Chalmers Leask Underwriting Agencies v Mayne Nickless Ltd [1983] HCA 20

High Court of Australia Gibbs C.J. Wilson, Brennan, Deane and Dawson JJ. Chalmers Leask Underwriting Agencies v Mayne Nickless Ltd [1983] HCA 20

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

June 17 Gibbs C.J.

I have had the advantage of reading the reasons for judgment prepared by my brothers Brennan and Deane and am in agreement with them. I would, however, add a few observations.

The sole question on the appeal was whether the claim for loss or damage suffered by the respondent (the insured contractor) under a policy of contractors' risks insurance was excluded by cl. (iii) of the exclusions in the conditions of the policy. If it was not, the respondent was entitled to recover under the policy. By cl. (iii), the insurance did not cover "loss or damage directly caused by defective workmanship, material or design or wear and tear, or mechanical breakdown or normal upkeep or normal making good but so that this exclusion shall be limited to the part immediately affected and shall not apply to any other part or parts lost or damaged in consequence thereof".

The argument for the appellant was that a new trial should have been ordered by the Court of Appeal once that Court had reached the conclusion that the learned primary judge had fallen into error in importing the concept of negligence into the phrase "defective workmanship, material or design". It was submitted that the appeal was governed by the principle which was expressed as follows in Suttor v. Gundowda Pty. Ltd. [1] : "Where a point is not taken in the court below and evidence could have been given there which by any possibility could have prevented the point from succeeding, it cannot be taken afterwards." However, this is not a case in which a new point was taken for the first time in the Court of Appeal. The question whether the loss or damage was "directly caused by defective workmanship, material or design" was squarely raised by the pleadings. It was one of the main issues at the trial, although there the parties advanced different arguments as to the meaning of those words in the policy. According to the learned primary judge, the "principal submission" of the appellant was that if the coffer dam failed to keep the water out of the works being constructed by the respondent it was defective, and that it was not necessary to establish negligence to bring the case within the exclusion. That submission was rejected by the learned primary judge but it cannot be said that when the Court of Appeal accepted it, its judgment depended upon a point not raised at the trial. The issue on which the Court of Appeal decided the matter was litigated at the trial and the appellant should have adduced at the trial (and no doubt did adduce) whatever evidence it considered material, having regard to the construction which its counsel submitted and which was ultimately accepted. If, contrary to the view taken by the majority of the Court of Appeal, the primary judge had not made the necessary findings of fact in relation to that issue, it was in those circumstances open to the Court of Appeal to make its own findings, paying of course due regard to the views expressed by the primary judge as to the credibility and acceptability of the witnesses.