Max Hams & Anor v CGU Insurance Limited [2002] NSWSC 716

New South Wales Supreme Court

CITATION : Max Hams & Anor v CGU Insurance Limited [2002] NSWSC 716 FILE NUMBER(S) : SC 50022/01 HEARING DATE(S) : 31/7/02 JUDGMENT DATE : 15 August 2002

Max Hams (First Plaintiff) PARTIES : Judith Hams (Second Plaintiff) CGU Insurance Limited (Defendant) JUDGMENT OF : Einstein J

COUNSEL : Mr M Cashion SC, Mr J Lawrence (Plaintiffs) Mr PW Taylor SC (Defendant) SOLICITORS : Maurice Blackman Cashman (Plaintiffs) Deacons (Defendant) CATCHWORDS : Damages - Causation Jones v Dunkel (1959) 101 CLR 298 CASES CITED : TNT Management Pty Ltd v Brooks (1979) 23 ALR 345 West v Government Insurance Office of NSW (1981) 148 CLR 62 DECISION : Short minutes to be brought in.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

Einstein J

Thursday 15 August 2002

50022/01 Max Hams & 1 Ors v CGU Insurance Limited JUDGMENT Supplementary Judgment 1 A reserved judgment was delivered in these proceedings on 12 April 2002. The Judgment granted leave to the parties to address further submissions on any claim or matter arising from the findings which may not have been dealt with. 2 Pursuant to that leave the defendant on 24 May 2002 filed a motion seeking leave to further cross-examine Mr Sinclair on particular matters and an order granting leave to adduce further affidavit evidence in chief concerning those same matters and concerning the scope and amount of the property damage caused by the initial inundation found in paragraphs 166 and 167 of the reasons for Judgment. 3 The parties were directed to serve written submissions concerning the factual findings for which they contend on the existing evidence in relation to the cause of damage and the amount recoverable for that damage. The matter became not only the subject of written submissions, but further the subject of oral address on 31 July 2002. 4 Senior counsel for each of the parties accepted that it was appropriate in the first instance and by way of a threshold determination, for the court to initially deal with the findings which are appropriate on the existing evidence. At the same time it would be possible for the court to state whether, and if so for what reasons, and in relation to what matters, it may be appropriate for leave to reopen the existing evidence to be considered. Both senior counsel seemed to be of the clear view that the most efficient way forward was to approach the matter in this way and to leave to the side for the time being, questions going to applications capable of being pursued by either side for leave to reopen the evidence. 5 To a considerable extent the reasons which follow adopt the submissions put by the plaintiffs on 31 July 2002. The onus of proof 6 Clearly the plaintiffs bear the onus of proving that their claim falls within the insuring clause in the policy of insurance. This matter is not in issue. It was dealt with in the Judgment at paragraph 60. 7 What is in issue concerns the defendant's assertion that the destruction, loss or damage to the plaintiffs property was caused by an excluded event, namely "Flood" as defined in the policy. Clearly in that regard and as the defendants accept, the onus of proof lies upon the defendant. The logical way forward 8 The next appropriate step is to review the existing evidence in order to determine whether, and if so to what extent, the defendant has discharged that onus of proof. Leaving aside the "lakes" argument on which the defendant has been unsuccessful, the defendant will have discharged that onus if the evidence establishes that the damage to the plaintiffs' property was caused by waters which inundated the property which: · emanated from the arrival of waters which had escaped from Treloar Creek or from Scour Lake; or · did so because of the causal presence of such waters 9 As the Judgment makes clear, after an extensive review of the hydrology evidence, the court was not satisfied on the balance of probabilities that the defendant had established that the waters which inundated what was (aside from the woolshed), the highest flooded building, namely the Homestead, at 6:00pm on Monday 21 February 2000 and for the next few hours, satisfied either of these requirements. At paragraphs 142 and 143 of the Judgment the following appears: