Larson-Juhl v Jaywest [2001] NSWCA 260

Reported Decision : (2001) 11 ANZ Ins Cas 61-499

New South Wales Court of Appeal

CITATION : Larson-Juhl v Jaywest [2001] NSWCA 260 FILE NUMBER(S) : CA 40536/00 HEARING DATE(S) : 8 August 2001 JUDGMENT DATE : 8 August 2001

LARSON-JUHL AUSTRALIA LLC PARTIES : v JAYWEST INTERNATIONAL PTY LIMITED & ORS JUDGMENT OF : Handley JA at 1; Stein JA at 19; Ipp AJA at 20

LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT ED 1854/97 FILE NUMBER(S) : LOWER COURT Master Macready JUDICIAL OFFICER :

COUNSEL : T A Alexis/T C Hudson (Appellant) R A Dick (Respondent) SOLICITORS : Gells Lawyers Sydney (Appellant) Kanjian & Company Northbridge (Respondent) CATCHWORDS : INSURANCE - subrogation - scope of waiver clause - construction LEGISLATION CITED : Trade Practices Act Fair Trading Act CASES CITED: Woodside Petroleum Development Pty Ltd v H&R-E&W Pty Ltd (1999) 20 WAR 380 GPS Power Pty Ltd v Gardiner Willis and Associates Pty Ltd (2000) QCA 495 DECISION : Appeal dismissed with costs

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40536/00 ED 1854/97 HANDLEY JA STEIN JA IPP AJA

Wednesday 8 August 2001

LARSON-JUHL AUSTRALIA LLC v JAYWEST INTERNATIONAL PTY LIMITED & ORS

INSURANCE – subrogation – scope of waiver clause - construction

The proceedings arose out of a contract of the sale of the assets of a business being carried on in leased premises. The vendors continued to use part of the premises for the storage of stock. Consequently the fire and business interruption policy, which the vendors had maintained in respect of their businesses at the premises, remained in force after completion and the purchaser and its financiers were added to the policy. The parties were later required by the local council to vacate the premises because they were found to be unsafe. This triggered a claim by the purchaser under the business interruption section of the policy which the insurer met. It then brought proceedings in the name of the purchaser against the vendors and their guarantors relying on warranties in the contract of sale, and misleading and deceptive conduct prior to the sale. The defendants pleaded the waiver of subrogation clause in the policy as a complete defence. The proceedings were referred to Master Macready who upheld the defence and dismissed the proceedings. The insurer, in the name of the purchaser, appealed. HELD , dismissing the appeal: (1) Although the waiver of subrogation clause was being relied on in unusual circumstances, the rights to which the insurer claimed to be subrogated were also unusual in that the defendants were not alleged to have caused or contributed to the casualty; (2) In these circumstances there was no reason for the Court to put a strained construction on the language of the clause; (3) The duty of the Court was to construe the language of the clause fairly and simply without making any extensive or extravagant implications (as the Court was invited to do in this case); (4) Under the clause the insurer agreed to "waive any rights and remedies or relief " and there was nothing to confine the generality of these words. They covered the causes of action pleaded by the appellant. ORDERS