The State Insurance General Manager v Van de Ven
- Court
- Court of Appeal
- Judgment
- 26 October 1993
Areas of law
Judgment analysis
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Facts
The respondent, Mr Van de Ven, claimed on his motor vehicle policy after his 1981 Mercedes Benz was stolen from a Wellington street and later found burnt out and pushed over a cliff. The insurer, State Insurance, declined the claim, alleging breaches of policy conditions. The insurer's suspicions were aroused because the car was insured for $48,500, which it considered to be significantly more than its market value of around $30,000, and because items of only trifling value were taken, fitting a pattern of insurance fraud. An investigation by an assessor, Mr Mearns, and the police suggested the car was stolen using a 'service key'. The investigation also revealed phone calls between a man convicted of receiving items from the car and the residence of Mr Van de Ven, where his adult stepson, Graham McGee, lived. The central dispute became whether Mr Van de Ven had been truthful with the insurer's assessor about the existence and whereabouts of a third 'service key' for the vehicle. The High Court found in favour of Mr Van de Ven, and the insurer appealed.
Held
- An appellate court will not overturn a trial judge's finding on witness credibility, particularly a finding that an insured did not have the requisite intent to deceive when making a statement in support of a claim, unless that finding is clearly wrong, as the trial judge has the advantage of seeing and hearing the witness give evidence.
- For an insurer to rely on a forfeiture clause for a false statement, it must discharge the onus of proving the statement was made with an intention to deceive or with recklessness as to its truth, not merely that it was a mistake.
Leave to bring the appeal out of time is granted. The appeal is dismissed. Costs of $3,500 are awarded to the respondent, together with any disbursements as fixed by the Registrar.
Key passages3
Where an insurance policy contains a clause providing for forfeiture of all benefits if a false declaration is made in support of a claim, that clause will be enforced.
“That was the subject of the only ground pursued in the appeal, based on breach of Condition 3 of the policy which provided inter alia that 'if any false declaration or statement be made or used in support of any claim ...... all benefit under this policy shall be forfeited'.”
To void a claim based on a false statement, the insurer bears the onus of proving the statement was intentionally deceptive or made with recklessness as to its truth; a mere mistake is insufficient.
“Mistake is not enough. There must be an intention to deceive, or recklessness in not caring whether the statements were true or false, and the onus is on the appellant to establish this.”
An appellate court has a significant disadvantage compared to a trial judge in assessing witness credibility and will be reluctant to overturn findings of fact based on such assessments.
“He must have gained a favourable impression of Mr Van de Ven's integrity from seeing and hearing him give evidence, an advantage which is not available to us. As an appellate Court we feel unable to reach that conclusion in the light of the Judge's assessment of his overall credibility.”