Jones v Building Insurers' Guarantee Corporation

The appellant, Jones, sought to recover under the Home Building Act 1989 (NSW) from the Building Insurers' Guarantee Corporation. Jones had previously been found entitled to claim against an insurer, notwithstanding a policy exclusion that purported to exclude claims by a developer. The dispute arose because the legislation, which provided for the State to offer indemnity where an insurer became insolvent, contained an exception for "a developer to which the policy relates". Jones argued that his prior success against the insurer, despite the exclusion, meant he was not characterised as a developer for the purposes of this exception. The matter was heard by Giles and Ipp JJA and Brownie AJA.

The central legal issue before the Court of Appeal was whether Jones, having been previously held entitled to claim against the insurer despite a policy exclusion for developers, was nevertheless to be considered "a developer to which the policy relates" within the meaning of the exception in the Home Building Act 1989. This required the court to determine the proper characterisation of Jones in light of the statutory exception and the prior judicial finding.

The Court of Appeal reasoned that the prior decision, which allowed Jones to claim against the insurer notwithstanding the exclusion, did not alter his fundamental characterisation as a developer in relation to the building project and the insurance policy. The exception in the Act was designed to prevent developers from benefiting from the statutory indemnity scheme when they were the ones whose actions or status might have led to the claim in the first place. The court held that Jones remained "a developer to which the policy relates" for the purposes of the statutory exception, regardless of the earlier finding that the exclusion did not operate against him. Consequently, the appeal was dismissed with costs.