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Colonial Range Pty Ltd v CES-Queen (Vic) Pty Ltd

Colonial Range Pty Ltd v CES-Queen (Vic) Pty Ltd

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Case Copied 16 December 2016 41 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0121

COLONIAL RANGE PTY LTD (ACN 070 855 220)	Applicant
v
CES-QUEEN (VIC) PTY LTD (ACN 153 232 663)	First Respondent
and
DELTA PTY LTD (ACN 007 069 794)	Second Respondent

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JUDGES:	WARREN CJ, WHELAN JA and RIORDAN AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 November 2016
DATE OF JUDGMENT:	16 December 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 328
JUDGMENT APPEALED FROM:	[2016] VSC 494 (Digby J)

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BUILDING AND CONSTRUCTION – Protection work – Requirement for owner to ensure contract of insurance in force – Building Act 1993 s 93(1).

STATUTORY INTERPRETATION – Section 93(1)(a) of the Building Act 1993 – Meaning of ‘insurance … against damage by the proposed protection work to the adjoining property’ – Whether insurance on which adjoining owners can themselves claim is required.

INSURANCE – Insurance contracts – Construction – Whether contract of insurance with endorsement satisfied Building Act 1993 s 93(1).

INSURANCE – General indemnity insurance – Distinction between property damage insurance and liability insurance.

PRACTICE AND PROCEDURE – Arguments raised for first time on appeal – Whether party should be permitted to rely on argument.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr P Murdoch QC with Mr M Guthrie	Norton Gledhill
For the First Respondent	Mr M Roberts QC with Ms C Symons	Moray & Agnew
For the Second Respondent	Mr C Caleo QC with Mr B Reid	Thomson Geer

WARREN CJ
WHELAN JA
RIORDAN AJA:

The applicant, Colonial Range Pty Ltd (‘Colonial’), applies for leave to appeal against a decision of the trial judge that the plaintiff’s Amended Originating Motion be dismissed.

The relevant background facts can be stated as follows:

(a)The first respondent, CES-Queen (Vic) Pty Ltd (‘CES-Queen’), is the registered proprietor of 150 Queen Street, Melbourne. It proposes to demolish the existing 13 storey building on the site and replace it with a 71 storey residential tower to be known as ‘Tower Melbourne’.
(b)The second respondent, Delta Pty Ltd (‘Delta’), has been retained by CES-Queen to perform the demolition work.
(c)Colonial is the registered proprietor of two properties adjoining 150 Queen Street, being the properties at 140 Queen Street and 21-27 McKillop Street. It is common ground that these properties are ‘adjoining properties’ to 150 Queen Street within the meaning of the Building Act 1993 (‘the Act’).[1]
[1]Section 3 of that Act defines adjoining property to mean ‘land (including any street, highway, lane, footway, square, alley and right of way) which is so situated in relation to the site on which building work is to be carried out as to be at risk of significant damage from the building work’.
(d)CES-Queen is required by Part 6 of the Building Regulations 2006 to carry out protection work in respect of Colonial’s properties, as adjoining properties, before commencing demolition of the existing building at 150 Queen Street.

(e) Part 7 of the Act provides for an owner to serve a notice of proposed protection works on an adjoining…

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: [2016] VSCA 328
Decision Date: 16 December 2016

CaseChat Overview and Summary

Colonial Range Pty Ltd brought a claim against CES-Queen (Vic) Pty Ltd seeking compensation for damage caused to its property by work performed by CES-Queen in the course of its building work. The primary dispute in this case was whether CES-Queen had satisfied the statutory requirement under section 93(1) of the Building Act 1993 to have a contract of insurance in place that would cover any damage to adjoining property caused by the protection work. The Victorian Supreme Court was tasked with determining the scope and requirements of the statutory insurance obligation and whether CES-Queen's insurance policy met the legislative criteria.

The court considered whether the statutory requirement for insurance under section 93(1)(a) of the Building Act 1993 necessitated an insurance policy that allowed the adjoining property owners to claim directly or whether it was sufficient if the adjoining owners could only claim indirectly through the principal insured. Additionally, the court examined whether CES-Queen's general liability insurance policy, which included an endorsement, complied with the statutory requirement. It also differentiated between property damage insurance and liability insurance, determining the extent to which each type of insurance covered the risks posed by the protection work.

In its decision, the court held that the statutory requirement under section 93(1)(a) of the Building Act 1993 meant that the insurance policy needed to provide a means for adjoining property owners to directly claim for damages caused by the protection work. The court found that CES-Queen's general liability insurance policy, despite including an endorsement, did not meet the statutory criteria because it did not allow for direct claims by the adjoining property owners. The court also clarified that the distinction between property damage insurance and liability insurance was relevant, with the former typically providing direct coverage for property damage, whereas liability insurance often required a claim to be made through the principal insured. As a result, CES-Queen was found to be in breach of the statutory insurance requirement.

Consequently, the Supreme Court dismissed CES-Queen's appeal and upheld the original decision in favour of Colonial Range Pty Ltd. The court further ordered CES-Queen to pay Colonial Range Pty Ltd's costs of the appeal.

Orders