Arrow International Ltd v QBE Insurance (International) Ltd

Arrow International Ltd appealed a decision of MacKenzie J, who found that QBE Insurance (International) Ltd was not liable to indemnify Arrow for the settlement reached with the owners and others regarding damage to Luxford Villas. The Court of Appeal dismissed the appeal, upholding the judgment of MacKenzie J. The central issue was whether QBE was liable to indemnify Arrow for the settlement based on damage that occurred during the relevant period of insurance, or if the damage first became actionable or manifest during that period. The Court of Appeal, aligning with MacKenzie J, concluded that Arrow was not entitled to indemnity as the physical damage that triggered Arrow's liability for compensation had occurred before the policy period commenced. The Court found that the policy's wording clearly required a single point of damage occurrence to trigger coverage, and in this case, the damage had already happened before QBE's policy was in effect.

The Court further rejected Arrow's argument that the policy should cover continuous exposure, allowing for multiple triggers of liability. MacKenzie J and the Court of Appeal found that the policy's wording did not support such an interpretation. Additionally, the Court dismissed the notion that the policy's trigger for liability was the manifestation of damage, rather than its occurrence. The Court found that Arrow's liability for compensation was already established before QBE's policy period, and no new liability was incurred during that period. As a result, the Court of Appeal dismissed the appeal and awarded costs to QBE on a band A basis and usual disbursements.