See also Halsbury's Laws of England , 4th Edition, Vol 25 at para 181.
77 The question was expressly considered in JJ Lloyd Instruments Limited v Northern Star Insurance Co Limited [1987] 1 Lloyd's Law Reports 32 ("Miss Jay Jay") which was concerned with a yacht which suffered damage whilst at sea. Under the policy, the owner was insured in respect of damage caused by external accidental means. The policy provided that "no claim shall be allowed in respect of any loss or expenditure incurred solely in remedying a fault in design or in the event of damage resulting from faulty design." At issue was whether the damage suffered by the yacht was the result of faulty design or the action of the sea. The Court found that both the action of the sea and defective design were causes of the damage. It held that since the policy did not exclude design defects which contributed to a loss without being the sole cause, the claim fell within the policy.
78 At page 40, Slade LJ stated:
"… I think it no less clear that the faulty design and construction of the boat must also be regarded as at least a cause, whether or not the proximate cause of the damage. On a common sense view of the facts both of these two causes were, in my opinion, equal, or at least nearly equal, in their efficiency in bringing about the damage. In these circumstances, if the policy had contained a relevant express exception which related to loss caused by the unseaworthiness of the vessel, the (insured's) claim might well have been unsustainable. " (Emphasis added).
79 Having considered Wayne Tank, Slade LJ went on to say:
" However, since the instant policy contains no relevant exception relating to loss caused by unseaworthiness of the vessel, different principles apply. The legal position in such a case is stated thus in Halsbury's Laws of England (supra)..
'It seems that there may be more than one proximate (in the sense of effective or direct) cause of a loss. If one of these causes is insured against under the policy and none of the others is expressly excluded from the policy, the assured will be entitled to recover.'"
80 The authorities tend to show that the question of proximate cause is to be determined according to a common sense view of the events: (see Canada Rice Millers Ltd v Union Marine & General Insurance Co Ltd (1941) AC 55. Moreover, it is not necessarily the case that the latest in point of time is the proximate cause (the "Miss Jay Jay" at 39). As Lord Shaw of Dumferline said in Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd (1918) AC 350 at 369:
"… The cause which is truly proximate is that which is proximate in efficiency".
81 So understood it is easy to envisage circumstances where there can be more than one effective proximate cause.
82 It is clear from these decisions that the principle in Wayne Tank has been applied only where there has been an express exclusion of one of the competing causes of the casualty. It is also clear that the dominant cause approach has been viewed with a degree of disfavour so far as it invites a search for, and isolation of, a single cause.
83 In City Centre Cold Store Pty Limited v Preservative Skandia Insurance Limited (1985) 3 NSWLR 739, Clarke J (as he then was) said (at 744 to 745):
" Lord Sumner, in Board of Trade v Hain Steamship Co Ltd (at 541) concluded that the finding of the arbitrator, which was in question, established that there were two causes for the disaster and if one was "warranted free" then an underwriter would not be liable.
Lord Sumner had previously expressed the same view in his dissenting speech in P Samuel and Co Ltd v Dumas [1924] AC 431, at 467, where he said:
"… Where a loss is caused by two perils operating simultaneously at the time of loss and one is wholly excluded because the policy is warranted free of it, the question is whether it can be denied that the loss was so caused, for if not the warranty operates."
This passage was expressly approved by Morris LJ in Atlantic Maritime Co Inc v Gibbon [1954] 1 QB 88 at 138, and Cairns and Roskill LJJ (at 69, 74) in Wayne Tank. The latter case is usually cited by text writers as the primary support for the proposition appearing in the quoted passage in the speech of Lord Sumner and, whilst only Cairns LJ decided the case upon the basis that there were two operative causes, it seems to me that the proposition should be regarded as established law.
Once this is accepted then it must be recognised that it is not always possible, or essential, to isolate one cause as the dominant one. Likewise, if there are two causes and one only is covered there appears no good reason why, provided the other is not excepted, cover should be refused.
Accordingly, I accept that the law is as stated in MacGillivray and that there may be two or more efficient causes. The next question relates to the approach which should be taken by the court when there are a number of causes. Roskill LJ opines that the court should endeavour to select one efficient cause. He said (Wayne Tank (at 72)):
"… I think … that the court must, if it can, determine the proximate cause of the loss …. If there were two competing causes the court must select the dominant cause of the two as the proximate cause, it being well understood that the problem is not solved by mere point of order in time."
A somewhat different viewpoint was articulated by Cairns LJ in the same case when he said (at 68-69):
"… I do not consider that the court should strain to find a dominant cause if, as here, there are two causes both of which can properly be described as effective causes of the loss … I should prefer to say that unless one cause is clearly more decisive than the other, it should be accepted that there are two causes of the loss and no attempt should be made to give one of them the quality of dominance."
For my part I propose to determine in the first instance whether there is one effective cause. But, recognising that in the present case there are a number of contributing causes, I do not propose straining to isolate one if it seems to me that two or more causes operated with approximately equal effect ."
84 Again, in HIH Casualty & General Insurance Limited v Waterwell Shipping Inc and Another (1988) 43 NSWLR 601 ("Waterwell"), the Court, while accepting the Wayne Tank principle, indicated that the common sense approach should be taken in preference to the artificial approach of searching for a dominant cause, where realistically there were two or more efficient causes of a loss. That was a case where the insured's vessel sank because its sea valves were negligently left open by the crew, and also because the wall of a strainer box failed due to corrosion, allowing sea water to enter and flood the vessel. The insured claimed indemnity under a policy which insured it in respect of loss or damage caused by the negligence of crew members. The insurer sought to deny indemnity in reliance upon a provision in the policy that "unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear".
85 Sheller JA, with whom Beazley and Stein JJA agreed, said (at 612):
" If I may respectfully say so, such an approach, in a situation where each of two or more causes may realistically be described as an efficient and, in that sense, proximate cause, prefers commonsense to the artificial exercise of attempting to decide which of two or several is the winner of what in fact may be a dead heat. In my opinion, this Court should follow and apply the decision of the English Court of Appeal in the [Miss Jay Jay]. Therefore, where there are competing proximate causes and loss from one is insured against and none of the others is expressly excluded, the insured is entitled to recover ."
86 As his Honour later said (at 613):
" in the present case, if the loss of the vessel was proximately caused by both the negligence of the master, officers or crew and by wear and tear, the appellant was liable under the policy even though the policy did not cover wear and tear or loss the result of wear and tear. No exclusion for wear and tear was called for or to be found. It was simply outside the cover provided ."
87 As I have observed, QBE submitted that Pioneer had to show that an event insured against was a proximate cause of its loss, relying upon decisions such as Australian Casualty Co Ltd v Federico (1986) 160 CLR 513 at 534-535; and West Wake Price and Co v Ching (1956) 3 All ER 821 at 825 per Devlin J. This, it submitted, Pioneer had failed to do since it was the presence of loose aggregate on the roadway which was the proximate cause, and that such circumstance did not involve a design matter or an advisory service.
88 Pioneer however submitted that the present case was not of the genus where coverage depended upon identification of a "cause" or "proximate cause" for its liability. In this regard it returned to the submission that the insuring clause related to "legal liability… incurred in the conduct of the Professional or Business Practice" of Pioneer (Emphasis added).
89 Further, it submitted that even if it could be argued that there were several causes, one or more of which did not qualify as an advisory service or design matter, then the endorsement, which limited cover to such matters, did not amount to an express exclusion, of the kind identified by Sheller JA in Waterwell as attracting an application of the Wayne Tank principle.
90 In my view, the present case was not one which would attract an application of the Wayne Tank principle. Had an exclusion been intended where there were concurrent causes, one of which was a non design or advisory matter, then it might properly have been expected that there would have been an express exclusion to that effect in Section 4 of the policy, which specifically identified ten excluded circumstances.
91 So far as there was any ambiguity in relation to whether the endorsement amounted to an exclusion of the kind to which the Wayne Tank principle applied, then, in my view, this should be resolved contra proforentem in favour of Pioneer: Alex Kay Pty Limited v General Motor Acceptance Corporation & Anor (1963) VR 458. The present case is akin to Waterwell where causes other than design or advisory services were "outside the cover provided rather than excluded".
92 Accordingly, had the liability of Pioneer been properly attributed to design or advisory services, then I do not consider that Wayne Tank could have been called in aid by QBE.
93 In passing, I also note that there is a distinction between policies in respect of which it is necessary to identify a "cause" or "proximate" cause, and policies in which the insuring clause is concerned with claims "arising out of" rather than with a loss "caused by" a specified event. That distinction was made by the High Court in Government Insurance Office of NSW v R J Green & Lloyd Pty Limited (1965) 114 CLR 437 per Windeyer J at 447; in State Government Insurance Commission v Stevens Brothers Proprietary Limited (1984) 154 CLR 552 at 555, 559; and in Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 in which the full Court said (at 505):
" The test posited by the words 'arising out of' is wider than that posited by the words 'caused by' and the former, although it involves some causal or consequential relationship between the use of the vehicle and the injuries, does not require the direct or proximate relationship which would be necessary to conclude that the injuries were caused by the use of the vehicle ."
94 Reference may also be made to Australian Paper Plantations Pty Limited v Venturoni (2000) VSCA 71 where some consideration was given to the nexus required between the liability or claim, and the performance of the work in question.