Capral Limited v Insurance Australia Limited t/as CGU Insurance [2024] FCA 775

FEDERAL COURT OF AUSTRALIA

Capral Limited v Insurance Australia Limited t/as CGU Insurance [2024] FCA 775 File number: NSD 993 of 2023

Judgment of: JACKMAN J

Date of judgment: 17 July 2024

Catchwords: INSURANCE – general products and liability policy – where applicant sold defective aluminium plate to customers who incorporated that plate into marine vessels – whether subsequent claims by customers were for property damage – where property damage relevantly defined as physical injury to tangible property – separate question answered in favour of insured INSURANCE – sistership exclusion – exclusion of damages claimed if property withdrawn from market or from use because of any known or suspected defect or deficiency therein – insurer's liability not excluded

Cases cited: Allianz Australia Finance Ltd v Wentworthville Real Estate Pty Ltd [2004] NSWCA 100; (2004) 13 ANZ Ins Cas 61-598 Austral Plywoods Pty Ltd v FAI General Insurance Company Limited [1992] QCA 4; (1992) 7 ANZ Ins Cas 61-110 Australian Casualty Co Ltd v Federico [1986] HCA 32; (1986) 160 CLR 513 AXA Global Risks (UK) Ltd v Haskins Contractors Pty Ltd [2004] NSWCA 138 Canadian Equipment Sales & Service Co Ltd v Continental Insurance Co (1975) 59 DLR (3d) 333 (Ontario Court of Appeal) Carwald Concrete and Gravel Co Ltd v General Security Insurance Company of Canada (1985) 24 DLR (4th) 58 (Alberta Court of Appeal) CGU Insurance Limited v Porthouse [2008] HCA 30; (2008) 235 CLR 103 Cook v Cook [1986] HCA 73; (1986) 162 CLR 376 Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 Elco Industries, Inc v Liberty Mutual Insurance Co 90 III App 3d 1106; 414 NE 2d 41 (1980) (Appellate Court of Illinois) Eljer Manufacturing Inc v Liberty Mutual Insurance Co 972 F 2d 805 (1992) (United States Court of Appeals, Seventh Circuit) Endurance Corporate Capital Limited v Sartex Quilts & Textiles Limited [2020] EWCA Civ 308 Erie Railroad Co v Tompkins 30 US 64 (1938) Federation Insurance Ltd v Banks [1984] VR 525 Foodpro National Inc v General Accident Assurance Co of Canada (1986) 33 DLR (4th) 427 (Ontario High Court of Justice) Globe Church Inc v Allianz Australia Insurance Ltd [2019] NSWCA 27; (2019) 99 NSWLR 470 Hamilton Die Cast Inc v United States Fidelity and Guaranty Co 508 F 2 d 417 (1975) (United States Court of Appeals, Seventh Circuit) Hartford Fire Insurance Co v California 509 US 764 (1993) Impact Funding Solutions Ltd v AIG Europe Insurance Limited [2016] UKSC 57; [2017] AC 73 Kaboko Mining Limited v Van Heerden (No 3) [2018] FCA 2055 LCA Marrickville Pty Ltd v Swiss Re International SE [2022] FCAFC 17; (2022) 290 FCR 435 Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390 McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 Paper Machinery Corporation v Nelson Foundry Company Inc 108 Wis 2d 614; 323 NW 2d 160 (1982) (Court of Appeals of Wisconsin) Pilkington United Kingdom Limited v CGU Insurance Plc [2004] EWCA Civ 23 Prime Infrastructure (DBCT) Management Pty Limited v Vero Insurance Ltd [2005] QCA 369; (2005) 13 ANZ Ins Cas 61-661 Qantas Airways Ltd v Leonie's Travel Pty Ltd [2010] HCA Trans 232 Quintano v B W Rose Pty Limited [2008] NSWSC 793; (2009) 15 ANZ Ins Cas 61-805 R & B Directional Drilling Pty Ltd (in liq) v CGU Insurance Ltd (No 2) [2019] FCA 458; (2019) 369 ALR 137 Ranicar v Frigmobile Pty Ltd; Ranicar v Royal Insurance Pty Ltd [1983] Tas R 113; (1983) 2 ANZ Ins Cas 60-525 Selected Seeds Pty Ltd v QBEMM Pty Ltd [2010] HCA 37; (2010) 242 CLR 336 Siegwerk Australia Pty Ltd v Nuplex Industries (Australia) Pty Ltd [2013] FCAFC 130; (2013) 305 ALR 412 Sphere Healthcare Pty Ltd v Allianz Australia Insurance Ltd [2023] NSWSC 1462 Swift v Tyson 41 US 1 (1842) Switzerland Insurance Australia Ltd v Dundean Distributors Pty Ltd (1998) 10 ANZ Ins Cas 61-388; [1998] 4 VR 692 The Owners — Strata Plan No 91086 v Fairview Architectural Pty Ltd (No 3) [2023] FCA 814 Todd Shipyards Corp v Turbine Services Inc 674 F 2d 401 (1982) (United States Court of Appeals, Fifth Circuit) Todd v Alterra at Lloyd's Limited [2016] FCAFC 15; (2016) 239 FCR 12 Traveler's Insurance Co v Eljer Manufacturing Inc 197 Ill 2d 278; 757 NE 2d 481 (2001) (Supreme Court of Illinois) Weedo v Stone-E-Brick 405 A 2d 788 (1979) (Supreme Court of New Jersey) Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance [2018] NSWCA 100; (2018) 359 ALR 314 Woodlawn Capital Pty Ltd v Motor Vehicles Insurance Ltd [2016] NSWCA 28; (2016) 111 ACSR 377 Zurich Australian Insurance Ltd v Regal Pearl Pty Ltd [2006] NSWCA 328; (2007) 14 ANZ Ins Cas 61-715 Ball, Michael and David St L Kelly, "Insurance" in Halsbury's Laws of Australia at [235] (as at 1 November 2017) Davies, Martin, "The Construction of Standard Form Shipping Contracts" [2023] Lloyd's Maritime & Commercial Law Quarterly 225 Derrington, Desmond and Ronald Ashton, The Law of Liability Insurance (1st ed, 1990) Herzfeld, Perry and Thomas Prince, Interpretation (Lawbook Co, 2nd ed, 2020) Heydon, JD, Heydon on Contract (Lawbook Co, 2019) Vasichek, Laurie, "Liability Coverage for 'Damages Because of Property Damage' Under the Comprehensive General Liability Policy" (1984) 68 Minnesota Law Review 795