These proceedings arise out of the daytime robbery on 18 March 2019 at a community centre run by the appellant near Wollongong during which cash stored in a safe at the premises was stolen.
The appellant is an incorporated association run by volunteers. The respondent was its insurance broker. That relationship commenced in 2014.
At the hearing of this appeal against the dismissal of its claim against the respondent, Mr Parnis, the President of the appellant, told us that the amount claimed to be stolen was $10,000 (the amount, originally, claimed in these proceedings was $11,500).
The appellant did not bring this appeal within the 28 day time limit prescribed by the Civil and Administrative Tribunal Rules 2014 (Rule 25 (4) (c)). Despite the considerable delay in commencing the appeal, for the reasons below, we think the necessary extension of time should be granted pursuant to the power to extend time contained in s 41 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act).
The appellant commenced proceedings in the Tribunal against the appellant in September 2019, having been informed by the respondent that the appellant's business insurance policy with Zurich Australian Insurance Ltd did not cover the risk. The first year of cover under this policy, arranged by the respondent for the appellant, was the 2014/2015 insurance year. The appellant arranged renewals of this insurance for subsequent years, including the relevant 2018/2019 year.
George Cross Falcons Community Centre Inc v Wymark Insurance Brokers Pty Ltd [2020] NSWCATAP 195 | Case summary | Zoe
The proceedings commenced in the Tribunal also followed upon a non-binding determination by an adjudicator with the Australian Financial Complaints Authority that the broker was not liable for the loss.
Zurich came to confirm that it refused indemnity. This was because no cover had been taken out (at additional premiums) for "Burglary" or "Money", as described in the policy wording - cover for "Fire" and "Liability" had been arranged. For present purposes, it is sufficient to say that cover for the risk of "Burglary" was available, but under this section of the policy theft of money exceeding $500 was excluded. Cover for theft of money for a larger amount was available on the terms described in the "Money" section of the policy.
The appellant's claim against the respondent was a professional negligence or breach of contract claim for failing to take reasonable steps to arrange adequate insurance cover for the appellant in respect of the community centre. It was a claim of the nature dealt with in cases such as Tosich v Tasman Investment Management Ltd [2008] FCA 377; 250 ALR 274 at [65]-[89] and PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (in liq) [2020] FCA 137; 379 ALR 732; 142 ACSR 561.
The ingredients of the claim were the existence and scope of a duty of care, breach of that duty, causation of loss and quantification of loss. In this case, there seems little doubt that the respondent broker owed the appellant a duty of care in carrying out its role as broker. Without being exhaustive, factual findings needed to be made as to why it was that cover did not extend to "Burglary" and "Money", particularly, in circumstances, where a large amount of cash was kept on the premises, whether the respondent took reasonable steps to assess the risks and advise on appropriate cover, whether the appellant made any request for relevant cover, and whether, absent a breach of duty, relevant cover would have been obtained.
The reasons of the Tribunal did not address any of these issues. Rather, the reasons appear to be more directed at the question whether, in the events which had occurred, the respondent should be treated as having arranged relevant cover. The core reasoning of the Tribunal was as follows:
The respondent indicated that the coverage for burglary and theft was included by mistake as the underwriter did not cover this and the claim had been refused by Zurich on this basis. The Tribunal is nevertheless satisfied that this unilateral mistake does not absolve the respondent for any liability for loss arising from burglary/theft, as defined in the policy.
The policy wording limits the liability for loss of money in such an event to an amount not exceeding $500.00.
Of relevance however is the policy wording which states:
"This section only forms part of your policy when Money Section is shown in the schedule and is limited to the period of insurance indicated."
Consequently, loss of money is not covered by the policy as it was not included in the then current policy.
In the view of the Tribunal this excludes any claim under the burglary/theft provision of the policy.
The reference here to inclusion of burglary and theft by mistake was a reference to the inclusion of this cover in a summary listing of coverage sent by the respondent to the appellant in respect of the relevant insurance year. This listing had said that "Burglary" was included but not coverage for "Money".
In our opinion, the approach taken by the Tribunal meant that it failed to address the elements of the appellant's claim. This was an error of law of the nature referred to by Gummow and Callinan JJ in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088; 197 ALR 389 at [24], Hayne agreeing at [95]. In any event, the Tribunal erred in law by identifying the wrong issue or asking itself the wrong question: see Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13 (2)].
Under s 80 of the NCAT Act, a party may appeal as of right to the Appeal Panel in an internal appeal on any question of law.
Whilst not directly on point, we should also point out that the Tribunal incorrectly interpreted the policy in arriving at its conclusion that loss of money was not included in the current policy. That conclusion was the correct one for a different reason, namely because the respondent had not arranged such cover with Zurich. The Tribunal erred in its view that the policy wording that it quoted in the passage we have referred to led to this conclusion. That wording, which came at the beginning of the "Money" section of the policy, did not exclude cover for an amount not exceeding $500 provided for under the "Burglary" section of the policy.
According to the Notice of Appeal, the appellant received notice of the Tribunal's decision on 6 March 2020. However, this appeal was not lodged with the Tribunal until 25 June 2020 - a delay of about 2 ½ months beyond the time prescribed for lodging this appeal. At the hearing of the appeal (conducted by telephone), Mr Parnis gave an explanation for the delay in which he said that a Notice of Appeal was sent by registered post to the Tribunal within the 28 day time limit. He then provided an account of communications with the Tribunal, principally, by telephone, which, ultimately, led to him sending a new Notice of Appeal. He said that in one of these communications he was told that the appellant needed to pay the lodging fee and that he would receive a letter about this, which never arrived. He explained that much of the delay in following up the position with the Tribunal was because of his understanding that because of the Covid 19 situation the Tribunal would be closed for a considerable period of time.
The explanation has not been confirmed by any documentary evidence and lacks precision. Nevertheless, because of the strong merits of the appeal and the absence of any additional prejudice to the respondent beyond its important interest in the expeditious conclusion of the litigation, we think it is in the interests of justice that the necessary extension of time for lodging the appeal be granted. In so concluding, we have had regard to the principles applicable to the consideration of an extension of time set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22].
The proceedings will have to be remitted to the Tribunal for rehearing and the making of a new determination as to whether the appellant's claim succeeds or fails. Findings of fact concerning the matters we have already referred to will need to be made and may need to include findings concerning the credibility of witnesses. Whilst we have not been presented with the evidence before the Tribunal at first instance, the, mistakenly, confined approach taken by the Tribunal to the appellant's claim, strongly, suggests that the parties should have the opportunity to adduce additional evidence to that already presented to the Tribunal at first instance, including through the cross-examination of witnesses. However, it will be a matter for the Tribunal at first instance to determine what, if any, further evidence is to be permitted and to make directions for the provision of any such further evidence in advance of the rehearing. .
[2]
ORDERS
For the above reasons, we make the following orders:
1. Extend the time for lodging the appeal to 25 June 2020.
2. The appeal is allowed.
3. Remit the whole of the case to the Tribunal at first instance for rehearing and determination on the basis of the evidence already presented by the parties to the Tribunal at first instance and such further evidence as may be permitted by the Tribunal.
[3]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 23 September 2020