AAI Ltd t/as Vero Insurance v Kalnin Corporation Pty Ltd; Kalnin Corporation Pty Ltd v AAI Ltd t/as Vero Insurance

The case involved a dispute between AAI Limited t/as Vero Insurance and Kalnin Corporation Pty Ltd. The defendants sought indemnity from the plaintiffs for losses incurred due to a claim made by an owners corporation under a residential building insurance policy. The plaintiffs, in turn, sought to recover the indemnity from the defendants. The dispute was heard by the Supreme Court of New South Wales.

The primary legal issues the court needed to determine were whether the condition precedent to the defendants' liability had been established, whether the plaintiffs had issued a policy of the kind referred to in the indemnity, and whether the plaintiffs were obliged to indemnify the owners corporation for losses claimed against the defendants. Additionally, the court had to ascertain whether the defects in the residential building were structural defects that were likely to result in physical damage to any part of the building, as per regulation 57AC of the Home Building Regulation.

The court examined the terms of the indemnity agreement and found that the condition precedent to the defendants' liability had been met. It was established that the plaintiffs had issued a policy of the kind referred to in the indemnity. The court held that the plaintiffs were obliged to indemnify the owners corporation for losses claimed against the defendants. Furthermore, the court determined that the defects in the residential building were not structural defects that were likely to result in physical damage to any part of the building, as per regulation 57AC of the Home Building Regulation.

As a result, the court ruled in favour of the defendants, dismissing the plaintiffs' claim for indemnity. The final orders of the court were that the defendants' claim against the plaintiffs for indemnity was successful, and the plaintiffs' claim against the defendants for indemnity was dismissed.