The insured was a real estate agent and property manager who held professional indemnity insurance with American Home Assurance Company. The plaintiff was renting a property managed by the insured.

The plaintiff was hit on the head by a pelmet which fell in the house in April 2005. She then sent a letter to the insured dated 26 April 2005 informing him that she had suffered personal injury and would advise him of her intentions in that regard. She also listed 17 other concerns with the general repair and maintenance of the rental property. She stated that the insured and the landlords would "be held liable for any personal injury claims arising from damage caused to the tenants due to poor living conditions" and that she had a current entitlement to bring a personal injury claim. The letter made no specific demand for payment in respect of the alleged personal injuries.

The plaintiff served a formal notice of claim on the insured in September 2005, however his insurance policy had expired in July 2005. The policy responded to claims made against the insured during the policy period. The insured nonetheless made a claim under the policy, which was denied by his insurer.

The Court had to determine whether the letter from the plaintiff to the insured in April 2005 constituted a 'Claim' within the meaning of the policy. The policy defined 'Claim' to mean any written demand for compensation in respect of professional services, which included property management.

The Court noted that interpreting terms in a contract of insurance requires the determination of what a 'reasonable person would have understood the terms to mean', in view of both the plain meaning of the text and the relevant circumstances known to the parties when entering into the contract. In this instance, it took the view that in order for the letter to be deemed a 'Claim' it must contain a written demand for compensation.

Notwithstanding that the 26 April 2005 letter contained no request for payment/compensation for the plaintiff's injuries, the Court held that it did constitute a written demand for compensation (a 'Claim' within the meaning of the policy) against the insured as the plaintiff had expressed an entitlement to make a personal injury claim as a result of her injury and had asserted that the insured was liable to her for damages for personal injury. The policy therefore responded to the claim subject to any exclusions.

The Court went on to find that an exclusion did apply, and the insurer was entitled to deny indemnity on that basis.

Livesay v Hawkins & Ors [2012] QSC 122

It is not necessary for a claimant to request payment or a remedy from an insured for a 'Claim' to be made. It may be sufficient if the claimant asserts a legal right to bring an action against the insured, for which it considers the insured will be held liable.

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