Accident, recklessness and insurance

Margaret McMurdo P:

For the appellant to be deprived of the benefit of the accidental overload clause, the overloading and damage must have been expected (Westco Australia Pty Ltd v Manufacturers Mutual Insurance Ltd (Unreported, Supreme Court of Queensland, Derrington J, D M Campbell and Kelly JJ agreeing, 22 May 1984); Mount Albert City Council v NZMC Insurance Co [1983] NZLR 193 – 194 (Cooke J, Somers and Jeffries JJ agreeing).  Both the overloading and the damage will be accidental if each can be categorised as “an unlooked-for mishap or an untoward event which is not expected or designed”: Fenton v Thorley & Co Ltd.8 As Cooke J in Mount Albert City Council v NZMC Insurance Co (Somers and Jeffries JJ agreeing) stated:

“… there is a category of cases falling short of a deliberate causing of the damage by the insured where his conduct is nevertheless so hazardous and culpable that the event cannot fairly be called an accident. It can only be a question of fact whether a case falls within this category. The insured’s knowledge of the risk must be important, in that unless the evidence justifies the inference that he deliberately incurred the risk one would be very slow to find that the event was other than an accident. On the other hand it seems to me not decisive that the risk may have been deliberately run or calculated. For instance, if the risk was reasonably seen by the insured as not a high one, the occurrence might still be found to be an accident.

It is not profitable to essay precise rules or semantics in this field. Facts and risks vary too greatly. One expression that has been used in some cases and was used by [the trial judge] here, is “courting” the risk. If that is understood as a term stronger than merely running or incurring, and in the sense rather of inviting or wooing, I respectfully agree that it can be a useful test for the tribunal of fact to apply. So can Lord Macnaghten’s definition [“an unlooked-for mishap or an untoward event which is not expected or designed”]. But in the end … I doubt whether as a matter of law the Court can go further than to say that those are helpful but not necessarily exhaustive tests…”

TPD: "unlikely ever" – a real chance

TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim [2016] NSWCA 68

Construction of the TPD clauses

  1. The statement in the headnote of White v The Board of Trustees [1997] 2 Qd R 659 that “‘unlikely’ meant ‘improbable’ in the sense of a less than 50 per cent chance” is erroneous: at [81], [86], [189]-[190].

White v The Board of Trustees [1997] 2 Qd R 659, consideredBeverley v Tyndall Life Insurance Co Ltd [1999] WASCA 198; 21 WAR 327, followed

  1. The phrase “unlikely ever” in the TPD clauses does not mean “less than 50 per cent”. A real chance that a person will return to relevant work, even if it is less than a 50% chance, will preclude an insurer being satisfied that the Insured Person is unlikely ever to return to relevant work. Conversely, the insurer will be satisfied if there is merely a remote or speculative possibility that an Insured Person will return to such work: at [88]-[91], [190].
  2. Consideration of the utility of dictionary definitions: at [80].

Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664, 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 [2014] NSWCA 409; 88 NSWLR 488, Comcare v Martinez (No 2) [2013] FCA 439; 212 FCR 272, R McDougall, “Construction of contracts: The High Court’s approach” (2016) 41 Aust Bar Rev 103, referred toBreach of duty

  1. MetLife did not breach its duty to Mr Shuetrim by failing to give the vocational assessment report, which was highly equivocal, “any, or any proper, weight”: at [100]-[102].
  2. TAL did breach its duty to Mr Shuetrim by failing to have regard to medical and psychiatric opinions expressed after the “relevant time”. These opinions were relevant to TAL’s determination of Mr Shuetrim’s claim: at [147]-[154].

The two-stage approach

  1. TAL should not be permitted to reverse its forensic decision made at trial, in circumstances where that decision significantly affected the course of the trial: at [164]-[167].

Sze Tu v Lowe [2014] NSWCA 462; 89 NSWLR 317, Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631, referred to

  1. Despite being the subject of some judicial criticism, the two-stage approach in Edwards v The Hunter Valley Co-op Dairy Co Ltd has been applied in considered appellate decisions in New South Wales, Queensland and arguably Western Australia, which have consistently been applied in first instance decisions across Australia, and shall not be departed from: at [168]-[188].

Edwards v Aberayron Mutual Ship Insurance Society (1876) 1 QBD 563, Edwards v The Hunter Valley Co-op Dairy Co Ltd (1992) 7 ANZ Ins Cas 61-113, HCF Life Insurance Company Pty Ltd v Kelly [2002] WASCA 264, McArthur v Mercantile Mutual Life Insurance Co Ltd [2002] 2 Qd R 197, Hannover Life Re of Australasia Ltd v Sayseng [2005] NSWCA 214; 13 ANZ Ins Cas 90-123, Birdsall v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2015] NSWCA 104; 89 NSWLR 412, considered

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Insurance, conditions and burden proof


Subject to the terms conditions and exclusions of this policy as agreed by You and Us, We agree to provide indemnity in respect of any Motor Vehicle described in the Schedule against loss damage or liability as hereafter mentioned arising out of an Accident or theft,

Provided …

(4) Your Motor Vehicle is being used in connection with Your occupation or business, or in the case of a sedan or station sedan, Your occupation, business or private use.


We may refuse to pay a claim, or may reduce the amount payable under a claim to the extent that Your breach of any condition of this policy causes or contributes to loss, damage or liability or prejudices Our interest or rights, in respect of that claim.


You and any person acting on Your behalf must exercise reasonable care and precautions to prevent loss or damage to the Motor Vehicle, and comply with all statutory obligations and by-laws or regulations imposed by any public authority, for the safety of the Motor Vehicle/s and, for the carriage of goods and merchandise.

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