When Tower Insurance declined a claim resulting from a fire at a house where methamphetamine was allegedly being cooked, it wasn’t fazed when the policyholders, Sunita and Nitya Nand, filed legal action against the company.
The Nands’ rented out their Flatbush, Auckland property to their son Nicholas Nand and Tower claimed the son let other people onto the property and, with his knowledge, they allegedly started cooking methamphetamine. Somehow a fire started at the property.
Nicholas Nand was later prosecuted under the Misuse of Drugs Act.
While the company did not suggest that the Nands were in any way involved in manufacturing methamphetamine at the property, it said on those facts the terms of the insurance policy entitled it to decline the Nands’ claim.
Indeed, Tower was so confident in its belief there was no case to answer, it applied for summary judgment when the Nands filed proceedings.
However, after dismissing some of Tower’s evidence as inadmissible due to being hearsay, Associate Judge Roger Bell spent considerable time discussing the various interpretations of the word ‘you’ as used in the policy.
Tower’s argument was that ‘you’ in the policy should include the Nands’ son, which would therefore trigger exclusion clauses, and prevent the Nands from claiming under the policy.
But the judge said: “Tower has not shown that the Nands’ cause of action cannot succeed.
“Tower’s defence relies on being able to decline their claim for fire damage to the Flatbush house because of misconduct by their son alleged to have caused the fire.
“It does not suggest that the Nands were in any way implicated in causing the fire.
“The terms of the policy do not allow Tower to rely on the son’s actions to bar their claim.
“Moreover, the admissible evidence does not allow findings on a summary judgment basis as to the son’s role in causing the fire.
“Accordingly, the summary judgment application must be dismissed.”
Associate Judge Bell also ordered Tower to pay legal costs.
A Tower spokesman said they had no further comment as the findings were still being reviewed.
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