Royal Insurance Company Limited v Mylius [1926] HCA 49

Royal Insurance Company Limited v Mylius [1926] HCA 49

By majority (Knox CJ, Isaacs and Starke JJ), section 49 expressly confers on a person interested in or entitled to the building—the respondent Mylius, as purchaser now registered proprietor—a right to require the insurer to rebuild out of insurance money, even though he was not a party to the insurance contract, and regardless of whether the mortgagees or prior owner make a claim. This right is enforceable against the insurer by declaration or mandamus. The insurer is subject to this statutory obligation notwithstanding privity of contract, and subject to the provisos of the section. Dissenting (Higgins and Rich JJ): only insured parties or those expressly assigned the benefit can enforce...

Parties
Appellant; Defendant: Royal Insurance Company Limited; Respondent; Plaintiff: Thomas Probyn Mylius; Respondent; Defendant; Mortgagee: Albert Augustus Terry; Respondent; Defendant; Mortgagee: Robert Fulton; Respondent; Defendant; Owner (vendor): Agnes Samuels
Jurisdiction
Australia
Judgment Date
02 December 1926
Procedural Posture
Appeal / High Court of Australia on Appeal From the Supreme Court of Victoria (full Court)
Outcome
Appeal dismissed with costs.
Legal Topics
Fire Insurance, Mortgagee's Rights, Insurable Interest, Application of Insurance Moneys, Imperial Acts Application Act 1922 (vic) S 49, Building Reinstatement
Insurance Law Property Law Fire Insurance Mortgagee's Rights Insurable Interest Application of Insurance Moneys Imperial Acts Application Act 1922 (vic) S 49 Building Reinstatement

Case Brief

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Parties

Royal Insurance Company Limited

Appellant; Defendant

Thomas Probyn Mylius

Respondent; Plaintiff

Albert Augustus Terry

Respondent; Defendant; Mortgagee

Robert Fulton

Respondent; Defendant; Mortgagee

Agnes Samuels

Respondent; Defendant; Owner (vendor)

Procedural Posture

Appeal / High Court of Australia on Appeal From the Supreme Court of Victoria (full Court)

Legal Issues

  1. 1 Whether a person who acquires an interest in land (subject to a mortgage) after a fire is entitled to compel the insurer to lay out insurance moneys on rebuilding under sec. 49 of the Imperial Acts Application Act 1922 (Vic)
  2. 2 Whether the insurer's statutory duty under s 49 includes an obligation to rebuild at the request of a non-party to the insurance contract
  3. 3 Extent of a mortgagee's rights under a fire insurance policy effected pursuant to a mortgage covenant

Ratio Decidendi

By majority (Knox CJ, Isaacs and Starke JJ), section 49 expressly confers on a person interested in or entitled to the building—the respondent Mylius, as purchaser now registered proprietor—a right to require the insurer to rebuild out of insurance money, even though he was not a party to the insurance contract, and regardless of whether the mortgagees or prior owner make a claim. This right is enforceable against the insurer by declaration or mandamus. The insurer is subject to this statutory obligation notwithstanding privity of contract, and subject to the provisos of the section. Dissenting (Higgins and Rich JJ): only insured parties or those expressly assigned the benefit can enforce...

Court Disposition

Appeal dismissed with costs.

Orders

  • Declaration that the respondent Mylius is entitled, as against the insurer, to have the sum of £2,450 (the policy amount) laid out in rebuilding/reinstating the building as far as that amount will go, subject to the provisos of section 49 of the Imperial Acts Application Act 1922 (Vic).
  • The judgment of the Supreme Court of Victoria (Full Court) stands.