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[2010] NSWDC 54
respondent. The plaintiff's appeal was dismissed. Vero was ordered to pay the defendant's costs of the appeal on the ordinary basis, unless otherwise ordered. The proceedings were remitted to the Consumer,...
The dispute was about whether a strata owners corporation had to pay one $500 insurance excess or 201 excesses totalling $100,500 for a claim about common-property defects. The Tribunal found that one excess applied. The District Court did not decide that the statutory scheme could never involve separate policies or claims. It held that, on the evidence presented to the Tribunal, the existence of one policy or 201 policies was a factual question, and the evidence did not require the Tribunal to find 201 policies. Because the appeal was restricted to questions of law, Vero's appeal failed. The proceedings returned to the Tribunal for final orders.
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Vero Insurance Limited appealed to the New South Wales District Court from a preliminary decision of the Consumer, Trader and Tenancy Tribunal (CTTT). The dispute concerned a claim by The Owners of Strata Plan No. 69352 for alleged defects to common property at premises in Chatswood. The claimed defects related to air-conditioning, stairway pressurisation and fire safety. The claim was for $85,137.50, excluding GST ([2]–[3], [18]).
The practical dispute was the amount of insurance excess. The owners corporation said the claim attracted one $500 excess. Vero characterised the claim as 201 separate claims, one for each lot owner, and sought an aggregate excess of $100,500 ([4], [9]–[10]). The Tribunal answered an agreed preliminary question in favour of the owners corporation, determining that one $500 excess applied ([5], [26]).
Vero's appeal was brought under s 67(1) of the Consumer, Trader and Tenancy Tribunal Act 2001. That provision limited the District Court's appellate role to a decision with respect to a matter of law ([11], [37]). Vero initially identified two alleged legal errors: a failure to identify the relevant policy or policies, and a misconstruction of the policy excess clause ([13]–[14]). At the hearing, its position was reformulated as an alleged error in treating the owners corporation's claim as one made in its own right, without recourse to the individual lot owners' insurances ([16]).
The evidentiary record was central. The Tribunal had a statement of agreed facts, a sample certificate, selected standard policy wording, and other material. The agreed facts stated that home warranty insurance had been issued in respect of 201 dwellings, and that the other certificates were identical to the sample apart from unit and certificate numbers ([18]–[20]). But the complete policy and relevant schedules were not before the Tribunal. In particular, the evidence did not definitively establish whether the arrangement was a master policy with 201 certificates or 201 separate policies ([20]–[22]).
Levy SC DCJ dismissed Vero's appeal. The court ordered Vero to pay the owners corporation's costs on the ordinary basis, and remitted the Tribunal proceedings for further orders to conclude them ([67]–[68]). The judgment therefore resolved the appeal and the preliminary excess issue as it had been framed, but did not itself make the final orders in the underlying Tribunal proceedings.
The court's primary reasoning was jurisdictional. Section 67(1) did not permit a general rehearing of the dispute. It allowed an appeal only on a question with respect to a matter of law. The court referred to authorities holding that this appeal route is limited and that the statutory phrase should not receive an unduly wide construction ([37], [47]).
The decisive question was how to characterise the issue in the appeal. Vero framed the dispute as requiring the Tribunal to apply the statutory insurance scheme and construe the policy so that 201 certificates meant 201 policies and 201 claims. The court instead considered that the pivotal question was whether the evidence established one policy or multiple policies. It classified that as a factual question ([52]–[55], [65]). That distinction mattered because a factual disagreement, without an appealable legal question, did not give the District Court jurisdiction to revisit the Tribunal's conclusion under s 67(1).
The lack of policy schedules was important. The court observed that the Tribunal did not have the material that would support or justify a conclusion that there were 201 separate policies rather than a master policy ([55]). The evidence therefore left open the Tribunal's finding that one policy and one claim were involved. The judgment does not hold that certificates can never represent separate policies. Its conclusion is tied to what the evidence did and did not establish in these proceedings.
The court also examined the documents that were available. The sample certificate referred to “A contract of insurance” and “the insurance policy” in the singular. It described a multi-unit development and identified a particular unit, and the court considered that the certificates could be understood as certificates issued under one contract ([58]). The selected policy wording referred to a “job specific owner policy”, also in the singular, and did not define “claim”. The court therefore considered that “claim” should bear its ordinary meaning ([59]).
The statutory provisions did not compel Vero's proposed interpretation. Section 102(6) concerned an excess for each claim, but the court found nothing in it requiring an inference that there were multiple policies and claims in the circumstances ([60]). Section 102(3), which provided for minimum cover in relation to each dwelling, was also consistent with multiple certificates being issued under a single policy. The court considered that arrangement commercially and administratively intelligible in a strata development ([61]).
Two interpretive principles were stated. Insurance policies, including policies required by statute, should be approached as commercial contracts and given a businesslike interpretation, taking account of the object and language used ([48]). The judgment also cited the principle that insurance policies should be interpreted liberally in favour of the assured ([49]), and said relevant statutory provisions should be interpreted purposively ([50]). Those principles supported, rather than displaced, the conclusion that the Tribunal's interpretation was open on the material.
The court accepted that the owners corporation could make a claim in its own right concerning common property, relying on the standing of an owners corporation as a special or unique form of agency to protect lot owners' interests ([62]). It also concluded that the owners corporation was not bound by Vero's internal decision to treat its lodged claim as 201 claims ([63]). The decisive point remained that the evidence supported the Tribunal's single-policy finding and the legislation did not compel a different one ([64]–[66]).
The judgment describes the existing statutory appeal framework rather than announcing a new general rule. Before this decision, s 67(1) already confined appeals from the CTTT to decisions with respect to matters of law. The court relied on appellate authorities for that proposition and emphasised that the statutory wording should not be expanded to cover a general disagreement with factual findings ([37], [47]).
As applied in this case, the judgment clarifies the importance of separating a legal construction question from a factual question about the underlying insurance arrangements. Vero relied on the statutory scheme and policy construction, but the court treated the number of policies as an evidentiary issue because the relevant policy schedules were absent and the available documents permitted a single-policy finding ([52]–[55], [58]–[66]). This is a case-specific application of the appeal limitation, not a holding that questions about insurance documents are always factual or that a statutory scheme can never raise an appealable legal question.
The judgment also restated interpretive principles applicable to insurance policies, including statutory policies: a businesslike reading of the contract, attention to its object and language, and a liberal interpretation in favour of the assured ([48]–[50]). It applied those principles to the certificate, wording and statutory provisions before it. The outcome did not alter the wording of the Home Building Act 1989 or the CTTT appeal provision.
The judgment cites HIA Insurance Services Pty Ltd v Kostas, Grygiel v Baine and Bondi Beach Astra Retirement Village Pty Ltd v Hohman for the limits of the statutory appeal jurisdiction ([47]). It cites McCann v Switzerland Insurance Australia Ltd and Australian Casualty Co Ltd v Federico for insurance interpretation principles ([48]–[49]). For the owners corporation's representative capacity, it refers to Owners of Strata Plan No 43551 v Walter Construction Group Ltd ([62]). The judgment does not provide a subsequent history of those cases or describe how later courts treated Vero. Accordingly, the material here supports an account of the principles invoked by Levy SC DCJ, but not a claim about later developments.
At [52], the court said: “the pivotal matter raised by the plaintiff insurer involved a matter of fact, not law.” In plain English, the disagreement was fundamentally about what the documents and evidence showed concerning the insurance structure, rather than a legal question suitable for the limited appeal route.
At [55], the court identified the missing schedules as “the fundamental problem” for Vero's argument. The Tribunal did not have the policy schedules needed to establish that each certificate represented a separate policy. That did not conclusively prove there was only one policy, but it meant the Tribunal could find that there was one.
At [58], the court considered the certificate's references to a contract and policy in the singular. It treated those words, together with the multi-unit context, as consistent with one contract and multiple certificates. The court said that interpretation was open on the ordinary meaning of the documents and was favourable to the assured.
At [60], the court said s 102(6) did not require an inference of multiple policies and claims. The provision concerning the excess did not, by itself, answer how many policies or claims existed. That depended on the arrangements shown by the evidence.
At [63], the court said the owners corporation was not bound by Vero's internal decision to treat one lodged claim as 201 claims “for its own purposes.” In plain English, Vero could not determine the number of claims simply by adopting that internal accounting or claims position.
At [65]–[66], the court concluded that the Tribunal had made a factual finding open on the evidence and that no relevant question of law arose. Those paragraphs connect the evidentiary record to the appeal's dismissal.
The judgment is most relevant where a statutory appeal is restricted to questions of law and the appellant's challenge depends on recharacterising what the evidence established. In this case, the appeal turned on whether the insurance arrangements involved one policy or 201 separate policies, and the available evidence did not definitively establish multiple policies ([21]–[22], [55]).
It is particularly relevant where documents include multiple certificates but the complete policy, schedules or other material needed to determine the legal and contractual structure are absent. The court treated the certificates as consistent with one contract and declined to infer that each certificate necessarily meant a separate policy ([55], [58], [61]). The result may differ on a different evidentiary record; the judgment does not decide that all multi-certificate arrangements constitute one policy.
The judgment may also be relevant where an insurer's internal claim classification differs from the claim as lodged by an owners corporation. The court said that the owners corporation was not bound by Vero's internal treatment of one claim as 201 claims ([63]). The court's reasoning concerned the evidence and statutory scheme in this case, rather than a universal rule about how every insurance claim must be counted.
The common-property context matters too. The claim related to defects in property vested in the owners corporation, and the court accepted that the owners corporation could claim in its own right as a representative body with a special or unique agency role ([24], [62]). The decision therefore provides a relevant example involving strata common property, certificates for individual lots, and an owners corporation acting in relation to shared defects.
The judgment itself does not discuss any later judicial treatment of Vero Insurance Limited v The Owners of Strata Plan No. 69352. The supplied text ends with the District Court's orders on 29 April 2010 and contains no later citations to this decision. It would therefore not be grounded in this judgment to say that later courts followed, distinguished, applied or overruled it.
The cases it does cite were used for particular propositions in the judgment. HIA Insurance Services Pty Ltd v Kostas, Grygiel v Baine and Bondi Beach Astra Retirement Village Pty Ltd v Hohman were cited in relation to the limits of appeals under s 67(1) ([47]). McCann and Federico were cited for principles of insurance policy interpretation ([48]–[49]). Owners of Strata Plan No 43551 v Walter Construction Group Ltd was relied on in support of the owners corporation's capacity to protect lot owners' interests ([62]). Those references explain the reasoning Levy SC DCJ adopted, but do not establish the later treatment of this judgment.
The judgment's conclusion was expressly tied to the evidentiary record. It noted that the full policy and relevant schedules were not tendered, and that the evidence did not definitively establish whether there was a master policy or 201 separate policies ([20]–[22]). The judgment therefore leaves open how the same statutory questions would be resolved if complete policy documents clearly established separate policies or expressly defined the insureds, claims and excesses.
The judgment also did not need to decide every possible issue about the meaning of “claim” under the statutory scheme. The selected policy wording did not define the term, so the court considered its ordinary meaning ([59]). The reasoning does not settle how a particular definition in a different policy, or a different factual structure, would affect the count of claims.
The owners corporation's ability to claim in its own right was accepted with reference to its representative role and the authority cited at [62]. The court did not set out a comprehensive account of the limits of that role in all home warranty insurance disputes. Nor did it decide how the statutory scheme would operate where claims concerned defects confined to individual lots rather than common property.
Finally, the appeal was dismissed because no appealable question of law was demonstrated on the record. The decision should not be read as resolving a different appeal where the appellant identifies a genuine question of statutory construction or demonstrates that the Tribunal applied an incorrect legal test. The judgment's key distinction is between a legal question within the limited appeal jurisdiction and a factual determination about what the evidence establishes.
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The Statement of Agreed Facts had annexed to it as Annexure "A", a sample, a copy of Home Owners and Warranty Certificate of Insurance. That sample certificate was numbered 160109 and was dated 12 February 2001. It was stated to have been issued by Royal & Sun Alliance Insurance Australia, to Meriton Apartments in respect of one of the 201 strata units in the building. I infer that Royal & Sun Alliance was the predecessor to the plaintiff insurer.
Also annexed as Annexure "B" was an extract of the standard statutory policy wording and definitions approved by the Minister and applicable to the policy in question. It appears that the full policy and any schedules that might have been annexed to the full policy were not tendered in the Tribunal proceedings.
Significantly, absent from the evidence before the Tribunal, was any definitive factual evidence that informed the Tribunal as to whether there was a single master policy with 201 related certificates of insurance issued under it, or 201 separate policies of insurance with the 201 identifiable and concomitant certificates of insurance.
It is plain that the Statement of Agreed Facts that was tendered in evidence in the Tribunal was carefully worded, and referred to the question of insurance as a generic entity rather than identifying one or more individual policies of insurance. I consider this to be a matter of some significance.
In the Tribunal the parties proceeded on the basis that the question for decision involved construction of the policy of insurance in the context of Part 6 of the Home Building Act 1989 and related regulations.
It was common ground that the owners corporation had no certificate of insurance and that the claim on the insurance concerned the common property that was vested in the owners corporation.
The Tribunal proceeded on the basis that although the owners corporation did not have a certificate of insurance, its claim was made on behalf of the individual owners. The Tribunal declined to conceptualise these circumstances as multiple claims.
The decision of the Tribunal concluded as follows: "I have considered the argument by the respondent that because an excess of $500.00 represents a small amount for each lot owner ($2.49) this is an absurdly small amount and provides no disincentive for making minor and frivolous claims. However, as already indicated, it is the absolute quantum of the claim rather than what the costs would be to each lot owner if it is not met which the issue is (sic).
The respondents' contention would lead to other absurdities and inconsistencies. It would, for example, permit a claim by a lot owner for $800.00 for minor defects to a kitchen cupboard in a lot, while a claim in respect of a $100,000.00 defect in common property would not be met.
As stated, the object of a provision for excess is the avoidance of minor or frivolous claims, having regard to the costs of assessment and processing of the claim by the insurer.
For the above reasons I determine that the excess payable by the owners corporation is the first $500.00 of the whole claim of $85,137.50."
It was common ground between the parties that the central issue in the appeal involved the proper construction of the statutory policy against the background of the legislation under which the policy had been issued.
On behalf the defendant owners corporation, Ms Olsson SC submitted that the plaintiff insurer has failed to identify a question with respect to a matter of law arising out of the decision of the Tribunal. Ms Olsson SC submitted that the decision of the Tribunal Member made clear his approach to the relevant principles and legislation, and the application of those principles and legislation to the policy in question, such that no relevant question of law has been demonstrated to have arisen from the decision of the Tribunal.
Simply put, the substance of the submissions made by Ms Olsson SC was that it was open to the Tribunal to find that there had been a single claim made under a single policy of insurance. It follows that there was no evidence of multiple policies. Ms Olsson SC also submitted that the defendant owners corporation was not bound by the insurer's internal decision to characterise the claim as having been made under multiple policies, and therefore, the insurer's attempt to impose aggregate excesses in the total sum of $100,500 was factually inappropriate and wrong in law. She submitted that the finding of the Tribunal to that effect, was correct.
In the result, Ms Olsson SC submitted that there was no basis in law for the Tribunal to have acceded to the insurer's submission. Consequently, she argued that there was no error demonstrated in the decision of the Tribunal on a question with respect to a matter of law.
On behalf of the plaintiff insurer, Mr Lynch argued that since the owners corporation had no insurable interest in the property, it could therefore not suffer a relevant loss. It was contended that as a result, a claim could therefore only arise on policies held in the names of individual lot or unit owners, according to the statutory scheme under the Home Building Act 1989. Mr Lynch sought to develop this argument by asserting that under the statutory scheme of insurance, there could not be just one claim in the circumstances, and therefore there could not be only one excess payable.
Mr Lynch submitted that under the statutory scheme, for the policy to apply to the owners corporation, it had to be shown that the owners corporation had a policy in respect of the dwelling for which cover was issued in respect of which a claim could be made. This argument was dependent upon the construction of the Home Building Act 1989 ("HB Act") and regulations made under the Act. He submitted that in context, the notion of a claim in this context had a particular statutory construction under section 102(6) of the HB Act and should be read in accordance with s 102C of the HB Act. He submitted that these matters involved questions with respect to matters of law and did not involve matters of fact.
Mr Lynch submitted that the decision of the Tribunal failed to understand the import of the statutory scheme under which the claim arose, and should have concluded that there was no insurance available for the benefit of the owners corporation. He submitted that this should result in a finding that there was no insurance available to support a claim to be made by the owners corporation other than through a series of individual claims made through the separate policies held by individual unit holders, thus requiring 201 lots of $500 excess to be paid. In this regard, he submitted that the Tribunal misdirected itself in its approach to the construction of the circumstances as not involving multiple claims under a policy of insurance issued pursuant to Part 6 of the HB Act, such that an error arose involving a question with respect to a matter of law.
In reply, Ms Olsson SC submitted that the commercial considerations applicable to the circumstances, including the unique form of agency involving the owners corporation, meant that only the body corporate could deal with the issues that arose concerning problems with the common property relying on Owners of Strata Plan No 43551 v Walter Construction Group Ltd [2004] NSWCA 429; (2005) 62 NSWLR 169.
In this regard Ms Olsson SC submitted that the title to the common property was vested in the owners corporation and that the owners corporation was acting in a representative capacity for the individual lot owners. Accordingly, she submitted that for the purpose of the home warranty scheme, the owners corporation was entitled to make a claim on the insurer in respect of the common property.
In reply, Ms Olsson SC also pointed out that the elaborate set of arguments put forward by the plaintiff insurer in these proceedings, and which related to points of construction, did not represent the basis upon which the plaintiff insurer had refused to pay the claim. She pointed out that the basis of such refusal was simply grounded upon the notion that whereas the owners corporation made a single claim, which called for the payment of an excess of $500 on the policy, the insurer characterised the claim as comprising 201 claims, which called for the payment of an excess of $100,500.
Section 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 enables a party dissatisfied with the decision of the Tribunal to appeal to the District Court. Any such appeal can only be from a decision with respect to a matter of law: s 67(1) of the CTTT Act. The reference to "a matter of law" in s 67(1) includes a reference to a matter relating to the jurisdiction of the Tribunal : s 67(8) of the CTTT Act.
The HB Act and the Home Building Regulation 1997 ("HB Reg") provide a statutory scheme for Home Owners Warranty Insurance.
The terms of any contract of insurance must be in accordance with the prescribed requirements : s 99 HB Act. The contract of insurance issued under these provisions must provide minimum cover for dwellings : s 102(3) HB Act. The excess on each claim is not to exceed $500 as specified in the contract : s 102(6) HB Act.
The HB Act does no define common property. "Dwelling" is defined as including a building or portions of a building that is designed, constructed or adopted for use as a dwelling and does not include portions of a building declared to have been excluded by regulation : s 3(1) HB Act.
The regulations declare common property as part of a dwelling in multiple dwelling buildings : reg 5 HB Reg.
The regulations provide for divisibility of insurance cover under a contract of insurance issued under the HB Act may be calculated by dividing the amount of the claim paid by the insurer in relation to common property of the building by the number of dwellings in the building : reg 46 HB Reg.
The provisions of the HB Act and the regulations as they relate to a strata scheme operate in conjunction with the Strata Schemes (Freehold Development) Act 1973 ("SS(FD) Act") and the Strata Schemes Management Act 1996 ("SSM Act").
Under that scheme, common property is defined as being so much of the property that does not comprise a lot : s 5 SS(FD) Act.
"Lot" is almost inscrutably defined by s 5 of the SS(FD) Act as: " lot means one or more cubic spaces forming part of the parcel to which a strata scheme relates, the base of each such cubic space being designated as one lot or part of one lot on the floor plan forming part of the strata plan, a strata plan of subdivision or a strata plan of consolidation to which that strata scheme relates, being in each case cubic space the base of whose vertical boundaries is as delineated on a sheet of that floor plan and which has horizontal boundaries as ascertained under subsection (2), but does not include any structural cubic space unless that structural cubic space has boundaries described as prescribed and is described in that floor plan as part of a lot."
In the paragraphs that follow, I set out the relevant authorities as to jurisdiction and interpretation.
It is well settled that the scope of an appeal from the CTTT to this court is limited to matters of law : HIA Insurance Services Pty Ltd v Kostas [2009] NSWCA 292. It is also well settled that the words "with respect to a matter of law" in s 67(1) of the CTTT Act should not be given an unduly wide construction : Grygiel v Baine & Ors [2005] NSWCA 218 per Basten JA at [26]. It has recently been authoritatively reiterated that an appeal under s 67(1) of the CTTT Act is limited to a "decision" of "a question" by the Tribunal "with respect to a matter of law" : Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWCA 38 per Basten JA at [12].
The principles governing the construction of policies of insurance are well settled. Even in cases of policies of insurance required by statute, the approach to interpretation requires recognition of the commercial contract between the parties and requires a businesslike interpretation, including the object sought to be secured and the language used : McCann v Switzerland insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 per Gleeson CJ at [22].
Policies of insurance should be interpreted liberally, in favour of the assured : Australian Casualty Co Ltd v Federico [1986] HCA 32; (1986) 160 CLR 513 per Gibb CJ at [6]; p 520.
The legislative provisions in question, where relevant, should be given a purposive interpretation to achieve the benefit intended by the legislation.
In the paragraphs that follow I set out my consideration of the matters raised by the grounds of appeal.
Consideration of whether a question arises with respect to a matter of law
In my view, in this appeal the plaintiff insurer has failed to demonstrate that the decision of the Tribunal has raised a question with respect to a matter of law. In my view, the pivotal matter raised by the plaintiff insurer involved a matter of fact, not law. The inevitable consequence of this conclusion is that the appeal must fail : s 67(1) CTTT Act.
It is clear from the decision of the Tribunal, and from the evidence upon which that decision was based, that the Tribunal was concerned with determining the consequences of a single claim made on a single policy concerning defects on the common property of the building in question. In my view this was an exclusively factual question.
On that basis, I accept the submission made by Ms Olsson SC that it is somewhat tortuous for the plaintiff insurer to contend that a "claim" must, as a matter of law in the circumstances of this case, be a reference to a multiple of 201 claims, simply because the statutory scheme provides for individual certificates of insurance to be issued to individual lot owners within a strata development scheme.
In my view the flaw in the argument relied upon by the plaintiff insurer is that the existence of 201 certificates of insurance in respect of lots in the building must necessarily mean that there were 201 policies of insurance. The fundamental problem with the argument relied upon by the plaintiff insurer is that the evidence before the Tribunal did not include any contract schedules that would serve to support or justify a conclusion that there were multiple policies rather than a master policy. In these circumstances, it was open on the evidence before the Tribunal to conclude that only one amount of excess of $500 was payable on the single claim made by the owners corporation on a single policy of insurance. The legislation referred to by the plaintiff insurer does not compel a contrary view.
An examination of the evidence and the relevant statutory provisions do not support the position advanced by the plaintiff insurer.
It is appropriate to consider the terms of Annexure A at Tab 3 of the affidavit of Mr Stanton. That annexure consists of a Homeowners Warranty Certificate of Insurance issued under s 92 of the HB Act.
That certificate refers to "A contract of insurance" having been issued under s 92 of the Act by Royal & Sun Alliance Insurance. The certificate further states that the nominated agents were arranging "the insurance policy as agents of the insurer". The certificate also refers to the certificate being in respect of a "multi-unit" development. The certificate also identified the particular unit number as a representative sample of what were obviously 201 certificates issued for the particular building as was required by the legislation : s 96(2A) HB Act. The certificate also referred to "the conditions of the insurance contract". It is significant to observe that the reference to contract is in the singular, which the Tribunal obviously construed, correctly, in my view, that there was a single contract of insurance for all the lots but with multiple certificates. None of these provisions in the certificate made reference to multiple insurance policies. The Tribunal obviously decided that all these references related to a single policy of insurance. In my view that interpretation arises on a consideration of the ordinary and natural meaning of the words used in the documents before the Tribunal and represents a literal interpretation in favour of the assured : Federico. In my view that interpretation was open on the evidence.
The terms of Annexure B to the affidavit of Mr Stanton, which comprised selective portions of the Homeowners Warranty Policy of Insurance, made reference to a "job specific owner policy". The reference to a policy was singular and not plural. That policy was required to be in the standard terms as was provided by statute. Whilst the policy relevantly defined a number of terms, it did not relevantly define what constituted a claim. As a consequence, I consider "claim" should be given its ordinary meaning.
In argument, Mr Lynch relied upon s 102(6) of the HB Act, however I consider that provision is of no assistance to the plaintiff insurer. That provision refers to a single contract of insurance and an excess amount for each single claim. There is nothing in the terms of that section which requires that in the circumstances it must be inferred that there were multiple policies, and thus multiple claims.
In support of his argument, Mr Lynch also relied upon s 102(3) of the HB Act, which provides for a contract of insurance to have cover of not less than $200,000 in relation to each dwelling to which the insurance relates. In my view that provision in the statutory scheme is of no assistance to the argument asserting that there were 201 policies of insurance, as was contended. In my view the reference in s 102(3) to "contract" in the singular, in the context of 201 certificates of insurance each insuring for $200,000, is not inconsistent with 201 certificates having been issued under a single policy of insurance. Such a circumstance would make perfect commercial and administrative sense, in the context of the strata scheme. It is also consistent with a single claim having been made by the owners corporation on behalf of the individual lot owners affected. In my view this conclusion is consistent with a purposive and beneficial interpretative approach.
In this regard, I accept the submission made by Ms Olsson SC that it is clear the owners corporation was able to make a claim in its own right, just as it is the right to bring proceedings against the insurer, pursuant to the legal standing it had as a special or unique form of agency, to pursue or protect the rights and interests of any registered proprietor of a lot within the strata development : Owners of Strata Plan No 43551 v Walter Construction Group Ltd [2004] NSWCA 429; (2004) 62 NSWLR 181 per Spigelman CJ at [49];pp 180-181.
It follows that the owners corporation was not bound by the internal decision of the insurer to treat the one lodged claim as being 201 claims for its own purposes. The plaintiff insurer's contention to the contrary does not accord with a businesslike interpretation of the contract. The insurer's contention to the contrary was based on the legislative policy of the statutory requirement for the payment of an excess intended to discourage frivolous claims. In context, the unbusinesslike character of that submission is revealed at once by recognizing that on its face, a claim for defects involving $85,137.50, is not a frivolous claim on any stretched use of language.
Accordingly, in my view, on the evidence before the Tribunal it was open to conclude that there was only one claim made against one policy. There was no evidence before the Tribunal that would reasonably support an argument that there were 201 policies issued in respect of which 201 claims were made so as to require that 201 multiples of amounts for excess of $500 had to be paid in respect of the claim, amounting to a total of $100,500.
The question of whether or not there was one policy or multiple policies, being 201 in number, was exclusively a question of fact open to be determined by the Tribunal. The Tribunal determined that factual question by deciding that there was only one policy and therefore the single claim which emerged under the policy attracted an excess payment of $500 and not the sum of $100,500 representing $500 multiples for 201 individual claims. In my view this did not raise questions with respect to matters of law.
The contrary arguments raised by the plaintiff insurer concerning this proposition depend for their validity on a construction of the statutory scheme so as to impute the existence of multiple policies. In my view the Tribunal was not required to construe the statutory scheme in the manner so contended. Instead, it was asked to determine the appropriate amount of excess due in relation to the matters that were the subject of evidence in the proceedings. Those matters related to a single claim. In my view the Tribunal correctly decided that only one lot of excess of $500 was required to be paid by the defendant owners corporation under the policy in respect of the single claim that had been made. That finding was open on the evidence, and in my view, no relevant question with respect to a matter of law arises for decision in this appeal.
I have determined that the appeal does not raise a question with respect to a matter of law. Accordingly, the appeal, and therefore the summons, should be dismissed with the costs of the summons to be paid by the plaintiff insurer. As the decision of the Tribunal dealt only with the preliminary question identified by the parties, it is necessary for the matter to be remitted back to the Tribunal for consequential orders to be made to finalise those proceedings. I anticipate that those orders would be made by consent to reflect the result of its appeal.
I make the following orders: (a) The plaintiff's appeal is dismissed;
(b) The plaintiff is to pay the defendant's costs of the appeal on the ordinary basis, unless otherwise ordered;
(c) The proceedings are remitted to the Consumer, Trader and Tenancy Tribunal to make further orders, consistent with these findings, to finally determine the proceedings in the Tribunal;
(d) Liberty to apply on 7 days notice if further orders are required.
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.
Vero Insurance Limited
The Owners of Strata Plan No. 69352
CITATION: Vero Insurance Limited v The Owners of Strata Plan No. 69352 [2010] NSWDC 54
Australian Casualty Co Ltd v Federico [1986] HCA 32; (1986) 160 CLR 513 Bondi Beach Astra Retirement Village Pty Ltd v Hohman [2010] NSWCA 38 CASES CITED: Grygiel v Baine & Ors [2005] NSWCA 218 HIA Insurance Services Pty Ltd v Kostas [2009] NSWCA 292 McCann v Switzerland insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 Owners of Strata Plan No 43551 v Walter Construction Group Ltd [2004] NSWCA 429; (2005) 62 NSWLR 169
[2009] NSWCA 292
(1986) 160 CLR 513
(2000) 203 CLR 579
(2005) 62 NSWLR 169
(2004) 62 NSWLR 181
The plaintiff's appeal was dismissed. Vero was ordered to pay the defendant's costs of the appeal on the ordinary basis, unless otherwise ordered. The proceedings were remitted to the Consumer, Trader and Tenancy Tribunal to make further orders consistent with the findings, with liberty to apply on 7 days' notice if further orders were required ([68]).