Allianz Australia Insurance Ltd v Inglis

Pippa Colman & Associates for Mr J Bain and Mr A Bain

[1] This is an application pursuant to s 96 of the Trusts Act 1973 (Qld). The executor of a will seeks the Court's advice as to whether or not he is justified in commencing proceedings against the insurer, AAMI, seeking an indemnity under the house and contents policy of the deceased man with respect to a personal injuries claim brought by his son.

Section 96 of the Trusts Act

[2] Section 96 of the Trusts Act provides:

"Right of trustee to apply to court for directions

(1) Any trustee may apply upon a written statement of facts to the court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee.

(2) Every application made under this section shall be served upon, and the hearing thereof may be attended by, all persons interested in the application or such of them as the court thinks expedient."

[3] Trustee is defined by s 5 of the Act to include an executor.

[4] Section 97 of the Trusts Act provides:

"Protection of trustees while acting under direction of court

(1) Any trustee acting under any direction of the court shall be deemed, so far as regards the trustee's own responsibility, to have discharged the trustee's duty as trustee in the subject matter of the direction, notwithstanding that the order giving the direction is subsequently invalidated, overruled, set aside or otherwise rendered of no effect, or varied.

(2) This section does not indemnify any trustee in respect of any act done in accordance with any direction of the court if the trustee has been guilty of any fraud or wilful concealment or misrepresentation in obtaining the direction or in acquiescing in the court making the order giving the direction."

[5] The Court of Appeal in Ban v The Public Trustee of Queensland[1] recently re‑examined these provisions. There is no bar to my giving advice, rather than determining questions between adversaries.

[6] On this application all relevant beneficiaries and other claimants on the estate were served. None of them took a different view to that of the executor. The insurer was not served. In a real sense then, I am being asked to advise the estate, rather than to make any determination between adversaries. I think that is appropriate in this case where litigation between the estate and the insurer may become protracted, although hopefully that will not be the case. The executor is a retired tradesman and the estate is a relatively small one. The High Court's observations at paragraphs [71]-[72] of Macedonian Orthodox Community Church St Petka Inc[2] are apposite here. That is, I am determining what is justifiable action in the interests of the deceased's estate and not determining rights of adversarial parties.

[7] In order to decide what is in the interests of the estate, it is necessary for me to look at the merits of the case the estate wishes to advance against the insurer. Obviously enough, it is not in the interests of the estate to bring litigation which has poor prospects of success. I therefore turn to consider the merits of the proposed action, but record that I have not heard the insurer in relation to the construction points, nor indeed have I heard any contradicter of the estate's position.

[8] The amended statement of facts filed pursuant to s 96 of the Trusts Act shows that the deceased was born in 1941 and died on 27 March 2019. He was married in the 1960s and had one child, Guy Murray, born 4 April 1968. The deceased and his wife were divorced and she took Guy to the United Kingdom and never returned to Australia. It seems that Guy also resided in the UK and did not visit the deceased man until shortly prior to the events connected with his personal injuries claim and the deceased man's death.

[9] In January 2019 Guy visited his father. At that stage his father was living alone and concerns had been raised about his health. The material on the application shows that the deceased man was apparently suffering from some sort of dementia or other illness which was affecting his mind.

[10] On 7 March 2019 the deceased man's house burnt down. The police investigated and concluded that the fire was not suspicious and that it occurred as a result of the deceased man spilling petrol in the garage and then accidentally igniting it. Mr Murray died 20 days later. Guy Murray rescued his father from the fire and has given a notice of claim under the Personal Injuries Proceedings Act 2002 (Qld).

[11] The deceased man's insurance policy provided:

The most we will pay for all claims from one incident for legal liability covered by this policy is $20 million, including all associated legal costs we have agreed to pay following your claim.

We cover your legal liability to pay compensation for death or bodily injury to other people, or loss or damage to their property, resulting from an incident which happens during the period of insurance:

● in connection with you owning or living in the building;

We do not cover legal liability caused by or arising from:

● a child ... under 18 years who is your child ...;

[12] The insurer has declined to indemnify the estate in relation to Guy Murray's personal injuries claim because it claimed that he was ordinarily resident at his father's address at the time of the incident.

[13] The material shows that Guy Murray is a citizen of the United Kingdom; travels on a UK passport and did not live in Australia between 1972 and January 2019. The statement of facts is to the effect that Guy Murray's intention was to stay in Australia only long enough to attend to arrangements for his father's ongoing care and then return either to the United Kingdom, or South Africa, where he anticipated finding work, in April 2019. He had made no application for Australian residence.

[14] The phrase "anyone who usually lives at the insured address" appears to be a plain English version of the phrase more familiar to lawyers, "ordinarily resident". There is an established meaning to this term in the case law, and my view is that the phrase the insurer relies on here should be interpreted in accordance with it.

[15] The case of Clarke v Clarke; Insurance Office of Australia Ltd[3] dealt with the phrase "ordinarily residing with". It was held that these words are to be given their ordinary English meaning. In that case a 13 year old child who had spent mathematically more time at boarding school than in her home in the 18 months before the relevant event was still found to be ordinarily residing with her parents in the family home. Smith J said:

"The duration of residence and the comparative times spent in different places or households, will, of course, commonly be of great importance, but they are not factors which are necessarily decisive. They may be outweighed by other factors ... In some circumstances, for example, a man may properly be said to be 'ordinarily residing' at a place immediately after he begins to reside there. For it may be his intention to reside there permanently and he may have severed his connexions with all previous places of residence ...

Again, if a person has once become so connected with a particular household that it would be regarded as his permanent home, an absence from it, even if of long duration and spent in only one other household, will not, in general, be regarded as changing the place where he ordinarily resides so long as the move is for a special limited purpose and is not intended to be permanent or to continue indefinitely ...

In the present case the fact that more time was being spent at boarding school than at the parents' home is, in my view, entirely outweighed by the circumstances that the infant's permanent home had at all times, until February 1960 [when she was first sent to boarding school], been with her parents, that the time spent at the school was for the special purpose of education, that the connexion with the parents' home and household had never been severed, and that they obviously intended to maintain the connexion while the infant's mode of living had remained under their control. In the light of these circumstances it is plain, I consider, that upon any view of the meaning of the policy that is fairly open the infant at the time of the accident was a person 'ordinarily residing with' her father, the insured." (my underlining)

[16] The underlined passage of the foregoing extract supports the estate's position. Mr Guy Murray was staying with his father as a visitor, for a limited period of time and with a limited purpose in mind. He had plans to depart when he had fulfilled that purpose; he had no plans to stay permanently or semi-permanently.

[17] Clarke was followed in Cardiacos v Cooper Consulting & Construction Services (Aust) Pty Ltd.[4] The question of "ordinarily reside" was discussed. Although not in an insurance context, I think the discussion is helpful and the passages contain a helpful collection of authority:

"27. ... Residence does not require continued physical presence. The dictionary meaning of 'reside' is 'to dwell permanently or for a considerable time; have one's abode for a time' (Macquarie Dictionary, rev 3rd ed (2003)), and 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place' (Oxford English Dictionary; Levene v Inland Revenue Commissioners [1928] UKHL 1; [1928] AC 217 at 222). There are many examples of a person having been found to be resident at a particular place although he or she spent the majority of his or her time away from that place. Thus a mariner might ordinarily reside at his family home, although he or she spends the majority of time at sea. A school child was 'ordinarily residing with the insured' so as to be excluded from the benefits of an insurance policy, although for the majority of time she lived away from home as a boarder at school (Clarke v Clarke ...). Numerous taxpayers have found themselves to be resident, or ordinarily resident, in one country where they have a home, although they spend the majority of their time in another at which they also have a home (eg Levene v Inland Revenue Commissioners; and Inland Revenue Commissioners v Lysaght [1928] AC 234 and the cases there cited). It is well settled that a person can be both resident and ordinarily resident in more than one place (Re Vassis; ex parte Leung [1986] FCA 21; (1986) 9 FCR 518 at 524-525; Re Taylor; ex parte Natwest Australia Bank Ltd [1992] FCA 296; (1992) 37 FCR 194 at 198; at - ).

1. Therefore, it does not follow that because from 1 October 2008 the plaintiff resided in the Phillip Street, Enmore property and was not physically present in the Cronulla property that he ceased to reside at the Cronulla property. As Weinberg J said in Logue v Hansen Technologies Ltd [2003] FCA 81 ... [26], after reviewing a number of authorities:

'What these cases, and others like them seem to establish is that the test for ordinary residence depends to a significant degree upon the state of mind of the person whose residence is in question. The language used in a number of the cases focuses upon whether the person habitually and normally resides in the jurisdiction, and does so for a settled purpose.'

1. ... In Hafza v D-G of Social Security [1985] FCA 164; (1985) 6 FCR 444, Wilcox J said at 449-450:

'As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. ...

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place, even involuntarily ... a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained continuity of association with the place (... together with an intention to return to that place and an attitude that that place remains "home" (see Norman v Norman (1969) 16 FLR 231 at 236). It is important to observe, firstly, that a person may simultaneously be a resident in more than one place ... and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.'" (my underlining)

[18] Again the underlined passages support the executor's position, in my opinion. Mr Guy Murray was a visitor, although his visit was of some considerable duration. The crucial thing is that his intention was never to do more than visit for the time it took to assist his father.

[19] In Dunning v Dunning[5] the phrase "a person who normally resides with you" in an insurance policy was considered. Harrison J cited the passage from Clarke (above). He also cited Re Taylor; ex parte Natwest Australia Bank Ltd (above) where Lockhart J noted that the words "ordinarily resident" "had no technical or special meaning, being ordinary English words and that the question was one of fact and degree". Harrison J went on to cite a passage from Rand J in Thomson v Minister of Natural Revenue[6] as to the expression, "ordinarily resident":

"The enquiry lies between the certainty of fixed and sole residence and the uncertain line that separates it from occasional or casual presence, the line of contrast with what is understood by the words 'stay' or 'visit' into which residence can be attenuated; and the difference may frequently be a matter of sensing than [sic] than of a clear differentiation of factors.

The gradation of degrees of time, object, intention, continuity and other relevant circumstances, shows, I think, that in common parlance 'residing' is not a term of invariable elements, all of which must be satisfied in each instance. It is quite impossible to give it a precise and inclusive definition. It is highly flexible, and its many shades of meaning vary not only in the contexts of different matters, but also in different aspects of the same matter. ..."

[20] The case of Williams v IS Industry Fund Pty Ltd[7] is helpful. It was an appeal from a tribunal concerning the construction of a superannuation deed, and involved the question of whether or not a 31 year old adult son "lived with" his father. For the first 20 years of his life the son lived with his parents. They divorced; he lived with his mother for five years while he attended University. He visited his father regularly. He began working for Club Med. He spent six months living and working in the Whitsunday Islands in Queensland. He returned to live with his father for two weeks, and at the conclusion of this holiday he was scheduled to commence living and working at a Club Med resort in the West Indies. Unfortunately he was diagnosed with cancer during this holiday and died relatively quickly. It was held by the Superannuation Tribunal that the son did not live with his father (and therefore that his father was not a beneficiary under the Superannuation Policy).

[21] The case is factually similar to this case. The Tribunal held that because Mr Williams (junior) was not intending to stay with his father beyond the duration of his holiday, but was intending to leave and begin his new assignment in the West Indies, he and his father did not "live together". The Full Court of the Federal Court did not find any error in the Tribunal's decision.

[22] Here the position of the executor is slightly complicated by the fact that Mr Guy Murray had a plan not to return to his residence in the UK when he had finished assisting his father, but to travel, and to work in South Africa. In rejecting the estate's claim the insurer relied on the notion that Mr Guy Murray had given up his residence in the UK, had not taken up any new residence, say in South Africa, and that therefore he must have been "ordinarily living" with his father, as he had no other residence. I do not regard this reasoning as sound. Just as a person may have more than one residence, it is possible that a person may have no residence. It seems to me Mr Guy Murray fell into this class. His intention was to abandon residence in the UK and take up residence in South Africa. He had achieved the former part of his plan, and was yet to achieve the latter. In the meantime he was visiting his father in Australia. At no time was his intention to reside or "ordinarily live" in Australia, or with his father. Like Mr Williams junior in the case just discussed, Mr Guy Murray was having a holiday, or paying a visit, before resuming a residence. It makes no difference that the purpose of the visit was to attend to his father's declining health. His intention was to stay with his father for a limited duration and a limited purpose.

[25] The relief sought by the applicant is to the effect that it is justified in commencing litigation against AAMI. I think that relief ought to be granted in a more nuanced way. It is to be hoped that the matter of indemnity could be resolved without instituting legal proceedings in the first instance.

[26] I will direct that the executor is justified in insisting on indemnity from the insurer AAMI under Policy Number HPA029266396 in respect of the claim made against it by Guy Murray for personal injuries arising out of the fire at 31 Dolphin Crescent, Noosaville QLD 4566 on 7 March 2019, including, should it become reasonably necessary, commencing litigation against that insurer, or joining it to litigation.

[1] [2015] QCA 18, [50]ff.

[2] [2008] HCA 42; (2008) 237 CLR 66 cited at [55] of Ban (above).

[3] [1964] VicRp 100; (1964) VR 773, 776.

[4] [2009] NSWSC 938.

[5] [2011] NSWSC 1278.

[6] [1946] SCR 209, 224.

[7] [2018] FCAFC 219.

[8] [2016] WASCA 25, [42].