wee A © a. a a eS a tae 7 we LS et oe CATCHWORDS TRADE PRACTICES - Negligence - Motor vehicle insurance - Instructions to brokers to effect insurance - Cover allowed to expire without issue of policy - Accidental damage to vehicle - Whether claim of negligence defeated by material non-disclosure - Representation on behalf of first respondent that insurance effected - Whether second respondent knowingly concerned in contravention - Assessment of damages. Trade Practices Act 1974 ss.52, 75B Yorke v Lucas (1985) 61 ALR 307, Gates v City Mutual Life Assurance Sochety Limited (1986) 63 ALR 600 referred to. NSW G.367 of 1985 GOKORA PTY LIMITED v MONTGOMERY JORDAN AND STEVENSON PTY LIMITED \-- = BOR Wilcox J Sydney 24 July 1986 ee i IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY ) No. G.367 of 1985 ) ) GENERAL DIVISION BETWEEN: GOKORA PTY LIMITED Applicant AND: MONTGOMERY JORDAN AND STEVENSON PTY LIMITED First Respondent WENDY KAY WORBOYS 1 Second Respondent _— \ _ _— : CORAM: WILCOX J { ' PLACE: SYDNEY , DATE: 24 JULY 1986 MINUTES OF ORDER + THE COURT ORDERS THAT: 1. Judgment be entered in favour of the applicant against the first respondent in the sum of twenty-three thousand two hundred and twenty-seven dollars and fifty-three cents ($23,227.53). ee en we eee "e Pe oe tee ee Pie ee cae ete ht an eaecheeel hee atele ae Judgment be entered in favour of the applicant against the second respondent in the sum of twenty-one thousand seven hundred and seventy-seven dollars and fifty-three cents ($21,777.53). Payment by the first respondent of any moneys, in excess of one thousand four hundred and fifty dollars ($1,450.00) in reduction or discharge of the amount of the judgment entered pursuant to order (1) hereof shell operate as a discharge pro tanto of the liability cf the second respondent hereunder. Payment by the second respondent of any moneys in reduction or discharge of the amount of the judgment entered pursuant to order (2) hereof shall operate as a discharge pro tanto of the liability of the first respondent hereunder. The respondents pay to the applicant- its costs of these proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. "oy wah af teem tm te ae 4 Freee un Pe ial IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G.367 of 1985 GENERAL DIVISION BETWEEN: GOKORA PTY LIMITED Applicant MONTGOMERY JORDAN AND STEVENSON PTY LIMITED First Respondent WENDY KAY WORBOYS Second Respondent CORAM: WILCOX J . Z - PLACE: SYDNEY DATE: 24 JULY 1986 REASONS FOR JUDGMENT This is a claim for damages against a company which carries on business as insurance brokers, Montgomery Jordan and_ . Stevenson Pty Limited ("MJS"), the first respondent, and its Secretary, Wendy Kay Worboys, the second respondent. The claim against the company is based upon s.52 of the Trade Practices Act 1974, it being said that the company -- through Ms Worboys —- ee teeter ae ep tere . or sen are conducted itself in a misleading or deceptive manner in representing to Mr Gary Lutherborrow, a director of Gokora Pty Limited, the applicant, that it had effected insurance over a truck leased and operated by that company. Ms Worboys is said to have been knowingly concerned in the company's contravention of s.52 and, in reliance upon s.75B of the Act, the applicant also seeks damages against her. By way of alternative a claim is made, but against the company only, for damages for negligence. The facts are within a small compass and, for the most part, not in dispute. There is, however, a contest upon the question whether any telephone conversations took place between Mr Lutherborrow and Ms Worboys in the period February to April 1985; and, if so, the terms thereof. Mr Lutherborrow referred to such conversations in his affidavit. In her affidavit Ms Worboys denied recollection of any such conversations. Mr Lutherborrow was cross-examined on the conversations, when additional details emerged. - However, there was insufficient time to hear Ms Worboys' cross-examination on the first day of the hearing. Upon the second day of hearing, some weeks later, Ms Worboys was not present. Her counsel said that she had been involved in a 'motor accident upon the previous evening. He produced a medical certificate which referred to her having a "head injury". No information was given as to the nature or the severity of the injury. No medical opinion was offered as to Ms Worboys' fitness to attend Court. But, being in fact absent, she could not be cross-examined that day. Although I raised the i ee eee eee eee Oe ee awe ae ee ee sense 8 ge I Maem, are erm ee Foe ee et "y matter with them, neither counsel sought an adjournment to a day when Ms Worboys would be present. Counsel for the applicant submitted that, under the circumstances, her affidavit evidence should be disregarded but I ruled that, the affidavit having in fact been read, it constituted evidence in the proceedings; although the weight to be given to any contested statements would almost inevitably be affected by the fact that Ms Worboys had not been subjected to cross-examination. On or about 16 September 1984 Mr Lutherborrow decided to acquire on behalf of Gokora an Isuzu truck, registered number NAB 453, for use in the long distance transportation business conducted by the company Through the North Parramatta branch of the Westpac Banking Corporation he arranged finance with Austraéiian Guarantee Corporation; the vehicle to be acquired pursuant to a four year lease arrangement. An officer of the bank recommended that Mr Lutherborrow contact MJS to arrange! insurance. He telephoned MJS and spoke to Ms Worboys. She took particulars. Mr Lutherborrow asked her to arrange a cover note. She did arrange a cover note, with NRMA Insurance Limited. on 25 September 1984 MJS sent an invoice to Gokora for $2,184.02, the amount of the first year's premium quoted by NRMA Insurance. This invoice was promptly paid. A proposal form was completed and signed by Mr Lutherborrow on 28 September 1984 but no policy was issued by NRMA Insurance. The cover note was extended from time to time, finally expiring on 21 January 1985. 2 Pt he eee eet ae Co a oe eee In the meantime, on 11 December 1984, NRMA Insurance notified MJS that the required premium would be $2,512.20; $428.18 more than the figure previously quoted and paid by Gokora to MJS. Ms Worboys decided to seek cheaper insurance. An employee of MJS contacted Co-Insurance Underwriters Pty Limited, a company which acts as a heavy vehicle underwriters agent, and received a quote for $1,296.83. On 8 January 1985 Co-Insurance Underwriters issued on behalf of GRE Insurance Limited a cover note, valid to 28 January 1985, over the vehicle. Ms Worboys sent a proposal form to Mr Lutherborrow. He completed the proposal on 15 January 1985 and returned it to MJS. There may have been some delay in transmission. According to a stamp on the document it was received by MJS on 1 February 1985. Ms Worboys said that she checked the proposal and forwarded it that same day to Co-insurance Underwriters under cover of a submission sheet identifying the insurer and the insured with the notation "please confirm payment details by return". Some time before 1 February 1985 Co-Insurance Underwriters had arranged an extension of the cover note to 7 February 1985. This was the last extension achieved. There was no response to the proposal from Co-Insurance ~ Underwriters. On 22 February 1985 Ms Worboys wrote to that company noting that there had been no response, stating that it ora ee > - "temas Steer ee Mate was therefore presumed that the original quotation stood and enclosing a cheque for $1,174.39 -- the quoted premium less commission. Again there was no response. The reason for the lack of response to the proposal and to the letter of 22 February was that neither was received by Co-Insurance Underwriters. Both had been addressed to the company at P O Box 489, Bankstown whereas the correct address was P O Box 498. The cheque for $1,174.39 was never presented. No request was made for extension of cover after 7 February 1985. It is common ground that the truck became uninsured after 7 February 1985 and remained uninsured when, on 3 May 1985, it was extensively damaged in an accident. In his affidavit Mr Lutherborrow deposed to numerous _ "telephone conversations with Ms Worboys. Many of those took place during 1984 and related to cover with NRMA' Insurance and the amount of premium required by that company. They are not presently material. However, Mr Lutherborrow also referred to a conversation, which he put as being "on or about" 20 January 1985, in which he complained to Ms Worboys about the non-receipt of the insurance policy and in which she responded: "Oh I had forgotten all about it. I will get on to it and get back to you". He went on to say that thereafter, between 22 February and 22 April 1985, he had a further four telephone conversations with Ms Worboys. In his affidavit he referred to these conversations only in summary terms, quoting himself on each occasion as asking eee oe ee eer oe ashe wa nae ee ee i Se en (nia Ne ee EY eee about the policy and receiving an answer from Ms Worboys that he should have received the policy by now, that she would "look it up and see what is holding it up". However, he mentioned that he had kept diary notes and in cross-examination he was asked about his diary notes. Mr Lutherborrow said that he had commenced to make diary notes on the matter from the beginning of 1985 and that he believed the diary record to be true and correct. Pressed as to his reason for this belief, he said that he made each note immediately after he hung up the telephone. In the light of counsel's cross-examination of Mr Lutherborrow, counsel for the applicant tendered the diary and I admitted it into evidence, taking the view that the effect of the cross-examination was to suggest recent invention. There is no entry for 20 January, which was a Sunday, but there is an entry in the section reserved for 28 January reading as follows: "Rang Wendy MJS about truck policy have not seen as yet. Was tolled (sic) about Co Insurance and should get rebate, about $700.00." Under the date 22 February 1985 there is a note that Mr Lutherborrow had rung Ms Worboys but that he could not talk to her as she was in a meeting. In the space for 11 March 1985 - is noted: "Rang MJS to talk to Wendy (again about truck insurance) still have not seen policy. Wendy said she had to look it up and find out about it, and she would get back to me." The note for 1 April 1985 is: "Rang MJS. 'Wendy said that she was still chasing it up but she assored (sic) me it was insured." i ens MT wo ee 2. 2 tn cd oer ~eom Finally, in the diary space for 22 April 1985 is stated: t "Rang Wendy MJS about workers compo and again about truck, 'Quote she would post it out." During cross-examination it was put to Mr Lutherborrow that Ms Worboys never said anything to the effect that she would post it out. He replied "Yes, she did". In her affidavit Ms Worboys responded in very general terms to Mr Lutherborrow's evidence regarding his telephone conversations with her, simply saying that she had no recollection or note in her file regarding any such conversations. She added "I say that to the best of my _ —knowledge and belief these said conversations never took place". After the accident Mr Lutherborrow contacted Ms Worboys. She said that she would send a claim form but, in the event, this was not necessary as Mr Lutherborrow was able to obtain a form from the repairer to whom the truck had been taken. Ms Worboys sent on the claim to Co-Insurance Underwriters on 6 May but, a few days later, Mr Michael Conway of that company rang to say that the cover note was never completed, and that he had no record of a proposal or of a payment being received. The claim was sent on to GRE, along with a quotation for the cost of repairs, but, understandably, it was declined. NON tet an veer es "nm ow mero ke abet A 8. There is no doubt that MJS was negligent in its handling of the transaction. That company knew that the temporary cover negotiated by it on behalf of Gokora was due to expire on 7 February. Over four months before that date it had received from Gokora the amount debited in its invoice of 25 September 1984, which moneys it had apparently retained in the meantime. Mr Lutherborrow had accepted Ms Worboys' advice to insure with GRE through Co-Insurance Underwriters and had completed and returned the proposal form not later than 1 - February. Yet the insurance cover was allowed to run out and the vehicle was allowed to remain uninsured for a period of almost three months until the date of the accident. I have no reason to doubt Mr Lutherborrow's evidence that he telephoned Ms Worboys from time to time during this period to enquire the position but there was no obligation on him to pursue the matter. The duty of MJS was to ensure that Gokora was covered or, if this proved impossible, that Mr Lutherborrow was unformed of the position so that he might determine what action he would take. The noté on thé submission sheet recognized the necessity for some acknowledgement by Co-Insurance Underwriters but, despite the lack of acknowledgement, no follow up action was taken. "The fact that the cheque for $1,174.39 was unpresented would have~been : apparent from the bank statement issued to MJS but no enquiry was made by MJS of Co-Insurance Underwriters about that Matter. In the result MJS wholly failed in its duty to Gokora, leaving that company uninsured at the time of the accident. Faced with this clear case of negligence, counsel for MJS put questions to Mr Lutherborrow in cross-examination to suggest that his answers in the GRE proposal form contained a material non-disclosure which would have entitled that company to avoid any insurance based upon the proposal. The purpose was to demonstrate that the applicant had, therefore, suffered no loss. This matter was not raised in the first respondent's Defence but I permitted an appropriate amendment. Mr Lutherborrow said in evidence that he was given no warning or advice about the completion of the proposal form so that, if it appeared that there had been a material non-disclosure, a question might: have arisen-whether this was the result of any breach of duty towards him by MJS. However, "I need not consider that matter. In my Opinion, there was no material non-disclosure." The answer relied on by the first respondent is contained in question I of the proposal. That question is as follows: "Have you (during the last five years) had any accident or- fire happen to the auto in your control or ownership?" Mr Lutherborrow gave the answer "No", woe pee ee ee RM ed te or er seme Leap * Te Ae al le he PE Fr 10. In evidence it emerged that, during that period of five years, there had been an incident in which a vehicle which had been driven by Mr Lutherborrow was damaged. The evidence of Mr Lutherborrow -- and this was the only evidence on the matter -- was that about four years previously he had parked a truck in a street in Haberfield. He left the vehicle. When he returned to it some two or three hours later he found another vehicle had run into it. The matter was reported to the police but there was no insurance claim. Mr Lutherborrow did not regard this accident as being covered by question I in the claim form. It is not clear to me that it was. No doubt Mr Lutherborrow had potential control of the vehicle at the time of the accident but, being absent, he was not in actual control. Nor does it appear whether the vehicle was in the ownership of Mr Lutherborrow at the time of the accident. It is quite possible that it was under lease or hire purchase. However, assuming that the answer amounts to a non-disclosure, there is evidence from two persons with lengthy experience in the insurance industry -- Mr AJ Steeden, an insurance broker of forty-five years' standing, and Mr Conway of Co-Insurance Underwriters ~- that this non-disclosure would not be considered by an underwriter to be material either to the acceptance of the risk or to the fixing oat File weer we . eet Fee oe li. of an appropriate premium. This evidence is not challenged. Accordingly, I reject the contention that the applicant sustained no damage from the negligence of MJS. The claim against MJS and against Ms Worboys under s.52 of the Trade Practices Act depends entirely upon the telephone statements attributed to Ms Worboys by Mr Lutherborrow. Had the evidence been limited to the short summary contained in Mr Lutherborrow's affidavit, it is doubtful whether the applicant would have been entitled to succeed on this claim. It is possible to read the comment "you should have received it by now" as a representation that a policy had in fact been issued by the insurer only if it be assumed that the policy was to reach Mr Lutherborrow through MJS rather than directly from the insurer. There is no evidence as to this matter. But the evidence goes further; both by way of sworn affirmation of the correctness of the diary entries and, specifically, in Mr Lutherborrow's assertion that Ms Worboys. said that she would post out the policy. According to Mr Lutherborrow, on 1] April 1985 Ms Worboys assured him that "it was insured". If accepted, this was a clear representation of 'the fact of insurance. The statement, said to have been made on 22 April, that she "would post it out" implies that the policy was at that time in the possession or control of Ms Worboys. Sane tad Vapi we at or 12. Counsel for the respondents submits that I should not accept Mr Lutherborrow's evidence as to these conversations. He points out that, in her affidavit, Ms Worboys deposed that from the time she forwarded on the completed proposal form she believed that the vehicle was insured and that it is common practice for an insurer to extend temporary cover upon receipt of a completed proposal form and to back date the commencement of the risk on the policy to the date of commencement of the temporary cover. Counsel also submits that Ms Worboys' immediate reaction to the news of the accident was consistent with a genuine belief that the vehicle was in fact insured. I accept that, until Mr Conway's call on 6 May, Ms Worboys believed that the vehicle would be treated by GRE as being temporarily covered. Such a belief would explain not only her carelessness in relation to the transaction but also a readiness to assure Mr Lutherborrow that all was well. I believe that she did give the assurances to which Mr Lutherborrow deposes. Mr Lutherborrow was an impressive witness. He appeared to me to be both a careful and an honest person. Unless the diary notes aré to -be dismissed as a fraudulent concoction, a view I reject, he is eloquently supported by those notes; -especially those of 1 April and 22 April. —_— wee See tp we ee nee SE a Me 13. It is not easy to say why Ms Worboys should have chosen to make untrue statements to Mr Lutherborrow. As she was not cross-examined the matter could not be explored. But she may have become increasingly embarrassed by the delay which occurred in relation to the matter and sought to mitigate that embarrassment -- and to avoid further enquiries -~ by giving Mr Lutherborrow re-assurance. "The cheque is in the post" is reputed to be one of the great lies of contemporary life. But, whatever the reason, I accept that Ms Worboys did inform Mr Lutherborrow, on at least two occasions before the accident, that the vehicle was insured. In fact it was not. Such statements constituted misleading or deceptive conduct by MJS, contravening s.52 of the Trade Practices Act- and rendering the company liable in damages for the loss sustained by Gokora. Notwithstanding that all relevant conduct of MJS was carried out on its behalf by Ms Worboys, counsel for the respondents c@ntests that Ms Worboys was knowingly concerned in the contravention of s.52 so as to be personally liable to the applicant pursuant to s.75B of the Act. He relies upon the recent decision of the High Court of Australia in Yorke v Lucas (1985) 61 ALR 307 relating to the scope of s.75B. Section 75B provides that a reference in Part VI of the Act ",... to a person involved in a contravention of a ,provision of Part IV or V shall be read as a reference to a person who-- woo wee awe ee eee eK * *®tereBE Rte ne et 14. (c) has been in any way, directly or - indirectly, knowingly concerned in, or party to, the contravention ..." In their joint judgment in Yorke v Lucas at p.312 Mason ACJ, Wilson, Deane and Dawson JJ said of para.(c) of the section: "There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention." Brennan J, at p.317, said that: ",.. honest ignorance of the circumstances - which give a representation a misleading or deceptive character or the character of a representation which is likely to mislead or deceive is inconsistent with civil liability under s.75B(a)." At p.318 his Honour went on to express the opinion that no stricter liability was imposed by s.75B(c). Counsel for the respondents contends that a person is not knowingly concerned in a contravention of S.75B if he or she makes a false statement without actual knowledge of falsity; so that Ms Worboys' belief that the vehicle was insured provides an answer to the claim against her. It does not matter, counsel argues, whether the answer was given , carelessly, or even recklessly. Counsel accepts that Ms Worboys could easily have checked the position before giving Mr Lutherborrow any assurance that the vehicle was insured and that she ought to have done so. But he says that this is immaterial; that, unless actual knowledge of,falsity is shown, the claim must fail. me ia oo 15. In Yorke v Lucas the High Court was not concerned with information given with careless or reckless disregard to the question of truth or falsity. On the contrary, Mr Lucas was seen as having acted carefully and honestly: see p.309. I do not read the joint judgment as bearing in any way upon a case of reckless indifference to truth or falsity. The reference by Brennan J to "honest ignorance of the circumstances", however, suggests that his Honour would not have excluded such a case from the operation of s.75B. An assertion of a fact, made in reckless indifference to its truth or falsity, cannot easily be regarded as being the product of "honest" ignorance. Had the evidence of Mr Lutherborrow stopped at the conversation of 1 April -- the assurance that the vehicle was in fact insured -- it would have been necessary to reach a conclusion about the application of s.75B to a case where the individual representor acted recklessly but with a genuine belief in the truth of the representation. However, the statement of 22 April went further. As I have said, the implication of the promise to post out the policy was that the policy had already issued and was in Ms Worboys' possession or control. Such a statement was false, as Ms Worboys knew. In relation to that statement, at least, s.75B operates to fix Ms Worboys with personal liability. way RR oe aterm r 16. The applicant claims damages as follows: l. Estimated cost of repairing vehicle -- the vehicle not yet being properly repaired $15,479.48 2. Temporary repairs made by Mr Lutherborrow to get the vehicle back on the road when his insurance claim was refused $2,207.05 3. Removal of dash to repair wiper motor and testing of wiper motor -- already paid $241.00 4. Loss of earning during the period of five weeks immediately following the accident $8,050.00 5. Cost of substitute insurance with NRMA Insurance Limited from 5 June 1985 to 7 January 1986; yearly premium $2,485.70. Claim 7 months $1,450.00 Item 1] is an agreed figure, the amount being conceded to be recoverable if the applicant succeeds. The respondents do not contest that Gokora in fact incurred the expenses referred to in paras.:2 and 3. They accept' that these repairs were necessary to make the vehicle roadworthy, if the full repairs were not to be carried out immediately. But it is said that the applicant should have immediately carried out the full repairs, and therefore avoided this expense. Mr Lutherborrow said in evidence that he did not have the money to pay for the full repairs. He was asked in cross-examination about borrowing the money: nde aA 17. "oO. You could not have borrowed any money? A. No. Q. What about from your father, sir? A. I could have, but I did not wish to at that time." Counsel submits that, having regard to this evidence, it should be concluded that Mr Lutherborrow could have borrowed the necessary funds from his father and that, by failing to do so, he has unreasonably failed to mitigate the applicant's damage. The evidence supports the first part of that proposition but not the latter. Counsel did not ask Mr Lutherborrow his reason for his reluctance to ask his father for the money. There may have been compelling reasons for his attitude. Without knowledge of those reasons, it cannot be said that his failure to approach his father was unreasonable. Items 2 and 3 should be allowed. There was a delay of almost three weeks between the date of the accident and the date upon which Mr Lutherborrow learned that the claim would be refused by GRE. During that period no repairs were undertaken, and justifiably so. If GRE had accepted the claim, the cost of temporary repairs would have been wasted. However, during this time, the applicant did hire a substitute vehicle. Mr Lutherborrow made one trip each week to Melbourne and back, as against his usual two trips per week. The substitute vehicle was available for only one trip each week. The applicant paid a hire fee of $350.00 per trip, a total of $1,050.00. Although it was proved in the aoe IF We at e- —--— - eee wees 18. evidence that a substitute vehicle for two trips per week would have been available from Ranger $rucks, Mr Lutherborrow did not know that fact at the time. In any event the cost of hiring a truck from Ranger would have been more than the margin of $400 which Gokora was able to earn on trips to Melbourne. I am satisfied that Mr Lutherborrow made the best arrangements he could in the situation in which he was placed. During the period of two weeks following the refusal -of the claim Mr Lutherborrow made no trips. He helped work on the vehicle. Given his financial position it was reasonable for him to do this to minimise the cost of the temporary repairs. The sum of $8,050.00 claimed in respect of loss of earnings is made up as follows: 1. Prior to accident on 3/5/85 Income = $2,000 (at 2 trips per week) 2. Following accident Truck unavailable for 3 weeks $ 6,000.00 Truck unavailable for 2 weeks (temporary repairs) . 4,000.00 __ $10,000.00 3. Less income received for 3 weeks 3,000.00 $ 7,000.00 4. Add hire charges for 3 weeks 1,050.00 $ 8,050.00 eee - ae ee frm ese Lt 19. Quite properly, no claim is made for the period the truck will be off the road undergoing permanent repairs. This loss would have been sustained had the vehicle been insured and will be suffered when, in the future, the permanent repairs are carried out. However, this computation fails to take account of the running expenses that would have been incurred in relation to the seven lost trips -- fuel, maintenance, accommodation, etc. Mr Lutherborrow estimated these expenses as being about $550-$650 per trip. I will take a mean of $600 per trip so that the total for seven trips would be $4,200. This sum should be deducted from the claim of $8,050.00, reducing the amount allowed to $3,850.00. Another, perhaps simpler, way of expressing the result is to say that I allow the profit of $400.00 ($1,000.00 less $600.00) on each of the seven lost trips -- $2,800.00 -~ and add the temporary hiring cost of $1,050.00. Finally, the applicant claims the cost of making alternative insurance arrangements for the remainder of the year in relation to which it expected to be covered by GRE, and for which it had paid a premium to MJS. The applicant took out substitute insurance with NRMA Insurance Limited on 5 June 1985 at a premium for twelve months of $2,485.70. It claims seven-twelfths of this amount, being for the seven months to 7 January 1986 when its insurance with GRE would in any case have expired; a claim of $1,450.00. eterrue Bae neat ee aed roe ere -—Men D Ene Y te se ee ee ty 20. I think that this amount is recoverable in the claim against MJS based upon negligence. MJS had been put in funds to effect insurance until 7 January 1986 but neglected so to do. But for the company's default, it would not have been necessary for Gokora to incur further expense for the period dune 1985 to January 1986. However, I do not think that this sum is recoverable under s.52. That section permits recovery of losses which are consequential upon misleading conduct, such as expenses incurred in reliance upon a misrepresentation: see Gates v City Mutual Life Assurance Society Limited (1986) 63 ALR 600 at pp.603, 607. But, as that decision makes clear, the section does not permit an award of damages designed to place the claimant in the position in which he or she would have been had the representation been true. The claim for insurance premium falls within the latter category. Had Ms Worboys told the truth Mr_.__, Lutherborrow could have taken action, by insuring elsewhere, to avoid the losses which he suffered as a result of the accident.- The losses claimed in items 1 to 4 are consequential upon the misrepresentation which caused him not to insure elsewhere and, therefore, to be left uninsured at the time of the accident and to suffer costs and loss of earnings which he would not otherwise -have sustained. But — _— wero we Tees 08 fo Ceres 2 Eee ket = 21. item 5 is not consequential upon that misrepresentation, rather, upon the initial default. It would have been incurred if alternative insurance had been arranged. As Gokora is entitled to recover against MJS in negligence, the premium payment should be included in the judgment to be awarded in its favour against MJS. But, as the claim against Ms Worboys is limited to the damages recoverable under s.52, the item should be excluded from the computation of damages against her. In the result I assess damages against MJS in the sum of $23,227.53, being items 1, 2, 3 and 5 as claimed and item 4 allowed at $3,850.00. The damages assessed against Ms Worboys will be that amount, less the sum of $1,450.00 for item 5, a total of $21,777.53. The respondents must pay the applicant's costs of the proceedings. I certify this and the twenty (20) preceding pages to be a true copy of the Reasons for Judgment of his Honour Mr Justice Wilcox. Associate: UWweonAe [r: Hettorw Date: 24 July 1986 Counsel for the Applicant: Mr R K Eassie Solicitors for the Applicant: Michael Napier & Co Counsel for the Respondent: Mr D I Browne Solicitors for the Respondent: Noyce Olliver Date(s) of hearing: 20 June and 18 July 1986