Delor Vue Apartments CTS 39788 v Allianz Australia Insurance Ltd (No 3) [2020] FCA 1281

Federal Court of Australia

Delor Vue Apartments CTS 39788 v Allianz Australia Insurance Ltd (No 3) [2020] FCA 1281 File number: NSD 2094 of 2018

Judgment of: ALLSOP CJ

Date of judgment: 3 September 2020

Division: General Division

Registry: New South Wales

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance – Insurance List

Number of paragraphs: 26

Date of hearing: 13 August 2020

Counsel for the Applicant: Mr M R Elliott SC with Mr P Mann

Solicitor for the Applicant: LMI Legal

Counsel for the Respondent: Mr D A McLure SC with Ms K Petch

Solicitor for the Respondent: Holman Webb Lawyers

ORDERS NSD 2094 of 2018

BETWEEN: DELOR VUE APARTMENTS CTS 39788 Applicant

AND: ALLIANZ AUSTRALIA INSURANCE LTD ABN 12 000 122 850 Respondent

order made by: ALLSOP CJ DATE OF ORDER: 24 JuLy 2020

THE COURT DECLARES THAT: 1. In failing, before the entry into the contract of insurance with the respondent, to disclose to SCI or the respondent the known defects concerning soffits and eaves, the applicant breached its duty of disclosure under s 21(1)(b) of the Insurance Contracts Act 1984 (Cth) (the Act). 2. Subject to the declarations in 3, 4 and 5 below, as at 8 May 2017, the respondent was entitled to a remedy under s 28(3) of the Act, in particular the remedy of reducing its liability to nil for the claim made consequent on damage caused to the applicant's property by Tropical Cyclone Debbie in March 2017. 3. The respondent is estopped from resiling from the representation made by email on 9 May 2017 that the claim would be honoured and indemnity provided, such that the mutual rights of the parties and the claim made by the applicant referred to in Declaration 2 were to be assessed and resolved by application of the terms of the policy of insurance, and not by reference to an assertion of right under s 28(3) of the Act. 4. By 28 May 2018, the respondent waived any entitlement to adopt a position based on an assertion of right under s 28(3) of the Act contrary to the position taken by the respondent that the claim would be honoured and indemnity provided in accordance with the terms of the policy. 5. In seeking to resile from the representation made by email on 9 May 2017 and in seeking to rely upon the non-disclosure of the applicant, the respondent, contrary to s 13 of the Act, failed to act towards the applicant in relation to the resolution of the claim with the utmost good faith. 6. The mutual rights and obligations of the applicant and respondent in connection with the claim under the policy made by the applicant concerning the damage to the applicant's property caused by Cyclone Debbie in March 2017 fall to be adjusted and determined by reference to the terms of the said policy, and not by reference to any asserted non-disclosure or misrepresentation. THE COURT ORDERS THAT: 1. The matter be referred to a mediation before a Judicial Registrar of the Federal Court of Australia with a mediation to take place on or before 21 August 2020. 2. If the matter is not settled, then by no later than 4 September 2020, the parties are to file an agreed minute of order, or competing minutes of order together with any submissions on the competing orders, as to the future conduct of the proceeding, namely the referral of the matter to a referee to be adjusted in accordance with the terms of the policy of insurance. 3. The respondent pay the applicant's costs of and incidental to the proceedings insofar as they concern the separate questions the subject of the Orders made on 10 May 2019, such costs to be agreed or assessed on a party-party basis. 4. Leave be granted to the parties to liaise with the Associate to the Chief Justice regarding Order 1 above. 5. Liberty to apply on 2 days' notice.