Court of Appeal rejects QBE’s appeal contending double insurance
By: Hazel Bowering-Scott
Published: 10/08/2018
The Court of Appeal has rejected QBE’s appeal in QBE Insurance (International) Limited v Allianz Australia Insurance Limited [2018] NZCA 239.  See our article on the High Court decision here

QBE contended that the Allianz policy must have commenced at 12.01am on 4 September 2010, meaning the property was double insured at the time of the earthquake and Allianz should contribute to the loss. 

QBE submitted that Whata J, in the High Court, had reached the wrong conclusion because he wrongly considered double insurance to be an evil, which meant that he approached the case from the standpoint of whether the parties had intended to create double insurance.  QBE alleged that this wrongly affected the entire judgement. 

Instead, QBE said that the correct approach was to determine the meaning of the Allianz contract using normal interpretation principles and then examine the consequences from there.  QBE submitted that the plain meaning of the Allianz policy was that it would come into force on 12.01am 4 September 2010.  

The Court of Appeal rejected QBE’s appeal and said that, viewing the communications objectively, what was sought and agreed between the parties was that the Allianz policy would incept on the expiry of the QBE policy.

The Court of Appeal did disagree with the approach of the High Court, which it said put too much emphasis on the interpretation of the Allianz policy schedule.  The Court of Appeal said that the contract of insurance existed well before the schedule was even created, by way of email and telephone conversations between the broker and Allianz.  It was immaterial that the start time was not expressly discussed, because what was discussed was that the contract would be taking over the expiring policy.  This is in line with standard industry practice.

The Court of Appeal also rejected Allianz’s cross appeal from the High Court finding that if the policy did mean what QBE claimed, that is, the Allianz policy incepted at 12.01am on 4 September 2010, rectification was not available.  The Court of Appeal confirmed that the remedy of rectification is only available when the recorded terms of a contract do not reflect the true agreement. 
 
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