The Northern Territory Court of Appeal recently reviewed the
Wayne Tank principle in a case where the loss resulted
from more than one cause. Under the Wayne Tank principle,
where there are two or more concurrent causes of the loss, one of
which is an insured event and one which is an excluded event, the
insurer is not liable to indemnify under the policy.
The Central Australian Aboriginal Congress
(Congress), is an incorporated association that
provided a wide range of medical and related services to its
patient group. The Congress was one of the defendants in an action
brought by the spouse of the late Clive Henry Impu for damages in
negligence. The Congress suffered judgment for $236,972. The trial
judge found the Congress had breached its duty of care to the
deceased by reason of a number of "administrative" errors
or failures, some by administrative staff, others by two medical
practitioners employed by the appellant. The Congress sought
indemnity from its insurer, CGU Insurance Limited
(CGU), for the judgment sum by way of third party
The trial judge found that under the terms of the Professional
Risks policy between Congress and CGU, claims against medical
practitioners were excluded, and that the failures of two doctors
employed by Congress contributed to the failures which led to the
deceased's death. Accordingly, her Honour applied the Wayne
Tank principle under which Congress would be indemnified under
its policy for the administrative errors by administrative staff
but would not be indemnified for the breaches by its employed
medical practitioners. Congress then appealed against the dismissal
of its third party claim against CGU.
The Court of Appeal considered the medical malpractice
exclusions in the policy. Angel J held that the relevant provisions
of the policy were exceptions or limits, instead of exclusions and
in the circumstances, the WayneTank principle
did not apply.
In contrast, Mildren J (with Martin CJ in agreement) held that
the provisions were exclusions However, they did not have any
operation on the facts of the case and as such his Honour came to
the same conclusion as Angel J, that the Wayne Tank
principle did not apply. Mildren J held that the proceeding against
Congress did not include a claim against the two medical
practitioners alleged to have been involved in the failures which
caused the deceased's death. The claim was against Congress for
providing negligent professional services to the deceased and in
the circumstances, the exclusion provisions in the policy did not
apply. His Honour also noted that there had been no finding of
negligence against the two medical practitioners in relation to
their treatment of the deceased. His Honour concluded that in his
view, the real cause of loss was the failure by Congress to put
proper systems in place to ensure that administrative errors of the
kind found by the trial judge were eliminated.
The Court of Appeal unanimously allowed the Appeal.
This decision shows the importance of carefully considering
whether exclusions apply to the allegations and findings of fact
made. The need to determine whether as a matter of construction a
limitation on cover is an "exclusion" to which the
Wayne Tank principle applies is also demonstrated.
Central Australian Aboriginal Congress Inc v CGU Insurance
Ltd  NTCA 1
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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.
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