NAPIER CITY COUNCIL v LOCAL GOVERNMENT MUTUAL FUNDS TRUSTEE LIMITED [2018] NZHC 2269

NAPIER CITY COUNCIL v LOCAL GOVERNMENT MUTUAL FUNDS TRUSTEE LIMITED [2018] NZHC 2269

Exclusion 13, properly construed, does not automatically exclude indemnity for an entire third-party statement of claim that contains both weathertightness and non-weathertightness allegations; a single statement of claim can incorporate multiple distinct claims and any ambiguity in an exclusion is to be resolved against the insurer; accordingly the insured had a realistic prospect of establishing a right to indemnity and the strike-out application failed.

Citation
[2018] NZHC 2269
Parties
Plaintiff/respondent: Napier City Council; Defendant/applicant: Local Government Mutual Funds Trustee Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 August 2018
Procedural Posture
Declaratory Relief / Strike Out Application
Outcome
Application to strike out declined; Council entitled to costs.
Legal Topics
Exclusion Clause Interpretation, Professional Indemnity, Weathertightness Vs Non Weathertightness Defects, Interpretation of 'claim' in Policy
Insurance Law Tort (negligence) Construction Law Civil Procedure Exclusion Clause Interpretation Professional Indemnity Weathertightness Vs Non Weathertightness Defects Interpretation of 'claim' in Policy

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Parties

Napier City Council

Plaintiff/respondent

Local Government Mutual Funds Trustee Limited

Defendant/applicant

Procedural Posture

Declaratory Relief / Strike Out Application

Legal Issues

  1. 1 Whether Exclusion 13 excludes indemnity for an entire third-party statement of claim that includes weathertightness allegations
  2. 2 Whether a single statement of claim can comprise multiple distinct 'claims' for purposes of the policy
  3. 3 Whether the insurer has shown the insured has no realistic prospect of indemnity

Ratio Decidendi

Exclusion 13, properly construed, does not automatically exclude indemnity for an entire third-party statement of claim that contains both weathertightness and non-weathertightness allegations; a single statement of claim can incorporate multiple distinct claims and any ambiguity in an exclusion is to be resolved against the insurer; accordingly the insured had a realistic prospect of establishing a right to indemnity and the strike-out application failed.

Court Disposition

Application to strike out declined; Council entitled to costs.

Orders

  • Strike-out application declined
  • Council awarded costs; if costs cannot be agreed Council to file brief memorandum within 14 days and RiskPool to respond within a further 14 days