Rheem Australia Pty Ltd v Mitsui Sumitomo Insurance Company Ltd [2023] FCA 1570

Rheem Australia Pty Ltd v Mitsui Sumitomo Insurance Company Ltd [2023] FCA 1570

The exclusion for 'electric wiring' in the Machinery Breakdown endorsement refers only to cables and wires, not to devices such as the CFS; thus, indemnity under the Machinery Breakdown and Section 2 of the policies (but not under the Fusion endorsement) is available. The Fusion endorsement excludes protective devices, which include the CFS, even if arcing does not occur in ordinary working. Clause 2(d) does not exclude indemnity for the incident.

Jurisdiction
Australia
Judgment Date
11 December 2023
Procedural Posture
Insurance Industrial Special Risks Policy Construction / Separate Questions Hearing
Outcome
Application regarding separate questions determined; applicant entitled to indemnity under Machinery Breakdown endorsement and Section 2 of both policies, not under Fusion. Respondents to pay applicant's costs for the separate questions. Further case management hearing adjourned.
Legal Topics
['policy Interpretation' 'machinery Breakdown' 'exclusion Clauses' 'fusion Endorsement' 'indemnity']
['insurance Law' 'commercial Law'] ['policy Interpretation' 'machinery Breakdown' 'exclusion Clauses' 'fusion Endorsement' 'indemnity']

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Procedural Posture

Insurance Industrial Special Risks Policy Construction / Separate Questions Hearing

Legal Issues

  1. 1 ['Whether the applicant is entitled to indemnity under Machinery Breakdown and Fusion endorsements to industrial special risks policies' "Proper construction of 'electric wiring' exclusion in the Machinery Breakdown endorsement" 'Construction of the concluding words to the Fusion endorsement' 'Whether clause 2(d) of the endorsements excludes indemnity']

Ratio Decidendi

The exclusion for 'electric wiring' in the Machinery Breakdown endorsement refers only to cables and wires, not to devices such as the CFS; thus, indemnity under the Machinery Breakdown and Section 2 of the policies (but not under the Fusion endorsement) is available. The Fusion endorsement excludes protective devices, which include the CFS, even if arcing does not occur in ordinary working. Clause 2(d) does not exclude indemnity for the incident.

Court Disposition

Application regarding separate questions determined; applicant entitled to indemnity under Machinery Breakdown endorsement and Section 2 of both policies, not under Fusion. Respondents to pay applicant's costs for the separate questions. Further case management hearing adjourned.

Orders

  • ['The separate questions are answered: (a) Yes, in relation to (i) and (ii), but No in relation to (iii); (b) No; (c) Yes, in relation to (i) and (ii), but No in relation to (iii); (d) No.' "The respondents pay the applicant's costs in relation to the separate questions." 'The matter stand over to 9.30 am on 9...