Zurich Specialities London Ltd v Thiess Pty Ltd [2008] NSWSC 1010

Zurich Specialities London Ltd v Thiess Pty Ltd [2008] NSWSC 1010

Clause 18 of the Policy imposed a condition on the insured requiring reasonable precautions to be taken as a condition of indemnity. It was not an agreement by the insured to carry out construction work for the insurers, but an agreement that, in carrying out construction work for the principals or owners, the insured had to act in a particular manner to qualify for indemnity. Therefore there was no construction contract forming part of the Policy and the Building and Construction Industry Security of Payment Act 1999 did not apply to the Policy.

Jurisdiction
Australia
Judgment Date
25 September 2008
Procedural Posture
Proceedings Seeking Urgent Interlocutory Relief to Restrain the Defendants From Taking Steps to Apply for Adjudication Under the Building and Construction Industry Security of Payment Act 1999 / Court Ruling, by Consent of the Parties, on Whether the Act Applied to the Insurance Policy
Outcome
The Court held that the Building and Construction Industry Security of Payment Act 1999 has no application to the insurance contract because the reasonable precautions clause is not a construction contract between the plaintiffs and the defendants.
Legal Topics
['construction of Insurance Policy' 'building and Construction Industry Security of Payment Act 1999' 'whether Insurance Policy Provision Was a Construction Contract' 'reasonable Precautions Clause' 'recognised Financial Institutions']
['insurance' 'building and Construction' 'construction Contracts'] ['construction of Insurance Policy' 'building and Construction Industry Security of Payment Act 1999' 'whether Insurance Policy Provision Was a Construction Contract' 'reasonable Precautions Clause' 'recognised Financial Institutions']

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Procedural Posture

Proceedings Seeking Urgent Interlocutory Relief to Restrain the Defendants From Taking Steps to Apply for Adjudication Under the Building and Construction Industry Security of Payment Act 1999 / Court Ruling, by Consent of the Parties, on Whether the Act Applied to the Insurance Policy

Legal Issues

  1. 1 ['Whether there is a construction contract that forms part of the Policy.' 'If there is a construction contract, whether the plaintiffs established that they are recognised financial institutions for the purposes of s 7(2)(a) of the Act.']

Ratio Decidendi

Clause 18 of the Policy imposed a condition on the insured requiring reasonable precautions to be taken as a condition of indemnity. It was not an agreement by the insured to carry out construction work for the insurers, but an agreement that, in carrying out construction work for the principals or owners, the insured had to act in a particular manner to qualify for indemnity. Therefore there was no construction contract forming part of the Policy and the Building and Construction Industry Security of Payment Act 1999 did not apply to the Policy.

Court Disposition

The Court held that the Building and Construction Industry Security of Payment Act 1999 has no application to the insurance contract because the reasonable precautions clause is not a construction contract between the plaintiffs and the defendants.

Orders

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