Brian Newbery v AA Insurance Ltd

[2015] NZHC 2457

This judgment is for an earthquake case with a difference; it is the first based on a contents policy.


Mr Newbury and his wife are collectors of Lladro figurines. These were displayed around their home, including on a mantelpiece, in display cabinets, and some under coffee tables where they could be seen.

In the Christchurch earthquake on 22 February 2011, 30 pieces of Lladro were damaged. It is undisputed that the replacement cost of these pieces is $210,065.

The contents policy

Mr Newbury insured his household contents with a policy from AA Insurance Ltd. The policy stated that:

"Your jewellery (including watches) and any works of art you own are covered up to $5,000 per item or $20,000 in total for any one event. If yours are worth more than this, you need to tell us about them so we can list them on your policy schedule and make sure you're fully covered."

The policy recorded a total sum insured of $328,895, and included a number of specified items, all of which were jewellery.

Works of art are defined in the policy as "pictures, paintings, prints, sculptures, ornaments, tapestries, antiques (other than furniture), hand woven mats or rugs." Mr Newbery did not specify the Lladro as works of art in his insurance policy.

The question to be determined

Justice Nation needed to decide whether the Lladro were works of art, in terms of the policy, and therefore whether AA Insurance's liability in respect of the damage to them was limited to $20,000. He said that:

"I must put myself in the position of a reasonable and properly informed third party. The issue is then whether the parties to this insurance contract would have agreed that the term sculptures and/or ornaments as used in the policy would include the Lladro pieces that are the subject of this claim."

The High Court's decision

Expert evidence from a valuer and an auctioneer was heard. They both agreed that Lladro is usually just referred to as "Lladro", but that is could also appear in catalogues as a Lladro ornament or a Lladro sculpture.

Justice Nation decided that the term "ornament" is wide, but that its use in the policy:

"gives the insured the ability to notify the insurer of his wish to have cover for more than the limits specified in the policy. It also allows for the insurer to be better informed as to the risk it is assuming and to avoid surprise in the event of a claim relating to household contents."

He went on to say that to an ordinary person, an ornament would mean an item which has no practical use, and was on display because the owner appreciated its appearance.

Justice Nation decided that:

"A reasonable insured would have understood that the insurer was providing cover at a certain level for the normal range of contents that might be found within a home, but that the insurer would want to know if certain items it was covering had some value greater than might otherwise be assumed...
I consider any reasonable person wanting to insure these items under the policy would have considered the Lladro to be 'ornaments' as that term is used in the policy."

In this case:

"each Lladro piece, in respect of which this claim has been made, comes within the meaning of 'ornament' as that term is used in the definition of 'works of art' in the policy. There is accordingly only limited cover available in respect of the damage done to all such items."

Justice Nation went on to say that because the Lladro figurines were mass produced in a factory he would not consider them to be sculptures, but he also noted that if he had construed the term "ornaments" more narrowly, he might have adopted a wider meaning for the term "sculptures".

The end result of the case is that the amount that Mr Newbery could claim for the damaged Lladro is limited to $20,000. This judgment serves as a reminder to ensure that all valuable items are specifically noted on insurance policies.

A copy of the decision is available here:

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