The Owners – Strata Plan No 55682 v W. R. Berkley Insurance (Europe), PLC & Ors [2020] NSWDC 758

District Court New South Wales

Medium Neutral Citation: The Owners – Strata Plan No 55682 v W. R. Berkley Insurance (Europe), PLC & Ors [2020] NSWDC 758 Hearing dates: 30 November-4 December 2020; 7-10 December 2020 Date of orders: 17 December 2020 Decision date: 17 December 2020 Jurisdiction: Civil Before: Abadee DCJ Decision: See paragraphs 448-449 Catchwords: INSURANCE – strata insurance policy for damage to property – property damaged by fire – occupation of a unit within the strata by an "outlaw motorcycle gang" ('OMCG') for use as its clubhouse – proposal form for insurance referred to nature of occupation of the unit as an 'office' – whether fact of occupation by OCMG disclosed by Insured, by its insurance broker, to underwriting agent for Insurer prior to the policy being entered into – materiality of non-disclosure of occupation by OMCG – whether Insurer entitled to reduce liability to nil under Insurance Contracts Act 1984 (Cth), s 21(3) TORTS – negligence – whether insurance broker negligently failed to disclose fact of OMCG's occupation to Insurer's underwriting agent – whether negligent failure to advise Insured of the risk of an unenforceable policy of insurance if OMCG's occupation not disclosed – whether broker's negligent failure to advise client of alternative options – causation – scope of liability where only part of the loss claimed premised upon Insurer's breach of contract of indemnity – proportionate liability defence – whether author of earlier proposal form and earlier broker were 'concurrent wrongdoers' TORTS – negligence – on contingent cross-claim whether insurance agent in breach of duty of care – whether negligence is said to be direct or vicarious DAMAGES – assessment of value of indemnity if insurer liable for breach of policy LIMITATION OF ACTIONS – Insurer's contingent cross-claim against underwriting agent – premise that OMCG's occupation was disclosed contrary to underwriter's representation to Insurer – concession that if OMCG's occupation was disclosed on the insured's behalf, there was breach by underwriter of strict contractual obligation – whether cause of action against underwriter in contract statute barred – whether cause of action fraudulently concealed – Limitation Act 1969 (NSW), s 55 – whether ordinary operation of s 14 may exclude period in which wrongful conduct prevents action being commenced ESTOPPEL – conventional estoppel EVIDENCE – common knowledge – whether occupation by OMCG of a tenancy was material fact requiring disclosure to Insurer PRACTICE AND PROCEDURE – Brokers and Insured argue that duty of disclosure waived or modified by disclosure of information – no pleading of the contention – Insurer and Agent argue Owners Corporation had no standing to claim for financial loss asserted by lot owners – no pleading of absence of standing – whether arguments should be considered by the Court Legislation Cited: Civil Liability Act 2002 (NSW), ss 5B, 5C, 5D, 5E, 34 Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth), s 917F(2), Part 2D.1, Part 7.6 Crimes (Criminal Organisations Control) Act 2012 (NSW) Crimes (Criminal Organisations Control) Bill 2009 (NSW) District Court Act 1973 (NSW), s 134 Evidence Act 1995 (NSW), ss 140, 144 Insurance Act 1973 (Cth), s 17G Insurance Contracts Act 1984 (Cth), ss 21, 28, 52, 57 Limitation Act 1969 (NSW), ss 14, 55 Privacy Act 1988 (Cth), s 66 Strata Schemes Management Act 1996 (NSW), ss 82, 83, 245 Uniform Civil Procedure Rules 2005 (NSW), r 14.14 Cases Cited: Anthony v Morton [2018] NSWSC 1884 Apollo Shower Screens Pty Ltd v Building and Construction Industry Long Service Payments Corp (1985) 1 NSWLR 561 Argyropoulos v Layton & Anor [2002] NSWCA 183 ASIC v Cassimatis (No 8) (2016) 336 ALR 209 Breen v Williams (1996) 186 CLR 71 Brescia Furniture Pty Ltd v QBE Insurance (Australia) Ltd [2007] NSWSC 598 Cassimatis v ASIC (2020) 376 ALR 261 CGU Insurance Ltd v Porthouse (2008) 235 CLR 103 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735 Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421; [2016] FCAFC 186 Commonwealth v Cornwell (2007) 229 CLR 519 Coote v Kelly; Northam v Kelly [2016] NSWSC 1447 Delor Vue Apartments CTS 39788 v Allianz Australia Insurance Ltd (No 2) [2020] FCA 588 Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317 Faraday v Rappaport [2007] NSWSC 34 GC NSW Pty Ltd v Galati [2020] NSWCA 326 Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470 Gold Ribbon (Accountants) Pty Ltd (in liq) v Sheers & Ors [2006] QCA 335 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Hadley v Baxendale (1854) 156 ER 145 Hawkins v Clayton (1988) 164 CLR 539 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets (2008) 73 NSWLR 653 Ketteman v Hansel Properties [1987] 1 AC 189 Leggo v Brown & Dureau Ltd (1923) 32 CLR 95 Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 March v Stramare (E & M.H.) Pty Ltd (1991) 171 CLR 506 Monaghan Surveyors Pty Ltd v Stratford Glen-Avon Pty Ltd [2012] NSWCA 94 Moratic Pty Ltd v Gordon [2007] NSWSC 5 Onassis Calogeropoulos v Vergottis [1968] 2 Lloyd's Rep 403 Pell v The Queen (2020) 94 ALJR 394; [2020] HCA 12 Permanent Trustee Australia Ltd v FAI General Insurance Company Ltd (in liq) (2003) 214 CLR 514 Richtoll Pty Ltd v WW Lawyers Pty Ltd (in liq) [2016] NSWCA 308 Sanderson Motors Pty Ltd v Lindsay Bennelong Developments Pty Ltd [2014] NSWSC 846 Saul & Anor v Menon [1980] 2 NSWLR 314 Seymour v Seymour (1996) 40 NSWLR 358 State of New South Wales v Harlum [2007] NSWCA 120 Stealth Enterprises Pty Limited trading as The Gentleman's Club v Calliden Insurance Limited [2015] NSWSC 1270 Stealth Enterprises Pty Ltd t/as The Gentlemen's Club v Calliden Insurance Ltd (2017) 19 ANZ Insurance Cases 62-131 Sybil Dawne Hintze v Ratna Tsering & Anor [2018] NSWSC 1190 Sydney Water Corporation v Turano (2009) 239 CLR 51 Tame v New South Wales (2002) 211 CLR 317 Textralian Enterprises Pty Ltd v Perpetual Trustees Victoria Ltd [2000] NSWCA 176 The Nominal Defendant v Cordin (2017) 79 MVR 210 The Owners – Strata Plan 85044 v Murrell; Murrell v The Owners – Strata Plan 85044 [2020] NSWSC 20 Trajkovski v Simpson [2019] NSWCA 52 Walmsley v Cosentino [2001] NSWCA 403 Wardman v Hatfield [2003] NSWCA 283 Watson v Foxman (1995) 49 NSWLR 315 Williams v Natural Life Health Foods Ltd [1998] 2 All ER 577 Texts Cited: J D Heydon, Cross on Evidence (electronic version, LexisNexis) J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, LexisNexis Butterworths) Category: Principal judgment Parties: The Owners – Strata Plan No 55682 (Plaintiff) W. R. Berkley Insurance (Europe), PLC (First Defendant/First Cross-Claimant) Berkley Insurance Company (Second Cross-Claimant) HHIA Pty Ltd (Second Defendant) Mr D Hynes (Third Defendant) Ms L Honeychurch (Fourth Defendant) Westcourt General Insurance Broker Pty Ltd trading as Westcourt General Insurance Broker Pty Ltd ACN 009401772 as trustee for the WGIB Trust (Fifth Defendant) QUS PTY LTD (Cross-Defendant) Representation: Counsel: Mr C Simpson for the plaintiff Mr M Friedgut for the first defendant/first cross-claimant and the second cross-claimant Mr J Sleight for the second to the fifth defendants Mr M Newton for the cross-defendant