Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 (No 2)

[2021] FCAFC 145

FEDERAL COURT OF AUSTRALIA

Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 (No 2) [2021] FCAFC 145

Appeal from:

Delor Vue Apartments CTS 39788 v Allianz Australia Insurance Ltd (No 2) [2020] FCA 588; and

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

File number:

NSD 924 of 2020

Judgment of:

MCKERRACHER, DERRINGTON AND COLVIN JJ

Date of judgment:

12 August 2021

Legislation:

Insurance Contracts Act 1984 (Cth) s 28

Cases cited:

Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 [2021] FCAFC 121

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs:

10

Date of last submissions:

9 August 2021 (Respondent)

Date of hearing:

Determined on the papers

Counsel for the Appellant:

The Appellant did not appear

Counsel for the Respondent:

Mr A Valore

Solicitor for the Respondent:

LMI Legal

ORDERS

NSD 924 of 2020

BETWEEN:

ALLIANZ AUSTRALIA INSURANCE LIMITED (ABN 15 000 122 850)

Appellant

AND:

DELOR VUE APARTMENTS CTS 39788

Respondent

ORDER MADE BY:	MCKERRACHER, DERRINGTON AND COLVIN JJ
DATE OF ORDER:	12 AUGUST 2021

THE COURT ORDERS THAT:

1.The application for further declaratory relief made pursuant to order 4 of the orders made on 9 July 2021 is refused.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER AND COLVIN JJ:

1. Delor Vue Apartments CTS 39788 (Delor) claims to be entitled to indemnity under a policy of insurance with Allianz Australian Insurance Ltd (Allianz) in respect of damage caused by Cyclone Debbie in March 2017. The Chief Justice made orders for the determination of two issues before other issues in the proceedings. As to those issues, his Honour found that although Allianz was entitled to reduce its liability to nil by asserting the rights conferred by s 28(3) of the Insurance Contracts Act 1984 (Cth), there were a number of legal principles that operated in a manner which meant that, in the circumstances which had occurred, Allianz was unable to rely upon s 28 of that Act.

2. The primary judge granted declaratory relief which identified the basis upon which Allianz was unable to rely upon s 28 of the Insurance Contracts Act and which then declared:

   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.

3. Allianz brought an appeal. We determined that the appeal should be dismissed. In doing so, we determined that the application of principles concerning the doctrine of election provided a further reason to those expressed by his Honour as to why Allianz was unable to rely upon s 28 of the Insurance Contracts Act.  Our view comprised the majority in the appeal and, on that basis, orders were made dismissing the appeal.  Those orders reserved liberty to Delor to apply for further declaratory relief to reflect the terms of the reasons on appeal.

4. Delor seeks the following additional orders by way of declaratory relief:

   On 9 May 2017, the appellant elected not to adopt a position based upon an assertion of right under s 28(3) of the Insurance Contracts Act 1984 (Cth), and thereafter confirmed that election by its conduct.

   [The declaration of the primary judge to the effect that Allianz is entitled to a remedy under s 28(3) of the Act] is subject to the additional declaration set forth [above].

5. For the following reasons, we are not persuaded that it is necessary or appropriate to grant the further declaratory relief sought.

6. First, the consequence for the rights and interests of the parties to the insurance policy of the decision on appeal is adequately captured in the declaration by the primary judge that has been quoted above.

7. Second, we are not satisfied that the language of the proposed declaration captures our reasons which rested both upon the conduct of Allianz in sending an email on 9 May 2017 and subsequent conduct of Allianz.

8. Third, the language of the proposed declaration does not capture the nature of the election in the present case which was between two inconsistent positions not simply a decision not to rely upon s 28(3) of the Insurance Contracts Act as is suggested by the proposed declaratory relief.

9. Fourth, allowing for the imprecision in terminology in relation to the relevant principles, the existing terms of the declaratory relief granted by the primary judge capture the relevant reason in declaration 4 and in circumstances where there is no language proposed to clarify that declaration it should be treated as reflecting our reasons on appeal: see our principal reasons at [236]‑[245].

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices McKerracher and Colvin.

Associate:

Dated:       12 August 2021

REASONS FOR JUDGMENT

DERRINGTON J:

1. I am grateful to McKerracher and Colvin JJ for succinctly setting out the relevant background in their reasons.  For the reasons I gave in Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 [2021] FCAFC 121, I would also not grant the further declaratory relief sought by the respondent.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

Associate:

Dated:       12 August 2021