Taylor v GIO General Pty Limited (ACN 002 861 583)
[2018] VCC 1301
•30 August 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
| GENERAL LIST |
Case No. CI-15-03424
| IAIN TAYLOR acting for the Deceased Estate of MAREE TAYLOR | Plaintiff |
| v | |
| GIO GENERAL PTY LIMITED (formerly GIO GENERAL LIMITED) (ACN 002 861 583) | First Defendant |
| and | |
| AAI LIMITED (ACN 005 297 807) | Second Defendant |
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JUDGE: | HER HONOUR JUDGE MORRISH | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 31 July 2017; 1, 2, 3, 4, 7, 8, 9, 10, 11, 14, 15, 16, 17, 22, 23, 28, 29 and 30 August 2017; 26, 27 and 28 September 2017; 2, 3, 4, 5, 6, 9, 10, and 11 October 2017 | |
DATE OF JUDGMENT: | 30 August 2018 | |
CASE MAY BE CITED AS: | Taylor v GIO General Pty Limited (ACN 002 861 583) & Anor | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 1301 | |
REASONS FOR JUDGMENT
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Subject: INSURANCE – BREACH OF CONTRACT
Catchwords: Contract of insurance covering flood loss – no dispute that flood caused some loss and damage to insured property and that the event was covered under the policy – policy enabled insurer to elect whether to repair/replace new for old or to cash settle the claim for the amount it would have cost the insurer to repair/replace new for old – whether insurer breached contract of insurance – insurer elected to repair/replace new for old – whether the insured frustrated the insurer’s attempts to remediate the property – whether the insurer entitled to re-elect and cash settle the claim – whether cash settlement sum paid was adequate
Legislation Cited: Insurance Contracts Act (Cth) 1984, s13; Wrongs Act 1958
Cases Cited:Jones v Dunkel (1959) 101 CLR 298; O’Donnell v Reichard [1975] VR 916; Archibald v Powell [2017] VSCA 259; Baltic Shipping Company v Dillon (1993) 176 CLR 344
Judgment: Plaintiff’s claim dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | The plaintiff appeared in person | - |
| For the Defendants | Mr D Klempfner | Barry.Nilsson. Lawyers |
TABLE OF CONTENTS
BACKGROUND
OVERVIEW OF THE HEARING
OVERVIEW OF THE ISSUES RAISED IN THE PLEADINGS
OVERVIEW OF THE REMAINING CAUSE OF ACTION
THE ISSUES REMAINING FOR DETERMINATION
SUMMARY OF DETERMINATION OF THE ISSUES
SUMMARY OF ORDERS PROPOSED
THE HEARING
THE ELEMENTS OF THE PLAINTIFF’S CAUSE OF ACTION
THE ELEMENTS OF THE DEFENCE
THE PLAINTIFF’S EVIDENCE
What is not evidence?
The effect of the death of the insured before the trial commenced
Viva voce evidence called by the Plaintiff
Exhibits tendered by the Plaintiff
Witnesses not called by the Plaintiff
THE DEFENDANT’S EVIDENCE
Viva voce evidence called by the Defendant
Exhibits tendered by the Defendant
Witnesses not called by the Defendant
THE POLICY
55UP Home and Contents Insurance Policy number 17339732P5
55UP Home and Contents Insurance Product Disclosure Statement
Business records
Chronology of events
THE PLAINTIFF’S WITNESSES
IAIN BRUCE CAMERON TAYLOR
Evidence-in-chief
Cross-examination
Re-examination
DR HEIKE NEUMEISTER-KEMP
The first report, exhibit R
The second report, exhibit S
The third report, exhibit U
The fourth report, exhibit Q
Evidence-in-chief
Cross-examination
RICKARD CHARLES BRYANT
Cross-examination
TIMOTHY MARK MCRAE
Evidence-in-chief
Major Renovation Estimate dated 30 June 2016, exhibit X
Major Renovation Estimate dated 21 August 2017, exhibit QQ
Further evidence-in-chief
Cross-examination
BERNARD VALENTINI
The Plaintiff’s expert reports
BRIAN MURPHY (EHS Assess)
WILLIAM MICHAEL COX (Currie & Brown)
The Plaintiff’s case closes
THE DEFENDANT’S WITNESSES
ANTHONY LEE OLIVER
Evidence-in-chief
Cross-examination
Re-examination
STEFAN KOPANJA
Evidence-in-chief
Cross-examination
Re-examination
SALLY LOUISE KINNAIRD
Evidence-in-chief
Cross-examination
LOIS WEST
Evidence-in-chief
Cross-examination
SUSAN LEISANNE SAUVARIN
Evidence-in-chief
Cross-examination
NICOLE MARIE PRIOR
Evidence-in-chief
Cross-examination
The Defendant’s case closes
FINAL SUBMISSIONS
Overview of the Plaintiff’s submissions
Overview of the Defendant’s submissions
ANALYSIS AND FINDINGS OF FACT
(1) Mr Taylor’s credibility
Matters reflecting poorly on Mr Taylor’s credit
(2) Was there a contract between the parties?
(3) Was it a term of the contract that if an event covered by the policy occurred, the defendant could elect to indemnify the insured by either:
(a) undertaking remediation works; or
(b) making a cash settlement in the sum it would cost the insurer to remediate?
(4) Did the event cause loss and damage covered by the policy so as to engage the insurer’s obligation to indemnify the insured?
(5) By electing to remediate the property, was the Defendant in breach of the......................
contract?
(a) What was the Defendant required to do once it had elected to remediate?
(b) What was the Plaintiff obliged to do?
(c) Did the Taylors frustrate GIO’s attempts to pursue the course GIO elected?
(6) By failing to complete the remediation works and instead electing to cash .......................... settle the claim, did the Defendant breach the contract?
(7) Was the amount offered by way of cash settlement adequate?
(8) Was the Plaintiff’s rejection of the settlement sum unreasonable?
Has the Plaintiff satisfied the Court, on the balance of probabilities, that the Defendant breached the contract?
Damages
CONCLUSION
HER HONOUR:
BACKGROUND
1 Maree Taylor lived with her adult son, Iain Taylor and their two dogs in a house at 78 Derinya Drive, Frankston (“the property”). Mrs Taylor was a retired school teacher. Iain Taylor was a disability pensioner. The house was in Mrs Taylor’s name. It was built in the 1970s by Mrs Taylor and her late husband. As at May 2011, the property was unencumbered by any mortgage.[1]
[1]Transcript (“T”) 1187
2 On 4 May 2011, Mrs Taylor took out home and contents insurance (“the policy”) with GIO General Ltd (“GIO”).[2] The building cover was for $300,000.00 and contents cover was for $50,000.00. The policy allowed GIO to elect whether to repair and/or replace damaged property, or cash settle the claim.
[2]GIO later transferred to AAI Ltd. This Judgment will refer to GIO only, but it is intended that this constitutes a reference to both defendants. For simplicity I shall refer to both defendants collectively as “the defendant”.
3 On 28 September 2011, water inundated the property, causing damage to parts of the building and to some of the contents.
4 It is not in controversy that the flood event was covered by the policy. The policy also covered various other benefits, to which I shall later refer.
5 The same day as the flood occurred, either Mrs Taylor or her son reported the event to GIO. That evening, a contractor was sent to the property to examine the damage and to make the property safe.
6 Thereafter, GIO elected to remediate the damage to the property, as was its right under the terms of the policy. GIO took a number of steps in an effort to pursue its election, and appointed contractors to carry out remediation works on its behalf; however, from very early on in this process, there were ongoing disputes about the extent of the damage, what steps were necessary to fix it and who was qualified and competent to undertake the remediation works. A dispute also arose about the damage to contents that concerned if and how they could be remediated. As the disputes continued, mould developed and spread within the building. Eventually the house was rendered uninhabitable. Mrs Taylor and her son (“the Taylors”)[3] moved into temporary accommodation, the cost of which was covered, to an extent, by the policy.[4]
[3]The evidence does not always make clear whether certain actions were taken by Mrs Taylor or by Iain Taylor. Apparently, Mrs Taylor authorised Iain Taylor to act on her behalf in most, but not all, transactions. This Judgment will refer to both Mrs Maree and Mr Iain Taylor as “the Taylors” where it is of little consequence which of them was the actor, unless otherwise stated.
[4]There was a limit on the amount covered, a matter to be discussed later in this Judgment
7 The business records of GIO[5] document an extensive history of contact made (mostly by Mr Taylor) on behalf of the Taylors to GIO. Some contact was made by telephone, but in addition, Mr Taylor sent many, many emails to GIO, either directly or indirectly, when he copied GIO into emails he sent to others.
[5]Exhibit G
8 The Taylors’ attack was multi-pronged - fighting on a number of fronts: they ran collateral complaints to GIO’s internal dispute resolution department (“IDR”), and to the Financial Ombudsman Service (“FOS”). They also involved the local Council and even requested that the Council issue a building order requiring the house to be demolished. On every field of battle GIO was required to, and did respond. Mr Taylor made allegations of misconduct against contractors and representatives of GIO, he claimed GIO representatives were biased, he asserted contractors were incompetent and he made repeated requests for additional information, clarification or for further documentation to be created.
9 GIO could not enter the property without the consent of the Taylors. Nor could it conduct repairs or replace damaged items without the Taylors’ consent. GIO asserts that at times, the Taylors either expressly or by implication withheld their consent to GIO and its contractors to access the property and that this denial of access delayed the remediation works from progressing. Delay potentially aggravated the mould problem, thereby potentially affecting the overall cost of completing the works. Mr Taylor denies that he or his mother ever denied GIO or its contractors access to the property.
10 GIO claimed that the Taylors frustrated GIO’s attempts to effect repairs, a claim denied by Mr Taylor. In any event, finally GIO elected to cash settle the claim and notified Mrs Taylor of its intention to do so. In correspondence sent to Mrs Taylor, it set out the calculations explaining how GIO had arrived at the cash settlement sum. On two occasions, GIO tendered a cash settlement to Mrs Taylor, but the Taylors were dissatisfied with the amount offered and returned the funds to GIO.
11 After GIO elected to cash settle the claim, GIO took no further steps to remediate the damage caused by the flood, although it agreed to investigate whether items not included in the settlement sum were damaged as a result of the flood. If further loss were to be established, GIO intended to cash settle for the additional items. The Taylors also did nothing to stop the mould from continuing to breed, flourish and spread. Nor did the Taylors take any steps to effect any repairs for themselves. GIO does not allege that by failing to do anything themselves to stop the progression of mould and consequent damage, the Taylors failed to mitigate their loss; however, GIO alleges that in rejecting the cash settlement sums, the Taylors acted unreasonably. Accordingly, GIO submits that the Taylors are responsible for any additional loss and damage caused to the property after the cash settlement was rejected.
12 Eventually, Mrs Taylor brought proceedings against GIO claiming that GIO had breached the contract of insurance, in that it failed to honour the terms of the policy both as to building and contents cover.
13 GIO does not seek to avoid liability for the relevant damage caused to the property. It acknowledges that at the very least it is obliged to pay the plaintiff what it would have cost it to repair/replace new for old as at the relevant date, namely as at the date it paid Mrs Taylor the settlement sums. It asserts that the amount offered by way of cash settlement was more than adequate to cover the items that the settlement covered. Further, it asserts that the cash settlement was not made in full and final satisfaction of every relevant potential claim arising from the flood.
14 Unfortunately, not long before the trial was due to commence, Mrs Taylor passed away. Iain Taylor was then granted leave to be joined as second plaintiff. That left Mr Taylor effectively wearing two hats once the trial got underway – first, he was a plaintiff in his own right, and second, as executor, he represented his mother’s estate.
OVERVIEW OF THE HEARING
15 The hearing commenced before me on 31 July 2017. Mr Taylor represented both plaintiffs - himself and the late Mrs Taylor’s estate. Mr D Klempfner of counsel appeared on behalf of the defendant.
16 In total, the hearing ran for some thirty sitting days - 31 July 2017; 1, 2, 3, 4, 7, 8, 9, 10, 11, 14, 15, 16, 17, 22, 23, 28, 29 and 30 August 2017; 26, 27 and 28 September 2017; 2, 3, 4, 5, 6, 9, 10, and 11 October 2017.
17 During the course of the hearing, Mr Taylor made a number of applications, and on a number of occasions he was granted leave to amend the plaintiff’s pleadings.
18 Partway through the proceedings, Mr Taylor was granted leave to withdraw his personal action as plaintiff (and, by agreement, with no order as to costs) when the claim about damage to the contents of the property was settled.
19 At the close of the plaintiff’s case, the plaintiff’s pleadings in their final form (as amended by Mr Taylor), were convoluted, raising many causes of action, some of which were ill conceived or were at best peripheral to the real issues between the parties. Pursuit of these tangential issues both lengthened and overly complicated the trial unnecessarily. It was not until the final day of hearing that Mr Taylor abandoned the last of these superfluous causes of action, which left the case in breach of contract as the sole remaining cause to be determined.
OVERVIEW OF THE ISSUES RAISED IN THE PLEADINGS
20 As mentioned earlier, it was not in dispute that the policy covered damage caused by flood, and as I shall later explain, nor was it in controversy that the particular flood in fact caused damage to both the building and to a number of contents.
21 According to the policy, GIO was obliged, at its option, to either repair/replace damaged property new for old or pay the plaintiff what it would cost GIO to repair or replace new for old. I shall set out the actual terms that applied a little later.
22 At first, Mrs Taylor had legal representation. Her Writ and Statement of Claim were prepared by her lawyers. Mrs Taylor was named as the sole plaintiff. The first Statement of Claim filed on her behalf dated 16 July 2015[6] alleged simple breach of contract[7] and sought:
[6]Exhibit 93
[7]Statement of Claim dated 16 July 2015, paragraphs 15 and 16 referred to the building; paragraph 20 referred to the contents
A.An Order that the Defendant pay the Plaintiff what it would cost the Defendant to repair the Insured Address new for old.
B.Alternatively, an Order that the Defendant pay the Plaintiff what it would cost the Defendant to rebuild the Insured Address new for old.
C.An Order that the Defendant pay the Plaintiff the sum insured for contents as increased … .
D.Damages.
E.Interest pursuant to statute.
F.Costs.
G.Such further or other order as the Court deems fit.[8]
[8]Statement of Claim, prayer for relief
23 Although the Writ was not filed until July 2015, Mrs Taylor’s solicitors acted on her behalf (on and off) from at least as early as 2 July 2012.[9] These solicitors acted on behalf of Mrs Taylor for almost four years until 17 June 2016, at which time they confirmed their intention to file a Notice of Ceasing to Act.[10] Although there was a period during that four years that their services had been terminated, it is unclear precisely when the solicitors were reappointed to act on behalf of Mrs Taylor; however, as is evident, Mrs Taylor reappointed her solicitors prior to the filing of the Writ and Statement of Claim.
[9]Exhibit G, pages 100-101, conversation between Iain Taylor and David Macleod. See also exhibit 8 dated 3 July 2012, Mr Taylor’s email to solicitors, copied to GIO. Note that Mr Taylor also wrote an email to the Taylors’ solicitors on 26 June, 2012, which he copied to GIO (exhibit O).
[10]Exhibit 95. Note that an affidavit in support of the application to file a Notice of Ceasing to Act was placed in a sealed envelope by the Judicial Registrar who gave leave to file the Notice. Although Mr Taylor insisted the lawyers “abandoned” the Taylors, by implication without cause, raising the question whether the sealed envelope should be opened, Mr Taylor did not press his assertion and the envelope’s seal was not broken.
24 After the solicitors withdrew, Mr Taylor embarked on a course of amending the plaintiff’s pleadings. Among the causes of action (or some other form of complaint or particular) he added or sought to add were:
(a)Negligence, essentially alleging that GIO was negligent in the manner it dealt with the claim;[11]
(b)A claim alleging that the plaintiffs were in a position of “special disadvantage in relation to the defendant”;[12]
(c)A claim or particular essentially alleging that GIO breached Occupational Health and Safety regulations;[13]
(d)A claim seeking damages for personal injury, essentially alleging that due to the manner in which the claim was handled, Mr Taylor suffered psychological or psychiatric injury;[14]
(e)A claim or particular essentially alleging false and misleading conduct,[15] undue influence and some other breach of a duty to act in good faith on the part of GIO;[16] and
(f)A claim essentially alleging unconscionable conduct on the part of GIO.[17]
[11]Amended Writ and Statement of Claim dated 8 October 2016, paragraph 26
[12]Amended Writ and Statement of Claim dated 8 October 2016, paragraphs 24 and 25
[13]Amended Writ and Statement of Claim dated 8 October 2016, paragraph 27
[14]Amended Statement of Claim dated 31 July 2017, filed with leave granted on 2 August 2017, the third day of hearing, paragraph 24
[15]Mr Taylor sought to include a claim that an expert witness had made actionable false and misleading statements in his report: See T2170-2173
[16]Amended Statement of Claim dated 31 July 2017, paragraph 25
[17]Amended Statement of Claim dated 16 August 2017, amended with leave on the 13th day of hearing
25 Mr Taylor also sought leave to add a cause of action alleging breach of consumer law.
26 With the added causes of action (or other complaints) came new claims of damages and further prayers for relief. I shall not mention them further here.
27 Much time, effort and cost was wasted in pursuit of these spurious claims.
28 As the trial progressed, all of these additional causes of action were either withdrawn or struck out. As mentioned, the sole cause of action remaining for determination was the alleged breach of contract.
OVERVIEW OF THE REMAINING CAUSE OF ACTION
29 GIO admitted that it was bound to honour the terms of the policy. It admitted that the flood event occurred and that (mostly) that event caused damage to the building on the property and its contents. GIO admitted that under the policy it was liable to either repair the damage new for old, or pay the plaintiff what it would have cost GIO to repair or replace new for old.
30 GIO claimed, and Mr Taylor conceded, that at any time GIO could elect to repair/replace the damaged property or re-elect to instead make a cash settlement.[18] In any event, GIO claimed that the Taylors’ conduct frustrated GIO’s capacity to repair/replace new for old, thereby leaving it no alternative but to re-elect and make a cash settlement.
[18]T818
31 The claim in breach of contract alleged that GIO failed to:
(a)Repair damage new for old;
(b)Rebuild the Insured Address new for old;
(c)Pay [the plaintiff] what it would cost [GIO] to repair or rebuild the Insured Address new for old.[19]
[19]Second Further Amended Statement of Claim pursuant to leave on 14 and 15 August 2017 and further amended on the 13th day of the hearing, 16 August 2017, paragraphs 7 and 16
32 GIO denies any breach of contract.
THE ISSUES REMAINING FOR DETERMINATION
33 I have mentioned some of the issues above.
34 The burden of proving that GIO breached the terms of the contract rests with the plaintiff.
35 The key factual questions to be determined are:
(1)Did GIO elect to repair or replace damaged property new for old?
(2)Did GIO fail to effect repairs to, or replace all the property that was damaged by the flood, new for old?
(3)Did that failure cause loss and damage to the plaintiff?
(4)Was GIO justified in opting to alter its first election to repair/replace new for old and instead elect to cash settle by paying the plaintiff what it would have cost GIO to repair/replace new for old?[20]
(5)Was the amount offered by way of cash settlement adequate?
(6)If not, what is the extent of the deficiency?
[20]The burden of proof of this issue rests with the defendant, but this fact is not in issue
36 The answer to the above questions will resolve whether the plaintiff has established, on the balance of probabilities:
(i)that GIO breached the contract; and
(ii)that this breach caused loss or damage to the plaintiff; and, if so
(iii)the quantum of an award of damages.
SUMMARY OF DETERMINATION OF THE ISSUES
37 For the reasons explained in this Judgment, I would answer the factual questions as follows:
(1)Did GIO elect to repair or replace damaged property new for old?
– Yes, this is not in issue.
(2)Did GIO fail to effect repairs to, or replace all the property that was damaged by the flood, new for old?
– Yes, although some remedial works were done, total remediation was not achieved.
(3)Did that failure cause loss and damage to the plaintiff?
– No, for two reasons: first, the Taylors’ conduct frustrated GIO’s attempts to perform its obligations, and this was the sole cause of GIO’s failure to effect repairs or replace all the damage that was caused to the property by the flood, new for old; and second, in any event, GIO elected to cash settle the claim in an amount that represented what it would have cost GIO to repair/replace the damage that was caused to the property by the flood, new for old.
(4)Was GIO justified in opting to alter its first election to repair/replace new for old and instead elect to cash settle by paying the plaintiff what it would have cost GIO to repair/replace new for old?[21]
– Yes, whilst denying that the plaintiff did anything to cause GIO to re-elect its course, the plaintiff conceded that the contract of insurance allowed GIO to re-elect how to settle the claim at any time of its choosing.[22] Regardless of the admission, as mentioned above, the Taylors’ conduct frustrated GIO’s attempts to perform the first election, thereby justifying GIO’s decision to re-elect and cash settle the claim.
(5)Was the amount offered by way of cash settlement adequate? -
– Yes. The defendant presented cogent evidence quantifying what it would have cost GIO to repair/replace new for old as at the date the settlement sum was paid to the plaintiff. There was little, if any, satisfactory evidence to rebut the defendant’s evidence and calculations on this issue.
(6)If not, what is the extent of the deficiency?
– Not applicable.
[21]The burden of proving this issue rests with the defendant, but this fact is not in issue
[22]A potential claim of promissory estoppel was discussed with the parties during the trial, but as Mr Taylor stated that GIO had the right to re-elect at any time, he abandoned any potential claim of estoppel – T3100.
38 It follows that the plaintiff has failed to establish the claim in breach of contract.
SUMMARY OF ORDERS PROPOSED
39 In all the circumstances, the plaintiff’s claim must be dismissed.
THE HEARING
40 At the commencement of the hearing, Mr Taylor was asked to explain why, as a matter of law, some of the allegations raised in his Amended Statement of Claim[23] were justified. Mr Taylor struggled to demonstrate that some of his pleadings were viable in law and/or in fact, but he assured the Court that by the close of the evidence he would prove all aspects of his case, and insisted that he be permitted to do so.
[23]Amended Statement of Claim dated 8 October 2016
41 The hearing was riddled with interruptions made by Mr Taylor, and his causes of action, and novel interpretations of the law disturbed an orderly presentation of the real issues in the trial. It was difficult to gain Mr Taylor’s compliance with directions that he either do or refrain from doing something. On many occasions he would not accept the directions given to him about the law, countering that “the plaintiffs are not being heard”. I mention these difficulties not to launch a personal attack on Mr Taylor, who, no doubt doggedly pressed his causes with sincerity and in the genuine belief that both the law and morality stood in his favour, but because it was suggested that if Mr Taylor’s behaviour in court was representative of his behaviour in his dealings with GIO and its contractors, then the Court could more readily appreciate the problems that GIO and its contractors encountered when dealing with him. Moreover, it was suggested that the Court could more readily accept that it was Mr Taylor’s uncompromising belief in the righteousness of his actions, regardless of the true facts, that was the cause of GIO’s inability to fulfil what it undertook to do by way of repairs to the property and its contents. I admit that Mr Taylor’s behaviour in court was far from perfect; however, I consider it dangerous to use that against him. If Mr Taylor’s actions during the course of pressing the claim against GIO were justified at law, he should not be penalised for his manner of presentation. Mr Taylor’s demeanour in court cannot make the defence case any stronger or the plaintiff’s case any weaker. Having said that, I should make it clear that in no instance is there evidence that any representative of GIO was rude or dismissive of either Mr Taylor or his mother, even when Mr Taylor’s behaviour seemed aggressive, obstructive or belligerent. To the contrary, all staff members of GIO and all contractors appointed by GIO who had direct dealings with the Taylors demonstrated enormous patience and courtesy.
THE ELEMENTS OF THE PLAINTIFF’S CAUSE OF ACTION
42 For present purposes the plaintiff must satisfy the Court, on the balance of probabilities, of four essential ingredients in the cause of action in breach of contract:
(1)There was a contract between the parties (not in dispute); and
(2)The contract contained a particular term or terms (expressly or by implication); and
(3)The defendant breached the relevant term/terms; and
(4)The breach caused loss and damage.
43 If all of these elements are established, then relief may be granted.
THE ELEMENTS OF THE DEFENCE
44 The Further Amended Defence dated 12 July 2017 denies that certain items claimed were covered by the policy and/or pleads that certain damage alleged was not caused by the flood. The defence raises the assertion of obstructive conduct on the part of the Taylors and it asserts that the Taylors unreasonably rejected payment for the full value of repairs to the property.
45 Although the plaintiff carries the overall burden of proof, I have assumed that the defendant must prove that the Taylors’ conduct frustrated GIO’s ability to carry out the remediation works and that the defendant must also prove that the settlement sum offered was adequate and was unreasonably rejected by the Taylors.
THE PLAINTIFF’S EVIDENCE
What is not evidence?
46 Before identifying the evidence called or tendered by the plaintiff, I should confirm that the only evidence I have considered when reaching my findings is comprised of the oral evidence on oath or affirmation, the exhibits that were tendered absolutely[24] and any admissions made. Mr Taylor was informed that his statements and comments made from the Bar table do not constitute evidence. Similarly, Mr Klempfner’s statements and comments from the Bar table do not constitute evidence.
[24]I have already remarked that the parties’ written submissions were marked as exhibits so that they could be identified in the event of an appeal. I have assured Mr Taylor that they do not constitute evidence of the facts asserted.
47 I have noted above that I draw no inference adverse to the plaintiff’s case from Mr Taylor’s behaviour in court. I accept that Mr Taylor placed himself under enormous pressure and that the manner of his presentation in court should not be counted against him, except possibly on the question of costs, a matter to be determined after this Judgment has been delivered.
The effect of the death of the insured before the trial commenced
48 The defendant has not sought to take forensic advantage of Mrs Taylor’s death.
49 No point is taken against the plaintiff about the admissibility of representations apparently made by Mrs Taylor as contained in the contemporaneous records of GIO. Those records were tendered by the plaintiff as the business records of GIO and became exhibit G in the trial. Mr Taylor accepts the accuracy of the majority of the entries contained in exhibit G, although he challenged the accuracy of some of the entries. I shall refer to the relevant entries later.
Viva voce evidence called by the Plaintiff
50 The witnesses called to give evidence on behalf of the plaintiff were:
·Iain Bruce Cameron Taylor[25]
·Dr Heike Neumeister-Kemp[26]
·Rickard Charles Bryant[27]
·Timothy Mark McRae;[28] and
·Bernard Valentini.[29]
[25]Evidence-in-chief: T472-629; T709-725; T806-825; T840-914; T923-955; T979-1057; T1064-1082 Cross-examination: T1082-1178; T1181-1302; T1311-1434
Re-examination: T1434-1453
Further evidence: T1577-1616
Yet further evidence: T1760-1761
[26]T630-709
[27]T731-748; T753-769
[28]T769-771; T787-790; T791-795; T801-805; T1488-1493; T1517-1534; T1545-1546; T1705-1706; T1708-1743
[29]T830-833; T834-836; T837-840
Exhibits tendered by the Plaintiff
51 The plaintiff tendered the following exhibits:
Number and Identifying Mark on Exhibit Short Description of Exhibit
A
Policy of insurance number 17339732P5
(Court Book pages 525-540)
B
GIO Product Disclosure Policy Statement
(Court Book pages 442-524)
C
Summary: Loss date 28 September 2011 at 6.48pm (Supplementary Court Book Document 293, page 1)
D
Builder Assessment Report of Brad O’Hara dated 5 October 2011 (Court Book pages 768-769)
E
Report from Steamatic dated 25 November 2011
(Court Book pages 780-791)
F
Online dispute lodged to Financial Ombudsman Service dated 19 November 2011 (Supplementary Court Book Document 295)
G
Computer generated business records of GIO summarising transactions in relation to this claim H007383413
(Court Book pages 553-767)
H
Report on microbial assessment of the water damage at 78 Derinya Dr, Frankston South prepared by David Lark Mycologist (Supplementary Court Book Document 297 pages 1-9)
J
Assessors report Tim Lonsdale dated 4 February 2012 (Supplementary Court Book Document 298 pages 1-6)
K
Aide memoire titled “Plaintiffs Submissions” – (does not constitute the Plaintiff’s evidence, merely a guide as for the Plaintiff’s oral evidence) FOR IDENTIFICATION ONLY
L
Mr Taylor’s aide memoire to explain the call records in Exhibit G
FOR IDENTIFICATION ONLY
M
Report by Noel Arnold & Associates dated March 2012 (Court Book pages 1429-1460)
N
Copy of letter to Jennifer Berensen from Mary Cole 13 June 2012 (Court Book page 841)
O
Email from Mr Taylor to Michael Bates (Taylors’ solicitor) dated 26 June 2012 forwarding copy attachment from Mary Cole
(Court Book pages 846-847)
P
Email from Nicci Prior to Michael Bates dated 1 August 2012
(Court Book page 887)
Q
Order 44 statement attaching report from Dr Heike Neumeister-Kemp dated 21 November 2016 (Court Book pages 136-162)
R
Report of Dr Heike Neumeister-Kemp dated 16 January 2014 (Court Book pages 1150-1175)
S
Report of Dr Heike Neumeister-Kemp dated 1 July 2014 (Court Book pages 1176-1179)
T
Bundle of photographs (Court Book pages 1180-1197)
FOR IDENTIFICATION ONLY
U
Report of Dr Heike Neumeister-Kemp dated 17 March 2015 (Court Book pages 1198-1213)
V
NOT ADMITTED INTO EVIDENCE SINCE IT IS CONCEDED THAT THE FACTS ASSUMED HAVE NOT BEEN PROVED IN EVIDENCE
(Ruling 6 October 2017)
Order 44 statement in relation to Mr Rickard Charles Bryant together with the report of Mr Bryant unsigned dated 14 March 2015 (Court Book pages 165-170, 1133-1134)
W
Order 44 statement of Mr McRae dated 24 November 2016
X
Report of Mr McRae dated 30 June 2016 (Court Book 1228-1245)
Y
Report of Mr McRae dated 30 June 2016 (Court Book 1246-1258)
Z
NOT ADMITTED INTO EVIDENCE SINCE IT IS CONCEDED THAT THE FACTS ASSUMED HAVE NOT BEEN PROVED IN EVIDENCE
(Ruling 6 October 2017)
Report of Mr McRae dated 30 June 2016 (Court Book 1259-1276)
AA
Report from Brian Murphy of Noel Arnold & Associates dated 24 September 2012 (Court Book pages 1461-1466)
BB
Copy email said to come from Tim McRae dated Wednesday 9 August 2017
CC
Email dated 4 July 2016 from the Taylors notifying Mr McRae that he has changed the date on the building quote
DD
Email from Dr Neil Hallam to Rob Hicks dated 24 November 2012 (Court Book page 981)
EE
Email copy of Exhibit 48 with Dr Hallam’s handwritten suggestions (Court Book pages 979-980)
FF
Email from Stefan Kopanja to Peter Dobeli dated 21 March 2013 together with report from Mould Lab dated 17 December 2012 (Court Book pages 1028-1031)
GG
Email from the Taylors to GIO and Rob Hicks dated 8 January 2013 (Court Book page 990)
HH
Report from Currie & Brown by William Michael Cox dated 23 February 2017 (Court Book pages 1560-1577)
JJ
Engineering Investigation Report dated 8 May 2013 written by Ji‑Wan Sohn Senior Forensic Engineer (Court Book 1485-1510)
KK
Supplementary advice dated 5 June 2013 from Ji-Wan Sohn reviewed by Oliver Kelly (Court Book pages 1511-1517) with attached issues of concern item 2010 on the defendant’s discovery list
LL
Copy letter from Botanica Farm Accommodation addressed to Maree Taylor dated 27 February 2013 (Supplementary Court Book Document 313)
MM
Two page printout of Mr Taylor’s notes on whiteboard dated 14 August 2017
NN
Printout of additions made by Mr Taylor on whiteboard to Exhibit MM dated 15 August 2017
OO
Letter from GIO dated 27 March 2013 attaching copy of GIO’s Notice of Response and relevant documentation (Attachment 139 pages 1-25)
PP
Mould Assessment Report of Mr Brian Murphy dated 29 November 2015 (Court Book pages 1518-1548)
Report of Mr McRae dated 21 August 2017 with attached photographs taken by Mr McRae (photographs tendered on 28 August)
Includes spreadsheet not tendered with original exhibit
RR
Australian Mould Guidelines 2010 edition (Dr Peter Kemp and Dr Heike Neumeister-Kemp)
SS
Do & Charge Authority from GIO General to Restorx dated 6 June 2012
TT
Activity Report RVMA31468 from Restorx Services dated 26 October 2016
UU
Activity Report RVMA31446 from Restorx Services dated 26 October 2016
VV
Update Report of Mr Stefan Kopanja dated 6 February 2013 (Attachment 105 pages 1-2)
WW
Plaintiff’s Chronology
XX
Plaintiff’s Final Submissions
YY
Additional Submissions Summarising the Submissions
ZZ
Plaintiff’s response to and comments about Exhibit 106
Witnesses not called by the Plaintiff
52 The plaintiff failed to call Dr Mary Cole and Associate Professor Neil Hallam, both of whom wrote reports and/or correspondence about the nature of the mould at the property and how it should be treated.[30]
[30]The Taylors had a falling out with Associate Professor Hallam, stating “he turned on me” (T527) and “he was suing us” (T1023)
53 The failure to call those witnesses is of little overall significance since GIO accepted Dr Cole’s suggestions in all but one aspect: Dr Cole recommended that when the property was to be painted, a fungicidal paint should be applied. GIO did not agree to cover the additional cost of this type of paint for a number of reasons including, first, the policy covered replacement new for old, not for betterment (previously there was no such paint at the premises), and second, the policy provided that the quality of the repair/replacement was guaranteed for life. After the works were completed, GIO planned to conduct independent testing to ensure that the mould had been eradicated. It would be obliged to keep remediating until that result was achieved under the terms of the lifetime guarantee. I should note here that there was no evidence before me that as at January 2013, painting was required as part of the remediation works.
54 The plaintiff also failed to call an engineer, Mr Chris Moran, who apparently prepared a report for these proceedings. The plaintiff was warned that an adverse inference may be drawn from the failure to call a relevant witness.[31] The defendant invites me to draw such an inference from the plaintiff’s failure to call Mr Moran.
[31]T990- 992
THE DEFENDANT’S EVIDENCE
Viva voce evidence called by the Defendant
55 The witnesses called to give evidence on behalf of the defendant were:
·Anthony Lee Oliver[32]
·Stefan Kopanja[33]
·Sally Louise Kinnaird[34]
·Lois West[35]
·Susan Leisanne Sauvarin;[36] and
·Nicole Marie Prior (referred to as “Nicci Prior” in exhibit G).[37]
[32]T1762-1792; T1800-1845
[33]T1846-1873; T1875-1877; T1879-1900; T1902-1936; T1937-1953; T1955-1964; T1972-1974; T1980-2012
[34]T2034-2053; T2054-2075; T2078-2083; T2084-2087
[35]T2088-2099; T2101-2125; T2128-2132
[36]T2132-2156; T2161-2162; T2175-2229
[37]T2236-2240; T2241-2273; T2276; T2279-2315; T2322-2345A; T2343 (pagination repeated some of the page numbers) - T2401; T2402-2433; T2438-2456
Exhibits tendered by the Defendant
56 The defendant tendered the following exhibits:
Number and Identifying Mark on Exhibit Short Description of Exhibit
1
Analysis of the pleadings prepared by the defendant: “Consolidated Pleadings” in table format
2
Email from the Taylors to Michael Bates and GIO dated 3 July 2012 attaching the Building Notice dated 22 June 2012
(Court Book pages 848-853)
3
The Parties’ Pleadings prepared by Mr Klempfner, Counsel for the Defendant, dated 1 August 2017
4
Email exchanges between Nela Lazetic and Mr Taylor dated 31 May 2012 (Supplementary Court Book Tab 299)
5
Chain of Emails between Mr Taylor, Nela Lazetic and Peter Dobeli (Supplementary Court Book pages 834-840)
6
Copy summary report from Restorx Services dated 20 June 2012 (Supplementary Court Book document 300)
7
Email from Nicci Prior dated 2 July 2012
(Court Book page 1301)
8
Email from the Taylors dated 3 July 2012 “to all concerned” (Court Book pages 854-859)
9
Scope of works by Restorx dated 5 July 2012
(Court Book pages 1302-1312)
10
Email from Nicci Prior from 12 July 2012 to GIO Claims attaching letter to Mr Hicks and first page of exhibit 9
(Court Book pages 1047-1050)
11
Email from Nicci Prior sent to Mr Bates (plaintiff’s solicitor) enclosing copy letter to Municipal Building Surveyor (Rob Hicks) (Court Book pages 1313-1315)
12
Chain of emails between Rob Hicks and Nicci Prior
(Court Book page 882-886)
13
Property damage repair quotation by Johns Lyng Group in respect of the wooden beams (Court Book pages 1316-1318)
14
Property damage repair quotation by Johns Lyng Group in respect of the split system ducted air-conditioning
(Court Book pages 1319-1320)
15
Email sent to Michael Bates from Nicci Prior dated 7 August 2012 and reply dated 8 August 2012 and attachment
(Court Book pages 1321-1324)
16
Email from Maree Taylor to Rob Hicks dated 10 August 2012 (Court Book page 892)
17
Building Order dated 15 August 2012 and covering letter (Court Book pages 893-896)
18
Email chain between Rob Hicks, Nicci Prior, Stefan Kopanja and the Taylors (Court Book page 891)
19
Email from Nicci Prior to Michael Bates dated 21 August 2012 attaching exhibit 17 and emails between Rob Hicks and the Taylors (Court Book pages 897-902c)
20
Email from Michael Bates to Nicci Prior dated 5 September 2012 (Court Book pages 1325)
21
Email from Nicci Prior to Matt Hamilton and Stefan Kopanja attaching copy of Exhibit 20 (Court Book pages 1326-1327)
22
Correspondence regarding delay to commencement of restoration works (Court Book pages 1328-1330)
23
Email from Nicci Prior to David Thomas, solicitor of Ligeti Partners (formerly acting for GIO)
(Court Book pages 1331-1335)
24
Email from Michael Bates to Nicci Prior dated 18 September 2012 (Court Book page 907)
25
Email exchange from David Thomas to Michael Bates and letter sent to Michael Bates by David Thomas dated 18 September 2012 (Court Book pages 1336-1339)
26
Email from the Taylors to Rob Hicks dated 18 September 2012 (Court Book page 908)
27
Email correspondence between Rob Hicks and David Thomas
(Supplementary Court Book document 305 pages 1-7)
28
Email from Nicci Prior to Brian Murphy dated 19 September 2012 (Supplementary Court Book document 304 page 1)
29
Updated Scope of Works from Restorx dated 9 October 2012 (Court Book 1340-1351)
30
Letter and report and from Noel Arnold & Associates Pty Ltd to Nicci Prior dated 15 October 2012
(Court Book pages 910-915)
31
Email from the Taylors to GIO dated 16 October 2012
(Court Book page 928)
32
Email exchanges between Michael Fraser and Rob Hicks and coped to Mr Taylor dated 16 October 2012
(Court Book page 909)
33
Letter and two reports of Dr Neil Hallam to the City of Frankston (Court Book pages 929-937)
34
Email between Rob Hicks and Nicci Prior and correspondence dated 15 November 2012 addressed to the plaintiff (Court Book pages 940-941)
35
Email exchange between the Taylors and Nicci Prior dated 16 November 2012 (Court Book pages 956-957)
36
Email sent by the Taylors to GIO dated 16 November 2012 (Court Book page 955)
37
Email from Nicci Prior to Estar Oung of Restorx dated 16 November 2012 noting that the attachment referred to is Exhibit 34 (Court Book page 945)
38
Correspondence between the Taylors and Rob Hicks dated 16 November 2012 (Court Book pages 948-949)
39
Email exchange between the Taylors and Rob Hicks dated 16 November 2012 (Court Book pages 950-951)
40
Email from Stefan Kopanja to Nicci Prior dated 19 November 2012 (Court Book page 968)
41
Email from Dr Hallam to Nicci Prior dated 18 November 2012 (Court Book pages 966-967)
42
Email from the Taylors to GIO dated 19 November 2012 (Court Book page 970)
43
Letter from Mr Bassett to Mrs Taylor dated 20 October 2012 (Supplementary Court Book document 306)
44
Email from the Taylors to Rob Hicks dated 21 November 2012 together with Mr Hicks’ response
(Court Book pages 971-972)
45
Email from the Taylors to GIO dated 21 November 2012 (Court Book page 976)
46
Email from Nicci Prior to the Taylors dated 22 November 2012 (Court Book page 1356)
47
Email from the Taylors to GIO dated 23 November 2012 (Court Book page 180)
48
Email from the Taylors to Rob Hicks and GIO dated 24 November 2012 (Court Book page 1358)
49
Email from Stefan Kopanja to Nicci Prior dated 28 November 2012 (Court Book page 1359)
50
Email from the Taylors to the Insurer GIO and Mr Hicks dated 1 December 2012 (Court Book page 1359)
51
Letter from Ligeti Partners to Maree Taylor dated 5 December 2012 (Court Book pages 1361-1363)
52
Letter to Maree Taylor from Michele Heritage, Financial Ombudsman Service Dispute Resolution Officer dated 10 December 2012 (Court Book pages 984-986)
53
Photographs, undated, photographer not identified
(Court Book pages 1-146)
54
Restorx General Items Inventory disputed dated 14 December 2012 (Court Book page 158)
55
Restorx Non-salvageable Inventory disputed dated 14 December 2012 (Court Book page 159-163)
56
Restorx Non-salvageable Electrical Items Inventory disputed dated 17 December 2012 (Court Book page 164)
57
Email from Estar Oung of Restorx to Sue Sauvarin dated 28 December 2012 attaching Exhibit 55
(Court Book pages 181-185)
58
Email from the Taylors to Nela Lazetic of the Financial Ombudsmen Services dated 29 December 2012
(Court Book page 987)
59
Job Completion Report from TVH to Stefan Kopanja of Restorx dated 10 January 2013
(Court Book pages 1367 – 1372)
60
Contents Assessment: Scope of Work dated 3 January 2013 (Court Book pages 988-989)
61
Email from Vicky Sloman of GIO to the Taylors dated 15 January 2013 attaching exhibits 54, 55 and 56
(Court Book pages 1373-1380)
62
Final report from Restorx regarding home contents dated 22 January 2013 (Court Book pages 170-172)
63
Final Report from Restorx regarding the building works dated 22 January 2013 (Court Book pages 1381-1383)
64
Tax invoice to GIO from Johns Lyng Group dated 24 January 2013 (Court Book page 1384)
65
Two emails from the Taylors to GIO dated 25 and 26 January 2013 (Court Book pages 991-992)
66
Email from Michael Fraser of GIO to Iain Taylor forwarding a copy of Exhibit 61 (Court Book pages 194-201)
67
Email from the Taylors to Mr Kopanja of Restorx dated 20 January 2013 (Court Book page 993)
68
Email from Estar Oung of Restorx to Mrs Taylor and the Taylors’ response both dated 31 January 2013
(Court Book pages 994-995)
69
Undated GIO Cash Settlement Letter and the Taylors’ email response dated 8 February 2013
(Document 310, pages 1-3A)
70
GIO’s email response to Exhibit 65 dated 1 February 2013 (Court Book pages 996-997)
71
Email from the Taylors to the Financial Ombudsman Services dated 10 February 2013 (Court Book pages 999-1000)
72
Admission - paragraph 346 of the Notice to Admit as evidence of an admission by the defendant of the fact asserted (Court Book page 223)
73
Letter from Mr Hicks to the Taylors attaching amended Building Order dated 27 February 2013
(Court Book pages 1003-1006)
74
Email from the Taylors to multiple parties regarding rental and claims about representation dated 27 February 2013
(Court Book page 1002)
75
Email from Rob Hicks to the Taylors dated 28 February 2013 and Mr Hicks’ email forwarding that email to Nicci Prior on 1 March 2013 together with attachments
(Court Book pages 1008-1015)
76
Email from the Taylors to GIO with associated proof of redraw of cheque in the amount of $87,400
(Court Book pages 1016-1019)
77
Update Report by Stefan Kopanja in response to complaints of handling of claim dated 5 March 2013
(Court Book 1385-1387)
78
Letter from Sally Kinnaird, Dispute Resolution Officer, to the Mrs Taylor dated 6 March 2013
(Court Book pages 1388-1393)
79
Email from Michael Fraser to the Taylors attaching Exhibits 77 and 78 (Attachments not included in this exhibit)
(Court Book page 1394)
80
Email from Plaintiff to GIO, Restorx, Financial Ombudsmen Services and Rob Hicks dated 7 March 2013
(Court Book page 212)
81
Correspondence regarding electricity bill reimbursement concluding in email from Mr Fraser
(Court Book pages 1021-1026)
82
Email from the Taylors dated 18 March 2013
(Court Book page 1027)
83
First and Final Report by Wendy Morcom dated 2 April 2013 regarding piano restoration (Court Book pages 1402-1403)
84
Email from Lois West to the Taylors dated 11 April 2013 (Court Book page 1404)
85
Emails passing between the Taylors and Mr Fraser dated 23 April 2013 (Court Book page 1405)
86
Email from the Taylors to GIO dated 24 April 2013
(Court Book page 1408)
87
Email from Chris Ipsaros of Restorx to GIO dated 6 June 2013 (Court Book pages 1036-1038)
88
Response provided by GIO to Financial Ombudsman Services dated 12 June 2013 (Court Book pages 1039-1046)
89
Determination by the Financial Ombudsman Services dated 8 November 2013 (Court Book pages 1409-1426)
90
Email from Rob Hicks extending time for compliance with Building Order dated 12 November 2013
(Court Book page 1061)
91
Further email from Mr Hicks further extending time for compliance with Building Order dated 13 May 2014
(Court Book page 1132)
92
Invoice from Restorx regarding storage costs (contents) dated 31 May 2014 (Court Book pages 1427-1428)
93
First writ and statement of claim filed on behalf of Mrs Taylor together with filing confirmation dated 17 July 2015
(Court Book pages 1-19)
94
Copy of the cheque offered as cash settlement by GIO dated 10 August 2015 (Court Book 1135)
95
Letter from Maurice Blackburn Lawyers dated 17 June 2016 to Mrs Taylor confirming ceasing to act as the Taylors’ solicitors (Court Book Document 313)
96
Letter from Mr Hicks to Mrs Taylor dated 27 January 2017 regarding further extension of time of the Building Order (Court Book page 1138)
97
Letter from Steamatic to GIO dated 5 October 2011
(Court Book pages 1298-1300)
98
Assessor’s Report (Adrian Patella) dated 13 December 2011 (Court Book page 157)
99
Report from Chatsworth Constructions Pty Ltd dated 14 December 2011 (Court Book page 793)
100
Email exchange between the Taylors and Vicki Sloman dated 12-13 February 2012 (Court Book pages 796-797)
101
Email from the Taylors attaching report from Agpath dated 24 May 2012 (Court Book pages 798-833)
102
Letter of Dr Timothy Doyle, clinical psychologist, dated 13 July 2016 (Court Book page 1277) (tendered as proof of the fact a statement was made not as proof of the truth of the contents)
103
THIS EXHIBIT HAS BEEN WITHDRAWN AS ITS SUBSTANCE IS CONTAINED IN EXHIBIT 38
Email from Rob Hicks to Mr Taylor, copy to Nicci Prior, dated 16 November 2012. Attachment 68 pages 1 and 2
104
Defendant’s written submissions
105
Defendant’s chronology
106
Defendant’s aide memoir to transcript
107
Elements of the plaintiff’s pleaded cause of action (according to the defendant)
Witnesses not called by the Defendant
57 Mr Taylor referred to the defendant’s failure to call Mr Cox, Quantity Surveyor of Currie & Brown, and Mr Brian Murphy, Certified Occupational Hygienist, of EHS Assess (formerly of Noel Arnold & Associates); however, it was Mr Taylor who tendered Mr Cox’s report as exhibit HH.[38] Mr Taylor also tendered Mr Murphy’s EHS Assess report as exhibit PP.[39]
[38]T980-981
[39]T1076 and 1078
58 I draw no inference adverse to the defendant from the failure to call either Mr Cox or Mr Murphy.[40] Mr Cox, as quantity surveyor, reported on the cost of remediation of the property as at around June 2016.[41] For reasons explained in this Judgment, I consider that the appropriate date for the assessment is as at January 2013.
[40]Jones v Dunkel (1959) 101 CLR 298; O’Donnell v Reichard [1975] VR 916
[41]Exhibit HH, page 5
59 The reports written by Mr Murphy for Noel Arnold & Associates (NAA) were tendered without objection. Moreover, those reports were integral to the claim as reports required by and supplied to the local Council in respect of the scope of works proposed.
THE POLICY
60 The parties agree that the contract of insurance is comprised of two documents:
·“55UP Home and Contents Insurance Policy number 17339732P5”;[42] and
·“55UP Home & Contents Insurance Product Disclosure Statement”.[43]
[42]Exhibit A
[43]Exhibit B
55UP Home and Contents Insurance Policy number 17339732P5
61 The policy names Ms Maree Taylor as the insured[44] and notes her date of birth as ##-##-1935 (full date of birth deleted). At the date of the flood, Mrs Taylor was aged seventy-six.[45]
[44]No point of privity of contract was taken in the action brought by Mr Taylor in his own right.
[45]Exhibit A, page 3
62 This document records that the policy covered the home and contents at 78 Derinya Drive, Frankston. The home sum insured was $300,000.00 and the contents sum insured was $50,000.00.[46]
[46]Exhibit A, page 1
63 The policy stated that the property:
·Is a home on a concrete slab
·Is approximately 40 years old
·Is mainly brick with timber roof
·…
·Is structurally sound, secure and well-maintained (including all outbuildings). … .[47]
[47]Exhibit A, page 3
64 The policy incorporated by reference the Product Disclosure Statement:
The information on your latest Certificate of Insurance, along with your 55UP Home and Contents Insurance Product Disclosure Statement (PDS) and any applicable Supplementary PDS will form your contract of insurance. Read the information carefully so that you understand what is covered and not covered and the conditions, limits and exclusions that apply.[48]
55UP Home and Contents Insurance Product Disclosure Statement[49]
[48]Exhibit, page 5
[49]Exhibit B
65 The document has a clear index on page one, making it easy to navigate through the various clauses forming part of the contract.
66 I shall now set out some of the relevant parts of the document:
About your sum insured
What is a sum insured?
The sum insured is the most you can claim for any one incident. The amount is shown on the certificate of insurance or in this PDS. The sum insured includes GST and any adjustment you are entitled to under additional feature 4 (automatic adjustments to the sum insured) on page 30.[50]
[50]Exhibit B, page 4
…
About your cover
What we cover as your home
Your home means your residential building at the insured address including its structural improvements, fixtures, fittings and domestic outbuildings.
Home also includes:
ñfixed wall coverings such as paint, wallpaper and wall tiles
ñfixed floor coverings including lino (glued down or not), timber floor coverings, but not carpet or rugs (carpet and rugs are covered under contents)
ñdishwashers housed in a cabinet (mobile dishwashers are covered under contents)
ñfixed or ducted air conditioners or vacuum systems (air conditioners attached to windows are covered under contents)
ñelectrical and gas appliances, light fittings and alarm systems if these appliances are permanently connected or plumbed to the electricity or gas supply
ñ…
ñgarden borders, paths and paving
ñ…[51]
[51]Exhibit B, page 7
What we do not cover as your home
Home does not include:
ñ …
ñ carpet (fixed or unfixed) or floor rugs
ñ …
Limits on home cover
The most we will pay for any one insured incident is the sum insured shown on your certificate of insurance unless a limit applies in the table below. You cannot increase the limits.[52]
[52]Exhibit B, page 8
…
What we cover as your contents
Your contents means your furniture, furnishings, unfixed electrical goods, valuables, portable personal possessions, clothing and unfixed household goods that you own.
Contents also includes:
ñ carpet and rugs (fixed and unfixed)[53]
[53]Exhibit B, page 9
…
What you are covered for
Insured events 1 to 12
When covered under this policy, your home and contents are insured for loss or damage at the insured address by any of the 12 insured events, if they happen in the period of insurance.
1. Storm and flood[54]
[54]Exhibit B, page 18
We cover
Loss and damage caused by storm and flood e.g. rain, wind, hail, storm and damage caused by flooding from rivers, streets and canals … .
…
2. Burst pipes, leaks and overflows[55]
We cover Damage from leaking, overflowing or bursting pipes and water containers at the home …. …
Additional features
When we accept a claim under your policy for an insured incident that happens in the period of insurance, you may also be entitled to these additional features.
1a.Temporary accommodation costs when you have home cover[56]
[55]Exhibit B, page 19
[56]Exhibit B, page 26. Note a similar provision applies in the case of contents causing an inability to live at premises (item 1b. temporary accommodation costs when you have contents cover) page 27
We cover
When you have home cover and an insured incident damages your home to the extent you cannot live there, we will pay for your temporary accommodation costs for the time it takes to repair or rebuild your home to a liveable condition. We will pay:
ñ up to 2 weeks in short term accommodation agreed to by us (e.g. standard rates for a hotel, motel or serviced apartment), then if necessary:
ñ up to another 50 weeks in residential accommodation of a similar standard to your home. The amount we will pay is based on the weekly rent you would receive for your home had it not been damaged. We will ask a licensed local property manager to assess this amount.
The limit for temporary accommodation is 10% of your home sum insured and the longest period you can claim for is 52 weeks. We will pay this in addition to the sum insured for your home.
We do not cover
Temporary accommodation costs:
…
ñ beyond the period it should reasonably take to replace or repair your home so you can live there again
ñ ….
2. Removal of debris[57]
[57]Exhibit B, page 28
We cover
Removal of debris and making the home safe
When your home is damaged by an insured incident, we will pay the reasonable and necessary costs to:
ñ remove the damaged parts of your home from the insured address
ñ demolish your home if necessary, and
ñ make the home safe if it can’t be lived in.
If we authorise the repair or rebuilding of your home, we will also pay the reasonable and necessary cost of:
ñ …
ñ fees and quantity surveyors, land surveyors, architects and engineers
ñ building application fees and legal work to repair or rebuild.
The limit for this additional feature for any one insured incident is 15% of your home sum insured. We will pay this in addition to the sum insured for your home.
Removal of debris and keeping contents safe
When your contents are damaged by an insured incident, we will pay the reasonable and necessary costs to:
ñ dispose of damaged contents, and
ñ store undamaged contents during the reasonable time it should take to repair your home.
The limit for this additional feature for any one insured incident is 10% of your contents sum insured. We will pay this in addition to the sum insured for your contents.
3. Safety net home protection[58]
[58]Exhibit B, page 29
We cover
When your home is damaged by an insured incident and the cost of repairing or replacing it exceeds the sum insured, then we will pay up to a further 25% of your home sum insured to:
ñ repair damage or
ñ replace your home or
ñ pay you what it would cost us to repair or replace your home.
Note
The cover in safety net home protection does not increase your home sum insured. Any additional feature based on a percentage of the home sum insured does not increase.
… .
4. Automatic adjustments to the sum insured[59]
[59]Exhibit B, page 30
We cover
When your home policy is due for renewal
At each renewal, we will review and adjust your sum insured, taking into account trends and building costs and the cost of rebuilding your home.
… .
…
What is not covered under any part of your policy
This section details what is not covered under any part of your policy.[60]
[60]Exhibit B, page 46
…
We do not cover loss or damage:
…
Failing to take care of the home or contents
Caused by, or as a result of, your failure to:
ñ take reasonable care of your home and contents
ñ keep the home and contents in good condition and well maintained
ñ fix faults and defects as soon as you become aware of them.
… .[61]
[61]Exhibit B, page 47
We do not cover loss or damage or liability:
…
Deliberate actions by you
Caused by an act or omission by you, your family or any owner or part owner of your home or contents, or anyone acting with your consent which:
ñ is deliberate
ñ demonstrates a reckless disregard for the consequences of that action or omission.[62]
[62]Exhibit B, page 48
…
We do not cover:
…
Wear, tear, rust or mould
Loss or damage caused by wear, tear, rust, fading, gradual deterioration, mould, rising damp, mildew, action of light, atmospheric or climatic conditions, corrosion or rot unless this is covered under:
ñ insured event 1 (storm and flood)
ñ insured event 2 (burst pipes, leaks and overflows).[63]
[63]Exhibit B, page 49
…
Extra costs following an insured incident
Consequential losses or extra costs following an insured incident including:
…
ñ professional, expert, legal, consulting or valuation costs unless you obtained our prior written authority to incur these costs
…
unless this is covered by an additional feature or option under this policy.[64]
[64]Exhibit B, page 50
…
Claims
Making a claim
When to make a claim
Contact us as soon as possible if you suffer loss or damage, or there is an incident that could result in a claim.
How to make a claim[65]
[65]Exhibit B, page 54
Step 1
…
Step 2
…
Step 3
Try to prevent further loss, damage or injury
You must do everything you reasonably can to prevent further loss, damage or liability (e.g. if there is a hole in the roof, arrange for it to be covered to prevent further water damage from rain).
Step 4
Contact us without further delay on [number deleted]
We are available 24 hours a day. You can also lodge your claim online (gio.com.au) and a consultant will return your call. If you delay reporting your claim, we will not pay for any additional loss or damage caused by your delay.
Describe details of what has been affected by the event (e.g. a broken window, storm damage or a list of stolen items). …
What you must not Do
…
ñ do not carry out or authorise repairs without our consent unless you cannot contact us and need to make emergency repairs to protect your home or contents[66]
[66]Exhibit B, page 55
…
How to establish your loss[67]
[67]Exhibit B, page 60
Establish an incident took place
When making a claim you must be able to prove that an incident insured by your policy actually took place. If you do not do this, we will not be able to pay your claim.
…
When your home or contents are damaged
Usually allowing us, a repairer or an expert appointed by us, to look at what is damaged is all that is needed to prove your loss. For valuable and badly damaged items, we may ask you to provide proof of ownership and value.
…
Things you must do
ñ allow us to inspect the damaged home or contents
ñ allow us to arrange for experts to assess the damaged home or contents and to quote on repair or replacement
ñ provide us with a quote for repair or replacement if we ask you for this. If you choose to use our recommended repairers (when available), there is no need to obtain your own quotes
ñ consult an expert if we ask for this.
Your co-operation is extremely important. If you do not co-operate we won’t be able to assess and pay your claim.[68]
[68]Exhibit B, page 60
…
How we settle your claim[69]
[69]Exhibit B, page 62
We choose how your claim is settled
If we agree to pay a claim for loss, theft or damage to your home or contents, we will decide if we will:
ñ repair damage new for old or
ñ replace home or contents new for old or
ñ pay you what it would cost us to repair or replace your home or contents new for old.
The meaning of new for old is defined below.
We will not:
ñ pay extra to replace your home or contents to a better standard, specification or quality than it was before the loss or damage occurred except as stated in ‘new for old’ below
ñ fix a fault that existed before the loss or damage occurred.
New for old means:
ñ new materials, new items
we replace or repair with new items or new materials that are available at the time of replacement or repair from Australian suppliers.
ñ new for old, regardless of age
we replace or repair new for old regardless of age, with no allowance for depreciation.
For example, a leather lounge which was purchased 5 years ago for $5000 and now worth $2000, will be replaced with a brand new leather lounge equivalent to your old lounge when it was new. Cover is not limited to $2000.
ñ same type, standard and specification as when new
we replace or repair to the same type, standard and specification as when new. If the same is not available, it means of a similar type, standard and specification when new. It can be a different brand.
New for old does not:
ñ …
ñ mean of a better standard, specification or quality than when new.[70]
[70]Exhibit B, page 62
When items may be replaced to a better standard
Refrigerators, freezers, dishwashers, air conditioners, washing machines and dryers with less than a 3 star energy rating
For these items when being replaced, new for old means replacing with a new item of equal specification and if you agree, it means replacing with a minimum 3 star energy rating if this is available. It can be a different brand.
Obsolete electrical appliances
For obsolete electrical appliances, such as outdated computers or TVs, new for old means replacing or repairing to an equal specification. If this is not available, it means to the nearest better specification available. It can be a different brand.[71]
[71]Exhibit B, page 62
…
Home claims[72]
[72]Exhibit B, page 64
How we settle home claims
If we agree to pay a claim for loss, theft or damage to your home, we will decide if we will:
ñ repair damage new for old or
ñ rebuild your home new for old or
ñ pay you what it would cost us to repair or rebuild your home new for old.
When we repair or rebuild your home
We will do our best to obtain new materials that are the same type, standard and specification as when new. If the same is not available, we will use new materials of a similar type, standard and specification that are commercially available and compliant with the latest building regulations.
When we cannot match materials
If we cannot find new materials to match undamaged parts, we will use the closest match available to us. ¯
If you are not satisfied with the materials we find as the closest match: ¯ ¯
if we agree, you can pay the extra cost of replacing undamaged parts of your home to achieve a uniform appearance.
or we will pay you what it would have cost us to repair or rebuild the damaged part.
Repairing or rebuilding damaged parts
We will only repair or rebuild the parts that are damaged by an insured incident. You cannot claim to replace undamaged parts of your home to create a uniform appearance. … .[73]
[73]Exhibit B, page 64
When we will repair or rebuild undamaged parts
If we cannot match the new materials with the undamaged parts, if necessary, we will only pay extra to create a uniform appearance when:
…
ñ other wall coverings are damaged (e.g. paint, wallpaper, wood panels, but not tiles) we will pay extra to paint, wallpaper or replace undamaged wall coverings in the same room, stairs, hallway or passageway where the damage occurred
ñ floor coverings are damaged (including tiles)
we will pay extra to replace continuously joined undamaged floor coverings of the same material in the same room, stairs, hallway or passageway where the damage occurred
ñ kitchen cabinets, cupboards or bench tops are damaged
…[74]
[74]Exhibit B, page 65
…
Changes to your home[75]
[75]Exhibit B, page 68
If you want to change the design of your home
When rebuilding your home, if we agree, you can choose to change the design of your home or upgrade parts of it, providing you pay the extra costs of doing this. If you want to downsize your home for less cost than you are entitled to claim, we will not pay more than it costs us to rebuild the downsized home.
…
Lifetime guarantee on home repairs
When we repair or rebuild your home, we guarantee the quality of materials and workmanship of that work for the lifetime of your home if we:
ñ authorise and
ñ arrange and
ñ pay the builder or repairer directly for this work.
What we guarantee
We guarantee the material used and standard of the workmanship to be free of defects. If a defect arises in the lifetime of your home as a result of poor quality workmanship or use of incorrect materials, then we will rectify the problem.
… .[76]
What we will do after a claim is paid[77]
[76]Exhibit B, page 68
[77]Exhibit B, page 71
Salvaged home contents
We can take and keep any recovered or salvaged item and sell it and keep the proceeds after we have replace the item or paid you for it.[78]
[78]Exhibit B, page 71
67 The document explains terms used in the contract.[79] The definitions include:
[79]Exhibit B, pages 74-78
flood
Inundation caused by rain falling over land resulting in water pooling, overflowing or spreading from:
ñ naturally occurring or man made inland watercourses such as rivers, creeks, canals, lakes, ponds, dams and reservoirs
ñ wet areas of land (e.g. marshes)
ñ dry roads and streets
ñ normally dry areas of land.
… .[80]
[80]Exhibit B, page 75
what it costs us
ñ for repairs, it means what it costs us to repair the item
ñ for replacement, it means the retail price of the item as if it were new at the time of the loss or damage less any discount available to us.[81]
… .
[81]Exhibit B, page 78
68 The document explains what to do if the insured has a complaint:
If you have a complaint
[telephone and fax numbers set out and email and postal address provided]
We will try to settle your complaint within 1 working day. If we can’t, we will tell you within 3 working days that we have received your complaint and try to settle it within 21 days. For more information on our complaints handling process, please contact us.
If you are dissatisfied with our decision or the way we handled your complaint, please let us know. Otherwise, you can also contact the Financial Ombudsman Service. You need to do this within 2 years of receiving a final decision.
The Financial Ombudsman Service provides a free service and is a totally independent and impartial body. They will tell you if they can help you, as their services are not available to all customers. If you want more information on the Financial Ombudsman Service, please ask us for a brochure.
Their contact details are:
…
[Details to make contact by telephone, mail and email set out, as well as the reference to the website].[82]
[82]Exhibit B, page 79
69 The document confirms that the insurer supports and adheres to the General Insurance Code of Practice. Details as to how a copy of the Code can be obtained are included.[83]
[83]Exhibit B, page 80
70 Finally, further useful contact details are found on the last page of the document.[84]
[84]Exhibit B, back page
Business records
71 As mentioned earlier, Mr Taylor tendered the business records of GIO relating to the claim.[85] Although he disputed the accuracy of some of the contents of the records, the majority of the entries remain unchallenged. I have used the business records as proof of the truth of facts asserted therein except where Mr Taylor gave, called or tendered evidence rebutting those assertions, provided his rebutting evidence was otherwise admissible. In this latter situation, I have made my assessment of the facts based on all of the relevant evidence.
[85]Exhibit G
72 Mr Taylor also tendered internal business records passing between GIO’s contractor “Restorx” and GIO.[86] I have adopted the same approach as I did with GIO’s business records. I should add here that the business records of GIO and Restorx use abbreviations and shorthand methods to note the events to which they refer. To make better sense of these records, I shall substitute whole words for abbreviations and punctuate where necessary. Where documents are cited in this Judgment, the majority of those documents are quoted in their original form without noting where the errors appear in the original.
[86]Exhibits UU and TT, “VAMP” entries between Restorx and GIO. “VAMP” is an electronic communication system available for use between GIO and its contractors.
Chronology of events
73 The parties each prepared a chronology setting out the relevant events, cross-referred to the evidence.[87] I have drawn on both chronologies; however, I have not confined my discussion or assessment of the evidence to those chronologies. In arriving at my findings of fact, I took account of the totality of the evidence. As will be seen, I have attempted to match the viva voce evidence to the documentary evidence forming part of the chronology.
[87]Plaintiff’s chronology - exhibit WW; defendant’s chronology - exhibit 105
74 It should be noted that although much of the correspondence sent by email to GIO and others was in Mrs Taylor’s name, Mr Taylor was in fact the author.[88] It is not disputed that Mr Taylor acted with his mother’s authority except where otherwise stated.
[88]T490
75 I now turn to the chronology.
76 The applicable version of the Policy and Product Disclosure Statement is dated 25 October 2010.[89]
[89]Exhibit B
77 On 4 May 2010, Mrs Taylor took out insurance in respect of the property, policy number 17339732P5.[90]
[90]Exhibit A
78 The groundwater flood occurred on 28 September 2011. This is an agreed fact.
79 At 6.48pm on the same day as the flood, the Taylors notified GIO that they had suffered a flood at the property and were making a claim under the policy.[91]
[91]Exhibit C; exhibit G, page 215
80 Again, on 28 September 2011, a representative of “Steamatic”, the contractor appointed by GIO, attended the property after hours to inspect the damage and to carry out necessary works to ensure the property was made safe.[92]
[92]Exhibit 97; exhibit G, pages 214-215
81 Exhibit G records a conversation between Mr Taylor and Luke Corrigan on 29 September 2011:
... received call from insured from claims assist action - insured concerned about getting legionnaires disease - insured wants us to close up the ducts so she doesn’t get sick and replace with a split system air conditioner/heater … .[93]
[93]Exhibit G, pages 213-214
82 The Taylors did not have air-conditioning at the property. Although installing such a unit would have been an upgrade not strictly covered by the policy, it is not in dispute that GIO agreed to fill the existing heating ducts and replace the old heating system with two new split systems capable of providing both heating and cooling.
83 On 5 October 2011, the Taylors again stated that they were worried about the possibility of contracting Legionnaires disease from contaminated water remaining in the heating ducts after the flood. A number of calls were made to discuss their concerns between 5 and 19 October 2011.[94]
[94]Exhibit G, pages 210-213
84 Also on 5 October 2011, Brad O’Hara from Chatsworth Constructions inspected the property at the request of GIO. He noted that the heating ducts positioned within the concrete slab had sustained water damage but confirmed that there was no sign of Legionnaires-causing bacteria. GIO authorised Chatsworth Constructions to clean and fill the ducts, and to install two split system heating/air-conditioning units.[95]
[95]Exhibit D; Exhibit G, page 213
85 On 18 October 2011, GIO authorised replacement of the existing flood damaged carpet with Axminster carpet to be sourced from Scotland.[96]
[96]Exhibit G, pages 210-211 (Andrea De Landelles)
86 The same day, Mr Taylor called GIO and spoke with Sarah Hedges. During this conversation, Mr Taylor expressed concerns about aspects of Chatsworth Constructions’ report which stated that although the heating ducts were damaged, there was no sign of Legionnaires-causing bacteria.[97]
[97]Exhibit G, page 210 (Sarah Hedges)
87 Exhibit G records:
... [Mr Taylor] concerned with report that has been submitted as the guy who attended only knew about installation and mechanics, – person who attended only looked at one vent, – he said they are in concrete and they need to be cleaned and then he said he knew nothing about cleaning the vent. – [Mr Taylor] advised he has spoken with the council who advised that grout needs to be put in – … [Mr Taylor] concerned about rust – cleaning is not going to fix this. … .[98]
[98]Exhibit G, page 210
88 On 19 October 2011, Paul Beresford of GIO called the Taylors to discuss the proposed remedial works.[99]
[99]Exhibit G, page 210 (Paul Beresford)
89 On 21 October 2011, GIO appointed Carpet Court for a “Do and Charge” job.[100]
[100]Exhibit G, page 209 (Sophie Pang)
90 On 25 October 2011, Mrs Taylor called GIO and spoke with Natalie Greet, to whom she expressed concern that the heating ducts had begun to rust.[101]
[101]Exhibit G, page 207 (Natalie Greet)
91 In a telephone call with Sophie Pang of GIO the same day, the Taylors requested that replacement Axminster carpet be imported from Scotland.[102]
[102]Exhibit G, pages 206-207 (Sophie Pang)
92 On 27 October 2011, Mrs Taylor called GIO and spoke with Matt Poci. She said that her son was obtaining quotations for the carpet and that she had been advised by the Council to fill in the ducts and close them off.[103]
[103]Exhibit G, page 205 (Matt Poci)
93 On 8 November 2011, Mrs Taylor called GIO and advised Christina Vilagosh that she was unhappy with the delays in processing her claim. Mrs Taylor also stated that it was her belief that the ducts could not be cleaned but instead needed to be replaced. GIO advised Mrs Taylor that it would arrange for someone to re-attend the property, inspect the ducts and take the necessary action to rectify the problem. Mrs Taylor confirmed that she was happy with this proposal.[104]
[104]Exhibit G, pages 203-204 (Christina Vilagosh)
94 On 14 November 2011, Mrs Taylor again discussed her concerns with GIO representatives about the presence of “white mould” in the heating ducts. GIO made enquiries of Steamatic in this regard.[105]
[105]Exhibit G, pages 201-202
95 The next day, Jennifer Cutajar of GIO spoke with the Taylors regarding advice that GIO had received that there was no mould at the property.[106]
[106]Exhibit G, page 200 (Jennifer Cutajar)
96 There were also various telephone conversations between GIO representatives and the Taylors regarding temporary accommodation for the Taylors.[107]
[107]Exhibit G, pages 197 - 200
97 Exhibit G records a conversation between Jennifer Cutajar of GIO and Mrs Taylor, and then Mr Taylor:
… contacted insured [then] … spoke with supply company who spoke to Steamatic. Their contractor does not believe it is mould, they believe it is salt and dirt that has risen up. They are however sending Australian Quality Systems to clean and to report if they believe there is mould at the property. Chatsworth constructions have also tested for bacteria and legionnaires – results were negative – contacted insured and advised of this. Insured asked for me to speak to her son … Advised him this. He demanded to be put into temporary accommodation until this is addressed. Advised I cannot authorise temporary accommodation until I have confirmation of mould at the property. Advised insured no confirmation, in fact they all deny mould at the property. Insured continued to argue in circles and demanded they attend tonight. Advised insured if he is not comfortable at the property he can seek his own temporary accommodation, however we will not authorise this unless we receive confirmation of this. Insured said he would call complaints department back. Advised he has the right.[108]
[108]Exhibit G, page 200
98 In a subsequent telephone call with Mrs Taylor, Mrs Taylor stated that the cost of temporary accommodation was “too much”. GIO agreed to fund limited temporary accommodation costs.[109]
[109]Exhibit G, page 198
99 On 16 November 2011, GIO made arrangements for Steamatic to attend the property to investigate whether mould was present.[110] Steamatic advised GIO that:
No mould is present, however the ducting is non-restorable due to debris and will need to be replaced. The insured were advised of the findings, however they still believe there is mould present.[111]
[110]Exhibit G, pages 195 - 197
[111]Exhibit G, page 196
100 A note was created to generate a review by a case manager.[112]
[112]Exhibit G, page 196
101 The same day, GIO informed the Taylors that Steamatic had advised that there was no mould present at the property but if they insisted that there was, the Taylors could submit an independent report and GIO would send out another specialist to report.[113]
[113]Exhibit G, pages 194-195
102 Exhibit G records a conversation between Jarrod Carrington of GIO and Mrs Taylor on 16 November 2011:
[received call from Mrs Taylor] – insured requested more temporary accommodation – repeated stance that no temporary accommodation is necessary and the home is fine to live in – I advised that [is] not what our experts are telling us and if they want us to change our mind maybe they could speak to Steamatic, because they [Steamatic] are advising us that accommodation is not required, however they are advising the insured accommodation is required.
103 The note goes on to record that no more temporary accommodation was to be approved:
If insured insists that there is mould at the property – they may submit an independent report. We would then send out another specialist to report if we have conflicting reports. If insured does not wish to stay at the property – they can arrange their own accommodation. If once they have submitted their own report and we have reassessed there is evidence of mould – they can submit accommodation invoices for review. AT THIS STAGE – NO EVIDENCE OF MOULD AND NO EVIDENCE THAT HOME IS UNLIVABLE AS PER STEAMATIC REPORT.[114]
(Emphasis in original)
[114]Exhibit G, page 195
104 The records confirm that GIO received an update report from Steamatic on 16 November 2011 confirming that no evidence of mould was found at the property.[115]
[115]Exhibit G, page 195
105 On 17 November 2011, GIO contacted Steamatic to follow up the Taylors’ allegations of mould. Steamatic advised that it had conducted swab and air sampling tests and was waiting for the results. Mr Taylor was present during the sampling process. GIO then authorised Steamatic to place air scrubbers and HEPA filters in the property. GIO appointed Chatsworth Constructions to repair or replace the heating ducts.[116]
[116]Exhibit G, page 192 (Christina Vilagosh); Exhibit G page 193 (Rishi Pimpliskar)
106 The same day, the Taylors prevented Chatsworth Constructions from attending to the cleaning and sanitising of the ducts.[117]
[117]Exhibit G, pages 192-193
107 On 18 November 2011, there was a telephone discussion between Christina Vilagosh of GIO and Mr Taylor, during which Mr Taylor insisted that there was mould in the ducts. Ms Vilagosh attempted to reassure Mr Taylor by telling him that:
Keeping our customers safe and healthy is our top priority and we do not take risks in regard to this.[118]
[118]Exhibit G, page 192 (Christina Vilagosh)
108 During this telephone conversation between Ms Vilagosh and Mr Taylor on 18 November 2011, Mr Taylor sought a cash settlement of the claim. The note records:
… [Mr Taylor] advised he would like an assessor to attend and organise a cash settlement.[119]
[119]Exhibit G, page 192
109 Also on 18 November 2011, in a telephone conversation with Glen Gordon of GIO, Mr Taylor stated that he would like follow-up calls to be answered within 24 hours –
“… as promised or else he will be going to the ombudsman.”[120]
[120]Exhibit G, page 191
110 On 19 November 2011, Mr Taylor lodged an online complaint to the Financial Ombudsman Service (“FOS”).[121] He described the details of dispute as follows:
We received flood damage on 28th September 2011 to our home address that is insured by GIO. The weather as reported was a 1 in 50 year day event and came down in a short period of time within this day. The catchment in the front is large and includes our long (90 metre drive way) and possibly other neighbours off load was also accumulated. The floodwater was too much for our usual drainage and water entered our house through the front door. Dirty muddy water damaged the carpet in three rooms and it also went down the ducted system that is encased in a concrete slab. GIO was informed and a contractor was called to the house. He attended within the hour, the weather was still somewhat extreme. He removed (cut out) the obvious wet carpet. A week later another subcontractor was sent by the insurer’s builder to inspect the ducts. He said the ducts would be fine and only needed cleaning. We were suspicious and made inquiries and no duct cleaner we rang (we think we rang approx 11) were willing to clean and advice was given that once dirty water enter this such environment there is little that can be done to bring it to its original state. We didn’t hear from the insurance contractors cleaner until we think 6 weeks after the incident and things had deteriorated further and since he came from Boronia and once informed of the state of the ducts he discussed it with his boss and he too declined to come and clean our ducts. Our ducts are now rusted and have been tested by the insurer’s contractor for mould, which we believe occurred as a result of the floods, to be in the ducts, bathroom and kitchen. We have been told that we will receive return phone calls and hope they are going to do rectification works but as time goes by nothing appears to be happening to fix the damage. Meanwhile more and more damage is occurring.
What do you think is a fair and reasonable resolution to the dispute?: That since we have a current GIO house and contents policy for flood damage and flood damage occurred and also made a claim then we should be compensated for what damage occurred. That damage is either settled as stated in their brochure, to be “repair damage new for old replace home and contents new for old or pay you what it would cost us to repair or replace your home new for old.” We prefer the later for we believe that this would be better solution for what they have shown so far can at best be described as incompetence. If needed then we should be given the ability to provide documentation to further substantiate this claim review but we do don’t see any problem why this claim should not be honoured.[122]
(Emphasis added)
[121]Exhibit F
[122]Exhibit F – note, I have corrected some of the typographical errors as they appeared in the original.
111 In his evidence-in-chief, Mr Taylor testified that it was not until approximately 5 December 2012 that he discovered cash settlement was an option:
I might just make note that this is … We didn’t know about cash settlements. We weren’t aware of that in the policy. We just thought it had to be fixed or – we didn’t even know of a second – if there was – I probably would have tried to push for the cash settlement before then if I knew, but it’s not for me to ask for; it’s for insurance to grant, I think. But I could have lobbied for it before then. I just did not know anything of cash settlements before this date … I just wasn’t aware of it.[123]
[123]T892. See also Mr Taylor’s evidence T892-895; T911
112 Mr Taylor also testified:
… the insurance always had time to implement their rights under the policy. They could have sought to pay out their claim as a cash settlement. We had no knowledge of a cash settlement suggested. We weren’t aware of cash settlements or anything. We just wanted to go back to a house. But the first acknowledgement of a cash settlement that could be their option to tender was in December, I think the 5th … .[124]
[124]T818-819
113 Mr Taylor also stated in his evidence that it was only after receiving a letter from the defendant’s solicitor dated 5 December 2012[125] that the Taylors read the policy and discovered that GIO could cash settle the claim at any time.[126]
[125]Exhibit 51
[126]T931
114 Mr Taylor’s oral testimony is at odds with the contents of his complaint to FOS and with the substance of his telephone conversation with Ms Vilagosh on 18 November 2011. As early as 18 November 2011, Mr Taylor asked for an assessor to attend the property to organise a cash settlement. The next day, on 19 November 2011, Mr Taylor was quoting the method of settlement directly from the policy and was requesting, as his preference, a cash settlement in accordance with its terms. I reject Mr Taylor’s evidence that he was unaware that the policy provided that GIO could cash settle the claim.
115 Mr Klempfner submits that I should accept that from the outset, Mr Taylor determined to obtain a cash settlement and his obstruction to remediation should be seen as conduct in furtherance of that objective.
116 Returning to the chronology, on 21 November 2011, Mrs Taylor contacted GIO.[127] GIO requested Chatsworth Constructions to contact the insured to arrange for a specialist ducted heating contractor to attend and assess whether the heating system could be cleaned as per the original report, or whether it needed to be replaced.[128] The same day, Mr Taylor called GIO seeking a follow up of the mould report. He was informed of GIO’s actions. Mr Taylor stated he would call Chatsworth Constructions himself.[129] Mr Taylor called GIO again later that day to check the status of the claim. As it was after hours, Mr Taylor said he would call back next day.[130]
[994]Exhibit 4, and Mr Taylor’s concession that the assertion might have been an “overstatement” – T528 and T1163
(14) GIO appointed Restorx to attend to both the building and the contents aspects of the claim.
(15) As the evidence demonstrates, Mr Taylor continued thereafter to question each scope of works put forward by GIO’s contractors, notwithstanding the fact that those scopes were consistent with Dr Cole’s report. On 6 June 2012, Mr Taylor again complained to Ms Lazetic of FOS that further clarification of cleaning products to be used and the methodology to be employed was required, and that the house needed to be cleaned on the outside as well as on the inside. He questioned the quality of the assessments made by GIO’s contractors and he sought $5,000.00 as compensation for the stress or inconvenience caused by GIO.[995] Two days later, GIO responded to the complaint, noting that as new points were raised by the Taylors the additional matters would need to assessed, then a scope of works could be created.[996]
[995]Exhibit 5
[996]Exhibit 5
(16) On 20 June 2012, Restorx provided a report in which further testing was recommended to be followed by a scope of works.[997] On 22 June 2012, the Taylors were at the local Council demanding that the Council issue a notice condemning the house.[998] There were numerous calls between the Taylors and GIO representatives thereafter during which Mr Taylor demanded further detail about the scope of works so that he could be satisfied that the decontamination works would be carried out properly.[999] Mr Taylor is not qualified as an expert in mould.
[997]Exhibit 6
[998]Exhibit G, page 204
[999]See exhibit G, entries referred to earlier in the chronology
(17) Mrs Taylor instructed Mr Bates of Maurice Blackburn to represent her in the claim.
(18) On 3 July 2012, Restorx sent contractors to the property to undertake works. Mr Taylor refused the technicians access to the property, complaining that he had not received a complete scope of works. He made it clear that access would not be allowed unless he was given a complete scope of works and a list of all products to be used.[1000] These facts are confirmed by an email that Mr Taylor sent the same day to GIO and to Mr Bates.[1001] Also that day, as a direct result of the Taylors’ complaint to the local Council, the Council issued a building notice in respect of the property.[1002]
[1000]Exhibit G, page 99
[1001]Exhibit 8
[1002]Exhibit 2
(19) On 5 July 2012, Restorx provided a detailed scope of works.[1003] I have earlier mentioned that this scope of works was largely consistent with what Dr Cole had recommended. GIO appointed Johns Lyng Group to attend to the ducts. Mr Taylor was not satisfied with the level of detail provided to him about what was going to be done.[1004] Unbeknown to the Taylors, there was a point of confusion between the contractors about which work should be done first, but GIO sorted out the order in which the works were to be performed. No additional delay was caused by this confusion because Mr Taylor was still demanding to know the fine detail of what was being done before he would permit work to proceed. GIO kept the Council apprised of developments.
[1003]Exhibit 9
[1004]Exhibit G, page 99
(20) On 13 July 2012, Johns Lyng Group conducted an onsite assessment and reported back to GIO with scopes of work and quotations of costs to undertake the works.[1005] Mr Taylor told the assessor that the house should be knocked down and that he would be getting his own expert reports.[1006] Three days later, the Taylors were back at the Council expressing concern about the scope of works. The building surveyor, Mr Hicks, asked the Taylors to commit their concerns to writing.[1007]
[1005]Exhibits 13 and 14
[1006]Exhibit G, pages 80-90
[1007]Exhibit 12
(21) Around this time the Taylors appointed Associate Professor Hallam, their landlord, in place of Dr Cole. The Taylors maintained that they were still concerned about the scope of works.[1008]
[1008]T814
(22) On 7 August 2012, Mr Taylor informed Restorx that he would not allow Restorx technicians on site unless he was provided with a scope of works;[1009] however, a scope of works had been provided to Mrs Taylor’s solicitor, Mr Bates, on 12 July 2012. I have mentioned earlier that when giving evidence about this conversation, Mr Taylor claimed no recall of the event[1010] and when cross-examined, he testified that he did not trust Restorx.[1011]
[1009]Exhibit UU
[1010]T1212-1218
[1011]T1218-1219
(23) On 8 August 2012, Mr Bates wrote to GIO seeking a copy of a missing page of the scope of works that had previously provided to him. He stated that he would obtain instructions from his client about access to the property.[1012]
[1012]Exhibit 15
(24) On 10 August 2012, the Taylors produced to the Council a written list of concerns about the scope of works.[1013] I have earlier set out the items of concern and noted that the concerns do not seem to be about the works proposed, rather they seem to be about whether the works would be successful.
[1013]Exhibit 16
(25) In response, the Council raised whether a meeting between the parties might resolve the matter.[1014]
[1014]Exhibit 17
(26) On 5 September 2012, as Mr Bates had not yet confirmed whether Mrs Taylor would permit the works to proceed, Ms Prior contacted Mr Bates for an update. Mr Bates told Ms Prior that Mrs Taylor’s instructions were to proceed with the works, a fact he confirmed by email.[1015] The next day, Ms Prior authorised Restorx to proceed with the works, following which Matt of Restorx sent a text message to Mr Taylor to make an appointment to commence the works.[1016] Mr Taylor’s response was to contact GIO and question whether Restorx had the necessary approval from Council.[1017] Matt of Restorx contacted Mr Hicks at the Council confirming that Mrs Taylor had agreed to the works commencing and that Restorx wished to schedule the works for the following week.[1018] The Taylors attended the Council seeking that a meeting be arranged for all parties to further discuss and agree on a scope of works.[1019] Subsequently, on 17 September 2012, GIO was informed by Council that the Taylors did not agree with their solicitor’s advice to proceed with the current scope of works. GIO instructed Ligeti Partners, solicitors, to act. The next day, on 18 September 2012, Mr Bates wrote to GIO:
[1015]Exhibit 20
[1016]Exhibit UU
[1017]Exhibit G, page 85
[1018]Exhibit 22
[1019]Exhibit 22
…We … have been told by our client that no works have commenced on our client’s home. We would be pleased to receive an update on this matter confirming when you expect that our client’s works are likely to commence. … .[1020]
[1020]Exhibit 24
(27) Later that day, Mr Thomas of Ligeti Partners wrote to Mr Bates (copied to Council) seeking advice about Mrs Taylor’s instructions so that the claim could be progressed.[1021] Two hours later, Mr Taylor sent an email to Mr Hicks and to GIO informing them that Mr Bates was no longer representing Mrs Taylor. Mr Taylor asserted that Council had requested a meeting. Mr Taylor did not state that the works could proceed.[1022]
[1021]Exhibit 25
[1022]Exhibit 26
(28) On 19 September 2012, Mr Hicks responded to Mr Thomas’ letter, which he copied to Mr Taylor. Mr Hicks sought further reports from both sides’ experts, Agpath and Noel Arnold & Associates, with a view to having the experts agree on a scope of works.[1023]
[1023]Exhibit 27
(29) GIO promptly appointed Brian Murphy of Noel Arnold & Associates to review and comment on Restorx’s scope of works dated 5 July 2012.[1024] GIO informed Mr Taylor accordingly.
[1024]Exhibit 28
(30) On 24 September 2012, Mr Murphy provided his (desktop) report. Essentially, he considered that each item in Restorx’s scope of works was consistent with standard guidelines for such remediation projects, IICRC S520, and that therefore the scope of works was appropriate. He noted areas in which further elaboration could be provided to further explain the methodology to be employed and the products to be used.[1025]
[1025]Exhibit AA
(31) Mr Taylor was still not satisfied, claiming that the report identified shortfalls in the scope of works. He testified that he had no faith in Mr Murphy.[1026]
[1026]T811-816; T1254-1255
(32) On 9 October 2012, Restorx provided an updated scope of works in which further detail was provided as suggested by Mr Murphy.[1027] GIO had, accordingly, complied with Council’s request; however, the Taylors had not yet so complied as they had not instructed Dr Cole (Agpath) to provide a report to Council about any of the scopes of work. Instead, the Taylors appointed their landlord, Associate Professor Hallam, in place of Dr Cole. According to Mr Taylor, Associate Professor Hallam had advised the Taylors that the scope of works was “insufficient” because it was merely a “desktop” exercise and also because he believed that the mould was incorrectly categorised as Class 3. This advice made Mr Taylor “unhappy” with the scope of works.[1028] It should be noted that Associate Professor Hallam’s report generally agreed with the points in Dr Cole’s report and with qualifications, he accepted the nine points contained in the Restorx report appended to the Noel Arnold & Associates’ report. He stated “these works appear to be in order and achievable”.[1029]
[1027]Exhibit 29
[1028]T1251-1252
[1029]Exhibit 33, page 931
(33) On 15 October 2012, Mr Murphy of Noel Arnold & Associates provided a further review of Restorx’s updated scope of works.[1030] Mr Murphy reported that the updated scope of works satisfied all of the recommendations he had previously made in his earlier report. The reports were provided to Council. The Building Order affecting the property prohibited persons from entering the property without Council’s approval. That part of the Order did not contribute any additional delay to the works proceeding because, in any event, the Taylors had not authorised the works to commence.
[1030]Exhibit 30
(34) On 20 October 2012, Associate Professor Hallam sent two reports to Council (copied to GIO), both of which were taken into account when, on 15 November 2012, Mr Hicks wrote to GIO and to the Taylors advising that when undertaking the works, the contractors should take account of the matters raised by the reports that each of the parties had submitted.[1031] GIO wrote to the Taylors informing them that a representative from Restorx would be contacting them soon to arrange for the works to commence and that the Taylors’ cooperation was expected.[1032]
[1031]Exhibit 34
[1032]Exhibit 35
(35) Ms Prior of GIO spoke with Mr Hicks about the progress of the works. Council’s order prohibited any person from entering the property without first having obtained Council’s authority to do so. Mr Hicks authorised GIO’s contractors to enter the property. Mr Hicks, however, had no power to override the Taylors’ right to deny GIO’s contractors access to the property. Mr Hicks did not authorise the Taylors to enter the property.[1033]
[1033]Exhibit G, pages 70-71; exhibit 37
(36) On 16 November 2012, Mr Taylor again wrote to Council raising further concerns about the works.[1034] Mr Hicks responded to Mr Taylor in attempt to assure him that all was in order.[1035] Mr Taylor replied with a list of yet more concerns.[1036]
[1034]Exhibit 38
[1035]Exhibit 38
[1036]Exhibit 39
(37) Council clarified that no further pre-testing for mould was required and that remediation works could commence immediately.[1037]
[1037]Exhibit G, pages 68-70; exhibit TT
(38) On 19 November 2012, Restorx and the Taylors agreed that two technicians from Restorx could attend the property on 21 November 2012 to commence the works. Mr Taylor agreed to provide the technicians with a key;[1038] however, on the morning that the works were to proceed, Mr Taylor cancelled the appointment as he wanted “more reassurance from the Council and the insurance company”.[1039] Earlier that morning, Mr Taylor had sent yet another email to Council noting more concerns. He requested that a further updated scope of works be provided, together with a schedule of works.[1040] Mr Hicks responded that the Taylors’ concerns had been addressed and that no further scopes of works were required.[1041] Mr Taylor then wrote to GIO seeking further information about the proposed works.[1042]
[1038]Exhibit G, page 65; exhibit TT
[1039]Exhibit TT
[1040]Exhibit 44
[1041]Exhibit 44
[1042]Exhibit 45
(39) On 22 November 2012, a Restorx representative spoke with Mr Taylor to organise another appointment so that works could commence. Mr Taylor said he would not agree unless either he was paid in advance for electricity usage or Restorx provided a generator.[1043] GIO explained to Mr Taylor that payment in advance for electricity could not be made; however, once the power bill was to hand, the Taylors would be reimbursed for the electricity used by the contractors.[1044]
[1043]Exhibit TT
[1044]Exhibit 46
(40) On 23 November 2012, further samples were taken at the property to test for mould. Later that day, Mr Taylor sent another email to GIO complaining that the technicians who attended the site that day did not have a copy of the Building Order in their possession.[1045]
[1045]Exhibit 47
(41) On Saturday, 24 November 2012, after receiving a draft email from “Gazzmeister” and Associate Professor Hallam, Mr Taylor sent an email to GIO and to Mr Hicks. The content of the email (errors included) was copied almost word for word from the draft:
Dear Sirs
As there are now several items of a procedural nature that are unclear and on the face of it in breach of previous discussions access to the property at Derinya Drive is hereby denied until such time as the matters are satisfactorality (sic) clarified.
Yours faithful[l]y
Maree Taylor.[1046]
[1046]Exhibit 48
(42) On 26 November 2012, a further attempt to gain access by Restorx technicians to the property was denied. Mr Taylor told the technicians that “all works have been put on hold by insured owner’s specialist Neil Hallam due to ‘procedures of the whole project’”.[1047]
[1047]Exhibit G, page 60
(43) On 1 December 2012, Mr Taylor wrote to GIO and to the Council to inform them that “under pressure” access would be given to the property to enable the works to proceed.[1048]
[1048]Exhibit 50
(44) On 5 December 2012, Ligeti Partners wrote to Mrs Taylor advising her that unless access was granted to the property, GIO would cash settle the claim.[1049] Before the letter was received by Mrs Taylor, Ms Sauvarin of GIO spoke to Mrs Taylor to confirm receipt of the email dated 1 December 2012 granting access to the property. Ms Sauvarin forewarned Mrs Taylor that a letter would be coming from GIO’s solicitors but that she should disregard it in view of the email. Ms Sauvarin also reassured Mrs Taylor that there would be further testing after the works were completed to verify that the mould had been eradicated.[1050] Mr Kopanja of Restorx made an appointment with Mrs Taylor to attend the property to commence the works.[1051]
[1049]Exhibit 51
[1050]Exhibit G, page 56
[1051]Exhibits TT and UU
(45) On 3 January 2013, TVH cleaned and disinfected the ducts.[1052]
[1052]Exhibit 59
(46) On 8 January 2013, Mr Taylor wrote to GIO and to the Council noting that there was cracking in the concrete slab.[1053]
(47) On 11 January 2013, Mr Taylor took the key back from Restorx’s technicians at the property. All works ceased.[1054]
[1053]Exhibit GG
[1054]Exhibits TT and UU
798 These circumstances show that despite the creation of multiple scopes of work, assurances and reassurances given to the Taylors that the works would be carried out effectively, that testing would be conducted to verify that the mould had been eradicated, that GIO would keep remediating until the testing proved eradication was successful, and that GIO would stand by its lifetime guarantee of the quality of any such works, GIO was not able to complete the repairs and remediation in a timely fashion. As time ticked on, the mould continued to develop, causing the risk of an escalation in damage and associated cost.
799 I am satisfied, on the balance of probabilities, that the Taylors’ conduct frustrated GIO’s attempts to pursue the course GIO elected to settle the claim. Accordingly, GIO was neither able nor obliged to press on with the remediation works.
(6)By failing to complete the remediation works and instead electing to cash settle the claim, did the Defendant breach the contract?
800 I am satisfied, on the balance of probabilities, that in view of the Taylor’s conduct identified above, which I have found frustrated GIO’s attempts to fulfil the course it had elected, GIO was justified in re-electing to cash settle the claim. In arriving at this conclusion, I also take into account the following matters:
(1) As mentioned earlier, Mr Taylor conceded that the insurer could, at any time, re-elect how to settle the claim.[1055]
[1055]T2986
(2) After the defendant elected to remediate, the plaintiff instead sought a cash settlement of the claim. In other words, cash settling the claim was an outcome that the Taylors wanted to achieve as early as November 2011.[1056]
[1056]Exhibit F
(3) No form of estoppel was pleaded in any version of the Statement of Claim in respect of the defendant’s re-election. Further, Mr Taylor specifically disavowed reliance on any form of estoppel. Even if any form of estoppel arises as a result of the defendant’s re-election, I would, in any event, have granted no such equitable relief, because:
(i) The plaintiff did not come to Court with “clean hands”. Although claiming a desire that the remediation works be performed, the plaintiff’s conduct frustrated GIO’s attempts to undertake the work;
(ii) Without Mrs Taylor’s consent, the insurer could not force entry to the premises and could not force her to acquiesce to what would otherwise constitute trespass to land and/or to goods; and
(iii) No additional compensable loss arose because:
(a) The insurer did not repudiate the contract or seek to avoid its obligation to honour the contract; and
(b) The defendant opted to cash settle the claim in the amount it would have cost the insurer to remediate the property. If the cash settlement amount is found to be inadequate, then damages will be awarded to compensate the plaintiff for the defendant’s breach of contract. Since the plaintiff cannot “double dip” in damages, an award made in equity would be otiose. In any event, the plaintiff has not identified how an award of damages granted in equity would result in a greater award than if granted in contract.
(7)Was the amount offered by way of cash settlement adequate?
801 As mentioned earlier, GIO tendered payment to Mrs Taylor in the amount of $87,400.00 by way of cash settlement. The evidence referred to earlier in this Judgment explains how GIO arrived at that sum. To recap:
ITEM $ Total contents cover - $50,000.00 less $1,000.00 paid in emergency funds 49,000.00 Total building cover - $300,000.00 Cost of rectification works – Estimate of costs made by Restorx for structural cleaning and remediation - $9,000.00 rounded up to $12,000.00 to allow for contingencies 12,000.00 Johns Lyng Group quotation (incorrect quotation used) $14,533.58, rounded up to $15,000 15,000.00 Cost of temporary accommodation estimated for five to six weeks at $3,800.00 per month, rounded up to three months 11,400.00 TOTAL $87,400.00
802 Although the cost of the timber beams was not intended to be included in the settlement sum, GIO did not seek to avoid liability for the beams. GIO made it clear that if it could be established that the beams were damaged as a result of the flood, the loss would be covered by the policy and a further cash settlement paid.
803 The policy provided that any cash settlement amounts would be calculated by reference to what it would cost the insurer to repair/replace new for old. The defendant has tendered evidence establishing what it would have cost GIO to repair/replace new for old as at the date of the cash settlement. The plaintiff presented no satisfactory evidence to rebut the defendant’s evidence in this regard.
804 Nor has the plaintiff tendered any evidence to rebut the defendant’s evidence to the effect that the works proposed in the relevant scopes of work were adequate to remediate the damage caused by the flood. The Taylors’ repeated requests for clarification of scopes of work and demands for further scopes of work do not establish that any of the scopes of work were in fact inappropriate or inadequate to respond to the damage. Regardless of the classification of the extent of mould, be it Class 3 or otherwise, the scope of work provided that all internal surfaces were to be cleaned and treated with an antimicrobial substance, regardless of whether tainted by mould or not. Moreover, there was a “safety net” provided by the clearance testing that would have been undertaken following the remediation works. The uncontested evidence is that GIO would have kept remediating until the clearance testing proved that the mould had been eradicated. GIO was also bound by the term of the contract that provided to the insured a lifetime guarantee of the remediation works.
805 There is no evidence that as at the date of the cash settlement, any major reconstruction work was necessary. There is no evidence that as at January 2013, the mould had penetrated so deeply inside the plasterboards that their removal was required. There is no evidence that at that time, all of the bathroom fittings and fixtures required removal and replacement. There is no evidence that at that time, any structural work was required as a result of the flood.
806 There is no evidence that as at the date of the cash settlement, the heating ducts could be repaired or replaced, or that the alternative form of heating (with the addition of air-conditioning) proposed by the defendant would be neither a suitable nor adequate source of heat.
807 The plaintiff’s expert, Dr Cole, who conducted her own tests and provided reports at a relevant time, made no finding that the extent of damage and remediation required was any greater than that found and proposed by the defendant’s experts.
808 The plaintiff’s experts, Dr Neumeister-Kemp and Mr Bryant, did not inspect the property until approximately eleven months after the cash settlement was paid. Mr Bryant conceded that he was unable to express an opinion about the likely condition of the property prior to his inspection.[1057] Dr Neumeister-Kemp provided no scope of works either referable to her inspection or to the date of the cash settlement. Neither gave evidence about what it would have cost GIO to make the repairs as at either date.
[1057]T745
809 Mr McRae added nothing to the subject of the extent of damage as at the date of the cash settlement. He did not inspect the property until June 2016, and then he made no effort to ascertain what damage was referrable to the flood or to reconcile his proposal with the structure or layout of the house, or with the fittings and fixtures that were actually in the house at the time of the flood.
810 There is no evidence that the house required demolition either as at the date of the cash settlement or as at the date of trial.
811 I am satisfied that as at the date of the settlement sum, the following repairs or rectification works were required as a result of the flood:
(1) The entire interior of the house needed to be cleaned with HEPA filtered vacuum cleaners and all surfaces required cleaning, wiping and treatment with a non-toxic antimicrobial/disinfectant solution as proposed by Dr Cole and the defendant’s experts. I am satisfied that the scope of works provided for this to be done. I am satisfied, on the balance of probabilities, that the likely cost of this aspect of the work as at the date of the cash settlement was correctly estimated in exhibit 63 at $9,000.00 (exclusive of GST) by Restorx. There is no credible evidence to rebut the defendant’s evidence in this regard.
(2) Work on the ducts within the concrete slab had commenced. The ducts had been cleaned, flushed and treated. All that remained was to fill the ducts, deal with the flue and then supply and install an appropriate heating system of no lesser quality or capacity than the old system. I am satisfied, on the balance of probabilities, that the cost of this aspect of the work was correctly quoted in exhibit 13 as $10,277.67.
(3) After the remediation works, GIO would have been required to pay for independent clearance testing to verify that the mould had been eradicated. I am satisfied, on the balance of probabilities, that Dr Neumeister-Kemp was correct in her evidence when she estimated that the likely cost of such testing would have been approximately $2,000.00.[1058]
[1058]T649
(4) The remediation and repair works would most likely have taken approximately six weeks to complete. In this regard, there is no satisfactory evidence to rebut the defendant’s evidence. I would allow an additional four weeks to cover the time required for clearance testing results to be produced. There is no dispute that the cost of temporary accommodation at the relevant time was $3,800.00 per month, or $876.92 per week. Accordingly, I am satisfied that this aspect of the claim required an allowance of $8,769.20.
(5) The plaintiff has identified a number of items in Mr McRae’s report, exhibit QQ, that may have added to the cost of remediation. Mr McRae allowed $1,000.00 for asbestos removal. I agree that this claim is justified. It does not appear that Mr Oliver included such an allowance in either of his quotations (exhibits 13 and 14), a fact he conceded when cross-examined by Mr Taylor.[1059] Mr Murphy also considered the provisional sum of $1,000.00 would be adequate to allow for asbestos removal.
(6) Mr McRae allowed $1,080.00 for a builders’ toilet and $2,040.00 for a temporary power pole and electricity. Whilst not satisfied that total amounts claimed for each of these two items are justified, I agree that some allowance should have been made for the provision of electricity and perhaps for the installation of a builders’ toilet. I am unable to calculate the precise amount by reference to the evidence; however, I would allow $2,000.00 to cover these sorts of contingencies.
[1059]T1806
812 I am not satisfied that as at the date of the settlement sum, the following repairs or rectification works were required as a result of the flood:
(1) I am not satisfied that the beam was damaged as a result of the flood. The inundation did not cause water to rise to the ceiling. Dr Neumeister-Kemp’s testing did not establish the presence of mould in the timber beams. In any event, I am satisfied that the unchallenged engineer’s report provided by Mr Sohn of FMG Engineering, exhibit KK, established that there is no structural damage to any of the beams. It must be remembered that there was uncontested evidence that the roof leaked and that the skylights were not properly sealed and watertight. Also, as noted, the settlement sum did not foreclose the plaintiff’s right to a settlement sum in respect of damage to the beams at a later time. I note the plaintiff’s failure to call Mr Chris Moran, engineer. I do not speculate as to what Mr Moran might have said had he been called, but the plaintiff’s failure to call him means that I may and do more readily rely on Mr Sohn’s report.[1060]
[1060]Jones v Dunkel (supra); O’Donnell v Reichard (supra)
(2) I am not satisfied that the cracks in the concrete floor are related to the flood. I am satisfied by the unchallenged evidence of Mr Sohn contained in exhibit KK in this regard. In any event, as with the beams, the plaintiff’s right was preserved for Mrs Taylor to receive a further cash settlement sum for damage in respect of the cracks in the concrete slab.
(3) Mr McRae allowed $2,760.00 for reports and certificates. There is no evidence that any further reports or certificates over and above those referred to in the defendant’s scope of works were required. Accordingly, I would not make allowance for these items.
(4) None of the final detailed scopes of work made provision for cleaning any of the exterior surfaces of the house, although it would appear that GIO agreed to cover the cost of this. As I understand it, cleaning the exterior of the house was proposed to reduce the risk of cross-contamination. There is insufficient evidence before me to establish, on the balance of probabilities, that the exterior of the house was in fact contaminated with mould as at January 2013. Even if contaminated, there is insufficient evidence to establish what steps were necessary to eradicate the mould. Nor is there any satisfactory evidence to enable me to quantify the cost of such remedial work.[1061] Having said that, as with the beams and the crack in the concrete slab, the settlement sum did not stand as an obstacle to the plaintiff receiving a further cash settlement sum in the event that there was such damage and that the loss could be proved as resulting from the flood.
(5) Save and except for the allowances referred to above, I am otherwise not satisfied that any of the other items claimed in Mr McRae’s reports are justified. As Mr McRae conceded, he was not asked to provide any estimates referrable to the period January 2013, nor would it have been possible for him to do so.[1062]
[1061]Dr Neumeister-Kemp’s report stated “the make safe of the area and its surrounds is usually in the vicinity of $30,000.00 approximately” (exhibit S, pages 117-118). Not only is the amount quoted an approximate figure only, it does not isolate what the cost is of decontaminating the exterior of the building. Mr McRae allowed $30,000.00 for a different company to treat contamination on the exterior of the building, but this was based on Dr Neumeister-Kemp’s report, exhibit U.
[1062]T1715
813 Accordingly, as at the date of the cash settlement, I am satisfied, on the balance of probabilities, that the cost to GIO of repairing/replacing new for old the property damaged as a result of the flood was:
Item $ Restorx cleaning 9,000.00 plus GST 9,900.00 Filling the ducts, removing balance of old heating system and replacing with two split system units 10,277.67
Cost of clearance testing 2,000.00 Temporary accommodation costs 8,769.20 Asbestos removal 1,000.00 Contingencies 2,000.00 Contents 49,000.00 TOTAL 82,946.87
814 On a date between 31 January 2013 and 8 February 2013, GIO paid the first settlement sum in favour of the insured in the amount $87,400.00,[1063] $4,453.13 in excess of the amount of $82,946.87 that I have found was sufficient to meet the cost of repairs and remediation and repairs/replacements as at that date.
[1063]Exhibit G, page 34; exhibit 69
(8) Was the Plaintiff’s rejection of the settlement sum unreasonable?
815 I have assumed that the burden of proof on this issue rests with the defendant. I have earlier set out the information that the plaintiff had to hand at the time the settlement sum was paid to Mrs Taylor. This included a letter detailing how GIO arrived at the settlement sum.[1064] The Taylors also had access to all of the supporting documentation and quotations.[1065] The information provided to the plaintiff was straightforward and uncomplicated. The figures included were capable of verification and calculation. That the Taylors did not agree that the settlement sum was sufficient does not of itself make the plaintiff’s decision to reject it a reasonable one when assessed objectively in light of all the relevant circumstances.
[1064]Exhibit 69
[1065]Exhibit OO
816 In his complaint to FOS (copied to GIO) about the settlement sum, on 10 February 2013, Mr Taylor wrote:
We would be foolish to accept an offer that did not take into account the possibility of mould return or recurring problems from slab cracks or rising damp. Would any reasonable person waiver a life time warranty that is a contingency for these issues. Future owners/occupiers or council may require these warranties that ensure correct workmanship is undertaken and help in no future occupier becoming sick and thus dealing again with a sick contaminated building.[1066]
[1066]Exhibit 71
817 Mr Taylor did not explain why the settlement sum should allow for the contingency that the plaintiff’s own contractors might not perform the work properly. After all, if the plaintiff accepted responsibility to effect remedial works, the defendant would have no control over the plaintiff’s choice of contractor, the plaintiff’s scope of works, or the timing of such works. In these circumstances, it is not possible for me to make any meaningful assessment to allow for such a contingency beyond the defendant’s control.
818 On or around 1 March 2013, Mrs Taylor refunded an amount equivalent to the settlement sum that had been paid into her account.
819 On 6 March 2013, GIO advised the Taylors that the settlement sum would be re-tendered to the plaintiff.[1067] The letter gave further explanation as to how GIO had arrived at the settlement sum. The letter was crafted in plain, uncomplicated terms. The letter also made clear that the settlement sum did not include any allowance for the cracking in the concrete slab or moisture in the timber beam. GIO undertook to have a structural engineer inspect these items, and if damaged as a result of the flood, a further cash settlement would be paid to the plaintiff to cover the “fair and reasonable repair cost”.[1068] The letter also stated:
Cash payment funds
You have advised GIO that you have returned the cash payment funds in the form of a bank cheque. Once these funds have been received, GIO will reissue the settlement in the form of a cheque. Please be aware that your acceptance of the settlement does not prevent you from disputing the matter further with the FOS or via any other avenue.[1069]
[1067]Exhibit 78
[1068]Exhibit 78, page 2
[1069]Exhibit 78, page 5
820 In all the circumstances, I am satisfied, on the balance of probabilities, that the plaintiff’s decision to reject the settlement sum was unreasonable.
Has the Plaintiff satisfied the Court, on the balance of probabilities, that the Defendant breached the contract?
821 I have set out the relevant terms of the contract. I have found that the parties were bound by the terms of the contract of insurance and that the flood event was covered by the contract.
822 I have also found that the contract provided to the defendant the right to elect whether to repair/replace new for old or to cash settle the claim. I have found that GIO attempted to honour the contract by repairing/replacing new for old, but that GIO was frustrated in those attempts by the Taylor’s conduct. Accordingly, I have found that the defendant was entitled to re-elect their response to the claim and make a cash settlement in an amount that it would have cost GIO to repair/replace new for old as at the date of the cash settlement.
823 I have found that as the dates that GIO paid the cash settlement sums in the amount of $87,400.00 to the plaintiff, the actual cost to GIO to repair/replace new for old, was in the amount of $82,946.87. The terms of the contract obliged GIO to pay no more than that in the settlement sum.
824 Accordingly, the plaintiff has failed to establish, on the balance of probabilities, that the defendant has breached the contract.
Damages
825 Because the plaintiff has failed in the claim of breach of contract, no damages can be awarded.
CONCLUSION
826 The plaintiff has failed to establish that the defendant breached the contract of insurance. Accordingly, the claim must be dismissed.
827 I shall hear the parties on the question of costs.
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