GROUP: Fire and General Insurance
SERVICE: Motor vehicle
Complaint No : 109234
Casebook Index: Interpretation - Specific words/expressions.
C was in a business partnership with B, an immediate family member. C insured a
tractor owned by the partnership with P. B took the tractor from a shed on C’s
property. C made a claim to P for the tractor under the policy. P declined the claim, on
the basis that the removal of the tractor was not a theft and that it considered it was a
civil matter between C and B. P also cancelled all C’s policies. C argued that the
removal of the tractor was a loss under the policy.
P’s enquiries confirmed that B had taken the tractor and was holding it, pending
dissolution of the business partnership. The police did not charge B with theft of the
tractor, as they believed she did not, fraudulently and without colour of right, intend to
permanently deprive the partnership of the tractor.
However, the policy offered cover for loss of the tractor. As the policy did not include
a definition of “loss”, the Case Manager applied the rules of interpretation applied to
other contracts, that is, to give the word its ordinary and natural meaning. The Case
Manager believed, in the context of the policy, that “loss” not only included items
which had been stolen, but also included items which had been misplaced or could not
The courts have also considered the meaning of the word “loss”. Moore v Evans
 1 KB 458 established the test for what constitutes “loss”. The case involved a
situation in which the insured was unable to regain possession of jewellery he owned,
because of World War I. The court held that this did not constitute a “loss” as,
ultimately, he would recover the jewellery, even although he may have to wait a long
time. In Moore v Evans the court stated that mere temporary deprivation did not
constitute a “loss”, but that “loss” did not require certainty the items would never be
recovered. Holmes v Payne  2 KB 301 adopted the test set out in Moore v
Evans. Roche J stated that uncertainty of recovery was the main consideration when
considering whether there had been a “loss”. The reasoning in these cases was
adopted in EJ Hampson & Others Syndicate 1204 v Mining Technologies Australia
Pty Ltd (1998) 10 ANZ Insurance Cases ¶61-389.
The Case Manager believed the circumstances set out in these cases were similar to
C’s complaint and, although the partnership had been deprived of the use of the
tractor, there was no evidence to suggest it would not recover the tractor upon
dissolution of the partnership. On this basis, the Case Manager believed that it was not
uncertain the partnership would recover the vehicle and, as such, there was no loss
under the policy. Therefore, P was not obliged to met the claim.
Result Complaint not upheld