Drummond v Gordian Runoff Ltd [2023] NSWSC 607

Drummond v Gordian Runoff Ltd [2023] NSWSC 607

Section 103BB of the Home Building Act 1989 (NSW) operates outside the contract of insurance and directly alters the parties' rights and obligations. The defendant's entitlement to refuse the plaintiffs' claim was sourced in State statute, not in the effect of the contract of insurance, so section 54 of the Insurance Contracts Act 1984 (Cth) was not engaged. Because section 54 did not apply, section 103BB did not directly or indirectly conflict with it and was not invalid under section 109 of the Constitution.

Jurisdiction
Australia
Judgment Date
09 June 2023
Procedural Posture
Summons Seeking Indemnity for a Delayed Claim Under a Last Resort Home Warranty Insurance Policy / Principal Judgment on Amended Summons Filed on 5 August 2022
Outcome
Summons dismissed with costs.
Legal Topics
['home Warranty Insurance' 'delayed Claim' 'section 54 Insurance Contracts Act 1984 (cth)' 'section 103 BB Home Building Act 1989 (nsw)' 'section 109 Constitution Inconsistency']
['insurance' 'constitutional Law'] ['home Warranty Insurance' 'delayed Claim' 'section 54 Insurance Contracts Act 1984 (cth)' 'section 103 BB Home Building Act 1989 (nsw)' 'section 109 Constitution Inconsistency']

Case Brief

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Procedural Posture

Summons Seeking Indemnity for a Delayed Claim Under a Last Resort Home Warranty Insurance Policy / Principal Judgment on Amended Summons Filed on 5 August 2022

Legal Issues

  1. 1 ['Whether section 54 of the Insurance Contracts Act 1984 (Cth) prevents an insurer from refusing a delayed claim where the insured fails to notify the insurer in accordance with section 103BB(3) of the Home Building Act 1989 (NSW).' 'Whether section 103BB of the Home Building Act 1989 (NSW) is invalid pursuant to section 109 of the Constitution as inconsistent with a law of the Commonwealth.']

Ratio Decidendi

Section 103BB of the Home Building Act 1989 (NSW) operates outside the contract of insurance and directly alters the parties' rights and obligations. The defendant's entitlement to refuse the plaintiffs' claim was sourced in State statute, not in the effect of the contract of insurance, so section 54 of the Insurance Contracts Act 1984 (Cth) was not engaged. Because section 54 did not apply, section 103BB did not directly or indirectly conflict with it and was not invalid under section 109 of the Constitution.

Court Disposition

Summons dismissed with costs.

Orders

  • ['Dismiss the Amended Summons filed on 5 August 2022.' "Order the plaintiffs to pay the defendant's costs."]