INSIGHTS: The Pig, the Policy and the Porky

Lynch v Bredbo Pty Ltd [2025] NSWDC 54

Meridian Lawyers acted for Insurance Australia Limited (IAL) in the above proceedings. A Notice of Intention to Appeal has been filed. Details of the circumstances around this interesting decision are provided below.

Key takeaways

The key takeaways from this decision are as follows:

• Business Liability Cover: When considering a claim under Business cover, insurers should satisfy themselves that the event has a direct connection to the business of the insured. This will not extend to activities outside the business description.
• Firearms Exclusion: A literal reading is applied to the words, to confirm that hunting is “an activity involving the use of a firearm…”. If hunting is being undertaken on rural properties, specific cover should be sought and endorsed into the policy.
• Legality Condition: The insurer bears the onus of establishing a breach of the policy condition, that either caused or contributed to the incident, with the Briginshaw test applied (which is higher than the normal civil burden of proof on the balance of probabilities).
• Reasonable Precautions Condition: Reckless conduct can breach policy conditions for reasonable precautions, and the question of whether recklessness can be established is one of fact. This can impose positive obligations on insureds to avoid risks, with a ‘not my problem’ approach no longer acceptable.
• Fraud: Errors or omissions in Claim Forms and information provided to an insurer, with the intent of inducing cover under the policy, is an act of insurance fraud entitling an insurer to avoid the claim. If and when an insured becomes aware of information confirming a previous error in information provided to an insurer, the insured is under a positive obligation to correct the error, or risk a finding of fraud.

Background

The relevant background for the decision was as follows:

• The Plaintiff (Lynch) and Mark Streeter (Streeter) were involved in an accident when an unregistered Can-Am vehicle flipped, causing injuries to Lynch (Incident) who was the passenger. Lynch commenced proceedings in the District Court of NSW alleging the Incident was caused by Streeter’s “accelerated driving of the Can-Am vehicle… so that the vehicle ran over a piglet in front of it” (Injury Claim).
• Streeter made a claim under the Farm Liability Policy issued to Bredbo (farm owner) of which Streeter was a director. Streeter provided two signed Claim Forms and two further emails to IAL, stating that the Incident occurred when the “right front tyre sunk into a bog/hole and this caused the vehicle to turn over”.
• When IAL requested Streeter’s version of events be sworn to by Statutory Declaration, he issued a cross-claim joining IAL to the Proceedings (Policy Claim). In the course of the Proceedings, IAL was provided with two videos taken by Lynch before the Incident and of the Incident. The videos were inconsistent with Streeter’s version of events of the Incident.
• Streeter served and subsequently tendered an Affidavit which maintained his version of events as to the Incident, including the purpose of the trip (“to inspect the property”) and the cause of the Incident (“the right front wheel felt as if it had stopped”).
• The Injury Claim was resolved (as between Lynch and Streeter), and the hearing was limited to the following issues in the Policy Claim:
  • Insuring Clause: Whether the Incident (from a hunting trip at the Property) arose from the Business Liability Cover for Bredbo’s Policy, which extended cover to “ownership or occupation” of the Property or “Private work carried out by… Employees”
  • Firearms Exclusion: Whether the Injury Claim was for liability “directly or indirectly caused by or arising out of an activity involving the use of a firearm…” to engage the Firearms Exclusion
  • Legality Condition: Whether striking the pig constituted an act of cruelty to animals, in breach of the policy condition to “obey… all relevant laws”
  • Reasonable Precautions: Whether striking the pig was either intentional and/or reckless, in breach of the policy condition to “take all reasonable precautions to prevent anything which could result in a claim under this policy”, and
  • Fraud: Whether the information provided by Streeter to IAL constituted fraud under section 56 of the Insurance Contracts Act 1984 and common law, thereby entitling IAL to refuse the Policy Claim.

Under cross-examination, Streeter maintained they were not on a hunting trip, despite video evidence to the contrary (where Lynch declared “we’re out shooting pigs, deer and kangaroo”) and a text message from Streeter to Lynch prior to the Incident which said “apparently there are l6+ deer on the top paddock & any pigs we con nuke – also we have licence to reduce the grass thieves (aka kangaroos)….”

As to striking the pig, Streeter’s evidence under cross-examination changed from “following” the pigs to “chasing” the pigs, but he maintained he did not intentionally or recklessly strike the pig. Streeter did concede he was “driving at speed”, “ faster than he should have been”, and driving “too fast”.

Decision

Judge Judith Gibson dismissed the Policy Claim, finding the Incident occurred on a hunting trip [at 144(a)] and Streeter had lied to IAL and on oath to the Court about the circumstances of the Incident [at 123].

Insuring Clause

Her Honour found the Business Liability cover was not triggered for the hunting trip as the “mere fact that Mr Lynch was on the premises doing painting work does not mean that he is covered for all and any activity, whether that be recreational hunting or some other activity. The circumstances of the injury have to be connected to the ownership or occupancy of the premises” [at 72].

Firearms Exclusion

In the first decision on a firearms exclusion (despite such exclusions being common within rural policies) her Honour found the Incident during a hunting trip was “directly or indirectly caused by or arising out of an activity involving the use of a firearm”.

As to the purpose of the exclusion, her Honour noted [at 98]:

“In terms of business efficacy, the clause is aimed at a wide range of conduct because of the inherently dangerous nature of firearms. It is not restricted to injury caused by the gun being shot.”

Therefore, a recreational hunting trip (irrespective of whether a firearm is discharged) will enliven a Firearms Exclusion, applying the literal words in the exclusion.

Legality Condition

Her Honour found the Legality Condition did not apply, as there was “no evidence of intention or any act of significance other than driving direct at a pig which was trying to escape while running in front of the vehicle” [at 117]. Therefore, IAL did not establish the striking of the pig was an act of cruelty in breach of the Prevention of Cruelty to Animals Act 1979 (NSW). Relevantly, the Briginshaw standard is applied whereby the decision maker should feel actual persuasion on the evidence, above the balance of probabilities.

Reasonable Precautions

Her Honour made a factual finding that Streeter had either deliberately [at 110] or recklessly [at 111] hit the pig  and this was a breach of the policy condition for reasonable precautions. Relevantly, the alternative finding of reckless conduct was sufficient to breach the policy condition, even where intention could not be established.

Fraud

Her Honour found Streeter had committed insurance fraud on the following basis [at 143]:

“I am satisfied that Mr Streeter recklessly chased and struck the pig and that the circumstances of the accident as shown on the video demonstrate that he must have known that he had struck a pig and that this was the reason for the accident. The circumstances in which he stated to the contrary on the claim form while knowing the true situation is of itself sufficient evidence of fraud.”

Her Honour found that Streeter’s conduct in his dealing with IAL constituted separate events of fraud [at 144-145], confirming “IAL has discharged the very heavy onus imposed in relation to fraud for each of these factual matters.”

Why the decision is important

With the exception of the Firearms exclusion (where there is no previous case law), IAL relied on established case law to support each basis for its refusal of the claim. However, while this decision re-affirms earlier case law, it serves as an important reminder on a number of issues for policy interpretation, and an insured’s ongoing obligations to its insurer during the claim process.

If an insured becomes aware of information confirming a previous error in information provided to an insurer, the insured is under a positive obligation to correct the error, or risk a finding of fraud. Insurers should also ensure they are satisfied with the information provided, and ask more questions where the insured’s version of events is completely at odds with the claim against the insured.

This article was written by Consultant Sally Morshead. For further information or advice on any related matters please contact Sally.

Disclaimer: This information is current as of April 2025. This article does not constitute legal advice and does not give rise to any solicitor/client relationship between Meridian Lawyers and the reader. Professional legal advice should be sought before acting or relying upon the content of this article.