Allianz Australia Insurance Limited v Rawson Homes Pty Ltd

Allianz Australia Insurance Limited appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning the interpretation of a construction works insurance policy. The dispute arose after a hailstorm caused damage to multiple houses under construction by Rawson Homes Pty Ltd. The core of the disagreement centred on the application of the policy's "deductible" clause, specifically whether it should be applied to each individual house damaged or only once to the total claim for the hailstorm damage.

The Court of Appeal was required to determine the proper construction of the insurance policy, particularly the deductible provision, in the context of damage occurring to multiple units within a single construction project. The central legal question was whether the deductible was intended to apply on a per-house basis or as a single aggregate deduction from the total loss suffered by the insured.

The Court of Appeal allowed the appeal, finding that the primary judge had erred in their interpretation of the policy. The Court reasoned that the language of the policy, when read as a whole and in accordance with established principles of contractual construction, indicated that the deductible was to be applied to the total sum payable for the damage caused by the hailstorm, rather than being applied individually to each house. This interpretation was based on the specific wording of the deductible clause and its placement within the policy's structure. Consequently, the Court set aside the primary judge's orders and entered judgment for Rawson Homes Pty Ltd in a reduced sum, reflecting the correct application of the deductible. The Court also made orders regarding the costs of the appeal and reserved the question of costs for the proceedings below.