Opal Tower builder Icon claims victory in $42m stoush over costs
Icon has claimed victory over the $42 million it has spent to date on rehousing, relocating and providing services to Opal Tower tenants after the federal court found insurers Liberty Mutual and QBE should share those costs under the builder’s third-party liability insurance policies.
The judgment dated last month meant the insurers would pay about half of what it had spent on residents since they were forced to evacuate on Christmas Eve 2018 from the high-rise apartment tower it had completed less than five months earlier, Icon said.
“In the past two years, Icon has outlaid more than $42 million on Opal Tower, covering relocation expenses for owners and tenants, hotels, rental and lease costs, security, pet accommodation, removalists and furniture storage, insurance and transport,” an Icon spokesman said.
“We welcome the certainty provided by the Federal Court’s decision on liability insurance costs as we have done everything we can to minimise the impact on residents.”
A spokeswoman for Liberty Specialty Markets said the company couldn’t comment on the likely cost as expenses arising from the claim hadn’t been assessed and validated. It could also appeal.
“From our perspective, this case really revolves around what was defined in Icon’s policy wording, and the perceived intent of the policy,” she said.
“Our policy was determined not to respond to Icon’s claim, however the Court ruled that it should be rectified to provide coverage. Liberty is currently considering whether it will appeal this decision.”
QBE did not respond to a request for comment.
The dispute arose after the insurers declined to indemnify Icon, in part over the relevant period of insurance.
“Liberty contended that cover under its policy extended to the date of ‘practical completion’ of projects undertaken during the period of insurance and did not provide cover for any subsequent defects liability period,” Clyde & Co partner Lucinda Lyons said.
“QBE, on the other hand, contended that the Opal Tower development did not satisfy the definition of a ???Product’ of Icon in order for indemnity to trigger under the Insuring Clause.”
However, in his ruling Justice Michael Lee sided with Icon and held the Liberty policy did extend cover for incidents and damage during the 12-month defects liability period. Justice Lee also rejected QBE’s argument that a ‘product’ did not need to be tangible and moveable to be included in the policy.
Separately, Icon last week put into administration an entity, Icon Construction Australia (NSW) Pty Ltd that completed its last project in 2017 and was no longer operational. It had liabilities recorded at $1.2 million, administrator Ben Verney said.
