Zurich Australia Insurance v Johnstone - [1999] NSWSC 64

CITATION: ZURICH AUSTRALIA INSURANCE v. JOHNSTONE [1999] NSWSC 64

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): 10022/99

HEARING DATE(S): 15 February 1999

JUDGMENT DATE:
15 February 1999

PARTIES :

Zurich Australia Insurance Pty. Limited v. Kathryn JOHNSTONE

JUDGMENT OF: Greg James J at 1

LOWER COURT JURISDICTION: Local Court

LOWER COURT FILE NUMBER(S) : 3841/98

LOWER COURT JUDICIAL OFFICER: P. O'Shane

COUNSEL : Plaintiff: C. Hodgson
Defendant: D. Banwell (Solicitor)

SOLICITORS: Plaintiff: Stapleton Gruzman
Defendant: Neville R. Banwell & Associates

CATCHWORDS: Stated case - error of law - errors of principle in exercising discretion to allow amendment - no question of principle

ACTS CITED: Local Court (Civil Claims) Act 1970
Insurance Contracts Act
Suitors Fund Act

DECISION: The stated case is upheld

ZURICH -5-
IN THE SUPREME COURT
OF NEW SOUTH WALES
NAME OF DIVISION
No. 10022 of 1999
GREG JAMES, J.
MONDAY 15 FEBRUARY 1999

ZURICH AUSTRALIA INSURANCE PTY. LIMITED
v. KATHRYN JOHNSTONE
JUDGMENT

HIS HONOUR:
1 These proceedings were brought to this court by way of stated case from the decision of a magistrate sitting in the Local Court under the Local Court (Civil Claims) Act 1970.
2 The stated case contains in paragraph 1 a description of the issue that has brought the matter here, in particular that in proceedings against an insurer, the defendant in the lower court and the plaintiff in the proceedings before me, a claim has been made for damages arising from a refusal to indemnify the plaintiff in that court, the defendant in the proceedings before me, in respect of the loss of a motor vehicle which had allegedly been stolen and abandoned having been burned out.
3 In those proceedings, which have not yet or had not yet as at the date of the learned magistrate's determination, which is in question before me, been set down for hearing, the insurer sought to amend its defences. It was partially successful before the learned magistrate. That its success was only partial is what has brought us here.
4 There was sought as well as the amendment the magistrate granted, an amendment which would have permitted the raising of defences under the Insurance Contracts Act, which might effectively be described as defences relying on material non-disclosure and, in particular, a defence that the defendant had failed to disclose to the insurer that her de facto husband had been convicted of serious offences which might compendiously be described as relating to motor vehicles and also offences of dishonesty.
5 The learned magistrate, according to the stated case, determined that the insurer should not have leave to amend its defence by raising those defences, notwithstanding the application to amend did not apprently appear to present or to raise any real questions of prejudice, notwithstanding that the application does not appear to raise any question of inconvenience to the action by way of its timing, but on the basis that the learned magistrate considered there was no evidence which would establish that the defence "would" succeed at a…

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: [1999] NSWSC 64
Decision Date: 15 February 1999

CaseChat Overview and Summary

The case of Zurich Australia Insurance v Johnstone involved a dispute between the plaintiff, Zurich Australia Insurance, and the defendant, Johnstone. The matter was heard in the Supreme Court of Victoria, where the plaintiff sought to amend their statement of claim to include a new cause of action. The defendant opposed the amendment, arguing that it would prejudice their defence and that the amendment was an abuse of process. The court was required to determine whether the trial judge had erred in law by allowing the amendment, specifically whether there had been an error of principle in exercising the discretion to permit the amendment.

The court examined the legal principles governing amendments to pleadings and the discretion of the trial judge in allowing such amendments. The court noted that the trial judge had considered the factors relevant to the exercise of discretion, including the timing of the application, the prejudice to the opposing party, and the merits of the proposed amendment. The court held that the trial judge had not erred in principle in allowing the amendment, as the factors considered were appropriate and the amendment did not prejudice the defendant's defence. The court further held that there was no abuse of process in allowing the amendment, as the proposed cause of action was relevant to the subject matter of the proceedings.

As a result of the court's reasoning, the appeal was dismissed. The court found that there was no error of law in the trial judge's decision to allow the amendment, and that the trial judge had properly exercised their discretion. The orders of the trial judge were therefore affirmed. The defendant's appeal was dismissed with costs.

Orders