(xv) There is one form of proposal included in the documents. It is not obviously incomplete. It is dated 16 April 1996 and in the section of the proposal seeking details of pilots, the only person nominated is Mr Collins. Details of his experience are provided.
12 There are three other documents to which reference should be made. One of these is a letter of 30 May 1996 that Mr Robinson of CIMG wrote to AAUP. The letter included the following:-
"We note that it is your intention to deny liability in respect to the claim relating to the above accident, such denial having been based on the expiry date of Cover note AV9910 (that is 11/05/96). May we point out inter alia, that on the morning of 13/05/96 that Wayne Dorgan and Len Keenan of this office visited your office to discuss the progress and ratings of the ABS scheme. You and Damien Hooper were present. At the conclusion when the meeting was breaking up, Len Keenan spoke briefly with Damien about the position of the "Tink" claim, and the proposal on "Dass", that we were awaiting.
Upon his return to this office Len wrote to Dass, letter dated 13/05/96 chasing up proposal and premium. At this time Len Keenan was in no doubt that the cover was continuing. Upon receipt of the proposal form, it was noted John Dass was not nominated as a pilot and following the ordinary course of events, this aspect of the insurance was being clarified by this office."
13 This letter is headed "without prejudice". Objection was made to this letter when it was tendered but, implicitly, counsel objecting disclaimed reliance on this endorsement.
14 The second document is a file note dated 30 May in the following terms:-
"Re John Dass
My recollection of this insurance is that on visit to AAUP on 13/5 together with Wayne Dorgan we had discussed the ABS business generally and in particular the premiums charged for 96/97 term. There would be some RP documents issued by AAUP to balance their books with those premiums charged by us in accordance with agreed scale.
At the end of meeting, as it was breaking up and as we were leaving table I spoke to Damien about 1) Tink and the claim excess 2) Dass advising prop to come. On return to office a letter was sent to Dass chasing him up - see letter of same date 13/5. Due to shortage of time there was apparently no confirmation sent to AAUP on that date.
(Written by Len Keenan)."
15 The third document is a letter of 21 June 1996 from AAUP to CIMG. It asserted, inter alia, that the only proposal received was that dated 16 April 1996 and this was received on 29 May 1996. There is nothing to suggest that the proposal was passed on to AAUP earlier.
16 It should also be noted that, apart from the file note of 13 May referred to in paragraph (xi) above, there is no more or less contemporaneous note of cover having been extended at that time. A decision on the question of whether the cover originally granted was extended depends on what inferences or conclusions should be drawn from the documents to which I have referred.
17 That note of 13 May is cryptic but that is not uncharacteristic of records of insurance effected between brokers and underwriters. In its reference "call AAUP Essendon" the note suggests that there was a call to or from CIMG and AAUP. In its statement "cover extended Damien" the note is unequivocal in its terms.
18 It was suggested I could draw an inference as to the identity of the author of that file note. One difficulty with that course arises from the fact that all that is in evidence is a photocopy of the document containing the note. As a general proposition photocopies are not something on which handwriting experts are prepared to rely. On the other hand there is a distinctiveness about the writing and it does appear to accord with that on a number of documents apparently emanating from Mr Robinson.
19 But if the handwriting is that of Mr Robinson, one may wonder at its contemporaneity, given that the meeting at which it is suggested cover was extended was attended by representatives of CIMG other than Mr Robinson.
20 From the point of view of any one wishing to contend that cover had in fact been extended, the terms of the note of 13 May referred to in paragraph (xii), in their silence, are suggestive that cover was not extended and the terms of the note of 30 May and of the passage I have quoted from the letter of that date fall a long way short of what would be regarded as desirable. They do not refer to any actual request for, or consent to, the extension of cover and in that omission the documents argue against there having been an extension of cover. If in fact there had been a communication which in express terms extended the period of cover, one would have expected that communication to have been referred to in the letter of 30 May.
21 Although in totality the matters to which I have referred mean that one cannot be confident in answering the question whether cover was extended, the conclusion at which I have arrived is that there is sufficient evidence that it was and that I should proceed in an interlocutory application on that basis.
22 I am also of the view that any extension of cover was likely to have been for a period which included the date of the plane crash, 28 May. The period stated in the original cover note was 12 April to 11 May - a month. Absent any discussion as to the period of an extension, one would imply a reasonable time and the fact that the original cover was for a month argues that that is a reasonable time.
23 I turn then to the question of the terms of that cover and more particularly whether it extended to cover Mr Collins.
24 In evidence were the terms of an insurance policy produced by AAUP in response to a subpoena which required the production of:-
"The printed terms and conditions of an aviation insurance policy or policies issued by (AAUP) for a single engine aircraft known as a Beechcraft Bonanza or similar thereto for both private use and charter in the period between 1 March 1996 and 30 May 1996."
25 The terms of the document produced included, in Section 3B:-
"(1) We will pay, up to the relevant limit of our liability stated in the Coverage Schedule" such sums which you, or a pilot authorised by you who is within the class of pilots described in the Coverage Schedule, or any employer of such a pilot who may be held legally liable for the pilot's acts or omissions, are legally liable to pay as compensation (excluding interest and legal costs awarded and punitive or exemplary damages) for accidental bodily injury (including death) of other persons or accidental damage to the property of other persons which occurs during the policy period of cover and is caused directly by the aircraft or by any person or object falling from the aircraft."
26 There is no doubt that such a clause and the effecting by Mr Dass of insurance which in terms provided cover to Mr Collins would be effective to do so - Trident General Insurance Co Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107; Insurance Contracts Act 1984 (C'th) s48.
27 However the terms of the insurance which was effected were not appropriate to cover Mr Collins. It is clear from the quotation and proposal forms, and I would infer it in any event, that the identity or at least the experience of pilots of the aircraft was a matter material to the issues of which insurance cover would be granted and if so on what terms. The information supplied to AAUP in this connection prior to the time of the crash of the aircraft identified the pilot as Mr Dass. He was the only person identified to CIMG prior to any renewal of the cover which may have occurred on 13 May. Indeed one might go so far as to say that if it was intended that Mr Collins was to be the, or a, pilot of the aircraft, the information supplied to AAUP to the effect that the "pilots" was Mr Dass was misleading.
28 Accepting that some adaptation of the wording might be required to take account of the fact that such insurance as was current at the time of the crash was pursuant to a cover note, there is nevertheless no basis upon which it could be concluded that, prior to the crash, Mr Collins was "a pilot … within the class of pilots described in the Coverage Schedule".
29 Accordingly, Mr Collins was not a person to whom any insurance cover provided by AAUP extended. Insofar as the application for leave under s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to join AAUP is based on Mr Collins being insured pursuant to the cover note and the extension of the term of cover granted under it, the application must fail.
30 This conclusion makes it unnecessary for me to consider a number of other questions which were the subject of debate during the proceedings before me. However against the possibility that the Plaintiffs may wish to appeal, there may be virtue in my saying something about some of them.
31 As I have indicated, one of the issues was whether, even if there was insurance cover which extended to indemnify Mr Collins, such extension conferred no rights on the Plaintiffs against AAUP. In that regard, s6 of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW), so far as is relevant, provides:-
"6(1) If any person (hereinafter in this Part referred to as the insured) has, whether before or after the commencement of this Act, entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability.
(4) Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action of the judgment given therein the parties shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured:
Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. … "
32 Mr Drummond, appearing for AAUP, drew attention to the fact that the section confers rights on persons who have "entered into a contract of insurance". He submitted that even if Mr Collins had been covered by the cover note issued to Mr Dass, and was by reason of the principle accepted in Trident General Insurance Co Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107 or pursuant to s48 of the Insurance Contracts Act 1984 (C'th), entitled to recover his loss from AAUP he was nevertheless not someone who had "entered into a contract of insurance" within s6. The first part of that proposition is plainly right as the judgments in Trident General Insurance Co Limited v McNiece Bros Pty Ltd recognise. The second follows from the words of the section.
33 There was also debate as to the effect of s51 of the Insurance Contract Act. So far as is presently material, that section, and section 48 which is relevant in this connection, provide:-
48(1) Where a person who is not a party to a contract of general insurance is specified or referred to in the contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends, that person has a right to recover the amount of the person's loss from the insurer in accordance with the contract notwithstanding that the person is not a party to the contract.
(2) Subject to the contract, a person who has such a right-
(a) has, in relation to the person's claim, the same obligations to the insurer as the person would have if the person was the insured; and
(b) may discharge the insured's obligations in relation to the loss.
51(1) Where -
(a) the insured under a contract of liability insurance is liable in damages to a person (in this section called the "third party");
(b) the insured has died or cannot, after reasonable enquiry, be found; and
(c) the contract provides insurance cover in respect of the liability,
the third party may recover from the insurer an amount equal to the insurer's liability under the contract in respect of the insured's liability in damages."
34 In s9 of that Act, "insured" and "insurer" are defined to "include a proposed insured and a proposed insurer respectively".
35 In light of the distinction made in s48 between the "insured" and a third party entitled to cover under a policy, and against the background of the existing legislation in s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and similar legislation in the Australian Capital Territory, it is not possible to regard the references to "insured" in s51 as intended to encompass third parties to whom cover is expressed to extend. The authors of Australian Insurance Law by Tarr, Liew and Holligan, 2nd.ed., at page 66 take a similar view.
36 In reaching this conclusion I acknowledge that it is liable to create or amount to an impediment to actual recovery by someone in the Plaintiffs' position of any verdict against such third party beneficiaries of a policy. Should the third party not be in a position to meet the verdict, but not disposed himself to sue the insurer, and an insurer be recalcitrant, a plaintiff will presumably be obliged to bankrupt the third party's estate and then induce the trustee of that estate to sue the insurer. Such a result is less than ideal but short of giving to s51 of the Insurance Contracts Act or s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), an operation which the language does not bear is, in my view, inevitable. Whether there are any other methods by which rights against the insurer may be pursued it is unnecessary for me to consider.
37 It was submitted on behalf of the Plaintiffs that CIMG was an intermediary and that accordingly it was immaterial that there had been no payment of the premium to AAUP prior to the aircraft crash. Having regard to the terms of s14 of the Insurance (Agents and Brokers) Act, that is clearly correct. As a general proposition, insurance intermediaries include insurance brokers - see s9 of that Act - and s14 does not contain the exception of general insurance brokers which is contained in s12.
38 There were also arguments whether CIMG was an agent for AAUP or a general insurance broker. A number of facsimile transmission documents emanating from CIMG had as part of their heading "Australian Bonanza Society Private Aircraft Owners Group". The cover note dated 9 April 1996 noted as the broker involved "Private Aircraft Owners Group". There were other documents referring to the "Australian Bonanza Society Insurance Program". All of these documents related to the insurance proposed for Mr Dass.
39 One document which was not so restricted was a letter of 30 May 1996 from CIMG to AAUP. It included the remark that "Overall we consider the Australian Bonanza Society business has been a profitable one with its years with the Pool …".
40 It was submitted by Mr Neil QC on behalf of Mr Kortenhorst that these documents showed a continued course of dealing whereby CIMG acted as agent for AAUP through the Australian Bonanza Society or the Private Aircraft Owners Group. They do not. They show nothing more in this connection than that CIMG had some association with, or perhaps carried on part of its business under the name or aegis of, that society or group.
41 Mr Glissan also contended that there was an arguable case that CIMG was acting as an agent for AAUP. He relied on additional documents, including letters from CIMG of 13 May and 24 June 1996. It is unnecessary for me to set these out except for one paragraph of the letter of 24 June on which Mr Glissan placed strong reliance. That paragraph reads:-
"Upon receipt of the proposal form, (although named as proposer) John Dass had not completed pilot information under Question Five for his own pilot credentials apart from those of the late Mr Collins. It is also the usual practice for ABS Members to complete a supplementary questionnaire which accompany the completed proposal forms for assessment by your office. Understanding an extension of the cover note existed at this time the additional information was sourced from the Insured."
42 Mr Glissan submitted that the paragraph demonstrates that CIMG were acquiring information for transmission to AAUP as the agent of the latter. I disagree. The passage is equally consistent with a broker, on his own account, obtaining information which an insurer does or is likely to require. There is nothing else in the letters upon which Mr Glissan relied which argues for CIMG being an agent for AAUP.
43 Mr Glissan also relied on statements made in paragraph 18 of the Statement of Claim in Mr Dass's action against CIMG to the effect that:-
(i) CIMG had accepted the premium from Mr Dass and advised Mr Dass that insurance would be effected;
(ii) The plaintiff relied upon CIMG's advice in good faith.
(iii) CIMG was authorised by AAUP to accept premiums on its behalf and to issue and/or extend cover notes.
(iv) In the circumstances CIMG was acting with the authority of AAUP as AAUP's agent in affecting the insurance cover.
(v) Alternatively by reason of the foregoing CIMG was deemed to be the agent of AAUP by operation of s11 and/or s12 and/or s14 of the Insurance (Agents and Brokers) Act 1984.