Thiess Pty Ltd & Anor v Zurich Specialties London Ltd & Anor [2009] NSWCA 47

Thiess Pty Ltd & Anor v Zurich Specialties London Ltd & Anor [2009] NSWCA 47

The obligation for the insured to take reasonable precautions under clause 18 of the Construction Risks Insurance Policy is a condition precedent for indemnity, not a contractual promise to carry out construction work. The insurance policy's commercial purpose is to provide indemnity for loss or damage, not to oblige the insured to perform construction work for the insurers. Therefore, the policy does not contain a 'construction contract' within the meaning of the Building and Construction Industry Security of Payment Act 1999.

Parties
Appellant: Thiess Pty Ltd; Appellant: John Holland Pty Ltd; Respondent: Zurich Specialties London Ltd; Respondent: Swiss re International SE
Jurisdiction
Australia
Judgment Date
03 March 2009
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
appeal dismissed with costs
Legal Topics
Construction Risks Insurance Policy Interpretation, Construction Contract Definition Under Building and Construction Industry Security of Payment Act 1999, Conditions Precedent in Insurance
Building and Construction Insurance Construction Risks Insurance Policy Interpretation Construction Contract Definition Under Building and Construction Industry Security of Payment Act 1999 Conditions Precedent in Insurance

Case Brief

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Parties

Thiess Pty Ltd

Appellant

John Holland Pty Ltd

Appellant

Zurich Specialties London Ltd

Respondent

Swiss re International SE

Respondent

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the Construction Risks Insurance Policy constituted a 'construction contract' under s 4 of the Building and Construction Industry Security of Payment Act 1999
  2. 2 Whether the obligation to take reasonable precautions under the policy was simply a condition precedent to insurer's liability or an enforceable promise to take those precautions

Ratio Decidendi

The obligation for the insured to take reasonable precautions under clause 18 of the Construction Risks Insurance Policy is a condition precedent for indemnity, not a contractual promise to carry out construction work. The insurance policy's commercial purpose is to provide indemnity for loss or damage, not to oblige the insured to perform construction work for the insurers. Therefore, the policy does not contain a 'construction contract' within the meaning of the Building and Construction Industry Security of Payment Act 1999.

Court Disposition

appeal dismissed with costs

Orders

  • Appeal dismissed with costs