Stuart Donaldson SC and Ermelinda Kovacs, instructed by Patrick Mead and Mikaela McKinnon of Carter Newell, successfully appeared for Liberty Mutual Insurance Company in the recently decided:

– Seymour Whyte Construction Pty Ltd v Liberty Mutual Insurance Company t/as Liberty Specialty Markets [2025] NSWSC 1597; and
– Seymour Whyte Construction Pty Ltd v Liberty Mutual Insurance Company t/as Liberty Specialty Markets (No 2) [2026] NSWSC 281.

Today, McHugh JA dismissed the proceedings. This case turned on the proper construction of an insurance policy styled “Contractor’s Pollution Legal Liability Policy” (the Policy).

🪏 The plaintiff (Seymour) sued the defendant (Liberty) for damages for indemnity or breach of contract under the Policy issued by Liberty to Seymour on 7 December 2016.

🪏 Seymour claimed that the Policy covered what amounted to Seymour’s costs of safely dealing with a large volume of asbestos-contaminated soil in the course of performing its obligations under a construction contract with VicRoads.

🪏 The central issue was whether various types of “Loss” (as defined in the Policy) claimed by Seymour “arose from” what the Policy calls “Pollution Conditions” caused by Seymour’s operations.

⚖️ Relevantly, McHugh JA observed:

“Care must be taken to construe the agreement as a whole, rather than extracting words or phrases and attempting to construe them in isolation. In particular, the definition at issue here must be read in the context of the insuring clause, where it appears as follows: “… Loss arising from Pollution Conditions caused by Covered Operations performed by the Insured …” The circumstance to which the Policy responds is not pollution; it is polluting. It is not enough that the Loss arises from the presence or the discovery of Pollutants. What the Policy responds to is Loss arising from some act on the part of the insured that causes Pollution Conditions, which as defined involve actions or processes in which there is some kind of physical change involving a Pollutant.”