June 2019

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Appeal Court win for insurers


by John Reynolds, KT Journalism and Kate Tilley, Resolve Editor


A five-judge NSW Appeal Court has rejected a church’s claim against two insurers for breach of contract.

In a majority decision, Chief Justice Thomas Bathurst, Appeal Court President Margaret Beazley and Justice Julie Ward found Globe Church’s claim for water damage was statute barred and some alleged damage potentially occurred after the joint Allianz-Ansvar policy had lapsed.

Justices Anthony Meagher and Mark Leeming dissented, finding insufficient evidence to reject Globe’s claim.

The Appeal Court ordered the case back to Supreme Court Justice David Davies for further directions. Justice Davies had referred the case to the Appeal Court because Globe’s and Allianz’s arguments for and against claims accrual questioned prior Appeal and English court judgements’ validity.

The Appeal Court heard Globe had industrial special risks cover on its Gateshead, NSW, property with Allianz (60%) and Ansvar (40%) from 2007 to 31 March 2008. At subsequent renewals, Ansvar was the sole insurer.

Globe alleged its church hall and carpark’s underground footings were damaged by rainwater and floods from 8 June 2007 to March 2008 and more related damage occurred from 31 March 2008 to 31 March 2013.

Allianz and Ansvar had denied liability and disputed the damage had occurred. Globe launched breach of contract proceedings in 2016.

Justice Davies asked the Appeal Court to determine if Globe’s claims for damage that allegedly occurred before 31 March 2008 had accrued, were statute barred, or maintainable.

¬†CJ Bathurst and Justices Beazley and Ward found Globe’s claim for property damages under the 2008 policy accrued no later than 31 March 2008 and no later than the end of September 2009 for claims for business interruption and professional costs.

But they said the claims were not maintainable and dismissed the entire case against Allianz and Ansvar. They ordered Globe to pay 50% of the insurers’ costs for the Appeal Court hearing and referred the case back to Justice Davies.

But Justices Meagher and Leeming ruled Globe’s claims had not accrued when the damage allegedly occurred and there was insufficient evidence to determine if the claims could or could not be maintained.

They said they would not have dismissed the case against Allianz and would have ordered Allianz and Ansvar to share Globe’s Appeal Court hearing costs.
Globa had argued its claims were not statute barred because the time in which to bring the claims did not start until the insurer breached its promise to indemnify by denying the claims in 2011.

Globe Church Inc v Allianz Australia Insurance Ltd [2019], NSWCA 27, 26/02/19

 
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Resolve is the official publication of the Australian Insurance Law Association and
the New Zealand Insurance Law Association.