THE TOKIO MARINE AND FIRE INSURANCE CO LTD v COSTAIN AUSTRALIA LTD [1988] NSWCA 157

THE TOKIO MARINE AND FIRE INSURANCE CO LTD v COSTAIN AUSTRALIA LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY, SAMUELS and MCHUGH JJA 16 November 1988, 23 December 1988 [1988] NSWCA 157

Appeal from Common Law Division — Interpretation of Insurance Policy — Builder built house on wrong land — Claim by landowner and by client for whom house erected — Builder compromises claims by buying land and transferring that land and the house to client.

Claim by Builder under Insurance Policy for amounts paid on compromise under indemnity as "damage to property" - Insurer admitted amounts were "damage to property" but claimed they were within exception of "claims in respect of the cost of... Correcting... any work undertaken by The Insured".

Held: amounts not within the exception. ORDERS Appeal dismissed with costs.

Mahoney JA The Tokio Marine and Fire Insurance Co Ltd ("the insurer') insured the plaintiff Costain Australia Limited ("the insured') against all sums which the insured should become legally liable to pay for compensation in respect of, inter alia, damage to property "happening in connection with" the insured's business. The insured made a claim under the policy. The insurer said that the claim was not within the policy. The insured therefore sued the insurer and the proceeding was heard by Carruthers J.

At the trial, a number of issues were contested. The learned judge found for the insured. The insurer has appealed to this Court against his Honour's judgment.

The contest before this Court has been limited to one question, namely, whether the claim falls within a particular exception in the policy ("the faulty workmanship exception').

At the trial before Carruthers J the facts were agreed. Those facts are set forth in the record as follows: "At all relevant times the plaintiff carried on business as a builder under the name and style Costain Homes.