Court of appeal on automatic reinstatement


In a decision released 10 September 2014 in QBE Insurance (International) Ltd v Wild South Holdings Ltd & anor [2014] NZCA 447  the Court of Appeal disposed of appeals in 3 separate proceedings each of which involved issues over the operation of an “automatic reinstatement” clause.  The Court decided that cover reinstates as soon as an event causing loss happened.  Under the insurance policy either party may by notice cancel reinstatement, but notice must be given prospectively.  The court held that the doctrine of merger did not apply.  The Court said that the application of the deductible clause should await evidence at trial as should whether a building was “destroyed” for the purposes of the Vero Insurance policy