DTZ Worldwide Limited v AIG Australia Limited

In this matter, DTZ Worldwide Limited sought to recover damages from AIG Australia Limited, the insurer, under a buyer’s warranty and indemnity insurance policy. The dispute arose from DTZ’s acquisition of an international property services business that included a facilities management contract in Singapore. DTZ claimed that the sellers had breached certain warranties in the share sale agreement, which were intended to ensure that the Disclosure Materials provided were not misleading. The claim was brought against AIG Australia as the insurer for the first, second, third, and fourth excess layer policies.

The primary legal issues the court had to determine were whether there had been a breach of warranty by the sellers and, if so, whether the damages claimed were covered by the insurance policies. The court needed to assess the extent of any breach of warranty and the corresponding damages, and then determine whether these damages fell within the coverage thresholds of the relevant insurance policies. The court had to consider the proper measure of damages for the breach of warranty and the implications for the insurance coverage.

The court found that there had been a breach of warranty by the sellers in relation to certain information disclosed and not disclosed about the facilities management contract. However, the court also determined that the amount of any damages resulting from this breach was less than the threshold of the first excess layer policy. As a result, the court dismissed DTZ’s claim against AIG Australia, finding that the damages did not exceed the threshold required to engage the insurance coverage. The court's reasoning was grounded in the specific terms of the insurance policies and the extent of the breach of warranty established in the proceedings.

The final orders of the court dismissed DTZ Worldwide Limited’s claim against AIG Australia Limited, finding that the amount of any damages resulting from the breach of warranty by the sellers was less than the threshold of the first excess layer insurance policy. The court held that AIG Australia Limited was not liable to pay any damages under the policy.