What is an "accident" in property damage insurance
policies is often not clear cut.
Expert evidence from a crane operator may have allowed the
Insurer to maintain its denial.
The Appellant Insured owned and operated a mobile crane which
could only move over level ground while carrying loads over a
The Insured used concrete rubble to level the area over which
the crane was to pass. It was intended that as the crane travelled
over the rubble, the rubble would compress resulting in level
However, the rubble did not compress which resulted in the boom
The operator of the crane was experienced and was aware of the
risk the boom would fail in the circumstances in which it did.
The operator's evidence at trial was that he watched the
spirit level in the machine during the 12 second period the crane
crawled up the incline before the room collapsed.
The insurance policy provided an indemnity for accidental
We will pay for insured damage caused by or resulting from
accidental overloading which is non-deliberate and clearly
The policy had an exclusion clause which provided that the
policy did not cover damage to the crane which was:
... [being] operated contrary to the manufacturer's
The court at first instance concluded that the operator of the
...had a full 12 seconds of crawling the crane up the ramp
... during which he must have appreciated two things. First the
rubble was not compressing as he expected and second, from looking
at the spirit level, the crane was not being operated on level
Therefore the court at first instance found the collapse of the
boom of the crane was not an accident due to the operator's
"recklessness, a gamble or a deliberate courting of the risk
of which he was well aware".
It is trite that property damage policies will not respond to a
loss where the loss is deliberately caused. But as Cooke J in Mt
Albert City Council v NZMC Insurance Co  NZLR 190
... 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 be
fairly called an accident ... One expression that has been used in
some cases and was used ... here is "courting" the risk.
If that is understood as a term stronger than merely running or
incurring, and in the sense of inviting or willing, I respectfully
agree that it can be a useful test ...
The majority of the Queensland Court of Appeal found that the
operator of the crane was not "courting the risk" in the
circumstances, and so the collapse of the crane's boom was
still an "accident" in terms of the policy and so cover
was not excluded.
In the majority decision, McMurdo P found that by the time the
crane operator realised the ground was not compressing as expected,
the overloading and collapse of the crane was imminent and
Morrison JA in the other majority judgment stated that "the
total time [for the Insured to realise the rubble was not
compressing] was only 12 seconds".
Fraser JA in the minority judgment considered it was implicit in
the primary judge's findings that 12 seconds was sufficient
time for a full appreciation by the crane operator that it was
reckless to continue proceeding up the ramp.
Many people in the community, might say that 12 seconds was a
very long time to continue operating a machinery in circumstances
where there is likely to be an accident. However, the majority of
the Court of Appeal concluded it was sufficiently short period that
the collapse of the boom was unavoidable.
We query if an expert crane operator could have given evidence
on behalf of the Insurer about the amount of time it should take a
properly qualified crane operator to realise that the operation
should be ceased to prevent the crane's boom from
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about your specific circumstances.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
The government intends to implement a scheme that drastically cuts benefits to people injured in motor vehicle accidents.
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