16 September 2019, Supreme Court of New South Wales, Court of Appeal – Meagher and McCallum JJA
Relevant policy
Mr and Mrs Voitenko conducted business at a warehouse in Mortdale, and had taken out a contents insurance policy for the sum of $1.1million with Zurich Australian Insurance Ltd (Zurich).
Damage suffered
Three months after the policy was taken out, the warehouse was destroyed by a fire. Zurich made payments in the sum of $284,917, and refused to meet any further claims.
Initial Proceedings
Mr and Mrs Voitenko commenced proceedings against Zurich for breach of the insurance contract, claiming damages of $786,069.
Zurich’s initial defence was on the ground that the claim was fraudulent, however, two years later, in May 2019, Zurich amended its defence, alleging that the first had been deliberately lit by Mr Voitenko. Thus, Zurich claimed an entitlement to refuse to pay on the ground that Mr Voitenko had breached his duty of utmost good faith, or, in the alternative, on the ground of an exclusion under the policy for loss or damage caused by a willful act of the insured.
What was appealed?
Mr and Mrs Voitenko identified five alleged material errors in the primary judgment:
- Primary judge had erred in their failure to take account of the material consideration of presumptive prejudice, and there was significant prejudice in allowing Zurich to amend for the first time that Mr Voitenko was responsible for lighting the fire, eight years and eight months after it occurred.
- Primary judge had erred in treating the explanation for the delay as sufficient justification for it, thereby treating the justification as a factor to be weighed against the effects of the delay on the applicants.
- Primary judge had erred in taking account of the irrelevant consideration of when evidence was served, in considering whether the explanation for the delay did in fact justify the delay.
- Primary judge’s failure to weight in the balance Zurich’s failure to identify what pointed to an available defence of “fraud in the event”.
- Primary judge had erred in their failure to have specific regard to the matters identified in s 56-59 of the Civil Procedure Act 2005 (NSW).
Findings on Appeal
- Leave was required because the decision was interlocutory, and governed by principles concerning appellate review of discretionary decisions and decisions on a question of practice and procedure, requiring the exercise of particular caution before intervening. – [4]
- Failure to make explicit reference to s 56-59 of the Civil Procedure Act did not constitute legal error – the critical question was whether the primary judge had failed to have regard to any mandatory relevant consideration identified in those provisions. – [37]
- There is not sufficient doubt to warrant reconsideration on appeal. The application did not raise an issue of principle, a question of general public importance or an injustice which was reasonably clear. – [40]
