Ziel Nominees Pty Ltd v VACC Insurance Co Ltd [1975] HCA 40

High Court of Australia Barwick C.J. Stephen and Jacobs JJ. Ziel Nominees Pty Ltd v VACC Insurance Co Ltd [1975] HCA 40

ORDER Appeal dismissed with costs. Barwick C.J.

We have had an opportunity of considering the matter. The appellants in this appeal by a contract in writing dated 1 December 1972, purchased for a cash price, an encumbered property in Fitzroy, from the personal respondent who was joined as a defendant in the action, and as a respondent in this appeal for conformity as a necessary party whom I shall call hereafter the vendor. The contract was enforceable. The property had been insured by the vendor against loss by fire by a policy dated 5 May 1970, but renewed from time to time with the corporate respondent whom I shall hereafter refer to as the insurance company, with an upward limit of liability of $60,000.

On 21 January 1973, the improvements on the land which was the subject of the contract of sale were very substantially damaged by fire and to an extent which could have involved the insurance company in a liability of $60,000 being the upward limit of the policy. On 8 February 1973, the vendor lodged with the insurance company a declaration of loss, claiming the full amount of the policy on the footing that the damage by fire exceeded that amount.

On 20 February 1973, the vendor signed an authority addressed to the insurance company to pay to the purchaser's solicitors and I quote: "All the moneys to which I would be entitled under the insurance policy being the insurance proceeds of the property at 237 Smith Street, which was destroyed by fire." The vendor further informed the insurance company that upon that payment being made he, the vendor, released the insurance company from any claims he may have had. He further undertook, presumably to the appellants, to take all steps necessary with due despatch in the processing of the claim lodged by him with the insurance company. Apparently, though signed on 20 February this document was handed over on settlement of the contract of sale the following day. Thus, as an authority and as an assignment, as I have assumed it to be, it was effective upon the settlement on 21 February. As l have said, on that day, 21 February, the contract of sale was settled according to its terms.