Citation: Lynch v Bredbo Pty Ltd [2025] NSWDC 54
Court: District Court of New South Wales
Date: 12 March 2025
Judge: Gibson DCJ
Background
A painter, the late Stephen Lynch, was injured on 9 September 2022 when a Can-Am utility vehicle driven by Mark Streeter overturned on a rural property owned by Streeter's company, Bredbo Pty Ltd. Lynch had been engaged to paint the homestead in preparation for its sale and was living on the property while carrying out that work. Streeter was a director and shareholder of Bredbo.
That evening, after dinner, Streeter loaded a rifle into the Can-Am and the two men set out across the farm paddocks. The vehicle overturned, injuring Lynch. Lynch's claim against Bredbo was settled for $78,591.56 inclusive of costs.
Streeter then brought a cross-claim against the property's insurer, Insurance Australia Limited (IAL), seeking indemnity for that settlement sum under Bredbo's "Countrypak" rural insurance policy. IAL denied indemnity on several grounds, including that the accident occurred during a recreational hunting trip, that relevant policy exclusions applied, and that Streeter had made a fraudulent claim. The cross-claim was the subject of this judgment.
Legal Issues
The court was asked to resolve the following questions:
- Whether Lynch's personal injury arose out of or in connection with Bredbo's "Business" as defined in the policy
- Whether the accident occurred during a recreational hunting trip
- Whether the policy's Firearms Exclusion applied
- Whether Streeter deliberately drove the vehicle into a pig, and if so, whether that conduct was intentional, reckless, or negligent
- Whether deliberately driving into a pig breached the Prevention of Cruelty to Animals Act 1979 (NSW), the policy's Legality Condition, and/or its Reasonable Precautions Condition
- Whether Streeter made fraudulent or deliberately misleading statements in two claim forms (dated 6 and 10 October 2022) and a subsequent email (dated 24 April 2023)
- Whether IAL was entitled to deny indemnity under s 56 of the Insurance Contracts Act 1984 (Cth) and/or at common law on the basis of fraud
Decision
Business activity and recreational hunting. The court found that the accident did not arise out of Bredbo's business. The evening outing was a recreational hunting trip, arranged by text messages in which Streeter had spoken of shooting deer, "nuking" pigs, and reducing kangaroos, and to which Lynch had enthusiastically agreed. The outing took place at night in pitch dark, making any property inspection impossible. On the evidence, including video footage taken by Lynch during the trip, the court was satisfied that the vehicle overturned while Streeter was actively chasing pigs.
Firearms Exclusion and Reasonable Precautions. The court found the Firearms Exclusion applied. The court also found that Streeter had failed to take reasonable precautions, including by knowingly driving a vehicle with a missing passenger door at night across paddocks in pursuit of pigs, with a passenger present. On the Legality Condition, however, the court found in Streeter's favour: it was not satisfied that deliberately driving a vehicle at pigs necessarily constituted cruelty to animals under s 5 of the Prevention of Cruelty to Animals Act 1979 (NSW) in the circumstances established.
Fraud. The court found that Streeter had made fraudulent misrepresentations to IAL. In his claim forms, Streeter described the cause of the accident without any reference to chasing pigs, despite the pig chase being the major contributing factor. He knew Lynch had taken video footage but made no effort to view or disclose it to IAL. He also omitted to disclose that the passenger door of the vehicle was missing, a circumstance directly relevant to the severity of Lynch's injuries. The court found Streeter's account was at best a half-truth and, in the circumstances, deliberately misleading. Each of these findings was individually sufficient to establish fraud, and IAL had discharged the heavy onus that fraud carries.
Result. All twelve issues were resolved in IAL's favour, with the exception of the two questions concerning the Legality Condition. The cross-claim was dismissed.
Orders Made
- Cross-claim dismissed
- Costs reserved (liberty to apply for special costs orders)
- Liberty to apply (including in relation to any slip rule applications)
- Exhibits retained until further order
Key Takeaways
- The District Court confirmed that where an insured's director makes a claim omitting material facts that were known to him and that directly bear on how the accident occurred, those omissions can constitute fraud sufficient to entitle the insurer to deny indemnity under s 56 of the Insurance Contracts Act 1984 (Cth).
- A recreational hunting trip organised by text message, carried out at night with a loaded rifle, and accompanied by video evidence of pig-chasing, was held to fall outside the "Business" cover provided by a rural property insurance policy, even where the insured was a farming company and the participants were on the insured land.
- Where multiple independent findings each individually satisfy the heavy onus of proving fraud, a court may decline to treat those findings as merely cumulative and will consider each ground sufficient to ground the insurer's refusal to indemnify.
- The absence of a vehicle door was treated as a material safety matter the insured was required to disclose when lodging a claim: knowingly omitting that information formed part of the fraudulent conduct established against Streeter.
- Finding in the insured's favour on the Legality Condition illustrates that a court will scrutinise each policy exclusion independently: success on one ground does not carry over to related but distinct grounds.
Legislation and Cases Referenced
Legislation:
- Insurance Contracts Act 1984 (Cth), ss 54, 56
- Prevention of Cruelty to Animals Act 1979 (NSW), s 5
- Uniform Civil Procedure Rules 2005 (NSW), Part 24
- Evidence Act 1995 (NSW), ss 136, 140
Cases:
- Fox v Percy (2003) 214 CLR 118
- McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; 203 CLR 579
- Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
- Barrie Toepfer Earthmoving and Land Management v CGU Insurance Ltd [2016] NSWCA 67
- QBE Insurance Australia Ltd v Vasic [2010] NSWCA 166
- Certain Underwriters at Lloyds of London v Dhillion Scaffolding Pty Ltd [2022] VSCA 92
- Liberty Mutual Insurance Company Australian Branch v Icon Co (NSW) Pty Ltd [2021] FCAFC 126
- Kmart Australia Limited v Marmara [2024] NSWCA 249
- Malos v Malos [2003] NSWSC 118; 44 ACSR 511
- Jones v Dunkel (1959) 101 CLR 298
- Craig v Associated National Insurance Co Limited [1984] 1 Qd R 209
- Angel v Hawkesbury City Council [2008] NSWCA 130
- Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419