CL AIM REPUDIATED

Sun (Auckland), Volume I, Issue 143, 7 September 1927, Page 12

CL AIM REPUDIATED

INSURANCE CO. TO PAY £I,OOO CLEAR CONDITIONS ESSENTIAL “It is especially incumbent on insurance companies to make clear, both in their proposal forms and in their policies, the conditions which are precedent to their liability to pay.” So stated Mr. Justice Stringer in the Supreme Court this morning, in a reserved judgment in which he awarded £I,OOO damages against an insurance company. The action was one in which Roy Ernest Eastman, builder and contractor (Mr. G. P. Finlay and Mr. King) sought to recover £I,OOO from the Eagle, Star, and Dominions Insurance Company, Ltd., and the New Zealand Insurance Company, Ltd. (Mr. E. H. Northcroft), as an indemnity on a policy repudiated by the defendants. PLAINTIFF PAYS £1,200 In September, 1925, the plaintiff took out a policy with a limit of £I,OOO on his employees. A. clause in the policy set out that the cover was for Auckland city and suburbs, but in March, 1926, the plaintiff took a drainage contract in Hamilton. While there, a workman v * injured by a fall of earth, and | n the company refusing liability tin workman sued and obtained from the plaintiff £1,267 18s and costs. INTERPRETATION OF POLICY The only question to be decided was the proper interpretation of the contract embodied in the policy. “I have no doubt,” said his Honour, “that:, having regard to the nature of the business carried on by the plaintiff, and the knowledge common to the defendants and other busines men —that the locality of the operations of a building and sewerage contractor must necessarily be changed from time to time, as opportunity offered, it was not intended or understood by either of the parties that the words ‘Auckland city and suburbs’ should operate as a limitation of the area within which the policy should apply.

“This, I think, is in accordance with good sense, gives reasonable business efficacy to the contract, and effectuates what I feel sure -was the intention of the parties when the contract was made. “Judgment will be for the plaintiff, for £I,OOO, with costs as per scale, witnesses;’ expenses and disbursements, and second counsel fees £3O 10s.”