In the Full Federal Court decision of Liberty Mutual Insurance Company Australia Branch trading as Liberty Specialty Markets v Icon Co (NSW) Pty Ltd [2021] FCAFC 126 given on 20 July 2021, the Full Court addressed the construction and scope of thirdparty liability policies in the context of claims made by a building and construction company for losses occurring as a result of the manifestation of serious defects within a building, during the defects liability period.

Key Take Away

1. The Full Court maintained that in the event of ambiguity in an insurance policy, the context (including the market) in which the parties are operating, as well as the commercial purpose of the policy, must be considered (Icon’s Cross Appeal); and
2. Similarly, the Full Court considered that the context of Insurance Policies must always be considered in circumstances where the definition of ordinary words are not clear (QBE Appeal).
3. The Full Court ultimately prefers Policy Interpretation which refers to extrinsic contextual material where Policy terms are not clear.

This case note discusses the 8 April 2021 decision of Shoveller v Dak-Wal Constructions Pty Ltd (No 2) [2021] NSWSC 352, in which a 76-year-old retiree fell from a 3m high walkway while visiting a holiday home in Kilcare NSW.