Allianz Australia Insurance Ltd v Probuild Constructions (Aust) Pty Ltd

The dispute before the Court of Appeal of New South Wales concerned the interpretation of a settlement deed and a deed of indemnity relating to performance bonds. Allianz Australia Insurance Ltd (the appellant) sought to establish that a settlement sum paid by Probuild Constructions (Aust) Pty Ltd (the first respondent) constituted surplus bond moneys held on trust for Allianz. The other respondents (second to fifth respondents) claimed a charge over these moneys.

The primary legal issues were whether the settlement sum paid by Probuild was held on trust for Allianz, and if so, whether that trust was subject to a security interest in favour of the other respondents, particularly in light of the Personal Property Securities Act 2009 (Cth). The court was required to determine the nature of the trust provisions within the deed of indemnity and their effect on the settlement moneys.

The Court of Appeal allowed the appeal, finding that the settlement sum of $7.7 million was held on trust for Allianz. However, the court also declared that this trust was subject to a charge in favour of the second to fifth respondents for the amount of $1,157,557.64 (excluding GST). The court set aside the orders of the court below and made declarations to reflect these findings. The respondents were ordered to pay the appellant's costs of the appeal and the proceedings below, unless a written application for a different order was made within 14 days.