Drabsch v AMP Fire & General Insurance Company Ltd [1991] QSC 304

IN THE SUPREME COURT OF QUEENSLAND Before the Honourable Mr. Justice de Jersey BETWEEN: MALCOLM DRA.BSCH A.ND: No. 4422 of 1982 Plaintiff AMP FIRE A.ND GENERAL INSURANCE COMPANY LIMITED First Defendant MAXWELL BOURNE Second Defendant JUDGMENT - de JERSEY J. Delivered the 21st day of October, 1991 CATCHWORDS: Insurance claim - theft cover - no proof of theft - materialnon-disclosure Counsel: T. Matthews for plaintiff D. Cooper and C. Francis for defendants Hearing dates: 14th, 15th, 16th October, 1991 .; -- 1 of 7 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: AND: No. 4422 of 1982 MALCOLM DRABSCH Plaintiff AMP FIRE AND GENERAL INSURANCE COMPANY LIMITED First Defendant M.AXWELL BOURNE · Second Defendant JUDGMENT ~ de JERSEY J. Delivered the 21st day of October, 1991 The plaintiff claims $40,000 from the first defendant together with damages for breach of contract, and damages for negligence or fraudulent mis-statement against the second defendant. The claim arises out of an insurance contract taken out bf the plaintiff with the first defendant over the plaintiff's compressor, through the first defendant's agent, the second defendant. The plaintiff alleges that the compressor was stolen in or about April, 1980, during the currency of the contract of insurance, and that the contract covered him for th~ft. The first issue to be resolved is whether the policy covered theft. On the basis of the plaintiff's evidence, I find that on 13th November, 1979 the plaintiff asked the first defendant, through its agents Mr. Bourne and Mr. Voss, for -- 2 of 7 -- 2 theft cover, among others. They agreed to organise. that cover. Consistently with that, Mr. Voss issued a cover note, recording theft as one of the risks. The cover note expired on 30th November, 1979. On 23rd November, the plaintiff signed part of a proposal form, being the piece stuck on to ex. 6, and Mr. Bourne assured him, in the context of the reference on that piece of paper to "burglary", that the resultant policy should cover theft. It was therefore to that stage the common intention of• the plaintiff and the first defendant's agents Mr. Bourne an1 Mr. Voss that the contract of insurance. was to c0ver theft. The agents had referred to a "tools of trade" policy, on the basis that that would include theft cover. I aCCl=Pt the E;!Vidence of the plaintiff's wife that on 11 th January, 1980 she renewed the policy. It was renewed until 13th May, 1980, as exs. 31 and 32 show. She renewed whatever contract was then in . ~xistence. As I have said,_ that. contract_ covered theft. On the basis of the evidence of the plaintiff and his wife, and accepting as I do the plaintiff's explanations for the apparently contrary indications on exs. 6 and 8, I find that the ·fir.st · defendant agreed to give the plaintiff theft cover in relation to the compressor, wherever situated in Australia, between 13th November, 1979 and 13th May, 1980. The second issue is whether the plaintiff has established on the balance of ~robabilities that the compressor was stolen during that period. The plaintiff last saw it at Toowoomba on 9th July, 1979 when he sent it off to Max Jones at Orange. The plaintiff and his wife had a business arrangement with -- 3 of 7 -- 3 Mr. Jones. The evidence discloses very little about what subsequently happened to the compressor. It was the parties' intention to use it as a "trade-in" for a new T4 rig being purchased from . Ingersoll-Rand, but that did not eventuate, Mr. Jones company. selling another compressor One might therefore infer of his own to that that this compressor remained with Mr. Jones. One proceeds on the basis that Mr. Jones lawfully gained possession of the compressor in ·about July, 1979. There is as I have said little evidence about what happened to it after that. The plaint~ff said that he looked for it, unsuccessfully, in February, 1980l and that in November, 1979 he had sent two of his employees to New South Wales to recover the machine. There was however ~o evidence of what they did, or, for that matter, as.to what the plaintiff did. The only other evidence about the machine concerned events seven years later in 1986. Mr. Williamson's evidence was that in about 1986 he made it known in the industry that he wanted to acquire such a compressor. He said that Mr. Jones telephoned him. After that, some documents arrived, apparently from Mr. Jones, including a photograph and a specification list which he "believed" concerned the plaintiff's compressor. Having heard his evidence on the point, I am not satisfied that that belief was soundly based. But even if Mr. Jones was thereby drawing Mr. Williamson's attention to the plaintiff's compressor, I would not be prepared to conclude on the balance of probabilities that Mr. Jones had fraudulently converted or stolen it. There is no evidence that Mr. Jones was himself -- 4 of 7 -- 4 offering to sell the machine to Mr. Williamson. Further, in June or July, 1979, the plaintiff had given Mr. Jones a power of attorney. Al though the plaintiff revoked that power of attorney on 5th November, 1979, he did not give notice of that revocation to Mr. Jones. It may be, for argument's sake, that Mr. Jones sold the machine as the plaintiff's attorney after receiving it in July, 1979, and having kept track of it, subsequently drew it to Mr. Williamson's attention in 1986. I am not speculating as to what occurred. I mention that as something which might, possibly have occurred, that being relevant in a case like this, described by counsel as circumstantial. There is no evidence which l ·accept which establishes on the balance of probabilities that the compressor was stolen, let·alone stolen within the currency of the policy - between 13th November, 1979 and 13th May, 1980. That the plaintiff believed Mr. Jones or someone else had stolen the machine is not presently to point. The plaintiff bore the onus of establishing cl: theft on the balance of probabilities. There was no evidence from those who may have looked for the machine at various times: as I have pointed out, the plaintiff's own efforts in that regard were not even the subject of any detailed evidence. During the trial I alerted Counsel for the plaintiff to my tentative view of the sparsity of the plaintiff's case oh theft, and that led to a late attempt to tender evidence under s. 92 of the Evidence Act as to efforts of a private investigator to recover the compressor. I was not prepared to admit that evidence for reasons which appear -- 5 of 7 -- 5 in the transcript (pp. 143-4). Obviously I may not speculate about what may have happened to the machine. There is simply no evidence from which I am prepared to conclude on the balance of probabilities that it was stolen, and stolen within the currency of the policy. therefore fail. The plaintiff's claim must The first defendant also opposed the claim on the ground of its avoidance of the policy ( effected through the pleadings) because of material non-disclosure. Because of the views I have expressed on the more fundamental point, I will not go into this further matter in any detail. I will however record my view that the first defendant was entitled, in the alternative, to succeed in this defence. The plaintiff. failed to disclose these material facts: that he had. breached his equipment lease_ with FNCB-Wal tons by parting with possession of the compress9r without its wri tt.en consent; that he had breached • that lease by leaving the compressor uninsured for the preceding five months or so; and that he had unsuccessfully sought to recover possession of the compressor ,· from Mr. Jones. Those· circumstances would in my opinion have affected the first defendant's willingness to insure the compressor, or at the premium exacted, especially in the context of Mr. Jones I s having a power of attorney from the plaintiff. They reflected an uncertainty about the security of the compressor :which would have caused any prudent insurer to hesitate before taking on the risk. -- 6 of 7 -- 6 There will be judgrnent for the first and second defendants against the plaintiff with costs including any reserved costs to be taxed. -- 7 of 7 --