Livesay v Hawkins & Ors [2012] QSC 122
In Livesay v Hawkins & Ors [2012] QSC 122, the Supreme Court of Queensland was recently required to consider what constitutes a "claim" within the terms of a policy of insurance. The dispute involved a real estate agent (Newman) and his insurer (AHAC) and arose out of proceedings commenced by Shirley Livesay for injuries she sustained in a house she rented at Meadowbook.
Mrs Livesay and her husband rented the house from Gaylene and Jeremy Hawkins who had engaged Newman to manage the property. He was responsible for carrying out inspections of the house, arranging repairs, entering into tenancy agreements and collecting rent.
On Anzac Day in 2005, Mrs Livesay was injured when a pelmet above a door in the house fell and struck her. The following day, Mrs Livesay and her husband delivered a letter to Newman's office. The letter contained words to the effect:
"...It caused personal injury to her left hand and appears to have cracked her nose. We are currently seeking medical advice and will advise you of our intentions on this matter..."
And
"As per the Tenancy Act and advice from Rental Tribunal, Ray White Real Estate and the owners of a rental property will be held liable for any personal injury claims arising from damage caused to the tenants due to poor living conditions.....";
It also contained a lengthy description of problems with the house and repairs that the Livesays considered needed to be carried out. It appears little happened following this letter until September 2005 when Mrs Livesay served a Form 1 notice of claim under the Personal Injuries Proceedings Act 2002 (PIPA) on Newman.
Newman held a professional indemnity insurance policy with American Home Assurance Company (AHAC) for the period 24 July 2004 to 24 July 2005. When Newman received the Form 1 notice of claim under PIPA, he notified a claim to AHAC. AHAC refused to indemnify him in respect of his liability to Mrs Livesay. The insurer submitted that no "claim" had been made against Newman during the policy period.
Newman and AHAC ended up before the Queensland Supreme Court. The court was asked to consider whether the letter to Newman constituted a "claim" for the purposes of affording him coverage under the relevant policy. The policy defined "claim" to mean "any written demand...for compensation made against the insured but only in respect of Professional Services by the Insured..."
The court considered that the letter expressly asserted an entitlement on the part of Mrs Livesay to recover for her personal injury claim "due to injury caused by dangerous fixture." It occurred in the context of a letter in which Mrs Livesay and her husband were seeking resolution of the complaints they had in respect of defects in the property. The letter made it clear that Mrs Livesay appreciated and contended that she had a claim against Newman. The court considered that these elements were sufficient for the letter to be considered a form of demand, irrespective of whether the demand coincided with complaints about the condition of the property. In the court's opinion the letter constituted a written demand for compensation within the definition of the term "claim" in the policy. On that basis, the claim fell to be considered under the policy.
The court held further, following a concession by the insurer, that section 54 of the Insurance Contracts Act 1984 "cured" the late notification of the claim. [Newman, however, was held not to be entitled to cover by virtue of the operation of a bodily injury exclusion in the policy.]
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