The owners of an Auckland building damaged by fire have lost their bid sue in New Zealand the Australian insurer of a lighting company they believed was responsible for the blaze.
Ludgater Holdings alleged a fire in its Auckland building in 2006 was caused by a faulty Atco capacitator in a fluorescent light. It won the right to seek action in the High Court, but this was overturned by the Court of Appeal, so it appealed to the Supreme Court, which released its decision today.
Ludgater told the court it lost $267,738.30 due to Atco's negligence.
Atco Controls - registered in Victoria, Australia - went into liquidation in July 2006.
The company was insured against product liability claims by Gerling Australia Insurance Co Pty.
New Zealand law allows claimants to take court action directly against an insurance company.
"The issue in this case is whether the section (of the Law Reform Act dealing with liability in insurance payments) can apply, and Ludgater can sue Gerling under it, when both Atco and Gerling were resident in Australia and the insurance policy was taken out there," the Supreme Court said.
The court found New Zealand statute could not be given "extra-territorial reach" and dismissed the appeal. It said the law governing Gerling's obligations was Australian law, including its insolvency rules.
Ludgater was ordered to pay Gerling costs of $15,000.
