Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd

Cape York Airlines Pty Ltd took action against QBE Insurance (Australia) Ltd in relation to an insurance policy covering an aircraft that was ditched in the sea off Green Island, near Cairns. The plaintiff sought compensation for the accidental loss or damage to the aircraft. The insurer had the option to pay for, repair, or pay for the repair of the aircraft under the terms of the policy. However, the plaintiff was not convinced that a repair would restore the aircraft to its pre-ditching condition, so it sought to be paid the insured amount. The insurer obtained a quote for repairing the aircraft but sought to limit its liability to the amount specified in the quote. The court had to determine whether the insurer could limit its liability in this way and whether it had elected to repair the aircraft under the policy terms.

The court found that the insurer's attempt to limit its liability to the amount specified in the quote did not align with the policy terms, which allowed the insurer to elect to pay for, repair, or pay for the repair of the aircraft. The court held that the insurer could not limit its liability in this way, and that it had not elected to repair the aircraft under the policy terms. The court held that the insurer was liable to pay the full insured amount to the plaintiff. The court also found that the plaintiff was entitled to interest on the insured amount from the date of the ditching until the date of judgment.

The court ordered judgment for the plaintiff in the sum of $1,942,367.88 plus interest to the date of judgment of $1,229,519, being a total judgment of $3,171,886.88. The court also ordered that the parties be heard as to costs. The insurer was liable to pay the full insured amount to the plaintiff, and the plaintiff was entitled to interest on the insured amount. The insurer could not limit its liability in the way it attempted, and it had not elected to repair the aircraft under the policy terms.