Welcome to my General Insurance Insights newsletter, bringing you the latest case notes on key judgements from July 2023 affecting general insurers in Australia.
Blue OP Partner Pty Ltd v De Roma  NSWCA 161
The respondent was a pedestrian who was injured when she walked hurriedly towards a waiting bus and tripped and fell on a steel utility pit lid set into the footpath. The appellant was responsible for the inspection, maintenance and safety of the pit.
The primary judge held that the appellant had breached its duty of care, as an occupier, by failing to draw attention to a height differential of approximately 1cm between the pit lid and its frame, and the trip hazard that presented itself by painting or applying lines.
On appeal, the appellant argued that it had no duty to warn in relation to the pit lid, because the risk of tripping on the relevant hazard was an “obvious risk” within the meaning of s.5F of the Civil Liability Act 2002. The Court of Appeal accepted that a reasonable person exercising due care for their own safety would have seen the hazard, noting that the checker plate on the pit lid and the rusty coloration of the edges of the pit lid and frame were obvious indications that there was or likely to be an uneven surface in the area that may present a risk of tripping. On that basis, the appeal was granted.
Kerembla Pty Ltd v XL Insurance Company SE trading as Brooklyn Underwriting  FCA 769
The applicant specialised in large diameter and mineral exploration drilling services to the coal mining industry. Two employees of the applicant loaded an excavator onto an articulated vehicle for transportation from a mine site to the applicant’s premises. On route, the excavator collided with a bridge. The owner of the bridge made a claim against the applicant in relation to the resulting damage.
The applicant sought indemnity in respect of that claim under its public and product liability policy held with the second respondent. The second respondent denied indemnity based on a “Vehicles” exclusion. It excluded liability for property damage “arising out of the ownership, possession or use” by the applicant of any vehicle.
The applicant challenged that decision and sought a declaration of indemnity. In doing so, it relied on two exceptions to the exclusion. One of those was that the vehicle (or any tool, implement, machinery or plant attached to it) was being operated or used as a “Tool of Trade” at the applicant’s premises or any worksite. “Tool of Trade” was defined as any vehicle that has tools, implements, machinery or plant attached to or towed by it and that is being used at the applicant’s premises or on any “Worksite“. However, “Tool of Trade” did not include any vehicle whilst travelling to and from a “Worksite” or vehicles used to carry goods to or from any premises.
The Court accepted that the relevant exception applied. That was based on its findings that: (1) the excavator was attached to a vehicle, namely the trailer; (2) the trailer was being used at a “Worksite“, because that term extended to all areas between premises or sites where work was performed for or in connection with the applicant’s business; (3) by the same token, the trailer was not deemed to be travelling from or to a “Worksite“, because the route itself was one; and (4) goods could not include any tools, implements, machinery or plant attached to or towed by a vehicle, as that would undermine the operation of the definition of “Tool of Trade“.
Townsville City Council v Hodges  QCA 136
The appellant successfully appealed the primary judge’s decision that it was liable for injuries sustained by the respondent after she stepped into a ‘hole’ whilst walking across a park occupied and maintained by the respondent.
The Court of Appeal spent considerable time discussing whether the hazard could properly be characterised as a ‘hole’. Whilst it accepted that was the case, it rejected the trial judge’s findings that the size of the hole was “of little consequence“. Rather, those characteristics informed the standard of care that was required to be exercised by the appellant. In doing so, the Court of Appeal had reference to the statement in Littler v Liverpool Corporation  2 All ER 343 that “[u]neven surfaces and differences in level between flagstones of about an inch may cause a pedestrian temporarily off balance to trip and stumble, but such characteristics have to be accepted. A highway is not to be criticised by the standards of a bowling green.”
In this case, the Court of Appeal found that the hazard, which was between 2 to 5cm deep and greater than 30cm in diameter, was a ‘hole’, but that it was concealed. That characteristic, as well as the size of the park and all park areas for which the appellant was responsible, were relevant to a determination of what was required by way of the exercise of reasonable care.
On that question, the Court of Appeal accepted that the appellant’s system of inspection and hazard identification, including routine inspections by various crews, senior representatives and by a person who regularly mowed the lawns, was reasonable. Further, because ‘the hole’ was “so shallow and highly concealed that it could only have been detected by person stepping on it or the wheels of a mower running over [it]”, there was no basis to suggest that the appellant was aware of it nor that its system could reasonably have revealed its presence. To that end, the Court of Appeal rejected the notion that the appellant was reasonably required to arrange for a person to step on every part of the park and other parks managed by the appellant to identify those types of hazards.
Flanagan v Bernasconi  NSWCA 150
The appellant was the owner of a residential property with a swimming pool. In 2012, the appellant emptied the pool to investigate a leak. The cause of that leak was later discovered to be a malfunctioning hydrostatic valve. Contrary to advice provided by a family member, the appellant left the pool empty and failed to attend to the leak. As a result, the pool partially lifted out of the ground, causing damage to the pool and one of its walls to collapse.
The appellant lodged a claim on her homeowners insurance policy held with Vero. That claim was declined based on an exclusion for loss or damage caused by a pool (or any area around a pool) lifting.
The appellant issued proceedings against the first respondent, her insurance broker, who was employed the second respondent, a brokerage firm. The claim was brought on the basis that the first respondent failed to advise her in relation to the pool exclusion at the time her policy was taken out. While it was not in dispute that the first respondent’s failure to provide that advice constituted a breach of duty, the first respondent disputed that his breach was causative of the appellant’s loss. The trial judge accepted that argument on the basis that, even if the appellant had remained with her prior insurer or had taken out a policy with an alternative insurer, the claim would likely have been excluded by reason of either a defects exclusion (due to a defect in the hydrostatic valve, even if that defect was not initially present) or a reasonable precautions exclusion (due to the failure of the appellant to investigate the leak and her leaving the pool empty for several months prior to its failure). Those findings were upheld by the Court of Appeal.
Ballina Shire Council v Moore  NSWCA 155
The appellant was successful in its appeal against the primary judge’s finding that it breached its duty of care to the respondent, a cyclist, who fell from her electric bicycle after swerving to miss a single bollard on a shared pathway managed and controlled by the appellant. That finding had been reached on the basis that the appellant failed to remove the bollard at the same time it removed a second, damaged bollard 4 years prior to the incident and that remaining bollard served no purpose and posed a risk to cyclists in accordance with the findings of an independent report commissioned by the appellant 6 months later.
The Court of Appeal found that the single bollard did, in fact, serve a legitimate social utility of slowing traffic of cyclists and pedestrians on the shared path. Nevertheless, it commented that, even if the bollard was on no utility, it did not amount to an unreasonable hazard.
This article was written by Ashley Harding, Partner.