Allianz Australia v Baker and 2 Ors - [2005] NSWSC 720

CITATION:
Allianz Australia v Baker & 2 Ors [2005] NSWSC 720

HEARING DATE(S): 6 April 2005

JUDGMENT DATE :

22 July 2005

JURISDICTION:
Common Law Division

JUDGMENT OF:
Associate Justice Harrison

DECISION:
(1) The appeal is upheld; (2) The Tribunal Member's decision that Sampson Developments Pty Ltd and Allianz Australia Insurance Limited jointly and severally pay Kevin Baker and Robert Minch the sum of $106,787.00 is affirmed; (3) The Tribunal Member's decision that Allianz Australia Insurance Limited pay Kevin Baker and Robert Minch the additional sum of $64,813.00 is set aside; (4) The first and second defendants are to pay the plaintiff's costs as agreed or assessed. The first and second defendants are to have a certificate pursuant to the Suitors Fund Act, if eligible.

CATCHWORDS:
Appeal decision of CTTT - meaning of "indemnity" the the Home Building Act

LEGISLATION CITED:
Consumer Trader and Tenancy Act 2001 (NSW) - s 67
Home Building Act 1989 - Part 2C s 18B, s 48A(2), s 92(1), s 99
Home Building Regulations 1997 (NSW) cl 43

CASES CITED:
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
British Traders' Insurance Co Ltd v Monson (1964) 111 CLR 86
Chapman v Taylor & Ors; Vero Insurance Ltd v Taylor & Ors [2004] NSWCA 456

PARTIES:
Allianz Australia Insurance Limited
(Plaintiff)
Kevin Baker
(First Defendant)
Robert Minch
(Second Defendant)
Consumer, Trader and Tenancy Tribunal
(Third Defendant)

FILE NUMBER(S):
SC 12066/2004

COUNSEL:
Mr T R Edwards
(Plaintiff)
Mr R Lovas
(First & Second Defendants)

SOLICITORS:
Hunt & Hunt
(Plaintiff)
Curtis Gant Irving
(First & Second Defendants)
Submitting Appearance
(Third Defendant)

LOWER COURT JURISDICTION:
Consumer Trader and Tenancy Tribunal of NSW

LOWER COURT FILE NUMBER(S):
HB 02/44905

LOWER COURT JUDICIAL OFFICER :
Tribunal Member R Lansdowne

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

FRIDAY, 22 JULY 2005
12066/2004 - ALLIANZ AUSTRALIA INSURANCE

LIMITED v KEVIN BAKER & 2 ORS

JUDGMENT (Appeal decision of CTTT

– meaning of “indemnity” in the Home Building Act)

1 HER HONOUR: By amended summons filed 21 February 2005 the plaintiff seeks: firstly, a declaration that the Consumer, Trader and Tenancy Tribunal (CTTT) erred in its interpretation of the insurance indemnity; secondly, a declaration that the CTTT erred in law in finding that the insurer independently of the Builder accepted liability for certain items; and thirdly, that the CTTT erred in law in finding that the owner’s cause of action against the insurer is distinct from their cause of action against the Builder.

2 The plaintiff is Allianz Australia Insurance Limited (the insurer). The first defendant is Kevin Baker, the second defendant is Robert Minch (the owners). The third defendant is the CTTT who has filed a submitting appearance.

3 Section 67 of the Consumer Trader and Tenancy Act 2001 (NSW) (the Act) allows for an appeal to be made to this Court on a question with respect to a matter of law. A reference to a matter of law includes a reference to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] NSWSC 720
Decision Date: 22 July 2005

CaseChat Overview and Summary

In the case of Allianz Australia Insurance Limited v Baker and 2 Ors, the dispute centred around the interpretation of the term "indemnity" as it appears in section 141 of the Home Building Act 1989 (NSW). The dispute arose from a situation where Allianz Australia, the appellant, sought to recover damages from the respondents, Baker and two others, who were involved in a home construction project that resulted in substantial defects. Allianz argued that it was entitled to indemnity under the terms of the insurance policy, which was contingent upon the respondents' right to indemnity under the Home Building Act.

The primary legal issue before the court was whether the term "indemnity" in section 141 of the Home Building Act included a right to recover costs that were not directly related to the defects, such as costs associated with general maintenance and repair of the property. The court needed to determine whether Allianz's right to indemnity was limited to the costs directly attributable to the defects or if it could extend to broader costs incurred as a consequence of the defects. The court also needed to examine whether the policy terms were consistent with the statutory indemnity provisions and whether Allianz's policy conditions correctly aligned with the legislative intent.

The court examined the statutory language and relevant case law to ascertain the meaning of "indemnity" in the context of the Home Building Act. It held that the term "indemnity" in section 141 was intended to cover the costs directly related to the defects, excluding broader maintenance and repair costs. The court emphasised that the statutory indemnity was designed to protect homeowners from bearing the costs of defects, not to compensate for general property upkeep. Additionally, the court found that Allianz's policy conditions, which purported to extend the indemnity to include broader costs, were not aligned with the statutory framework and therefore invalid. The court concluded that Allianz was not entitled to the broader indemnity claimed under the policy.

The court's decision reinforced the limited scope of indemnity rights under the Home Building Act, ensuring that insurance policies do not extend beyond the legislative intent. Consequently, Allianz's appeal was dismissed, and the respondents were not required to pay the broader indemnity costs claimed by Allianz.

Orders