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Tree trouble

A tree in a car park owned by a commercial landlord breaks in a weather event and damages a trailer parked in the car park and owned by the tenant to the building.

The landlord wishes to make a claim for the damaged trailer under their Public Liability policy that insures their liability as a 'property owner' at the insured location, as they feel morally obliged to fix the damage.

Is the landlord liable? Would it depend on whether the landlord had been 'negligent' by not keeping the tree regularly pruned? Can a tenant and/or their insurer recover off a landlord in this regard given the Property Law Act? Would the circumstances differ if the trailer was owned by another party i.e. not owned by the tenant?

CROSSLEY GATES

The landlord is probably not liable at law. If it was caused by bad weather the landlord has not been negligent. See Helson v Dear HC Wellington CP 536-86, 25 October 1988.

QUESTION

Supply of goods inclusion in PL

QUESTION

We have a client who was engaged to renovate a home. This involved replacing some flooring with secondhand tawa flooring to match existing. The flooring was purchased from a dealer but once laid and sanded back was found to be treated and tinted green, quite distinct from the natural golden tone of the existing tawa floor (of a similar age).

The homeowner is holding our client liable for this and we have lodged a PI claim on the basis of our client's error in selecting this flooring that fails to match the existing.

The insurer has accepted the policy is triggered but declined the claim under the Supply of Goods exclusion: "Arising from your sale, supply, installation or manufacture of goods". Our argument is that the insured has supplied a service, being the renovation, and has not supplied or installed goods as intended to be covered by this exclusion. Is the Supply of Goods exclusion being wrongly applied here?

CROSSLEY GATES

Assuming your client supplied the second hand Tawa and installed it, your client provided both goods (the Tawa) and services (installing it).

It looks like the error relates to supplying the wrong goods. Therefore the exclusion above would appear to apply.

Supplying incorrect goods is potentially a PL claim, but if there is no resultant damage beyond the mismatched flooring, there is unlikely to be cover under that policy either because of the products exclusion.

Your client would need a Products Guarantee Policy to cover it for its liability for the incorrectly selected flooring. I understand that type of policy is not commonly available in NZ and is expensive.

Damage on location

We have a client who rented a home for a commercial shoot. The shoot was over two days, after the shoot the owner noticed several areas of damage after the shoot.

The Insurer wants to apply a separate excess to each item of damage located. We have reviewed the wording to see if this as per the policy and note the following definitions: "Excess" - means the sum shown in the Policy Schedule, this Policy or an endorsement to this Policy which You must pay in respect of each Occurrence or event giving rise to a claim.

CROSSLEY GATES

Assuming there is a connection between the events, then the definition of "occurrence" probably applies meaning only one excess applies.

However, the excess clause applies "in respect of each occurrence or event giving rise to a claim". the alternative "or event" is a problem as each separate incidence of damage is an event. You could argue this is a drafting error because adding "or event" renders the benefit of the aggregation contained in the definition of "occurrence" redundant.

QUESTION

"Occurrence" - means an event, including continuous or repeated exposure to substantially the same general conditions, which results in Personal Injury and/or Property Damage neither expected nor intended.

Given the definition of "Occurrence" includes continuous or repeated exposure to substantially the same general conditions, could it be interpreted that the “Event” is the filming at the home and general movement of equipment during filming which resulted in the unexpected property damage and only one excess be applied?

What is ‘gradual change’?

QUESTION

A client had a bird nest under some roof tiles which caused water to get into a lounge ceiling. The property is the insured's weekend home and the water damage to the ceiling was not found until the following weekend. the insurer is stating it is gradual damage, and because the damage is not from an internal water or waste disposal pipe they are refusing to accept the claim. My question is ... what is damage gradual in nature, especially in a circumstance such as this?

CROSSLEY GATES

The word 'gradual' is an adjective and is describing the nature of the damage. The definition of the word is: 'taking place, changing, moving, etc., by small degrees or little by little.

The item damaged is a ceiling, so if the water damage progressed little by little across the ceiling, I suggest the adjective is probably apt - the ceiling was damaged gradually.

It looks like it wouldn't have been covered anyway because the water was external rain water (presumably).

Driver-only quandary

QUESTION

Our client had taken out PMV policy and it was named driver only comprehensive policy. Named driver is under 25.

Driver's uncle was driving the car who caused the accident. He is over 25 and has no previous claims history. He has full NZ driver license since 2003 and also hold class-2 license since 2006.TP vehicle is also involved.

Insurer declined claim on the basis it is named driver only policy.

Is insurer position correct in declining a claim?

STEVE KEALL

Hello, the correct answer depends on the insurance contract documents including the policy wording.

The insurer has in mind that the insured being the driver is a condition precedent to liability. Were this requirement to be a condition precedent to liability then this stance would be correct.

There is a conceptual difficulty with this requirement being a condition precedent to liability, even if it is stated to be one. What it really means is that there is no cover while someone else is driving the vehicle. Who is driving the vehicle is a state of affairs at the time of the incident about which the insured is making a promise ("only I will drive the car"). This is closer to warranty.

If it is a warranty, then law reform legislation provides that there is no cover only if the breach of the warranty caused the loss.

More information would be needed in this case to understand the issue of the cause of the loss (causation). The issue is straightforward if the TP is responsible. In that case, if there is no condition precedent and it is a warranty, the breach of warranty cannot have caused the loss because the TP caused the loss. So, there should be cover. This issue is less clear-cut where the uncle is, apparently, responsible. Given his good history, I suggest the fact that his being the driver was not the real and efficient cause of the loss, but rather his (apparent) carelessness on this particular occasion. In that kind of situation, assuming there is no condition precedent then there should be cover.

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