Allianz insurance

Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38. Topic of case: Insurance – Dispute regarding extent of indemnity offered by ...

The majority distinguished Allianz’s decision to exercise a remedy under section 28(3) with an insurer’s decision to avoid a contract of insurance under section 28(2). 2.7 Delor Vue commenced proceedings in the Federal Court claiming that Allianz could not exercise a remedy under section 28(3) of the Act because of waiver, election by affirmation, estoppel, and the duty of utmost good faith. 3.4 The majority considered that Allianz’s decision to exercise a remedy under section 28(3) of the Act was a statutory defence which did not involve ‘… The majority considered that an insurer who could, but chose not to, exercise a remedy under section 28(2) had elected to affirm the relevant contract of insurance. Allianz and Delor Vue could not agree on the sequence of work and the costs to be incurred by each party in the Claim. “the mere fact of intimating [a] choice” in relation to these alternative rights makes it “inevitable, or necessary in the interests of justice, that the choice, when once made, should be irrevocable’: [51]. No reliance or detriment would be required’; and 3.1 The majority (- Kiefel CJ, Edelman, Steward, and Gleeson JJ) held that a unilateral waiver could be revoked at any time with reasonable prior notice unless there were exceptional circumstances. 3.5 The majority held that Delor Vue had not established that it had suffered detriment due to Allianz exercising a remedy under section 28(3) of the Act. Nonetheless, Allianz sent an email to Delor Vue dated 9 May 2017 in which it stated as follows: Allianz’s loss adjusters quantified the cost of repairing or replacing the pre-existing defects at approximately $3.6M. (b) Stating that if Delor Vue did not agree to Allianz’s ‘offer’, Allianz would rely on section 28(3) of the Act to reduce its liability to Nil.