Icon Co (NSW) Pty Ltd v Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets [2020] FCA 1493

Icon Co (NSW) Pty Ltd v Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets [2020] FCA 1493

The evidence disclosed a clear and convincing mutual intention, formed through the parties' agents, that cover under the Liberty Policy would extend throughout the construction and defects liability periods for projects commenced and declared during the policy period, with premium paid on project value. This intention was not reflected in the written policy due to mutual mistake. As a result, rectification was ordered to add a contracts commencing endorsement; the alternative claims based on operation of Condition 15 and s 58 failed. Regarding the claim against QBE, the Opal Tower and its constituent parts were held to fall within the definition of 'Product' and thus the claim succeeded...

Parties
Applicant: Icon Co (NSW) Pty Ltd; First Respondent: Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets; Second Respondent: QBE Underwriting Limited as Managing Agent for Underwriting Members of Lloyd's Syndicates 386 and 299
Jurisdiction
Australia
Judgment Date
19 October 2020
Procedural Posture
Commercial Insurance Contract Dispute / First Instance Judgment
Outcome
Applicant’s claim against Liberty succeeds on rectification claim and fails on run off and statutory extension claims; claim against QBE succeeds.
Legal Topics
Rectification of Insurance Policy, Construction/interpretation of Contract, Run Off Cover in Construction Insurance, Statutory Extension Under S 58 Insurance Contracts Act 1984 (cth)
Insurance Law Contract Law Equity Rectification of Insurance Policy Construction/interpretation of Contract Run Off Cover in Construction Insurance Statutory Extension Under S 58 Insurance Contracts Act 1984 (cth)

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Parties

Icon Co (NSW) Pty Ltd

Applicant

Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets

First Respondent

QBE Underwriting Limited as Managing Agent for Underwriting Members of Lloyd's Syndicates 386 and 299

Second Respondent

Procedural Posture

Commercial Insurance Contract Dispute / First Instance Judgment

Legal Issues

  1. 1 Whether indemnity available under insurance policies for damage to Opal Tower during defects liability period
  2. 2 Whether the applicant's declaration of the project triggered 'run off' cover under the Liberty Policy
  3. 3 Whether s 58 of Insurance Contracts Act 1984 (Cth) operates to preclude Liberty from denying indemnity

Ratio Decidendi

The evidence disclosed a clear and convincing mutual intention, formed through the parties' agents, that cover under the Liberty Policy would extend throughout the construction and defects liability periods for projects commenced and declared during the policy period, with premium paid on project value. This intention was not reflected in the written policy due to mutual mistake. As a result, rectification was ordered to add a contracts commencing endorsement; the alternative claims based on operation of Condition 15 and s 58 failed. Regarding the claim against QBE, the Opal Tower and its constituent parts were held to fall within the definition of 'Product' and thus the claim succeeded...

Court Disposition

Applicant’s claim against Liberty succeeds on rectification claim and fails on run off and statutory extension claims; claim against QBE succeeds.

Orders

  • The parties are to provide short minutes of order reflecting the Court's reasons (or, failing agreement, competing short minutes of order and submissions limited to two pages) within seven days.
  • The Liberty Policy is to be rectified by adding the contracts commencing endorsement as set out in Annexure A.