FERRCOM PTY LTD v INBUSH (NSW) PTY LTD and ANOR [1996] NSWCA 184

FERRCOM PTY LTD v INBUSH (NSW) PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

COLE and BEAZLEY JJA and COHEN AJA

4 December 1996, 6 December 1996

[1996] NSWCA 184

DAMAGES — causation — Giles J's finding that not established upheld.

Cole JA The history of this litigation is to be found in the judgments in Ferrcom Pty Ltd v Commercial Union Assurance Co of Australia Ltd!, Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd? and Ferrcom Pty Ltd vy Commercial Union Assurance Co of Australia Ltd3. Following the proceedings in the High Court the matter was referred back to the Court of Appeal and thence to the Commercial Division to determine whether there remained extant the issue whether Ferrcom had sustained loss as a result of the breach of duty by the broker or agent, Inbush or Mr Green (whom I shall collectively refer to as "the brokers"). Giles J held in a judgment delivered 11 May 1994 that the issue remained unresolved, that the conduct of the initial proceedings bad not disentitled the broker from maintaining the submission that Ferrcom had failed to establish it had suffered damage as a result of the breach found and further, after another hearing, that the submission should be upheld thus resulting in a verdict for the broker. In case he were held to be in error, Giles J dealt with the cross-claim by Inbush and Mr Green against C E Heath as their insurers and held that that cross-claim failed.

Ferrcom has appealed against the decision of Giles J. To protect itself against the risk of that appeal being upheld, Inbush and Mr Green have appealed against the rejection of their cross-claim against C E Heath. It is necessary to address this latter appeal only in the event of Ferrcom's appeal being successful.

Giles J found that in 1987 Mr Green had arranged a policy of insurance for the crane as a piece of unregistered mobile machinery. That policy covered the owner of the crane against loss from overturning. He found that Mr Green told Mr Ferrarese of Ferrcom to let him know if the vehicle was to,be registered in which event he would "fix the insurance". The mobile crane became a registered vehicle on 21 May 1987. Mr Ferrarase told Mr Green that fact and asked him to "fix up the insurance" which Mr Green said he would do. However he did not inform the then insurers, Commercial Union, of the registration of the crane. As this Court and the High Court held, that circumstance relieved Commercial Union from liability under the policy. There was thus a clear breach of the duty of care owed by the brokers to Ferrcom. The remaining question was whether it was established by Ferrcom that the proven breach caused it loss. Whether Ferrcom suffered loss caused by the breach depended upon whether, absent breach of duty, Ferrcom would have obtained a policy of insurance which gave cover against