Allianz v Waterbrook

The dispute in *Allianz Australia Insurance Limited v Waterbrook Pty Limited* concerned a claim under a home building insurance policy for defective work. The applicant, Allianz, sought leave to appeal a decision of McDougall J in the Supreme Court of New South Wales. The respondent, Waterbrook, was a successor in title to a building that had undergone significant construction work.

The central legal issues before the Court of Appeal were whether two companies were "related" for the purposes of the *Home Building Regulation 1997*, whether the insurance policy was consistent with the *Home Building Act 1989*, and crucially, whether a successor in title sustains "loss" when acquiring a building with defects that were reasonably visible at the time of acquisition, including any consequential loss. The court also considered the principles of causation in relation to a successor in title acquiring a building with known defects.

The Court of Appeal, comprising Giles JA, Hodgson JA, and Ipp JA, determined that the answer to question 3 posed to McDougall J should be amended to "Yes". This indicates a finding that, in the circumstances of the case, the successor in title did sustain loss. The court granted Allianz leave to appeal and ordered that Allianz file its notice of appeal within seven days. Waterbrook was ordered to pay 75 per cent of Allianz's costs of the appeal, with each party to bear their own costs of the separate hearing before McDougall J.