Robinson v Vogelsang

Background

1. The plaintiff, Fiona Robinson, is now forty years of age. On 1 September 2009 when she was 34 she was seriously injured in a horse riding accident. She was rendered a tetraplegic. In these proceedings she sues Peter Rex Vogelsang and Catherine Martin. In the latest iteration of her statement of claim she alleges that Mr Vogelsang was the owner of a farming property where the accident occurred at Lot 545 xxx, Milang in South Australia ("Lot 545") and that he and Ms Martin were the owners of an eighteen year old horse that caused the accident.
2. The statement of claim alleges that Ms Robinson and her mother visited that property, that Ms Martin encouraged her to ride the horse, and stated that it was of a settled temperament. In broad terms the statement of claim alleges that Ms Martin did not disclose the horse's allegedly tempestuous nature or otherwise take appropriate action.
3. At all relevant times Allianz was Mr Vogelsang's insurer. In particular, during the relevant period, Mr Vogelsang had an Allianz "Classic Plus" Home insurance policy taken out in respect of a building he owned on property at Lot 95 xxx xxx xxx ("lot 95") and an Allianz "Farm Pack" Insurance policy in respect of lot 545.
4. To the extent that each of those policies provides indemnity to Mr Vogelsang, they also appear to, or at least arguably appear to, provide cover to Ms Martin under an extended definition of the insured in the policies that includes the de facto partner of the person named in the policy schedule. It is contended that Ms Martin is Mr Vogelsang's de facto partner.
5. Allianz declined to indemnify either of Mr Vogelsang or Ms Martin. As a consequence, they joined Allianz as a cross-defendant as well as an insurance agent, Ronald Haeusler.
6. The proceedings have a long history, which it is not necessary to repeat. It is sufficient to say that Mr Vogelsang and Ms Martin have buckled under the weight of paying for legal representation to defend the proceedings and pursue their cross-claims.
7. On the first day of the hearing, Ms Martin appeared for herself and purported to appear for Mr Vogelsang, even though a solicitor remains on the record for both of them. From the Bar Table, the Court was advised that Allianz had considered but declined to provide what was described as an ex gratia payment for Mr Vogelsang and Ms Martin to be legally represented at the hearing. This was said to be so because of some concerns that have been raised by the plaintiff. The Court is not in a position to adjudicate that matter, other than to note that given the commonality of interest on the part of Allianz and Mr Vogelsang and Ms Martin in meeting the plaintiff's claim, no reason in principle why such a proposal should not be pursued is apparent.
8. In any event, in anticipation of or in the knowledge of Mr Vogelsang and Ms Martin's financial difficulties, Ms Robinson filed the notice of motion of 22 October 2015 seeking to join Allianz. The motion was stood over to the first day of the trial. It was argued on that day except that senior counsel for Allianz, Mr Cavanagh SC, sought further time to obtain instructions concerning the ability of his client to meet the plaintiff's case, if it was joined as a defendant. However, shortly prior to this judgment being given, Mr Cavanagh SC did not make any submission to the effect that if his client was joined he could not meet any case put by the plaintiff.

Statutory Provisions

1. Section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 relevantly provides: 6 Amount of liability to be charge on insurance moneys payable against that liability (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. … (3) Every charge created by this section shall have priority over all other charges affecting the said insurance moneys, and where the same insurance moneys are subject to two or more charges by virtue of this Part those charges shall have priority between themselves in the order of the dates of the events out of which the liability arose, or, if such charges arise out of events happening on the same date, they shall rank equally between themselves. (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 and 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. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken. …"
2. Although both the events giving rise to these proceedings and the entry into of the relevant contract of insurance all occurred in South Australia, this Court nevertheless retains power under s 6(4) to grant leave to proceed against an insurer in proceedings in this Court (see Chubb Insurance Company of Australia Limited v Moore [2013] NSWCA 212 at [202]). Otherwise it can be seen that s 6(4) precludes a grant of leave where a court is positively satisfied that the insurer is entitled to disclaim liability. If the Court is not so satisfied but conversely considers there is an arguable case of liability, that is an arguable case that the insured is liable and that the insurer is liable to indemnify, then that can be sufficient to justify a grant of leave (see Tzaidas v Child and 3 Ors [2004] NSWCA 252 at [20]; Energize Fitness Pty Ltd v Vero Insurance Limited [2012] NSWCA 213, especially at [59]). Otherwise, a further factor of particular significance is the absence of a defendant that is able to meet the verdict (see Oswald v Bailey (1987) 11 NSWLR 715 to 725). There is no doubt that that factor is present in this case.

Arguable Case

1. The starting point is to consider whether an arguable case has been demonstrated against both the insured and the insurer. It is at this point that one of the many difficulties in the drafting of s 6 becomes apparent. Mr Cavanagh SC submitted that it is only Mr Vogelsang's liability that could be considered at this point, not that of Ms Martin. For the reasons that follow I accept that submission.
2. The purpose of a grant of leave under s 6(4) is to enforce the statutory charge created by s 6(1). That charge only attaches to "insurance moneys" that are payable "in respect of that liability", and that is only a liability of a person who "entered into a contract of insurance".
3. If it is established that Ms Martin was Mr Vogelsang's de facto partner, then she is undoubtedly a person who is entitled to the benefit of such cover as may be available under the policies I described earlier (see Insurance Contracts Act 1984 (Cth), s 48). However, on its face she is not a person who "entered into a contract of insurance" for the purposes of s 6(1) in that only Mr Vogelsang appears to have that status.
4. In Zurich Australian Insurance Limited v Metals and Minerals Insurance Pty Ltd and Ors [2009] HCA 50, the High Court held, inter alia, that insofar as s 45 of the Insurance Contracts Act has the effect of voiding a provision in a contract of general insurance that excludes or limits the liability of the insurer by reason that the insured has "entered into some other contract of insurance", it does not include a person who only has the benefit of a contract of insurance by the operation of s 48 (at [24], per French CJ, Gummow and Crennan JJ). Although that conclusion was partly based on a consideration of the history and scope of s 48, the plurality noted that the words "entered into" are not capable of encompassing a "non-party insured" (at [26] and at [39] per Hayne and Heydon JJ). There is no reason why the same approach does not apply to s 6(1) and s 6(4).
5. On this application, senior counsel for Ms Robinson, Mr Cranitch SC, tendered a statement from his client, two statements from a person with expertise in managing horses and extracts from an affidavit sworn by Mr Vogelsang. In her statement, Ms Robinson explained the circumstances in which she and her mother came to be on the property on the day of the accident.
6. As indicated, she states that Ms Martin encouraged her to ride the horse. The combination of her statement and the material from the horse management expert is capable of raising an arguable case that Ms Martin did not properly advise her as to the horse's propensities. However, this material does not address the position of Mr Vogelsang at all. To the contrary, Ms Robinson's statement says that he was not present when she visited the farm and there is absolutely no evidence that he had any knowledge one way or another of the propensities of the horse. The extracts from Mr Vogelsang's affidavit that were relied on do not advance this aspect of the matter either. Thus the material that was tendered on this application does not raise an arguable case against the person who entered into the contract for insurance, namely Mr Vogelsang.
7. This conclusion is fatal to the application to join Allianz. I note that there are also a number of arguments directed to whether the relevant policies in fact provided cover to Mr Vogelsang or Ms Martin for the claims that are made against them. These arguments will have to be considered as part of the determination of Mr Vogelsang and Ms Martin's cross claim against Allianz. In view of the conclusion I have reached it is not necessary to determine them at this stage and it is clearly not appropriate to do either.
8. Accordingly the Court orders that 1. The plaintiff's notice of motion filed 22 October 2015 be dismissed. [Brief discussion re balance of proposed amendments.]
9. Having considered the balance of the amendments I note that they either involve a cleaning up of the existing statement of claim or the pleading of s 18 of the Civil Liability Act 1936 (SA), which on any view would have to be addressed. Accordingly, the Court orders that: (2) The plaintiff be granted leave to file an amended statement of claim in the form that is annexed to the affidavit of John Andriano sworn 29 October 2015. -o0o- DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 November 2015