Worth v International Insurance Company of Hannover SE [2020] NSWSC 249

Supreme Court New South Wales

Medium Neutral Citation: Worth v International Insurance Company of Hannover SE [2020] NSWSC 249 Hearing dates: 2, 3, 4, 5, 6, 9, 10, 11, 12, 13 December 2019; further written submissions ending 20 December 2019 Date of orders: 19 March 2020 Decision date: 19 March 2020 Jurisdiction: Equity Before: Parker J Decision: See [331] Catchwords: INSURANCE – house fire – claim for indemnity – whether insured responsible for fire – circumstantial case – good faith in taking of defence alleging lack of reasonable dispatch in rectifying property Legislation Cited: Evidence Act 1995 (NSW), ss 63, 69, 146 Insurance Contracts Act 1984 (Cth), s 13 Cases Cited: Briginshaw v Bringinshaw (1938) 60 CLR 336; [1938] HCA 34 Rolleston v Insurance Australia Ltd [2016] NSWSC 1561 Sharma v Insurance Australia Ltd trading as NRMA Insurance [2017] NSWCA 307 Category: Principal judgment Parties: Kim Worth (Plaintiff/Cross-Defendant) International Insurance Company of Hannover SE (Defendant/Cross-Claimant) Representation: Counsel: TD Castle/P Mann (Plaintiff/Cross-Defendant) S Donaldson SC/NJ Olson (Defendant/Cross-Claimant)

Solicitors: LMI Legal (Plaintiff/Cross-Defendant) McInnes Wilson Lawyers NSW (Defendant/Cross-Claimant) File Number(s): 2016/326625 Publication restriction: Nil

Judgment 1. The plaintiff, Kim Michelle Worth, is the owner of a two-storey house in Tweed Heads on the Far North Coast of New South Wales. On the morning of 1 September 2015, the house was severely damaged by fire. Since then it has been uninhabited, and the fire damage has not been repaired. 2. Ms Worth used the house as a home for herself and her son Joshua. She also operated a childcare business from the ground floor. 3. At the time of the fire, the house was insured with the defendant, International Insurance Company of Hannover SE ("IIC"), under a policy styled "Home Based Business Property Insurance Policy". The Policy was effected on 20 August 2015, and the period of insurance was one year. As its name suggested, the Policy covered: (1) the building; (2) contents; (3) business interruption; and (4) additional items, including temporary accommodation, removal of debris and landscaping. 4. Following the fire, Ms Worth made a claim under the Policy. At that time the cause of the fire was still being investigated by the NSW Police Force and Fire & Rescue NSW ("FRNSW"). In December 2015, IIC and Ms Worth entered into a deed, styled "Deed of Settlement". The Deed provided for IIC to grant "conditional indemnity" whilst investigations concerning the cause of the fire were brought to completion. IIC agreed to pay Ms Worth in accordance with the Policy unless it was established that Ms Worth was responsible for the fire. In that event, Ms Worth would repay any amounts paid by IIC under the Policy, together with interest at court rates. 5. IIC made some preliminary payments to Ms Worth, totalling approximately $98,000. But in about June 2016 IIC learned that the Police had concluded that the fire had been deliberately lit. Thereafter IIC made no further payments to Ms Worth. In September 2016, IIC formally informed Ms Worth of its decision to decline indemnity under the Policy.