Admiral International Pty Ltd v Insurance Australia Ltd [2022] NSWCA 277

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Admiral International Pty Ltd v Insurance Australia Ltd [2022] NSWCA 277 Hearing dates: 26–27 September 2022 Date of orders: 20 December 2022 Decision date: 20 December 2022 Before: Bell CJ at [1]; Ward P at [274]; Macfarlan JA at [275] Decision: 1. Appeal in the CGU proceedings allowed in part. 2. Appeal in the Brightcity proceedings allowed in part. 3. In the CGU proceedings, set aside orders 1–3 of the orders made by the primary judge on 8 November 2021. 4. In the Brightcity proceedings, set aside order 5 of the orders made by the primary judge on 8 November 2021. 5. Direct that the parties file Short Minutes of Order consequent upon the reasons of the Court, together with any submissions (of not more than three pages) on the question of costs, with the Chief Justice's Associate by 4.00pm on 27 January 2023, with any outstanding questions as to orders and costs to be determined on the papers. Catchwords: APPEALS – from findings of fact – circumstantial proof – inferences from primary facts – where insurer denied claim on basis of insured's knowledge of and connivance in and consent to theft and arson – whether controlling mind and will of insured company had requisite knowledge – primary judge's reasoning circumstantial and based on inference – whether strands of primary judge's reasoning were capable of sustaining ultimate conclusion INSURANCE – property insurance – industrial and special risks cover – liability cover – fraud – theft from and subsequent arson of bonded warehouse – where insurer denied claim on basis of insured's knowledge of and connivance in and consent to theft and arson – whether controlling mind and will of insured company had requisite knowledge – primary judge's reasoning circumstantial and based on inference – whether strands of primary judge's reasoning were capable of sustaining ultimate conclusion – whether insurer's denial of indemnity and allegation of arson were a breach of insurer's duty of utmost good faith implied by s 13 of the Insurance Contracts Act 1984 (Cth) – whether insured was entitled to recover damages for consequential loss – whether insured had failed to take reasonable precautions to secure warehouse INSURANCE – measure of indemnity – loss – business interruption cover – where forensic accounting experts disagreed on whether insured company had positive revenue growth trend – where primary judge held that there was no such trend – where primary judge held that insured company had concrete prospects of procuring new customers – whether evidence supported finding that there was no positive growth trend in insured's revenue – where Court must do the best it can with the evidence available to assess damages Legislation Cited: Crimes Act 1900 (NSW) s 197(1)(b) Customs Act 1901 (Cth) ss 35A, 77G, 79 Evidence Act 1995 (NSW) s 140(2) Insurance Contracts Act 1984 (Cth) ss 13, 56 Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW) r 25.1 Supreme Court Act 1970 (NSW) s 75A Trustee Act 1925 (NSW) s 69 (repealed) Uniform Civil Procedure Rules 2005 (NSW) rr 14.14, 15.3, 15.4 Cases Cited: Almona Pty Ltd v Parklea Corporation Pty Ltd (2021) 392 ALR 457; [2021] NSWCA 171 Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 Ballard v Multiplex [2012] NSWSC 426 Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 Barrie Toepfer Earthmoving and Land Management Pty Ltd v CGU Insurance Ltd (2016) 75 MVR 108; [2016] NSWCA 67 Booksan Pty Ltd v Wehbe (2006) 14 ANZ Ins Cas 61-678; [2006] NSWCA 3 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Clancy v Plaintiff A (2022) 318 IR 31; [2022] NSWCA 119 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Comptroller-General of Customs v Zappia (2018) 265 CLR 416; [2018] HCA 54 ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 Fairfax Digital Australia & New Zealand Pty Ltd v Kazal (2018) 97 NSWLR 547; [2018] NSWCA 77 Fraser v B N Furman (Productions) Ltd [1967] 1 WLR 898 Gett v Tabet (2009) 254 ALR 504; [2009] NSWCA 76 Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470; [2019] NSWCA 27 Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61 John v Federal Commissioner of Taxation (1989) 166 CLR 417; [1989] HCA 5 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68 Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390 Libke v The Queen (2007) 230 CLR 559; [2007] HCA 30 Minister Administering the Crown Lands (Consolidation) Act and Western Lands Act v Tweed Byron Aboriginal Land Council (1990) 71 LGRA 201 Motor Accident Commission v Dinh (2015) 124 SASR 344; [2015] SASCFC 184 Mt Pleasant Stud Farm Pty Ltd v McCormick [2022] NSWCA 191 Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170; [1992] HCA 66 New South Wales v Hathaway [2010] NSWCA 184 Palmer v Dolman [2005] NSWCA 361 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10 President of India v Lips Maritime Corporation [1988] AC 395 Queensland v Commonwealth (1977) 139 CLR 585; [1977] HCA 60 Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679; [2016] HCA 22 Sgro v Australian Associated Motor Insurers Ltd (2015) 91 NSWLR 325; [2015] NSWCA 262 Skelton v R [2015] NSWCCA 320 Sprung v Royal Insurance (UK) Ltd [1999] 1 Lloyd's Rep IR 111 Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 Versloot Dredging BV v HDI Gerling Industrie Versicherung AG [2017] AC 1; [2016] UKSC 45 Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 White Constructions Pty Ltd v PBS Holdings Pty Ltd [2020] NSWCA 277 Worth v HDI Global Specialty SE (formerly International Insurance Company of Hannover SE) (2021) 393 ALR 93; [2021] NSWCA 185 Texts Cited: J D Heydon, Cross on Evidence (13th Australian ed, LexisNexis Butterworths, 2021) Category: Principal judgment Parties: In proceedings 2021/341356: