- Application of exclusion clause for cover where injury arising out of breach of duty as "owner or occupier"
On 15 April 1993, the first respondent (Mr Verini) and his wife purchased a property (the property). Mr Verini later applied for and obtained approval from the relevant local council to construct a residential building on the property. The plans included the construction of a timber balcony. The proposed building, including the balcony, was constructed between 30 June 1993 and 30 June 1994. Mr Verini engaged a carpenter to construct the balcony and assisted him by supplying the materials that were used. Mr Verini did not engage a structural engineer or any other person to supervise the building of the house. The balcony, as constructed, did not conform to the diagram of the balcony in the plans approved by the council. On 25 March 1996, Mr Verini transferred the property to another owner. Title was subsequently transferred on two further occasions and the present owners acquired title in November 2002.
On 31 October 2009, the balcony collapsed when a number of people were standing on it. A cause of the collapse was that the main support beam had no vertical support and at its eastern end was secured to the perimeter beam only by skew nails. Each of the second to fifteenth respondents (the claimants) suffered personal injury as a result of the collapse of the balcony.
The claimants sued Mr Verini and Mr Verini claimed indemnity under his insurance policy with WFI Insurance Ltd (WFI) . WFI denied indemnity on the basis of an exclusion clause arising out of breach of duty as owner or occupier.
The Decision at Trial
The trial judge held that the claim against the original owner/builder was not a claim in respect of a breach of his duty as owner within the meaning of the exclusion clause. WFI appealed.
The Decision on Appeal
The Court of Appeal held that the relevant ingredient of Mr Verini’s liability to the claimants was his conduct in connection with the execution of the building work. Therefore it was his carriage of and involvement in the execution of the work and not his ownership of the property which gave rise to the liability to the claimants. The trial judge was correct to find that WFI had not established that the exclusion clause applied to exclude cover under the policy.
An insurance contract should be given a business like interpretation with attention given to the language used, the commercial circumstances and objects it intends to secure. Further the court must give effect to the natural and ordinary meaning of clauses read in the light of the contract as a whole.
Importantly, when determining whether an exclusion or condition that excludes a particular risk from the scope of cover applies, it is necessary to accurately identify the breach that gave rise to the loss.
WFI Insurance Ltd v Verini  WASCA 143