DELTA PTY LTD V TEAM ROCK ANCHORS PTY LTD AND ANOTHER

[2017] QSC 115, Supreme Court of Queensland, Justice Dalton, 25 July 2017

Insurance (property and liability) - Extension of policy to third parties - Meaning of damage to property - Validity of assignment of claim - Reasonableness of settlement with third party

Queensland Investment Corporation (QIC) entered into a contract whereby Delta undertook excavation works at QIC's site in Brisbane. QIC contracted with Watpac as the builder, and the contract was novated so that Delta and Watpac were in a contractual relationship. Delta engaged TRA to secure the retaining walls for the basement excavation. TRA's performance was woeful and there was significant movement of the walls. Watpac suffered cost and delay, and a settlement was reached between Watpac and Delta by deed on 10 December 2010. Delta commenced proceedings against TRA in 2012. A settlement was reached under which Delta took an assignment of TRA's claim against TRA's property and liability insurers, Mecon. In the present proceedings Delta pursued TRA's claims against Mecon, and Delta also claimed against Mecon on the ground that Delta was itself a party to the Mecon policy in that the Mecon policy was stated to cover "principals and subcontractors who are not otherwise insured". Delta asserted that it was TRA's principal for this purpose. As regards the property damage liability section of the Mecon policy, there was an extended definition of "assured" as "any principal but only for the principal's liability that arises out of the work performed by you for that principal".