LIONEL RONALD ROGERS v HIH CASUALTY & GENERAL INSURANCE (NZ) LTD [2000] NZCA 269 (11 April 2000)

IN THE court of appeal of new zealand

ca281/99

	between	LIONEL RONALD ROGERS
		Appellant

	AND	HIH CASUALTY & GENERAL INSURANCE (NZ) LTD
		Respondent

Hearing:	11 April 2000
Coram:	Blanchard J McGechan J Young J
Appearances:	Dr R E Harrison QC for Appellant F W Rose for Respondent
Judgment:	11 April 2000

judgment of the court delivered by McGECHAN J

[1] This is the judgment of the Court.

[2] This appeal involves a short point as to the correct construction of an exclusion clause in a motor vehicle insurance policy.

[3] The policy on Appellant's Ferrari Testarosa covered private and social or domestic use.An exclusion excepted:

"either practising for or taking part in any race, time trial, rally, sprint or drag race, or similar motor sport event, demonstration or test."

[4] Appellant attended an advanced training course for drivers of high performance cars.We take that categorisation from what happened rather than headings to or excerpts from some associated documentation.It took place at Pukekohe Racetrack.It was professionally organised and run.It involved a number of seminar or briefing sessions including braking and cornering matters, followed by driving around the track under controlled conditions applying what had been learned.Speed increased as the day went on.There was no element of racing against others or against the clock.There was no overtaking.It was not a competitive day.Driving on one of the later exercises Appellant was approaching a corner at an estimated 200 km/ph.His brakes failed or faded. There was another experienced driver with him at the time.The car was written off, fortunately without personal injury.There was no suggestion Appellant was driving recklessly and a recklessness exception is not invoked.

[5] Appellant's claim on the policy was declined.As the grounds for declinature were put in the Notice of Opposition, the asserted basis was that the activity, while not racing or one of the other listed activities, came within the exclusion phrase "similar motor sport event, demonstration or test".

[6] Appellant contends this approach is wrong.In the Court below Appellant's primary ground was an asserted need to read the exclusion clause eiusdem generis and indeed contra proferentem.It was said the need for a "similar motor sport event, demonstration or test" related back to earlier references to racing and following which dictated an element of competition not present in what actually occurred.

[7] Respondent insurer's approach denied the need for competition, arguing that a sufficient common feature of earlier and final wording of the exclusion clause was constituted by the speed and danger involved, the presence of which alone would suffice.Respondent insurer pointed to the element of speed and danger on this occasion characterised as use for a "demonstration or "test".

[8] In the Court below the Judge took a view absence of competition did not prevent what was occurring from being "similar" within the policy exclusion. The policy, it was said, was intended to cover events "broadly similar in nature and risk" to the events such as racing listed in the exclusion clause. The Judge considered this was an organised motoring event involving elements of speed or danger which so qualified, and might be described as a "test", although not an "event" or "demonstration".The Respondent insurers succeeded.

[9] In this Court Appellant's submissions widened somewhat, in that the word "motor sport" was advanced as qualifying not only "event" but also "demonstration" and "test".The exclusion, it was said, spoke of a "motor sport test".Otherwise positions taken on both sides were largely repetitive of those below.

[10] This is very much a situation on its own policy and own facts in which authorities cited do not greatly assist except as to general principle.The insurance policy is to be construed objectively, on its words.Undoubtedly the vital concluding words of the exclusion are to be read eiusdem generis, and to the extent any ambiguity may exist contra proferentem against the insurer.

[11] We consider as a matter of ordinary language the word "motor sport" qualifies each of the succeeding words "event, demonstration, or test".If there is any ambiguity, reading contra proferentem produces the same conclusion.

[12] We do not consider the events of the day were a "demonstration" or a "test" at all, let alone a "motor sport demonstration or test" with the latter overtones of sporting competition similar to the list.It was advanced driving instruction.No more.Within any instruction there can of course be subsidiary elements of evaluation so as to enable training to focus on weaknesses, but this ancillary characteristic did not make it a "test" as such. We are unable to agree with the Judge's conclusion otherwise.

[13] Further, we consider a construction eiusdem generis of "similar motor sport event, demonstration, or test" with earlier exclusion wording clearly requires an element of competition.All of the preceding events-racing, time trials, rallies, and two others-are competitive.When the exclusion goes on to exclude "similar" matters there is no escape from a like need for competition.It is an essential requirement.That includes practising for a competitive activity, not far off that activity itself in what is done.The Judge thought otherwise, reasoning that elements of speed and danger involved in matters such as racing were a sufficient link in themselves to create similarity.We are unable to agree.When the concluding class comprises "motor sport event[s], demonstration[s] or test[s]" there is an inevitable implication of need for sporting competition going past mere elements of speed and danger.There was no competition here.

[14] What the insurer needed to do was to word the exclusion so as to shut out activity which while not sporting competition, and not reckless, posed heightened risk.The insurer did not go so far and cannot strain this policy wording to do so.

[15] The appeal will be allowed.Appellant will have summary judgment for the sum claimed with costs in the High Court $3,000, plus disbursements and costs in this Court of $3,000 plus reasonable disbursements including travel and accommodation costs of counsel to be fixed if necessary by the Registrar.

Solicitors

Greig Bourke, Auckland, for Appellant

Keegan Alexander Tedcastle & Friedlander, Auckland, for Respondent