Dalby Bio-Refinery Ltd v Allianz Australia Insurance Limited [2018] FCA 1806

Procedural Posture

Insurance Proceeding Concerning an Industrial Special Risks Insurance Policy / Final Hearing on Liability, With Quantum to Be Determined Later If Necessary, After Referee Reports Were Adopted by Consent

Legal Issues

1. 1 ["Whether perils exclusions 6(c)(i) or 6(c)(ii) of the Policy applied to physical loss, destruction or damage to Dalby's stockpiles of dry distillers' grain and solubles." 'Whether the word "heating" in perils exclusion 6(c)(ii) was limited to "spontaneous heating".' 'Whether the self-heating identified by the referee was a proximate cause of the damage for the purpose of the exclusion.' 'Whether the Insurers were confined by their concise statement in response to a case based on spontaneous combustion and/or spontaneous heating.' 'Whether a special costs order should be made following a Calderbank offer.']

Ratio Decidendi

Perils exclusion 6(c)(ii), properly construed in the context of the Policy, excluded damage occasioned by or happening through heating of any type and was not limited to spontaneous heating. The referee's reports established on the balance of probabilities that the damage was most likely occasioned by or happened through self-heating. It was unnecessary to identify the antecedent cause or causes of the self-heating, because the relevant exclusion was engaged by damage occasioned by or happening through heating. Even if the exclusion were limited to spontaneous heating, self-heating would fall within that concept because it occurred by internal processes rather than external cause. The...

Court Disposition

The originating application was dismissed with costs on the ordinary basis.

Orders

• ['The originating application dated 25 October 2017 be dismissed with costs.' 'The date by which a notice of appeal must be filed pursuant to FCR 36.03(b) is fixed as 14 days after the date on which reasons revised from the transcript are published.']