Abstract

Article

Concurrent Causes

No difficulty arises where a claim has only one cause. If the cause is within the insuring clause and not excluded by an exclusion clause, the claim is covered.  But if it has two or more causes, the claim will be covered only if at least one is within the insuring clause and none is excluded: Wayne Tank & Pump Co Ltd v Employers’ Liability Assurance Corpn Ltd [1974] QB 57, [1973]; Body Corporate 326421 v Auckland Council (the Nautilus) ) [2015] NZHC 862 (HC); The “Demetra K”) [2002] EWCA Civ 1070, [2002] 1 Lloyd’s Rep IR 795.If the nexus, arising out of is used, cause includes any indirect cause since it does not then need to be proximate but merely a material contributing factor.

 Wayne Tank must be seen against the background of the place of causation in insurance law. When there are rival causes, the first task is to see whether one only of the causes can be identified as the proximate or efficient cause: The “Alizia Glazial” [2002] 2 Lloyd’s Rep 421 at 431. But, if applying commonsense principles and recognising the commercial nature of the policy, two causes are proximate, the terms of the policy must be applied with care to those circumstances. If one falls within the policy and the other is simply not covered, the insured may recover. But if there are two proximate causes which are concurrent and interdependent in the sense that neither would have caused the loss without the other, in effect, jointly, and one falls within, and the other is excluded from, the policy, the exclusion prevails: and +that is the circumstance to which Wayne Tank was directed: McCarthy v St Paul International Insurance Co Ltd, per Kiefel J, with whom the Court agreed.

Derksen v 539938 Ontario Ltd [2001] SCC 72, [2001] 3 SCR 398 did not follow Wayne Tank, prtly because it read exclusions more strictly than th insuring clause, and partly on the basis that there was ambiguity in the exclusion.  Its discussion of the authority was therefore obiter at best; but it was influential in New Zealand Fire Service Commission v Legg [2016] NZHC 1492; [2016] 3 NZLR 685.  Further, the most important feature of the latter was the application of the principle to the circumstances of the case, which does not go to the principle itself. Further, as it had already been decided that the causation required by the exclusion was not present, the discussion on Wayne Tank was also obiter. It is doubtful whether this decision will constitute a lasting authority in New Zealand.  It will certainlly not displace the principle as it is accepted in Australia and England.