Home is where the heart is: the role of intention in residence-based exclusions29 June 2020 | Insurance Issues
The Supreme Court of Queensland has provided guidance on how exclusions in insurance policies concerning where a person “usually lives” or is “ordinarily resident” should be interpreted, concluding the person’s intention is relevant.
- The relevance of a person’s subjective intentions as to whether they “usually lived” at a place for the purposes of an exclusion in an insurance policy.
On 7 March 2019, Mr Arthur Murray’s house burnt down in a fire. Mr Murray’s son, Guy Murray (Guy), who was temporarily living at the house, rescued Mr Murray from the fire. Mr Murray however suffered injuries and tragically died in hospital 20 days later. Guy subsequently made a claim for personal injuries against Mr Murray’s estate.
At the time of the fire, Mr Murray’s house was insured under a home and contents policy. The policy included legal liability cover. It however excluded liability arising from the death or injury of anyone who usually lived at the insured address. Mr Murray’s estate sought indemnity under the policy for Guy’s claim. The insurer denied the claim on the basis that Guy usually lived at the address at the time of the fire. Mr Murray’s estate then made an application to the Supreme Court of Queensland under section 96 of the Trusts Act 1973 seeking directions as to what it should do about the insurer’s refusal to grant indemnity.
Guy was usually a UK resident and had travelled to Australia on his UK passport. He had not lived in Australia between 1972 and January 2019. Guy had intended to live in Australia temporarily while he arranged for his father’s ongoing care, after which he would live in either the UK or South Africa. He did not apply for Australian residence.
In order to give direction to the estate, the trial judge needed to consider the strength of its claim for indemnity. The critical issue for the trial judge was whether Guy “usually [lived]” at the insured address. In her Honour’s view, this phrase had the same meaning as “ordinarily resident”. Her Honour considered that for a person to be “ordinarily resident” of a place, they must intend it to be their home.
In these circumstances, Guy never intended to reside in Australia with Mr Murray. Instead, he intended to stay for a short time to arrange Mr Murray’s care before taking up residence elsewhere. It did not matter that Guy might have given up his UK residence; in that case, he would simply have had no residence at all. In the circumstances, the trial judge directed that the executor was justified in insisting on indemnity from the insurer in relation to the personal injury claim and, if necessary, commencing litigation against the insurer.
Implications for you
The insurer was not served with the relevant application and was not afforded an opportunity to make submissions in relation to the construction issue. Nevertheless, the decision indicates that a person’s subjective intention about where they will live is relevant to the operation of exclusions like the one in issue. This interpretation may present forensic difficulties for insurers attempting to rely on exclusions of this nature.