Thiess Pty Ltd v Zurich Specialties London Ltd

Thiess Pty Ltd (Thiess) and Zurich Specialties London Ltd (Zurich) were parties to a dispute concerning a Construction Risks Insurance Policy. Thiess sought to recover under the policy for losses incurred during the construction of a tunnel. The central question was whether the insurance policy constituted a "construction contract" for the purposes of the *Building and Construction Industry Security of Payment Act 1999* (NSW) (SOPA). The case was heard in the Court of Appeal of New South Wales.

The Court of Appeal was required to determine two primary legal issues. First, whether the Construction Risks Insurance Policy, by its terms, imposed an obligation on Thiess to perform construction work. Second, the Court had to consider whether the policy's requirement for Thiess to take "reasonable precautions" to prevent loss was merely a condition precedent to Zurich's liability under the policy, or if it also gave rise to an enforceable promise by Thiess to take those precautions.

The Court reasoned that the insurance policy did not impose an obligation on Thiess to perform construction work, and therefore it was not a "construction contract" within the meaning of SOPA. The obligation to take "reasonable precautions" was interpreted as a condition precedent to the insurer's liability, not as an enforceable promise by the insured to perform such precautions. The Court found that the policy's language did not create a contractual obligation for Thiess to actively undertake preventative measures, but rather stipulated that if such measures were not taken, the insurer would not be liable.

The appeal was dismissed, and Thiess was ordered to pay Zurich's costs.