The plaintiffs purchased a property bordering Lake Albert in South Australia. Extending into the lake from the foreshore in front of the house was a wooden jetty situated on Crown land. When purchasing the property, the plaintiffs took the view that they had acquired the jetty even though the contract of sale specifically excluded the licence to occupy the land on which the jetty stood.
The plaintiffs obtained a domestic household insurance policy with CGU Insurance Ltd (CGU) through an insurance agent, BankSA Insurance (BankSA), which insured property set out in the schedule "only if you own or are liable for the property". The jetty was not mentioned in the schedule, however the plaintiffs were assured on a number of occasions by BankSA's representative, Mr Lindsay, that the policy "covered" the jetty.
The plaintiffs made a claim on the policy when persons claiming title to the jetty removed it. CGU rejected the claim for indemnity. The issue at trial and on appeal was whether the requirement of ownership contained in the contract had been met, or whether, as a result of the assurances given by Mr Lindsay, the contract had been varied. The plaintiffs also argued that by reason of Mr Lindsay's assurances, CGU and BankSA were estopped from denying that the plaintiffs owned the jetty.
The plaintiffs had a right to acquire a licence in respect of the land on which the jetty stood, however the Supreme Court of South Australia held that this was not sufficient to satisfy the requirement that they "own" the jetty, as they did not have a title to the jetty that was superior to that of the other interested persons (in particular the current licence holder).
In relation to the claim that the contract had been varied by the representations that the jetty was "covered", the Court found that neither CGU nor BankSA had intended to effect a variation of the contract such that the plaintiffs would be indemnified for loss of the jetty irrespective of the terms of the written contract. The Court therefore considered that there had been no agreement between the parties sufficient to vary the contract of insurance.
The Court noted that representations relied on as giving rise to an estoppel need to be clear and unambiguous. It considered that Mr Lindsay's statements that the jetty was "covered" merely acknowledged that the jetty would be treated as a domestic building for the purposes of the contract but did not go so far as to represent that any other terms in the policy, such as the requirement for ownership, was to be abandoned. The plaintiffs' claim for indemnity under the policy was dismissed. Davis & Anor v CGU Insurance Ltd & Anor  SASC 220.
This case emphasises that terms in a contract of insurance are to be given their ordinary meaning, and that parties are likely to be bound by the written terms of a policy unless a clear intention to vary the terms can be demonstrated.