Patrick v Insurance Australia Limited
[2015] QDC 107
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- Unreported Judgment
- Patrick v Insurance Australia Limited[2015] QDC 107
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Patrick v Insurance Australia Limited[2015] QDC 107
Patrick v Insurance Australia Limited[2015] QDC 107
DISTRICT COURT OF QUEENSLAND
CITATION: | Patrick v Insurance Australia Limited [2015] QDC 107 |
PARTIES: | WILLIAM PATRICK (plaintiff) v INSURANCE AUSTRALIA LIMITED TRADING AS NRMA INSURANCE (ABN 11 000 016 722) (defendant) |
FILE NO/S: | 278 of 2015 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 15 May 2015 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 4 May 2015 |
JUDGE: | Reid DCJ |
ORDER: |
|
CATCHWORDS: | Application for summary judgment – claim for insurance – claim for property damage – whether damage was covered by insurance policy – where the defendant has “no real prospect” of successfully defending the claim – question for trial judge – application to modify statement of claim – relief sought for aggravated, consequential and exemplary damages – where a jury trial is sought to assess such damages – where separate trials are inappropriate |
COUNSEL: | The plaintiff appeared in person, represented by his father, H. Merolla A. Harding for the defendant |
SOLICITORS: | MCK Lawyers for the defendant |
INTRODUCTION
- [1]In this action the plaintiff seeks:
“1. Damages for breach of contract of $271,324.40 being the cost to repair the insured buildings, or in the alternative;
- 2.Damages in negligence from the defendant of $271,324.40 being the cost to repair the insured buildings, or in the alternative;
- 3.Damages of $271,324.40 being the cost to repair the insured buildings; based on the erroneous denial of the plaintiff’s insurance claim, due to the application of a flood clause exclusion, incorrectly applied to the plaintiff’s insurance policy;
- 4.Loss of rent, 18 months $36,370.50;
- 5.$127,445.30 interest pursuant to s 58 of the Civil Proceedings Act 2011 (Qld);
- 6.$11,000.00 for the cost of conducting the defendant’s internal review carried out by Scoglio law on behalf of the plaintiff.”
- [2]Before me the plaintiff applied for summary judgment. The application for summary judgment is specifically confined to the plaintiff’s claim that even if an exclusion for damage suffered due to flooding applies as the defendant asserts, that in fact the damage was not so caused. This part of the claim is set out in paragraphs [35] to [39] of the Statement of Claim and relates to sub-paragraph [3] of paragraph [1] hereof.
- [3]The plaintiff also sought orders:
“2.The court allows the plaintiff to modify the statement of claim to add new headings for relief sought for ‘aggravated, consequential and exemplary damages’
- 3.The matter is referred to a jury trial to determine the matter of the alleged fraud in the statement of claim, and allow the jury to determine the amount of exemplary damages.”
BACKGROUND
- [4]The plaintiff was the owner of a property damaged by what might be called the Brisbane floods of January 2011. The defendant was the insurer of the property. I gave leave to the defendant’s father, Mr Merolla, to represent him before me. That was not opposed, and was appropriate because the plaintiff suffered a number of congenital medical conditions which limited his capacity to represent himself, although it is not suggested he in any way lacks capacity.
- [5]The pleadings raise a number of issues about whether the policy excluded cover for the damage suffered. There is a significant ongoing dispute as to the content of the policy and of representations said to have been made by the defendant on a website said by the plaintiff to be referred to in the policy documents. Much of that dispute involves the claims made in sub-paragraphs [1] and [2] of the claim, set out in paragraph [1] hereof.
- [6]In the parts of the Statement of Claim, on which the plaintiff relies on its application, the plaintiff asserts that it was not river flood, but a combination of rain, run off and storm water that damaged the plaintiff’s property. The reason the plaintiff, in those parts of the Statement of Claim refers to “river flood” and to the “flood” exclusion is because in a letter of 4 July 2011 (being Exhibit “H” to the affidavit of the defendant) written by the defendant to the plaintiff’s then solicitor, the defendant asserted that damage caused by flood was specifically excluded by the contents product disclosure statement and policy booklet and that the damage was so caused. The letter states:
“In your client’s [policy], under the heading of “WHAT YOU ARE COVERED FOR”, the policy lists the incidents for which cover is provided. The details of cover are outlined on pages 6 to 17 and while the incident of “Storm” is covered, damage caused by flood is specifically excluded (see pages 15 and 35 of your [policy]). Cover for storm includes damage caused by sudden and excessive run off as a result of storms in your client’s local area.
In your client’s case, the expert advice confirms there was no significant rain in the local area at the time of the flooding. Rather, the flooding was caused by rain upstream in the upper catchments west of Brisbane which some time later overflowed the banks of the Brisbane River downstream and caused damage to the property.”
- [7]Despite the contents of that letter, the defendant in fact, in an Amended Defence filed only on 29 April 2015, after the filing of the application before me, now appears to rely on a significantly different contract of insurance, and consequently different terms of the applicable policy, to deny its liability. Paragraph 7(d) of the Amended Defence alleges that the terms of the policy provide:
“What you are covered for
Storm
…
however
- we will NOT cover loss or damage caused by flood
Water – leaking or escaping
If your home or contents suffer loss or damage caused by water leaking or escaping from
- pipes
we will under contents insurance
- replace or repair your damaged contents
we will under buildings insurance
- rebuild or repair that part of your home that was damaged
however
- we will NOT cover loss or damage caused by water leaking or escaping from a …
- stormwater channel or canal
- stormwater pipe off the site
What you are not covered for
- general exclusions
we will NOT cover
- Loss, damage, injury or death that occurs as a result of
- flood
flood is the covering of normally dry land by water escaping or released from the normal confines of a watercourse or lake, whether or not it is altered or modified. Flood also includes water escaping from the confines of any reservoir, channel, canal or dam.
Flood is not covered by this Policy.”
- [8]In submissions before me counsel for the defendant submitted that in this case it was at least arguable that the damage to the plaintiff’s property was caused by flood or, alternatively, by water leaking or escaping from a storm water channel or canal, or stormwater pipe off the site. In formulating that submission counsel pointed to the affidavit evidence of the plaintiff’s father, Mr Hugo Merolla, an engineer, of what he observed of the commencement of water ingress onto his son’s property immediately preceding the water damage thereto.
- [9]That affidavit suggests it is reasonably likely that the damage to the property was caused by water from the Brisbane River forcing its way up the stormwater system – both up canals or channels and also up stormwater pipes – and then flowing onto the plaintiff’s property.
- [10]Mr Merolla submitted the proper characterisation of this ingress of water onto the property was that it was not within the ambit of the term “flooding” as used in the policy and was also not water “leaking or escaping from pipes” onto the property, or from a “stormwater pipe off the site”.
- [11]He submitted the exclusions in the policy were to cover the situation where water flowing down the stormwater drainage system as designed for, escaped from the system during its downward flow, and not to the situation where, as here occurred, water flowed up the system from a swollen river downstream of the subject property. He relied, in making this submission, on the decision of Jackson J in LMT Surgical P/L v Allianz Australia Insurance Ltd [2013] QSC 181.
CONSIDERATION
- [12]In my view it could not be said on the evidence before me that this was a case in which it was appropriate to grant summary judgment. It could not be said that the defendant has “no real prospect” of successfully defending the claim, to adopt the words contained in r 292(2)(a) of Uniform Civil Procedure Rules 1999 (Qld). The cases emphasise the need for the Court to adopt a careful approach in such an application. In my view it could not be said that there is no need for a trial of the claim in this matter, which necessarily involves conflicts of fact and disputed issues of law.
- [13]It may be ultimately that the plaintiff succeeds, and it might be said that the argument presented on behalf of the plaintiff by his father constitutes a strong case. Ultimately, however, I think that that is a matter for a trial judge. Among other issues, I am reluctant to determine that the plaintiff would inevitably ultimately succeed without the need for a trial because of uncertainties concerning the exact policy document and disputes as to whether or not the damage suffered by the plaintiff could be said to be caused by water leaking or escaping from a stormwater pipe off the site of the plaintiff’s property or from a stormwater channel or canal. Those it seems to me are factual matters about which evidence must necessarily be given, and which involve issues of construction of the wording of the policy.
- [14]In the circumstances it is my view that this is not an appropriate case for the granting of summary judgment.
CLAIM FOR DAMAGES AND JURY TRIAL
- [15]The application also concerned a proposed amendment to the claim, to claim aggravated, consequential and exemplary damages. That application was not opposed.
- [16]The plaintiff also seeks an order for a jury trial in respect of the assessment of those damages i.e. the damages the subject of the amendment. In the original pleadings no jury was sought. The plaintiff limits his claim to a jury trial only of the claim for aggravated and exemplary damages. His father indicated to me in the course of submissions that he thought that this should be determined separately from the issue of liability and of damages as sought in the initial Statement of Claim, that is, he sought the appointment of a jury only for the purpose of assessing aggravated or exemplary damages.
- [17]In my view it would not be appropriate for a jury to be so appointed. It is not the practice in Queensland for there to be separate trials of liability and quantum, except in unusual circumstances. Indeed, the practice, generally, has been against the determination of separate issues on separate trials. In my view it would not be appropriate for issues of primary liability and damages to be determined separately from aggravated or exemplary damages as the plaintiff seeks. To do so would unduly delay the determination of the matter, there would undoubtedly be much replication of evidence and consequential additional costs.
- [18]In the circumstances the application for a trial by jury of the question of aggravated or exemplary damages should be refused.
OTHER ISSUES AND ORDERS
- [19]Before leaving this matter, I should say that I indicated in the course of argument that it was in my view appropriate if the summary judgment application was refused, for this case to be listed in the commercial division of the court. I propose to so order. Because of difficulties associated with a proper enunciation of both the claim and the defence, it is in my view also appropriate that the following steps be carried out:
- 1.The defendant within 14 days provide to the plaintiff a letter:
- (a)attaching a copy of the policy document on which the defendant relies in this action;
- (b)setting out the clauses thereof on which the defendant relies to assert it is not required to indemnify the plaintiff in respect of any loss or damage;
- (c)referring to any expert reports on which it relies to assert that damage to the plaintiff’s property is not covered by the terms of the attached policy document.[1]
- 2.Within a further period of 14 days the plaintiff file and serve an Amended Statement of Claim, including the pleading of the facts on which the plaintiff relies in respect of his claim for damages;
- 3.Within a further period of 14 days, the defendant file and serve any further Amended Defence to the Amended Statement of Claim;
- 4.Within a further period of 14 days, the plaintiff file and serve any Amended Reply;
- 5.Within a further period of 14 days, each of the parties file a list of disclosable documents;
- 6.The parties exchange any documents requested by the other party within a further period of 14 days;
- 7.Within 14 days of the exchange of such documents, the matter be listed before a commercial list judge for further review by either party giving three days’ written notice to the other;
- 8.Liberty for either party to apply to a commercial list judge for further orders upon giving five days’ notice in writing to the other party.
- [20]Having considered the application before me, and the uncertainty demonstrated as to the appropriate policy document, it is in my view imperative that a paginated list of documents on which the parties intend to rely at the trial be prepared and provided to the trial judge, seven days prior to the commencement of the trial and further documentation be admitted at the trial only with the leave of the trial judge. Thus, that all documents on which the parties intend to rely should be included in the paginated bundle. This of course would not obviate the need for expert or other evidence to be given, or obviate the need for the parties to give oral evidence as to the circumstances surrounding the formulation of the contract of insurance between the plaintiff and the defendant. Rather, the purpose of that bundle of documents would be to ensure there can be no dispute as to the contents of documents on which the parties intend to rely at the trial.
- [21]Whilst the application for summary judgment is refused, I reserve the question of costs of the application to the trial judge.
Footnotes
[1] I make such an order because it is clear the defendant does not now rely on the letter of 4 July 2011 in which it sets out the attitude it then held to the matter.