Valoba Holdings Pty Ltd v MMI General Insurance Ltd
[1999] QCA 211
•8/06/1999
IN THE COURT OF APPEAL [1999] QCA 211 SUPREME COURT OF QUEENSLAND Appeal No 11638 of 1998
Brisbane
Before McMurdo P Derrington J Chesterman J
[Valoba Holdings P/L v MMI General Insurance Ltd & Ors]
BETWEEN
VALOBA HOLDINGS PTY LTD
ACN 010 682 854
(Plaintiff) Appellant
AND
MMI GENERAL INSURANCE LIMITED
ACN 000 122 850
(First Defendant) First Respondent
AND
GIO INSURANCE LIMITED
ACN 052 179 647
(Second Defendant) Second Respondent
AND
RIVER THAMES INSURANCE LIMITED
(Third Defendant) Third Respondent
AND
NEW INDIA ASSURANCE LIMITED
(Fourth Defendant) Fourth Respondent
REASONS FOR JUDGMENT - McMURDO P
Judgment delivered 8 June 1999
I agree with the order proposed by Derrington J and with his reasons.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 11638 of 1998
Before
McMurdo P Derrington J Chesterman J
[Valoba Holdings P/L v MMI General Insurance Ltd & Ors]
BETWEEN:
VALOBA HOLDINGS PTY LTD (ACN 010 682 854)
(Plaintiff) Appellant
AND:
MMI GENERAL INSURANCE LIMITED (ACN 000 122 850)
(First Defendant) First Respondent
AND:
GIO INSURANCE LIMITED (ACN 052 179 647)
(Second Defendant) Second Respondent
AND:
RIVER THAMES INSURANCE LIMITED
(Third Defendant) Third Respondent
AND
NEW INDIA ASSURANCE LIMITED
(Fourth Defendant) Fourth Respondent
REASONS FOR JUDGMENT - DERRINGTON J
Judgment delivered 8 June 1999
The appellant sued the respondents for $606,154.41 for indemnity against its loss by fire
damage to its hotel. The respondents as a group were the insurers of the premises.
The claim was dismissed and judgment was given for the respondents on the basis that they
had validly avoided the policy for fraudulent misrepresentation. No relief under s.31 of the
Insurance Contracts Act 1984 was sought by the appellant in respect of that finding.
The misrepresentation found consisted of an answer to a question in the proposal for the
policy which stated that 75 percent of “the walls” of the insured building were constructed of
“brick/concrete” and 25 percent of “wood/fibro”. The learned trial judge found, correctly it is
respectfully observed, that the reference to “walls” in the proposal unambiguously referred to both
external and internal walls. Both below and on this appeal, that was accepted in argument without
dispute or qualification.
In his judgment, the learned trial judge used the material before him to assess the respective
proportions of the external walls by measurement, and stated his result as follows:
“On these broad estimates, 47.8% of the exterior walls are concrete and 52.2% are wood, if glass is converted into the material that surrounds it. This approximates to the original figure prepared for the defendants by Errol Arthur Watkins, a building construction consultant. In my opinion, the figures given in the proposal of 75% brick/concrete and 25% wood/fibro do not give a reliable broad description of the exterior walls of the buildings which the proposer wanted to insure. In my opinion, they constitute a misrepresentation ... . ”
No issue is taken with these estimates.
The appeal turns upon the proposition that his Honour’s assessment of the relative
proportions was limited in this way to external walls, and that his omission to take the further step
of including internal walls in his final assessment invalidated his conclusion that there had been any
misrepresentation at all, much less one that was fraudulent.
As his Honour said in the above passage, that assessment which he was there discussing
was indeed confined to external walls, subject to some minor irrelevant exceptions, and it is true that
he made no mention of the internal walls before stating his findings of misrepresentation and fraud. Despite his submissions to the contrary, the respondent’s counsel’s own outline of submissions
clearly stated the position when it said:
“The learned trial Judge determined that the description constituted a misrepresentation by expressly referring only to the evidence of the composition of the exterior walls of the hotel. The reasons for Judgment are silent on the issue whether the description constituted a misrepresentation when analysed by reference to all the walls in the hotel.”
It is unlikely that this omission was deliberate since it was common ground between the
parties, and the argument and evidence were all conducted on the basis that the internal walls were
relevant to the exercise. It is also unlikely that this experienced and careful judge would have failed
to take them into account.
The answer seems to lie in the evidence which plainly indicates that if the internal walls are
taken into account, the relative proportions of the whole would be no better for the appellant’s case,
and that this followed so simply and clearly that his Honour overlooked the mention of it. There was
no specific evidence of the location, number or dimensions of internal walls on which his Honour
could draw for an exercise similar to that which he had carried out for the external walls. The only
evidence was broad and imprecise, but it showed that the proportion of wood of the internal walls
of the whole was greater than that of the external ones, so that if the assessment of the latter went
against the appellant, the assessment of the former would surely do so. The above simple
explanation is the best one and it is totally consistent with the evidence and the conclusion.
However, it is desirable to identify the evidence that supports this view.
For the purpose of description, the hotel may be conveniently divided into three parts in the
manner described by the witness, Mr Watkins (see Ex.75). A large part consisted of the original
hotel of two storeys which were substantially constructed in wood, both externally and internally, but with many windows on its external walls on those sides which fronted two streets. Further, a
part of one such wall on the ground floor had been rebuilt with brick. The two other sections were
more recent additions and had external walls of masonry. They were both single storey structures
and in parts had common walls with the original wooden structure. It was assumed by the learned
trial judge that these common walls were composed only of masonry as far as they went, and above
them the wooden walls of the original building were retained. That is the best for which the
appellant could hope.
It was commonly accepted in evidence that the internal walls of both storeys of the old
section were entirely of wood. Because the upstairs part consisted of about 26 small bedrooms,
the quantity of its internal partitioning must have been extensive. The downstairs walls were not as
numerous but would still have had some significance. By contrast, both newer areas, and
particularly parts such as the beer garden, bottle shop and lounge/dining room, appear to have had
little internal subdivision. In respect of such walls as there were, Mr Watkins expressed the view
that the proportion of them in wood and masonry respectively would be roughly equal. Although
he had not seen the premises before the fire, his assessment in this respect was not challenged, nor
was any evidence led to the contrary.
A plan showing masonry walls was tended by the appellant (Ex. 4). While there is no
evidence that it was exhaustive in that respect, it shows some internal masonry walls and, in the light
of the issue, these might be expected to provide the most complete description of that feature from
the appellant’s point of view. As might be expected, they are limited to the perimeter walls of these
areas of the hotel that had different functions, such as the kitchen, toilets, bottle shop etc., but not their internal walls nor the division between the bar and lounge/dining room. Any internal partitions
in those areas would seem to have been of wood.
Learned counsel for the appellant was critical of some of the evidence led by the
respondents. Much of this was misplaced or was allowed for by the learned trial judge in his
estimates. Those criticisms that referred to the evidence of the relative proportions of materials in
the internal walls are generally insubstantial; and to the extent that they have merit they do not
materially diminish the comfortable conclusion that the proportion of internal wooden walls was no
less than that in relation to the external walls. This is demonstrated by applying a broad overall
view. The comparatively large ground area of the wooden structure of the two storeys, and the
number of its wooden internal walls, particularly in the upper storey, in contrast with the relative
paucity of the internal masonry walls in the newer section, all of one storey, lead inevitably to the
conclusion that the relative proportion of wooden walls was greater internally than externally. These
matters are all established on the uncontradicted evidence, including plans, other studies and the
photographs of the premises.
It follows that the learned trial judge’s omission to refer expressly to the internal walls does
not provide any good reason to disturb his consequential findings.
Since that is the only ground taken, the appeal should be dismissed with costs.
IN THE COURT OF APPEAL 99.211 SUPREME COURT OF QUEENSLAND Appeal No. 11638 of 1998
Brisbane
[Valoba Holdings P/L v MMI General Insurance Ltd & Ors]
BETWEEN:
VALOBA HOLDINGS PTY LTD (ACN 010 682 854)
(Plaintiff) Appellant
AND:
MMI GENERAL INSURANCE LIMITED (ACN 000 122 850)
(First Defendant) First Respondent
AND:
GIO INSURANCE LIMITED (ACN 052 179 647)
(Second Defendant) Second Respondent
AND:
RIVER THAMES INSURANCE LIMITED
(Third Defendant) Third Respondent
AND
NEW INDIA ASSURANCE LIMITED
(Fourth Defendant) Fourth Respondent
McMurdo P Derrington J Chesterman J
Judgment delivered 8 June 1999
Separate reasons for judgment of each member of the Court; each concurring as to the order made.
APPEAL DISMISSED WITH COSTS.
CATCHWORDS: INSURANCE - fire insurance - avoidance of policy -misrepresentation as to proportions of wood and masonry in building structure - meaning of “walls” whether trial judge’s omission of calculation of internal walls meant failure to take them into account - whether different result.
Counsel: M J Bell QC for the appellant.
Mr R Bain QC for the respondents.Solicitors: South & Geldard as Town Agents for Gateway Lawyers for the appellant.
Dunhill Madden & Butler for the respondents.
Hearing Date: 18 May 1999. IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 11638 of 1998
Before
McMurdo P Derrington J Chesterman J
[Valoba Holdings P/L v MMI General Insurance Ltd & Ors]
BETWEEN:
VALOBA HOLDINGS PTY LTD (ACN 010 682 854)
(Plaintiff) Appellant
AND:
MMI GENERAL INSURANCE LIMITED (ACN 000 122 850)
(First Defendant) First Respondent
AND:
GIO INSURANCE LIMITED (ACN 052 179 647)
(Second Defendant) Second Respondent
AND:
RIVER THAMES INSURANCE LIMITED
(Third Defendant) Third Respondent
AND:
NEW INDIA ASSURANCE LIMITED
(Fourth Defendant) Fourth Respondent
REASONS FOR JUDGMENT - CHESTERMAN J
Judgment delivered 8 June 1999
I agree with the reasons for judgment of Derrington J and with the order he proposes.
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