the lower court to determine the appropriate course of action in light of the findings.

Orders