8 All communications with the individual property owners went from SSAA Insurance Brokers Pty Limited to RWA Insurance Brokers. RWA was a rural broker, with contacts through the rural industry in New South Wales and Queensland."
39 The evidence does not otherwise reveal directly by whom SSAA Brokers was retained nor what the nature of its role was.
40 The insurers submitted that I should find that the role of SSAA Brokers was that it was, in accordance with common insurance practice, a "placing broker". The submission was made that, in that role, SSAA Brokers were acting for, and were the agents of, the cross claimants.
41 The evidence from which it was submitted that I would draw such a conclusion is Exhibit XCJ. That is a document dated 26 October 2001 in which SSAA Brokers write: "We confirm having placed insurance as follows ……".
42 Exhibit XCJ clearly refers to a different policy for a different year than the QBE policy. The fact that it was apparently a predecessor policy to the QBE policy does not assist in the drawing of any relevant inference. However, the fundamental difficulty seems to me to be that the mere statement that SSAA Brokers "confirm having placed insurance" is insufficient in its terms to indicate for whom it was placing the insurance nor whose agent it was in acting as it did.
43 This is a matter upon which I would have expected some direct evidence to be led. The Insurers tendered the statement of Mr Rob Low. At all relevant times, Mr Low was the principal executive of SSAA Brokers. He was the person best placed to give direct evidence as to the role of SSAA Brokers. His statement contained no evidence addressed to this issue. Instead, reliance was placed upon an inference to be drawn from Exhibit XCJ to the effect that SSAA Brokers were acting as placing brokers, and therefore the brokers for, and agents of, the cross claimants. The absence of evidence from Mr Low, whose statement was in evidence, would tell strongly against drawing the inference which the Insurers seek: see Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418E - 419C per Handley JA.
44 I am fortified in this conclusion by two things. The first is that the Insurers led no evidence to establish any industry practice addressed to the question of the function and role of a placing broker. An inference that SSAA Brokers were a placing broker would not carry with it an automatic conclusion as to what its function and role was without additional evidence. The second matter which fortifies my conclusion is that no question was asked of Ms Vasic by Mr McCulloch SC for the Insurers to suggest that SSAA Brokers was acting in the course of this transaction as her agent either because she had retained it or because RWA had retained it.
45 I am not prepared to draw an inference from Exhibit XCJ either alone, or in the context of all of the other evidence that SSAA Brokers were a placing broker with respect to the QBE Policy. It follows that I am not prepared to equate the knowledge of SSAA Brokers with the knowledge of the Cross Claimants.
46 Available Evidence: Given the necessity for mutuality of knowledge as the authorities demonstrate, not all of the material relied upon by the Insurers can be used as material demonstrating the existence of surrounding circumstances which may aid in the exercise of construction and interpretation of the QBE Policy.
47 Both of the cross claimants are named as the joint insureds under the QBE Policy. Although strictly speaking it was only necessary for the first cross claimant to be a named insured because the second cross claimant was apparently her employed manager and would have been covered as a result of the terms of the policy, because both cross claimants were joint insureds, it is necessary for the Insurers to demonstrate the knowledge of both cross claimants for the Court to have regard to it when interpreting the terms of the QBE Policy.
48 It is clear that there was an earlier policy of insurance and that was known to the cross claimants. The first completed proposal before the Court is dated 14 January 2001 (Exhibit XCM). Mr Fairey gave evidence that it was some time after he commenced living on the property in 1999 that he was approached to permit shooters to visit the property for that purpose. Permission was sought from his sister, Ms Vasic, who gave evidence that having received the request, initially rejecting the proposal, but subsequently accepting it, she arranged insurance with the Insurers for the property. Exhibit XCE (which came to the attention of RWA, the broker for the cross claimants) makes it plain that there is a renewal of a policy. Exhibit XCC proves that there was an earlier policy with an entirely different policy number which provided coverage for:
THE INSURED'S (sic) FOR LEGAL LIABILITY TO THIRD PARTIES FOR BODILY INJURY AND/OR PROPERTY DAMAGE CAUSED BY AN OCCURRENCE IN CONNECTION WITH THE INSURED'S ACTIVITY IN ALLOWING HUNTERS ON THEIR PROPERTIES - PROPERTY OWNER COVER ONLY
49 The Insurers also rely upon the documents which became Exhibits XCK and XCL. These Exhibits relate to a policy of insurance obtained by the Cross Claimants from Wesfarmers Federation Insurance Limited ("Wesfarmers") for the period 21 July 2002 to 21 July 2003. The Insurers point to the fact that the cross claimants took out a policy with Wesfarmers ("the Wesfarmers policy"). Coverage under that policy was obtained for Farm Legal Liability, which excluded from coverage: " … any personal injury caused by or arising directly or indirectly from any activity involving the use of a firearm". The Insurers argue that this is a relevant surrounding circumstance as it indicates or tends to indicate that the policy issued by the Insurers was to cover a gap in the Wesfarmers' policy.
50 I do not regard the Wesfarmers' policy as a fact which is available to be taken into account in assisting with the interpretation of the QBE policy. It is sufficient for me to reach this conclusion by pointing to the absence of any evidence proving, or tending to prove, any knowledge at all resting in either the Insurers or their broker and agent, Concord, of the existence of this policy whether the insureds were the Cross Claimants or some other insureds. Although there was some evidence, to which I refer below, of a market research exercise undertaken by SSAA Brokers, even assuming that their knowledge was that of the Insureds, there is still no evidence suggesting that the contents of the Wesfarmers policy and in particular the wording of the exclusion clause was ever in fact taken into account in preparing the QBE policy.
51 Finally, in terms of surrounding circumstances, the Insurers rely upon the evidence contained in the statement of Mr Low. I have already dealt with those parts of the statement which describes the identities of the various participants and the arrangements by which the QBE Policy seems to have come about. I have not yet dealt with para 10 of the statement which is in these terms:
"This insurance cover was one developed by me as Chief Executive of SSAA Insurance Brokers Pty Limited, as a gap cover insurance for the purpose of covering rural landowners for their liability for negligence to licensed shooters while out hunting on their properties. The policy was developed in the late 1990's, as it became apparent that some public liability policies excluded cover for incidents arising from the use of firearms on rural properties and excluded indemnity for the property owner's liability to licensed shooters. We did market research and noted that while approximately 80% of policies provided cover, that there was a gap in the market for the other policies, and that a new cover should be made available. The gap insurance was to provide cover in relation to liability to licensed shooters that is excluded from public liability policies held by persons owning or operating rural properties."
52 I would not be prepared to hold that the contents of para 10 of Mr Low's statement constituted a surrounding circumstance which may affect the construction of the QBE policy.
53 Mr Low is not said by the Insurers to be their agent. I have held that I am not satisfied on the evidence that he was the agent of the Cross Claimants. Consequently, his knowledge and intentions don't satisfy the requirements of mutuality of knowledge so as to be relevant. As well, the material in para 10 of his statement is largely an expression of his subjective intention and purpose and of his own conduct. It is not material which the Court is entitled to take into account in looking at surrounding circumstances: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40]. Finally, the material to which he refers is not material which would ordinarily be known by or available to people who are not expert in the insurance field. The Cross Claimants did not fall into that category. I do not see that it would be reasonable to impute to them that specialist knowledge.
54 Conclusion: The highest on the evidence of surrounding circumstances which can be material to be relied upon is the contents of Exhibit XCC which demonstrates, with respect to a previous policy, that the coverage clause was different and that difference involved: