9.05.2018

Nitya Nand & Sunita Nand v Tower Insurance Ltd [2016] NZCA 1455

This case concerned a defendant’s summary judgment application by Tower against its insured, Mr and Mrs Nand.  The Nands’ policy contained an exclusion for losses arising from wilful acts or omissions by “you”.  Tower argued that “you” included the Nands’ children, which entitled it to decline a claim for fire damage while the insured property was rented to their son.  Tower’s application was declined.

Background

In 1999, the Nands bought a rental property in Flatbush, Manukau and insured it with Tower.  On 1 July 2012 there was a fire at the property and the house was extensively damaged.  The Nands’ adult son had been living in the house with his partner and young child, allegedly as a tenant.

The Nands accepted that, without their knowledge, their son let other people on to the property who began manufacturing methamphetamine and that a fire was accidentally started as a result of something going wrong in the process.

Cover under the insurance policy – The meaning of “you”

The policy defined “you” to include “the insured, your spouse and your children normally residing” at the premises.  Tower claimed the son was a child of the insured normally residing at the premises and therefore fell under the definition of “you” for the purposes of the policy.  It followed, under Tower’s reasoning, that the policy excluded cover since the fire damage was due to an “unreasonable, criminal and reckless or wilful act or omission … by you”.  Tower also relied on the policy conditions that the insured would “not cause or facilitate loss or damage … by any unreasonable, reckless or wilful act or omission”.

The Court found the son was not an “insured” under the policy – the only property insured was that of the landlord, not the tenant.

Nonetheless, the Court considered what the situation would have been had the son been co-insured.  With the possible exception of jointly owned property, misconduct by one insured will not deprive another innocent insured of cover (relying on Maulder v National Insurance Co of New Zealand Ltd [1993] 2 NZLR 351).  In the present case, the Court concluded that, since the deliberate misconduct of an insured would not trigger exclusions depriving another innocent insured of cover, “the same must also apply when the person causing the loss is not insured under the policy at all”.

Further, Tower could not rely on a breach of the requirement not to recklessly cause or facilitate loss or damage.  That condition applied to “you and any person in charge of your property with your permission”.  This last language could have encompassed the son.  However, such an interpretation would be inconsistent with the exclusion for deliberate damage caused by anyone residing at the premises, which contained a specific carve-out for damage deliberately caused by tenants.  The more specific language of the exclusion and its exception was found to prevail over the more general wording of the policy condition.

Finally, there was insufficient evidence to meet the summary judgment standard that the son had caused or facilitated the fire by unreasonable, reckless or wilful acts of omissions.

The Court dismissed Tower’s summary judgment application and awarded the Nands costs.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry_100x100 1
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Getting the Deal Through: Construction 2019
Partners Nick Gillies, Helen Macfarlane and Christina Bryant are the contributing authors of the New Zealand Chapter of the 2019 edition of “Getting the Deal Through Construction”. Getting...
19.09.2018 Posted in Construction Law
UAE COMPANIES LAW UPDATE
New Zealand businesses looking to establish a foothold in the UAE have many options
10.09.2018 Posted in Trade and Commodities
When You Can’t Have it Your Way
Antares Restaurant Group Limited (which owns and operates Burger King in New Zealand) has received a whopper of a sanction – a ban on the company supporting visa applications until July next year.
4.09.2018 Posted in Employment Law
Getting the Deal Through: Shipping 2019
The Marine team at Hesketh Henry have again contributed to Getting the Deal Through: Shipping 2019.
30.08.2018 Posted in Maritime Law
A Guide to Concurrent Delay
Hesketh Henry was pleased to host the New Zealand Institute of Quantity Surveyors on 14 August 2018, where one of our construction partners, Nick Gillies, presented on concurrent delay.  The same pre...
22.08.2018 Posted in Construction Law
Update – New Zealand’s New Biofouling Standards
New Zealand has introduced a new standard requiring all vessels to have a “clean hull” on arrival in the country after 15  May 2018.[1]  The objective is to minimise the introduction of ...
21.08.2018 Posted in Maritime Law
No Longer Stumped: The Health and Safety at Work Act 2015 Sentencing Guidelines
The High Court at Auckland has released its first and much-awaited decision under the Health and Safety at Work Act 2015 (HSWA).
21.08.2018 Posted in Health & Safety Law
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.