Bradbury v London Guarantee & Accident Co Ltd [1927] HCA 35; (1927) 40 CLR 127 (16 September 1927)

HIGH COURT OF AUSTRALIA

Bradbury Plaintiff, Appellant; and The London Guarantee and Accident Company Limited Defendant, Respondent.

H C of A

On appeal from the Supreme Court of Western Australia.

16 September 1927

Isaacs A.C.J.Higgins and Starke JJ.

H. P. Downing K.C., Stawell K.C. and A. C. Downing, for the appellant.

J. P. Dwyer and Lappin, for the respondent.

Downing K.C., in reply.

The following written judgments were delivered:—

Sept. 16

Isaacs A.C.J.

On 20th December 1925 Jane Eliza Bradbury contemporaneously made two proposals to the London Guarantee and Accident Co. Ltd. to insure for six months her property against fire. One proposal was in respect of a building, the other in respect of the furniture therein. The proposals were accepted and policies were issued. On 22nd January 1926 the property was destroyed by fire. The Company denying all liability, the appellant instituted an action claiming a declaration of liability and also payment of the sum of £1,600, the amount of insurance. Various defences were set up; but, with the exception of two, the issues were decided at the trial in favour of the appellant and are not now challenged by the respondent. As to one of those two issues the defendant objected that the amount of its liability, if any, must be settled by arbitration. This is conceded by the appellant. There remains one issue only, that on which the respondent succeeded both before Burnside J., the learned trial Judge, and before the Full Court.

One of the questions in the proposal was as follows:—"Have you or wife/or husband ever been a claimant on a fire insurance office or had a fire? If so, state when, where situated, and name the office and/or insurers." The answer in one proposal was: "Fire in 1914 from adjoining shops, Throssell Street, Collie." In the other it was: "Known to Company." The information required and answers are declared to be material to the risk, and the proposal is declared to be the basis of the contract. As a fact it was proved that in 1917 a fire had occurred on the premises of her husband, and he then made a claim on a Melbourne insurance office. The omission of this fact from the answer to the question quoted is the ground on which judgment was given in both Courts for the respondent.

It should be observed that the judgment as at first delivered by Burnside J. proceeded on the basis that the appellant was still a married woman, though separated from her husband for thirty years. After judgment delivered it was pointed out to the learned Judge that she had been a widow since September 1923. The learned Judge, however, observed that as "the question covers the relationship of husband and wife" the result was the same. In the Full Court Draper J. said he had had some doubt, but, taking everything into consideration, did not feel justified in differing from the reasons given by the learned Chief Justice, to which Northmore J. agreed. Those reasons were:—"I can see no ambiguity. It is not as if the question referred to the present dealings of a non-existent husband. The Company was inquiring into past history. That is the obvious object of the question. It wished to know what had been her conduct or the conduct of her husband for the time being. It wanted to know what the record of the parties was, so as to be able with its eyes open to form its judgment whether the risk was a safe one to undertake."

With almost all that is there said I entirely agree. But the pivot of the case is whether the word "husband" is to be read as "present husband" or "husband for the time being." If the latter, a woman who had been twice married and then a widow or divorced, and whether her husbands had lived in this or any other country, would be bound to relate their whole fire history at the peril of nullity of the contract. The argument in support of that view was in effect that, by association with a man who had had a fire or made a claim against an insurance office, the wife might have become in some way affected so as to increase the risk of future fires. Whether that assumes a moral deterioration or a sort of introduction to pyrotechnics, I am unable to conjecture. But it is too remote, in my opinion, to enter into the calculation of any reasonable insurer. Even the greater possibility of a woman fraudulently allowing her husband to pose as the owner of her property, and to set fire to it, is so rare and remote that it was not even suggested, though that would more reasonably identify her with a circumstance so as to make it material.

The real point is that to read the elliptically framed question as the respondent contends, is to read it unreasonably, and so as to entrap a proponent. The test is as put by Lord Shaw of Dunfermline in Condogianis v. Guardian Assurance Co.[1]: "What is a just and reasonable construction of the words in the question Has proponent" or husband "ever been a claimant on a fire insurance company?"; or in the broader and just as sound form stated later on[2], which, when adapted to the present case, would run thus: "Could a" woman "making a proposal for insurance fairly read the question as applying only" to a present husband? And pursuing his Lordship's observations further, it may be asked: What essential element important to be known would thereby be unrevealed?

The meaning of words varies according to the circumstances in which they are used (River Wear Commissioners v. Adamson[3]; The Lion[4]). The circumstances here were that a woman proposed to insure her property. The Company naturally desired to understand what risk it was taking. Her past fire history was, of course, important. Not merely her fire history during her married life, for that might be comparatively recent, but her personal history. This is obvious. Further, the presence of a husband who, by habits or proclivity or even misfortune or otherwise had had a fire or been a claimant, would be an equally obvious element of importance (see Midland Insurance Co. v. Smith[5]). And so the proponent would, as a matter of common sense, necessarily understand. But I am not prepared to say that the question as to the husband married perhaps a month before would be satisfied by an answer limited to that month, if he had had a previous fire and made a claim as appears in the present case. The important consideration is the personal element of those interested in the subject, not the married condition. If that is so as to the wife, why should it not be so as to the husband? However that may be, I am of opinion that the proponent in this case, a widow, might fairly and justly understand the question so far as it referred to "husband" to mean "present husband," so as to refer to the likelihood of such a person increasing the risk of fire. That is the primary meaning of the word unaccompanied by any expressions extending the meaning, or any circumstances requiring a signification of "past husband or husbands," or "both present and past husbands." To include so much would, as it seems to me, necessarily imply ambiguity, because all that extension would arise from the one expression "husband." And if that be so, the authorities referred to with approval in Condogianis' Case[6] are decisive in favour of the appellant. To say that unambiguously it includes dead husbands impels the question, why? What possible relation to the risk, beyond the two remote considerations already alluded to, could the fact of a marriage relation have, which was terminated by death perhaps years before? I feel quite unable to answer that in favour of the construction put upon the question by the Company.

On the whole, with unfeigned respect for the views from which I feel constrained to differ, I am of opinion that the proponent, having at the time no "husband," was justified in answering as she did, especially as the Company was distinctly told on one of the proposals that she was a "widow." The appeal should, therefore, be allowed and the declaration sought should be made. The amount must be settled, if in dispute, by arbitration, as required by the contract.

Higgins J.

In my opinion, this appeal must be allowed.

I fully concur with the learned Chief Justice of this State when he says that the Company, in putting the question, "was inquiring into past history"; that "it wanted to know what the record of the parties was so as to be able with its eyes open to form its judgment whether the risk was a safe one to undertake"; that there is "an express warranty that the answers made to the questions asked were true"; and that "it is an express and essential condition of the contract that the policy should be null and void in the event of the answers proving to be false." But we have yet to ascertain the meaning of the printed question: "Have you or wife/or husband ever been a claimant on a fire insurance office or had a fire?" Having regard to the obvious purpose of such a question in relation to a proposal for a policy of fire insurance, I take the words "or wife or husband" to mean an existing wife or an existing husband, if the proponent has one. At the time of the proposals (one for house, the other for furniture, &c.), signed on 20th December 1925, the proponent was a widow, for Bradbury had died in 1923. On his death the plaintiff had no husband. The natural meaning of the question, under such circumstances, was "Tell us have you had a fire yourself, or has your husband had one." The husband may be expected to live with the proponent and to benefit with her from any insurance moneys paid on a fire. Such a question is idle as to a deceased husband. The question is not has any ex-husband of yours had a fire, but has your husband had a fire? What the Company wanted to know was the past history of the present husband (if any).

It is not right to ignore the consideration that the question as it stands is in a printed form, and addressed to all proponents whether male or female, married or single; and that the proponent widow would naturally take it to refer to an existing husband, in giving the information which the Company's officer filled into the form. But I do not like to rest my opinion so strongly on the maxim verba fortius accipiuntur contra proferentem, as on the maxims which logically take precedence, verba intentioni debent inservire and verba generalia restringuntur ad habilitatem rei vel personœ—that general words are to be construed in application to the purpose for which they were used. The purpose here was, manifestly, to enable the Company to know the past history (as to fire insurance) of a person proposing the insurance and of his or her spouse, in order that the possibility of a wilful fire might be duly weighed (see Leake on Contracts, 6th ed., pp. 146-148; Ford v. Beech[7]).

No argument has been addressed to us on the ground that in the defence "express warranty" of the truth of all the answers has not been pleaded. As the Chief Justice pointed out, the pleading could, if necessary, have been amended.

Starke J.

I agree. In my opinion the question, "Have you or ... husband ever been a claimant on a fire insurance office or had a fire?" does not, reasonably construed and having regard to its purposes, refer to the case of a husband of the proposer dead at the time of the proposal.

Appeal allowed. Judgments of Full Court and Supreme Court set aside. Declare that the policies referred to in the statement of claim were and are valid and subsisting policies and that the defendant is liable to pay or make good to the plaintiff, not exceeding the amount of her insurable interest, the value of the property insured to the amount ascertained in case of dispute in manner provided by the said policies. Appellant to have costs in all Courts.

Solicitors for the appellant, Downing & Downing.

Solicitors for the respondent, Dwyer, Unmack & Thomas.