LMT Surgical Pty Ltd v Allianz Australia Insurance Ltd

LMT Surgical Pty Ltd, the plaintiff, sought to recover damages from Allianz Australia Insurance Ltd, the defendant, following a flood that affected their property in Milton. The plaintiff’s premises experienced water inundation due to local run-off and a back-flow of water from the Brisbane River through storm water drainage pipes. The insurance policy included a clause excluding liability for damage caused by flood. The plaintiff argued that the water overflow was not from the normal confines of a natural watercourse, hence, the insurer should be liable for the damages. The defendant, on the other hand, argued that the exclusion clause in the policy applied, and they were not liable for the damages.

The court was required to determine whether the water overflow that caused the damage to the plaintiff’s property was from the normal confines of a natural watercourse. If it was not, then the exclusion clause in the insurance policy would not apply, and the defendant would be liable to indemnify the plaintiff. The court also needed to interpret the meaning of "flood" and "normal confines of a natural watercourse" as used in the policy exclusion clause.

In its reasoning, the court noted that the water overflow that caused the damage to the plaintiff’s property was not from the normal confines of a natural watercourse. The court held that the exclusion clause in the insurance policy did not apply, and the defendant was liable to indemnify the plaintiff for the damages caused by the flood. The court found that the water overflow was caused by the back-flow of water from the Brisbane River through storm water drainage pipes, which was not part of the normal flow of a natural watercourse. The court also held that the exclusion clause did not cover this type of water overflow.

The court ordered the defendant to indemnify the plaintiff for the damages caused by the flood. The court also ordered the defendant to pay the plaintiff’s costs calculated on the indemnity basis of the proceeding to be assessed.