Vero Insurance Ltd v Witherow - [2004] VSC 272

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7790 of 2002

VERO INSURANCE LIMITED (FORMERLY KNOWN AS ROYAL & SUN ALLIANCE AUSTRALIA LIMITED)	Appellant
v
ANDREW WITHEROW	Respondent

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JUDGE:	Hollingworth J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 June 2004
DATE OF JUDGMENT:	9 August 2004
CASE MAY BE CITED AS:	Vero Insurance v Witherow
MEDIUM NEUTRAL CITATION:	[2004] VSC 272

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Appeal against a declaration made by the Victorian Civil and Administrative Tribunal - jurisdiction of the Tribunal under the Domestic Building Contracts Act 1995 - whether the Tribunal had jurisdiction to deal with the claim against the appellant - whether decision by insurer to sue indemnity provider was "arising from any required insurance" - Domestic Building Contracts Act 1995 - sections 54, 55, 59A, 60 and 61 - Victorian Civil and Administrative Tribunal Act 1998 - sections 3, 4, 148

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M W Thompson	Herbert Geer & Rundle
For the Respondent	Mr C Moshidis	Guymer Naidoo

HER HONOUR:

Introduction

This is an appeal on a question of law under s.148 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") against a decision of the Victorian Civil and Administrative Tribunal ("VCAT"), constituted by Deputy President Professor D Cremean on 20 September 2002 in proceeding number D49/2002. The Deputy President held that VCAT did have jurisdiction in relation to an application brought by the current respondent ("Witherow") against the current appellant ("the insurer").

Master Evans granted leave to appeal on 22 November 2002.

Witherow was the sole director and company secretary of Witherow Builders Pty Ltd ("the builder"). As a condition of issuing domestic building insurance cover to the builder pursuant to a Ministerial Order made under s.135 of the Building Act 1993 ("Building Act"), the insurer required the provision of a deed of indemnity executed by Witherow and his mother, jointly and severally indemnifying the insurer in respect of insurance payments made thereunder. Such a deed was executed on 6 February 2001 ("the indemnity deed") and insurance cover was duly issued. In April 2001, the builder was placed into liquidation.

The insurer issued certificates of insurance to Gary and Brenda O'Mahony ("O'Mahony"), the owners of a property in Parkdale, and J G Williams and P A Killeen-Williams ("Williams"), the owners of a property in Beaumaris, in respect of works undertaken by the builder at their respective properties. Each of O'Mahony and Williams subsequently brought claims for indemnity under the respective insurance contracts. The insurer met each claim, paying O'Mahony $21,313.97 and Williams $48,599.00.

On 2 January 2002, the insurer served on Witherow a demand pursuant to the indemnity deed, seeking recovery of the amounts paid to O'Mahony and Williams ("the 2 January letter").[1]
[1] The insurer subsequently released Witherow's mother from her obligations under the indemnity deed.

On 25 January 2002, Witherow commenced an application in VCAT, seeking a review of the insurer's decision to demand money from him…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] VSC 272
Decision Date: 9 August 2004

CaseChat Overview and Summary

Vero Insurance Ltd appealed against a declaration made by the Victorian Civil and Administrative Tribunal regarding its jurisdiction to hear a claim against the appellant, which was an insurer. The claimant, Witherow, sought to hold the insurer liable for breach of contract under the Domestic Building Contracts Act 1995. The insurer argued that the Tribunal did not have jurisdiction over the claim as it did not arise from any required insurance under the Act. The appeal was heard by the Supreme Court of Victoria, which had to determine the scope of the Tribunal's jurisdiction under the Act and related statutes.

The central legal issue before the court was whether the decision by Vero Insurance Ltd to sue an indemnity provider could be considered as "arising from any required insurance" as per the Domestic Building Contracts Act 1995. This required an interpretation of the relevant provisions of the Act and the Victorian Civil and Administrative Tribunal Act 1998. The court had to assess whether the insurer's action against the indemnity provider could be seen as a dispute stemming from a contract of insurance required under the Act, thereby falling within the Tribunal's jurisdiction.

The court found that the Tribunal did not have jurisdiction over the claim. The reasoning of the court was based on a strict interpretation of the statutory language of the Domestic Building Contracts Act 1995 and the Victorian Civil and Administrative Tribunal Act 1998. The court held that the claim did not arise from any required insurance under the Act, as it was not a dispute directly connected to the insured's obligations under a domestic building contract. Consequently, the appeal was allowed, and the Tribunal's jurisdiction was deemed inapplicable.

The Supreme Court of Victoria set aside the declaration made by the Tribunal and dismissed the claim. The court clarified that the Tribunal's jurisdiction was limited to disputes directly related to the insured's obligations under the Domestic Building Contracts Act 1995 and did not extend to actions taken by an insurer against an indemnity provider. This decision underscored the importance of the precise wording of the statutes in determining jurisdictional boundaries.

Orders