Court decision sees Liberty Mutual to pay for Opal Tower chaos

ICON and QBE have had a win in the Federal Court after a trio of judges found Liberty Mutual Insurance should cover the claim arising from Sydney’s infamous Opal Tower.

The court battle comes after the evacuation of the Opal Tower building in Sydney’s Olympic park in December 2018. Residents of the 37-floor tower were forced from their homes after the building cracked due to improper construction materials.

The magnitude of the issues saw Icon, the developer of the building, spend $17m on rectification costs as well as $8.5m on rehousing residents.

This was added to by $5.5m in legal fees incurred by Icon in the fight to force its insurers to pay up given the issues occurred during the defect liability period.

The $31m sum from last year has since grown to a total of $36m as a result of new rectification and legal costs.

Chief Justice James Allsop and Justices Anthony Besanko and John Middleton upheld Icon’s attempt to force Liberty to pay but awarded a win to QBE.

Federal Court justice Michael Lee had sided with Icon in November 2020, ordering QBE and Liberty Mutual to pay Icon’s cost.

This leaves payments for the damage to the Opal Tower now at the foot of Liberty Mutual Insurance.

“Icon’s case against Liberty was that at all material times the parties understood and intended that cover was being written on a contracts commencing basis such that cover would be available under the policy on foot at the time a construction project was commenced for liability in connection with that project occurring at any time prior to the expiry of the defects liability period, and that cover to that effect was indeed secured,” the court said.

The developer dragged the insurers to court after they declined to indemnify Icon, claiming the damage was not covered within the period of the insurance purchased.

“It was plain that Icon, through Austbrokers, had sought contract specific cover; and was receiving it from Liberty. It did so by quotation slips that referred to the defects liability period. This had been sought from 2012,” the court said.

The residents of the tower have also launched a class action against the Sydney Olympic Park Authority, which has itself launched a cross claim against Icon.