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[2025] NSWCA 247
mixed. Appeal allowed in part; the primary judge’s orders were set aside and replaced with judgment for Tanwar for $149,021, and Gordian was ordered to pay Tanwar’s costs of the proceedings and appeal.
The Court of Appeal found the policy covered the underground pipes because they were structural improvements connected to insured storage tanks. The insurer could not rely on the construction-work exclusion because it had not proved the amount payable under contracts for the work. Tanwar could not reopen its unsuccessful proof of the full amount claimed, but it recovered the reasonable rectification cost established by the evidence: $149,021. Its lost-rent claim failed because there was no evidence the lease allowed rent to be reduced in the circumstances.
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2,637 words · generated 06/10/2026
Tanwar Institute of Professional Studies Pty Ltd as trustee for the Tanwar Family Trust owned a petrol station at Lewisham. Tanwar Enterprises Pty Ltd leased and operated it. In July 2015, Tanwar received an Environment Protection Authority notice requiring upgrade work to control vapour recovery and comply with cl 69 of the Protection of the Environment Operations (Clean Air) Regulation 2010 (NSW) ([7]). Mr Tanwar, a licensed builder, undertook the work with subcontractors after Tanwar could not engage a tank company. The work ran from about November 2015 to April 2016 ([8]).
6 cited instruments linked from this judgment.
The upgrade required removal of part of the concrete apron and replacement of underground pipes connecting petrol storage tanks to bowsers. The pipes were about 300 mm below ground ([8]). After the work, tests showed air entering the pipes and the bowsers malfunctioning. Investigations found at least 24 small holes, with part of a drill bit embedded in one pipe. That evidence indicated possible malicious damage ([9]).
The insurer investigated, while Mr Tanwar began remedial work, completed in November 2016 ([10]–[11]). It denied liability in June 2017 ([12]). Tanwar later claimed $444,305: $379,680 for identifying and rectifying damage, $45,625 for lost rent, and $20,000 for claim preparation ([13]). Its evidence on rectification included invoices and cheque records involving Tanwar Enterprises, a related entity; the insurer’s quantity surveyor gave estimates of the upgrade and remedial work ([14]–[15]). There was no supporting documentation for the rent claim beyond the lease, alongside Mr Tanwar’s statement that rent of about $12,500 a month had not been received ([16]).
The District Court dismissed the claim on multiple grounds. It considered the pipes outside the definition of “Buildings”, applied the construction-work exclusion, accepted the insurer’s change-of-risk argument, and found Tanwar had not proved its claimed loss. It also rejected lost rent and claim-preparation costs ([34]–[40]). On appeal, the insurer accepted it could not rely on the change-of-risk clause, leaving the principal issues about what property the Policy covered, the construction-work exclusion, rectification quantum and rent ([43]–[45]).
The Court of Appeal, with Payne and Kirk JJA agreeing with Ball JA, allowed the appeal in part. It ordered judgment for $149,021, together with Tanwar’s costs at first instance and on appeal. The lost-rent appeal failed, and there was no appeal against the claim-preparation-cost finding ([45], [67], [70]).
The Policy insured physical loss or damage to property shown in the schedule. The schedule identified Buildings at the Lewisham premises, with a $500,000 sum insured, and specified settlement on a reinstatement-or-replacement basis ([19]–[22]). Its definition of “Buildings” included “storage tanks” and “other structural improvements pertaining to the Buildings”, among other items ([23]).
The Court read the definition as inclusive rather than exhaustive. Because the listed items did not themselves describe the ordinary central meaning of a building, the definition was ordinarily read as covering buildings as commonly understood plus the additional listed items. Ball JA referred to Obeid for that approach ([47]). The Court also applied the contextual approach to contract interpretation described in Pacific Carriers and Toll: words are considered against surrounding circumstances known to the parties and the transaction’s purpose and object ([48]). The Policy was standard wording designed for varied risks, but the result was the same whether the relevant context was a petrol station or a general policy capable of covering different premises ([48]).
The Court rejected a rule that the definition covered only above-ground improvements. Foundations are generally underground, and swimming pools and storage tanks may also be below ground. The ordinary meaning of “building” can include a basement ([51]). The pipes were themselves structures, and they “pertain[ed]” to the storage tanks because they connected those tanks to the bowsers. Since storage tanks were expressly included, the pipes came within “other structural improvements pertaining to the Buildings” ([52]). Their underground location did not take them outside the cover ([51]–[53]).
The exclusion concerned property undergoing construction, alteration or addition where “the total contract value of all work” at a premises exceeded the lesser of $500,000 or 20 per cent of the total sum insured on Buildings and Contents. On the schedule and the primary judge’s approach, the material threshold was $100,000 ([23], [36], [55]). The parties accepted that the insurer bore the onus of proving the facts necessary to establish the exclusion ([55]).
The decisive point was the word “contract”. The Court construed “contract work” as work done under a contract, with the relevant value being the amount payable under that contract ([55]). The insurer’s quantity surveyor assessed the reasonable cost or value of work, but that did not prove what a contract required Tanwar to pay. The insurer did not establish the contracts under which the EPA work was done, or the amounts payable under any such contracts. Nor was there evidence that the value of subcontractors’ work alone exceeded the threshold ([55]).
The insurer argued that “contract value” differed from “contract price” and that the work’s reasonable value was decisive. The Court rejected the submission because it effectively read “contract” out of the policy wording. The value of work and the value of work under a contract were distinct concepts ([56]). The Court noted a possible commercial reason for the wording: contractors undertaking significant work might have insurance for contract works. It treated that as supplementary, however, and rested its conclusion on the wording itself ([56]).
On quantum, the Court distinguished the unsuccessful claim for the full amount from the amount supportable on the evidence. Tanwar had not appealed the primary judge’s finding that the invoices and related-party records did not prove its claimed loss, and it could not obtain a rehearing merely because it succeeded on liability ([58]). The Court also said s 54 of the Insurance Contracts Act 1984 (Cth) did not address a plaintiff’s failure to prove loss. That section concerns policy terms permitting an insurer to refuse payment because of an insured’s act or omission ([61]).
The Policy provided reinstatement or replacement cover. The insurer could rebuild the Buildings or pay the cost of rebuilding, repairing or replacing them ([24], [62]). In the context of this claim, the Court treated that as requiring rectification of the damaged pipes. The reasonable cost of that work, on the insurer’s quantity surveyor’s evidence, was $149,021. The Court therefore entered judgment for that amount ([62]–[63]).
The lost-rent claim failed for a different evidentiary reason. The Policy provided cover for loss of rent resulting from insured damage and interruption or interference with the business ([29]–[33]). But Tanwar’s lease allowed rent abatement only in specified circumstances, including damage making the premises or part of them unfit for occupation or use ([65]). No evidence established that those conditions had occurred, and Tanwar proposed no other basis for abatement. The Court accordingly upheld the rejection of lost rent ([66]–[67]).
The judgment does not describe an earlier disagreement among appellate courts or announce a new general rule of insurance law. It applies established contract-interpretation principles to particular policy wording. Before the appeal, the District Court had treated the underground location of the pipes as excluding them from “Buildings” and had considered the reasonable value of the upgrade work sufficient to engage the construction-work exclusion ([35]–[36]). The Court of Appeal displaced both conclusions by construing the inclusive definition and giving effect to “contract” in “contract value” ([47]–[57]).
After the decision, the specific interpretive result is that this Policy’s definition covered these petrol pipes because they were structural improvements pertaining to the expressly included storage tanks. The judgment does not establish that every underground pipe is insured under every buildings policy. Its reasoning depends on the particular definition and the pipes’ relationship to listed property ([51]–[52]).
Likewise, the judgment does not say that a “contract value” threshold will always mean the same thing regardless of policy wording. It construes this Policy’s expression “total contract value of all work” as the amount payable under relevant contracts. Where the wording expressly refers to contract value, evidence merely estimating reasonable market cost may not establish the contractual amount. The Court’s conclusion also depended on the insurer’s failure to prove the relevant contracts and amounts ([55]–[57]).
The decision also illustrates two distinct limits in the case. First, success on liability did not reopen the insured’s unappealed failure to prove its larger claim ([58]). Second, a proved reinstatement cost could support a lesser judgment where the policy’s basis of settlement was reinstatement or replacement and the evidence established a reasonable rectification amount ([62]–[63]). The judgment does not provide a general account of all possible measures of insurance damages; it addresses the policy wording and evidential record before it.
Finally, the Court’s treatment of s 54 is expressly tied to a failure to prove loss. It states that s 54 has no application to that evidentiary failure ([61]). The judgment does not determine the broader operation of s 54 in other factual settings.
At [47], Ball JA explains that an inclusive definition may add items to the ordinary meaning rather than replace it. In plain English, a list introduced by “includes” can expand the category while leaving its ordinary core intact. Here, “Buildings” included ordinary buildings plus the listed items.
At [48], the Court records that contractual wording is interpreted in context, considering known surrounding circumstances and the transaction’s purpose and object. The Policy was standard wording intended for broad use, but the Court did not need to choose between a service-station-specific context and a general-policy context because both led to the same result.
At [49], the Court explains that “Buildings” distinguished improvements to land from contents, which might be insured separately. It cautions that context cannot justify giving words a meaning they do not bear. In practical terms, the definition was broad enough to cover land improvements, but the text still set the boundaries.
At [51], the Court rejects the primary judge’s above-ground limitation. Its examples show why location alone was not decisive: foundations, pools, tanks and basements can be underground while still falling within the relevant conception of a building or improvement.
At [52], the Court applies the definition to the particular pipes. They were structures and pertained to the tanks because they connected tanks to bowsers. The connection to an expressly included item was central to the result.
At [55], the Court states that the relevant contractual value was the amount payable under a contract. In plain English, an expert estimate of what work would reasonably cost was not automatically proof of what a contract required the insured to pay.
At [56], the Court says that work’s value and its value under a contract are distinct. The insurer’s interpretation would have made “contract” do no work in the clause. That textual point defeated reliance on the quantity surveyor’s estimate to establish the exclusion.
At [58], the Court refuses a rehearing on quantum. Winning on the meaning of the Policy did not give Tanwar a second opportunity to prove the larger amount it had claimed when it had not appealed the adverse finding on proof.
At [61]–[62], the Court separates the statutory issue from the policy measure of recovery. Section 54 did not cure the failure of proof. The reinstatement-or-replacement clause instead provided the relevant basis for the reasonable rectification cost established by the evidence.
At [66], the Court explains why the rent claim failed: the lease specified when rent abated, and the evidence did not establish that those conditions were satisfied. A stated rental amount and a period of repair were not, by themselves, proof of rent loss under the lease and Policy.
The most direct application is a property-damage dispute involving policy wording that defines Buildings inclusively, expressly covers storage tanks, and extends to “other structural improvements pertaining to the Buildings”. Where damaged underground pipes connect covered tanks to operational equipment, the reasoning in [51]–[53] is relevant. The factual connection matters: the Court found these pipes pertained to the tanks because they linked tanks to bowsers. The judgment does not decide the status of unrelated underground services or pipes under differently worded policies.
The exclusion reasoning is relevant where an insurer relies on wording that turns on “contract value” or “the total contract value of all work”. A key question under this decision is whether the evidence proves contracts for the work and the amounts payable under them, rather than only the reasonable or market cost of the work ([55]–[57]). The case involved work undertaken by the insured’s principal with subcontractor assistance. The Court noted there was no evidence that subcontractor work alone exceeded the threshold ([55]).
The quantum reasoning is relevant where a policy provides reinstatement-or-replacement cover and the insurer disputes the insured’s larger pleaded figure, but evidence establishes a reasonable cost to repair or replace insured property. It must be read alongside the procedural point: the Court refused to remit an unappealed adverse finding on the insured’s claimed loss ([58], [62]). The judgment is not authority for routinely reopening quantum after an appeal succeeds on liability.
For business-interruption claims based on lost rent, the decision highlights the need to connect the claimed loss to both the policy’s cover and the lease’s rent provisions. Here, the Policy required loss resulting from interruption or interference, while the lease set conditions for rent abatement. The absence of evidence that those conditions were met defeated the claim ([29]–[33], [65]–[67]).
The supplied judgment is dated 17 November 2025 and contains no discussion of later decisions applying or distinguishing it. No later-court treatment can therefore be identified from the materials provided.
The authorities cited by the Court are earlier authorities, not later treatment of this decision. Obeid is cited for the approach to inclusive definitions ([47]). Pacific Carriers and Toll are cited for contextual contractual interpretation ([48]). Beaufort Developments is mentioned in the Court’s rejection of the insurer’s attempt to treat “contract” as unnecessary wording ([56]). The District Court decision, Tanwar Institute of Professional Studies v Gordian Runoff Ltd [2024] NSWDC 586, is the decision under appeal, not a later authority ([3]).
The judgment resolves the meaning of the particular Policy definition for the pipes in this petrol station. It does not specify how far “other structural improvements pertaining to the Buildings” extends in other settings. Whether a different service, pipe or installation qualifies would depend on the policy text and its relationship to listed property; the reasons do not provide a universal test beyond the ordinary meaning and contextual approach applied here ([48]–[52]).
The Court did not decide what evidence would be sufficient to prove “contract value” in a different case. It held that this insurer had not proved contracts or amounts payable, and that its cost estimate did not do so. Other policy language or a different evidentiary record may raise different questions ([55]–[57]).
The decision also leaves open the application of s 54 to circumstances other than a failure to prove loss. Its statement is limited to saying that the provision does not apply to that failure ([61]). Similarly, although s 57 was mentioned, no interest claim was made. The Court observed that interest would be difficult to justify on this record because the claim had not been properly proved and the insurer’s liability was not quantified until the appeal ([68]).
Finally, the lost-rent conclusion turned on the specific lease and lack of evidence that its abatement conditions were met. The judgment does not resolve how a business-interruption claim would be assessed where a lease contains different terms or evidence establishes actual interruption, abatement, or another basis for reduced rent ([65]–[67]).
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Tanwar Institute of Professional Studies Pty Ltd as trustee for Tanwar Family Trust v Gordian Runoff Ltd [2025] NSWCA 247
Hearing dates: 29 October 2025
Date of orders: 17 November 2025
Decision date: 17 November 2025
Before: Payne JA at [1]
Kirk JA at [2]
Ball JA at [3]
Decision: (1) Appeal allowed;
(2) Set aside the orders of Weber SC DCJ made on 13 December 2024 and in their place order:
(a) That there be judgment for the plaintiff in the sum of $149,021;
(b) That the defendant pay the plaintiff’s costs of the proceedings;
(3) The respondent pay the appellant’s costs of the appeal.
Catchwords: INSURANCE – interpretation – standard business insurance policy – insurance of petrol station – meaning of “building” within policy – whether underground pipes fall within definition of “building”
INSURANCE – interpretation – meaning of “contract value” – whether “contract value” distinguishable from “contract price”
Legislation Cited: Insurance Act 1973 (Cth) s 17F
Insurance Contracts Act 1984 (Cth) ss 54, 57
Protection of the Environment Operations (Clean Air) Regulation 2010 (NSW) s 69
Cases Cited: Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266
Obeid v Australian Competition and Consumer Commission (2014) 226 FCR 471; [2014] FCAFC 155
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35
Tanwar Institute of Professional Studies v Gordian Runoff Ltd [2024] NSWDC 586
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52
Category: Principal judgment
Parties: Tanwar Institute of Professional Studies Pty Ltd ATF Tanwar Family Trust (ABN 81 137 118 597) (Appellant)
Gordian Runoff Ltd (ACN 052 179 647) (Respondent)
Representation: Counsel:
A Kaylinger (Appellant)
DF Elliott (Respondent)
Solicitors:
Abad and Villanueva Solicitors Pty Ltd (Appellant)
Lander and Rogers (Respondent)
File Number(s): 2025/0011620
Publication restriction: None
[This headnote is not to be read as part of the judgment]
In July 2015, the appellant, Tanwar Institute of Professional Studies Pty Ltd as trustee for the Tanwar Family Trust (Tanwar), received a notice from the New South Wales Environment Protection Authority (EPA) stating that it needed to undertake certain upgrade work to its petrol station at Lewisham to control vapour recovery and be compliant with the relevant environmental regulation. The petrol station was leased to and operated by Tanwar Enterprises Pty Ltd (Tanwar Enterprises). Mr Ramesh Tanwar, the sole director and shareholder of Tanwar and Tanwar Enterprises, was a licensed builder who, with the assistance of subcontractors, commenced the necessary work himself. As part of the works, it was necessary to remove a portion of the concrete apron of the petrol station and replace the underground pipes which connected the petrol storage tanks to the bowsers.
On completion of the works, testing indicated that air was getting into the pipes and the bowsers were not working properly. There was some evidence that indicated that the damage had been caused maliciously. Tanwar proceeded to make a claim against the respondent insurer, Gordian Runoff Ltd (Insurer), under a business insurance policy (Policy) in respect of damage done to the underground pipes. The Insurer investigated the claim and, in the meantime, Mr Tanwar commenced remedial work to repair the damaged pipes.
The Insurer denied liability on various grounds. Tanwar subsequently commenced proceedings against the Insurer seeking $444,305, comprising of amounts for: the cost of identifying and rectifying the damage, business interruption (loss of rent), and claim preparation. Tanwar provided limited evidence quantifying the amounts detailed under the first and third categories claimed in the form of invoices and cheque butts, but did not tender any documents supporting the claim for lost rent other than the lease. The insurer led expert evidence from a quantity surveyor who expressed the opinion that the value of the upgrade work was $312,402.47 and the value of the remedial work was $149,021.
The primary judge, Weber SC DCJ, rejected Tanwar’s claim on several bases. Relevantly, his Honour held that the pipes “due to their location within the ground do not fall within the definition of ‘Building’ within the meaning of the Policy”. Additionally, his Honour found that the exclusion to the definition of “Buildings” applied. That was because, consistently with the relevant exclusion clause, the damage to the pipes occurred during construction work (the upgrade work) and the contract value of that work was more than $100,000 (that is, more than 20% of the sum insured). His Honour held that at most Tanwar was entitled to recover $149,021 for the cost of the remedial work. His Honour further rejected the claims for lost rent and claim preparation costs.
On appeal, Tanwar contended, relevantly, that the primary judge erred by: (1) finding that the pipes did not fall within the definition of “Buildings”; (2) finding that the “contract value” exclusion to the definition of “Building” applied; and (3) by failing to give proper consideration and weight to the evidence of Tanwar with respect to the loss of rent claim. It sought a rehearing in relation to its claim for rectification costs. It did not appeal the primary judge’s finding in relation to claims preparation costs.
The Court (Ball JA, Payne and Kirk JJA agreeing) held, allowing the appeal and entering judgment for the appellant in the sum of $149,021:
(1) Contrary to the conclusions of the primary judge, the ordinary meaning of the word “building” included structures below ground, such as a basement. In the present case, the pipes fall within the extended definition of “Buildings” in the Policy. That was because “Buildings” was defined to include storage tanks and “other structural improvements pertaining to the Buildings”. The pipes fell within the latter description because they were structural improvements pertaining to the storage tanks: [47]-[54].
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52, cited.
(2) The insurer bore the onus of proving that “the total contract value of all work” that was carried out by Tanwar to comply with the notice received from the EPA exceeded $100,000, which it failed to do. “Contract work” must mean the value of work done under a contract, which must be the amount payable under the contract for the work. The Insurer made no attempt to prove the existence of any contract under which work was done to comply with the EPA notice, let alone the amount payable under that contract or those contracts for that work. To rely instead on the quantity surveying evidence led by the Insurer to assess the contract value would be to ignore the word “contract” in the expression: [56]-[58].
(3) There was no basis for ordering a retrial on the question of quantum. The issue had been determined at first instance. Tanwar should not be given an opportunity to re-litigate an issue on which it lost at first instance merely because it had succeeded on other issues on appeal. Tanwar was insured under the Policy on a “Reinstatement or replacement” basis. Consequently, the Insurer was obliged either to rebuild the Buildings (which, in the context must mean carry out the rectification work itself) or pay the costs of “rebuilding, repairing or replacing” the pipes. By denying liability, it failed to do that. Accordingly, Tanwar was entitled to recover as damages the reasonable cost of undertaking that work, which on the evidence was $149,021: [59]; [63]-[64].
(4) There was no evidence that Tanwar Enterprises was entitled to abatement of rent. Accordingly, the primary judge was correct to conclude that Tanwar had failed to prove its claim for lost rent: [65]-[68].
PAYNE JA: I agree with Ball JA.
KIRK JA: I agree with Ball JA.
BALL JA: The appellant insured, Tanwar Institute of Professional Studies Pty Ltd as trustee for the Tanwar Family Trust (Tanwar), appeals against a decision of the primary judge (Weber SC DCJ) rejecting a claim by Tanwar against the respondent insurer, Gordian Runoff Ltd (Gordian), under a business insurance policy issued by Calliden Insurance Limited (Calliden) and initially underwritten by Great Lakes Insurance SE trading as Great Lakes Australia (GLA) (the Policy): see Tanwar Institute of Professional Studies v Gordian Runoff Ltd [2024] NSWDC 586. On 29 June 2020, Gordian acquired the runoff business of GLA pursuant to a scheme approved by the Federal Court under s 17F of the Insurance Act 1973 (Cth). It will be convenient in this judgment to refer to GLA and Gordian together as the Insurer.
Tanwar’s claim was made in respect of damage done to underground pipes that formed part of a petrol station owned by Tanwar on New Canterbury Road, Lewisham. The petrol station was leased to and operated by Tanwar Enterprises Pty Ltd (Tanwar Enterprises). The sole director and shareholder of Tanwar and Tanwar Enterprises is Mr Ramesh Tanwar.
The primary judge also rejected a claim by Tanwar under a business interruption extension contained in the Policy for lost rent during the period the pipes were repaired.
For the reasons that follow, the appeal against the decision in respect of the damage to the pipes must succeed in part, but the appeal in respect of the claim for lost rent must fail.
In early July 2015, Tanwar received a notice dated 30 June 2015 from the New South Wales Environment Protection Authority (the EPA) stating that it needed to undertake certain upgrade works to the petrol station to comply with cl 69 of the Protection of the Environment Operations (Clean Air) Regulation 2010 (NSW), which required certain equipment to be fitted to petrol storage tanks in order to control vapour recovery.
Following receipt of that notice, Mr Tanwar, who was a licensed builder, with the assistance of subcontractors, commenced the necessary work himself after Tanwar had been unable to engage a tank company to do the work. The work was commenced in about November 2015 and was completed in April 2016. As part of the work, it was necessary to remove a portion of the concrete apron of the petrol station and replace the pipes, which were about 300mm underground. The pipes connected the petrol storage tanks to the bowsers.
On completion of the work, testing indicated that air was getting into the pipes and the bowsers were not working properly. Investigations revealed that the pipes had at least 24 small holes in them. There was some evidence in the form of part of a drill bit embedded in one of the pipes that indicated that the damage had been caused maliciously.
Tanwar’s insurance broker first notified the Insurer under the Policy of a potential claim on 18 July 2016 by which time Tanwar had discovered the holes in the pipes after cutting through the newly laid concrete.
The Insurer investigated the claim and, in the meantime, Mr Tanwar commenced remedial work to repair the damaged pipes. That work was completed in November 2016.
On 13 June 2017, the Insurer denied liability on various grounds, some of which remain relevant and some of which do not. At that stage, Tanwar had not attempted to quantify its claim.
Tanwar commenced proceedings against the Insurer on 11 July 2022 and by its further amended statement of claim filed on 24 January 2024, it claimed a total amount of $444,305 made up of the following amounts:
| Item | Cost | | Cost of identifying and rectifying the damage | $379,680.00 | | Business Interruption (loss of rent) | $45,625.00 | | Claim preparation | $20,000.00 | | Total | $444,305.00 |
No particulars were given of those figures.
The evidence given at trial in support of the quantification of the claim was limited. It was principally given by Mr Tanwar in two affidavits, one affirmed on 15 December 2023 and the other on 9 August 2024. In relation to the claims for the costs of the rectification work, the first affidavit affirmed by Mr Tanwar exhibited what were described as three scopes of work and three tax invoices. Two of the scopes of work and two of the invoices were addressed to “Calibre Insurance”, which presumably was intended to be a reference to Calliden. One of those invoices, dated 13 August 2016, was for $38,500 (including GST). The other dated 13 October 2016 was for $53,130 (including GST). Mr Tanwar explained in his second affidavit that the first invoice related to initial exploratory work undertaken by Tanwar. The second invoice related to additional exploratory work undertaken by it because “the [Insurer] did not accept [Tanwar’s] position concerning the findings from the Exploratory Works Part One”. The third scope of works was from Tanwar Enterprises and was addressed to Tanwar. It was dated 28 July 2016 and was for an amount of $261,500 (excluding GST). On 13 December 2016, Tanwar Enterprises issued an invoice to Tanwar for “Work completed as per Quotation accepted on dated [sic] 07.10.2016” in the amount of $287,650 (inclusive of GST). Tanwar also relied on cheque butts in respect of cheques drawn by Tanwar in favour of Tanwar Enterprises for $28,765 on 13 October 2016 and $258,885 on 9 February 2017 and a redacted account statement showing withdrawals of those amounts: J[87(g)].
In response to that evidence, the Insurer served an expert report dated 9 April 2024 from a quantity surveyor, Mr Eugene Cloete. Mr Cloete expressed the opinion that the estimated cost of undertaking the upgrade work was $355,557.55 and the estimated cost of undertaking the remedial work was $163,923.70 (both figures included GST).
No documents were tendered in support of the claim for lost rent other than the lease. However, in support of that claim, Mr Tanwar said at para 78 of his first affidavit that “During that time [that is, the time when the repair work was undertaken], the Plaintiff was not in receipt of the rent that they would have otherwise received from the tenant, with the rent being $12,500 a month. The Plaintiff has been deprived of approximately $45,000 to $47,000 in rent”.
In support of the claim for claim preparation costs, Tanwar tendered two invoices. One was from Northcliff Claim Services dated 27 September 2016 for $5,619.84 (incl GST). The other was from Abhay Enterprises Pty Ltd dated 13 July 2017 for $14,712.50 (incl GST) for 53.5 hours at $250.00 per hour (plus GST): J[97].
The Policy consists of a schedule and a standard form document setting out the Policy wording (the Policy Document).
The Policy Document is divided into a number of sections. The Property Damage section contains the following insuring clause:
“Your insurance under this cover section
Provided the Property Damage cover section is shown as insured in the Policy Schedule, then subject to the provisions of the Policy, We will cover You for physical loss of or damage to Your Property Insured at the Premises during the Period of Insurance.”
“Property Insured” is defined to mean “the property shown in the Policy Schedule as specifically covered with a Sum Insured in respect of each cover section”. “Premises” is defined to mean “the places listed in the Policy Schedule as the situation at which and from which You operate Your Business”, which was stated in the Schedule to be “281 New Canterbury Rd, Lewisham NSW 2049”.
The Property Damage cover section of the schedule is in the following terms:
| Method of Settlement | Reinstatement or replacement | | | Sum Insured | | Buildings | $500,000 | | Stock | Not Insured | | Contents | Not Insured | | Rewriting of records | $50,000 | | Removal of debris | $100,000 | | Specified Items | Not Insured | | Extra costs of reinstatement | Standard Policy Benefit | | Playing surfaces | $50,000 | | Optional covers | | | Flood cover | Not Insured | | Strata title mortgagee(s) interest | Not Insured | | Applicable Excess | | | Excess | $250 |
The effect of these provisions is that Tanwar was insured in respect of physical loss or damage to “Buildings” at the Premises up to an amount of $500,000.
The general definitions section of the Policy Document contains the following definition of “Buildings”:
“Buildings: means the Building(s) located at the Premises.
Buildings includes:
- sheds;
- customised and modified shipping containers or transportable buildings permanently located at the Premises used as workshops, lunchrooms or storage and which are permanently fixed to the ground with electrical or plumbing services, as necessary;
- shipping containers in which the Stock Your Business distributes is delivered to the Premises or from which merchandise is either being loaded into, unloaded from or stored in before dispatch, provided that the container doors are secured when unattended with padlocks and the padlocked container is fully enclosed by a locked fenced area at the Premises after hours;
- shipping containers in which the Stock or Contents of Your Business is stored, provided that the container doors are secured when unattended with padlocks and the padlocked container is fully enclosed by a locked fenced area at the Premises after hours;
- walls, foundations, storage tanks and sheds, awnings, exterior lights, masts, antennae and aerials, fixed external signs, gates, fencing, pavements, roads and other structural improvements pertaining to the Buildings;
- property owner’s fixtures and fittings, floor coverings, plant, plumbing or wiring services that are within the Buildings;
- carports, pergolas and canopies;
- barns and outbuildings;
- external fixed items including swimming pools, saunas and spas, gangways between Buildings, lights and signs and air conditioning units;
- bridges, wharves, piers and jetties.
Building(s) does not include:
- plant and machinery;
- Stock;
- Contents;
- property undergoing erection, construction, alteration or addition (including partial dismantlement of existing structures), where the total contract value of all work to be carried out at any one Premises exceeds $500,000 or 20% of the total Sum Insured on Buildings and Contents, whichever is the lesser, provided that this limit shall only apply to the portion of the Property Insured which is subject to any such work and not to any other portion of the Property Insured;
- land, unsealed driveways, unsealed paths, topsoil and fill, dams, reservoirs, canals, tunnels and railway tracks (not at the Premises).
…”
“Where the Policy Schedule shows that You are insured for ‘Reinstatement or replacement’ then, when:
a) Buildings, … are lost or damaged We will, at Our option:
i) rebuild the Building at the Premises shown in the Policy Schedule or at another site;
…
v) pay the cost of rebuilding, repairing or replacing the Buildings … provided that if You choose not to rebuild, repair or replace the Buildings … We shall effect settlement on an indemnity value basis;”
“Claims preparation expenses
We will pay for costs necessarily and reasonably incurred for the preparation and negotiation of a claim for which We agree to indemnify You under the Policy. The most We will pay is $25,000 in total for any one claim, unless a higher amount is included in the particular cover section of the Policy. This benefit is in addition to any Sum Insured or limit of liability.
This benefit does not apply to the Tax Audit cover section.“
“Change to risk
If You become aware of any changes to Your Business or other circumstances affecting the Premises during the Period of Insurance that may result in an increased risk of destruction, loss or damage to Your Property Insured under the Policy or liability to any third parties, You must notify Us of these changes in writing as soon as possible.
If You are a property owner insuring Buildings under the Policy at Premises that You lease to any third party(ies), You must inform Us within 90 days from when You first become aware of any:
a) changes of tenants; and/or
b) changes whether total or partial to the occupancy of the Buildings;
at the Premises during the Period of Insurance.
If We agree to the alteration of risk or changes We will do so in writing and You must pay Us any additional premium We may require.
Your failure to notify Us of the alteration of risk or changes could result in Us declining a claim and/ or cancelling or avoiding the Policy, except where We expressly allow alterations in risk in the relevant cover sections of the Policy.”
The first paragraph of the Business Interruption cover section of the Policy wording states that there are five types of cover available under that section of the Policy including “Loss of Rent Receivable basis” and that “The Policy Schedule indicates which cover has been selected by You”.
The Business Interruption cover section of the Policy Schedule is in the following terms:
| Cover Type | Annual Revenue | | Indemnity Period | 12 months | | Annual Revenue Amount | Not Insured | | Annual Rental Amount | $150,000 | | | Sum Insured | | Annual Revenue | Not Insured | | Loss of Rent Receivable | $150,000 | | Claim preparation and proving expenses | $20,000 | | Additional increase in cost of working | $25,000 | | Accounts receivable | $7,500 | | Documents | $5,000 | | Optional cover | | | Goodwill | $20,000 |
“Loss of Rent Receivable basis
What You are covered for
If ‘Loss of Rent Receivable’ is shown as insured in the Policy Schedule with a specific Sum Insured, in the event of interruption of or interference with Your Business in consequence of Damage to any Property Insured or any part thereof used by You at the Premises for the purpose of Your Business, We will pay You in respect of each item the amount of the loss resulting from such interruption or interference.
Provided that:
a) the payment is in accordance with the ‘What We pay’ provision for the item;
b) We have paid for or admitted liability in respect of such Damage to Your Property Insured under the relevant cover section, or another insurer has paid for or admitted liability in respect of such Damage;
c) We would have paid for or admitted liability in respect of such Damage under the relevant cover section of the Policy, or another insurer would have paid for or admitted liability in respect of such Damage and it would otherwise be covered under the relevant cover section but for the application of an Excess;
d) Our liability in no case will exceed in respect of each item the Sum Insured shown in the Policy Schedule or the sub-limit shown in this cover section, for that item; and
e) cover for ‘Item 4. Claim preparation and proving expenses’ is only provided if this item is shown as insured in the Policy Schedule with a specific Sum Insured.
Insurance on a Loss of Rent Receivable basis provides protection with regard to loss under:
Item 1. Loss of Rent Receivable.
Item 2. Additional increase in cost of working.
Item 3. Accounts Receivable.
Item 4. Claim preparation and proving expenses.”
“The amount payable under this item will be:
a) in respect of loss of Rent Receivable:
the amount by which the Rent Receivable during the Indemnity Period falls short of the Standard Rent Receivable, in consequence of the Damage; and
b) …”
“Rent Receivable” is defined to mean “the amount of the rent received or receivable (including base rental, Turnover rental and contributions to outgoings) from the letting of property at the Premises”. “Standard Rent Receivable” is relevantly defined to mean “the Rent Receivable during that period in the 12 months immediately before the date of the Damage which corresponds with the Indemnity Period …”. “Damage” is defined to mean “physical loss, destruction or Damage occurring during the Period of Insurance caused by an Event insured under the Property Damage cover section, …”.
The following cover is provided in respect of claim preparation and proving expenses:
“In addition to the amount payable under General Condition ‘Claim preparation expenses’ of the Policy, We will pay You up to the amount shown in the Policy Schedule for the costs of such reasonable professional fees as may be payable by You and other such reasonable expenses necessarily incurred by You and not otherwise recoverable, for preparation and negotiation of claims under this cover section. “
The primary judge rejected Tanwar’s claim on several bases.
First, he held that the pipes “due to their location within the ground do not fall within the definition of ‘Building’ within the meaning of the Policy”: J[61]. That was because the ordinary meaning of the word “building” “does not extend to items located within the ground”. That conclusion was reinforced by the fact that “‘plumbing’ (item 6) is only brought within the definition to the extent ‘that are within the Buildings’”: J[59].
Second, the primary judge held that the exclusion to the definition of “Buildings” applied. That was because the damage to the pipes occurred during the construction work and the contract value of that construction work was more than $100,000 (that is, more than 20% of the sum insured). In reaching that conclusion, his Honour rejected Tanwar’s argument that the construction work was complete at the time the damage occurred. He also rejected Tanwar’s argument that because the work was undertaken by Tanwar, the exclusion did not apply. In his Honour’s view, a distinction needed to be drawn between “contract price” and “contract value”. The exclusion was directed at the latter, which meant that what was relevant was the reasonable market price for the work, and not the price according to some contract. The unchallenged evidence of Mr Cloete was that the value of the work was $312,402.47: J[64]-[69].
Third, his Honour concluded that the Insurer was entitled to refuse to pay the claim because Tanwar had failed to comply with the General Policy Condition relating to a change to the risk. For reasons that will become apparent, it is unnecessary to explain his Honour’s reasons for that conclusion.
Fourth, the primary judge was not satisfied that Tanwar had discharged its onus of establishing its loss. On this issue, he said:
“88 I do not consider that the invoices issued by Tanwar and Tanwar Enterprises discharge Tanwar’s onus to establish its loss. I take this view as the invoices were issued by the insured or a related entity to another related entity. There was no evidence adduced by Tanwar as to the reasonableness of the invoices. In addition, the invoices are entirely unparticularised and unsubstantiated.
89 Tanwar has made no attempt to establish the labour costs, materials charges and contractor costs incurred in undertaking the repair works. Nor was there any attempt made to justify any internal labour rates charged by Tanwar and Tanwar Enterprises. There was no evidence as to whether the relevant internal rates are direct labour costs or include profit and indirect overheads.
90 I should also add in this regard that Mr Cloete gave unchallenged evidence that the reasonable cost of undertaking the investigation and remedial costs would not exceed $149,021 …
91 If I had have [sic] otherwise found that the policy responded to Tanwar’s claim, I would have concluded that the prejudice to the insurer for the purposes of s 54 of the ICA [the Insurance Contracts Act 1984 (Cth)] was the difference between the sum which Tanwar agreed to pay to Tanwar Enterprises less the amount asserted by Mr Cloete.”
Fifth, the primary judge rejected the claim for lost rent. That was because Mr Tanwar had failed to explain why Tanwar was not in receipt of rent that it otherwise would have received from the tenant as he alleged in his affidavit. According to the primary judge, “He [Mr Tanwar] did not, for example, establish that the service station operated by Tanwar Enterprises was closed during this period, or that rent was abated during this period”: J[95].
Lastly, the primary judge rejected the claim for claim preparation costs. That was because the Insurer was entitled to deny liability: J[98]. In any event, Tanwar had failed to establish that the costs it claimed were necessarily and reasonably incurred. As an example, Abhay Enterprises was an entity owned by Mr Tanwar that operated an Indian restaurant and was not an insurance claim specialist: J[99].
Tanwar’s amended notice of appeal identifies nine grounds of appeal. Grounds 1 and 3 were not pressed. Ground 4 attacks the primary judge’s interpretation of the definition of “Buildings”. Grounds 5 and 6 attack the primary judge’s conclusions in relation to the application of the exclusion to the definition of “Building” and “contract value” respectively. Grounds 2 and 2A (numbered 3 in the amended notice of appeal) attack the primary judge’s conclusions in relation to the change of risk clause. Ground 8 attacks the primary judge’s conclusions in relation to the business interruption element of the claim because they failed “to give proper consideration and weight to the evidence of the Plaintiff with respect to the loss of rent component of their claim”.
It is also relevant to add that one of the orders sought in the amended notice of appeal is:
“5 Order that judgment for Appellant against Respondent for $425,305 or such other sum the Court determines on rehearing.”
During the course of the hearing, the Insurer accepted that it was not entitled to rely on the change in risk clause. Accordingly, grounds 2 and 2A, which concern the application of s 54 of the Insurance Contracts Act 1984 (Cth) (the ICA) to the change of risk clause, do not arise, and the appeal should be allowed to the extent that the denial of the claim depended on that clause.
No ground of appeal addressed the primary judge’s findings at J[88]-[89] that Tanwar had failed to prove its loss. That issue was raised directly by the Insurer for the first time on the morning of the hearing, although the Insurer’s written submissions did refer to the findings of the primary judge. Tanwar’s counsel, Mr Kaylinger, was asked whether in light of the Insurer’s position he wished to make an application (inferentially to amend the notice of appeal). He indicated that he did not. However, he pointed to order 5 of the orders sought in the amended notice of appeal and submitted that it would be open to the Court to conclude that judgment should be given in the sum of $149,021, which was consistent with the primary judge’s conclusion at J[90]-[91]. The position was left on the basis that each party was given an opportunity to provide the Court with short written submissions after the hearing addressing the issue. In those submissions, the Insurer maintained its position that the appeal must fail because there was no challenge to the primary judge’s finding on quantum. In its submission, the opinion of Mr Cloete on the reasonable costs of undertaking the work was irrelevant. That was because Tanwar had sought to establish its loss by reference to its legal liability to pay a related party for the costs of remediation, not the hypothetical reasonable cost that would have to be incurred to restore the property to its former usable condition. For its part, Tanwar submitted that if it succeeded on the question of liability, the matter should be remitted to the District Court for a further hearing on quantum. Alternatively, it maintained its position that it was at least entitled to recover the $149,021.
For the sake of completeness, it might be added that there was no appeal against the primary judge’s conclusion in relation to claims preparation costs.
Several preliminary points should be made about the definition of “Buildings”.
First, the definition adopts the structure of stating that the defined term “includes” a list of items which are plainly not intended to be exhaustive (none of the included items, for example, describe the central notion of a building as ordinarily understood). In those circumstances, it would be usual to treat the defined term as capturing buildings as ordinarily understood together with the other items listed (whether they would ordinarily be described as “buildings” or not): see Obeid v Australian Competition and Consumer Commission (2014) 226 FCR 471; [2014] FCAFC 155 at [52]-[53].
Second, it is a well-accepted principle of interpretation that the words of a contract should be interpreted having regard to the surrounding circumstances known to the parties and the purpose and object of the transaction: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 at [40]. The definition of “Buildings” in this case is contained in standard policy terms that are intended to apply in a wide range of circumstances. There is a question whether in that case the relevant context is that of a policy that insures a petrol station or is that of a policy which on its face is intended to apply to a wide range of circumstances. Little, however, turns on the answer to that question. If the relevant context is a policy that insures a service station, then some of the words of the Policy are irrelevant, but other words, such as “tanks”, must be given a meaning that is apposite to a service station. On the other hand, if the relevant context is that the words appear in a standard term policy that applies in a wide range of circumstances, then the terms of the Policy must be interpreted in a way that accommodates all those circumstances, including insurance of a service station. In either case, the result is the same.
Third, it is relevant to bear in mind that one of the functions of the definition is to draw a distinction between buildings in the sense of improvements on land and the contents of buildings, which are usually insured separately. That can be seen in the expansive definition of “Buildings” which includes various structures on land that would not usually be regarded as buildings (such as masts, antennae and aerials, fixed external signs, gates, fencing and pavement) and the exclusion of “Contents”, which itself is defined inclusively to cover a broad range of things. That is not to say that the words of the definition should be given a meaning that they do not bear. But they should be given a broad meaning consistent with the fact that one reason for the limitation on the scope of cover arising from the definition of “Buildings” is because it was expected that improvements or additions to the land not covered by the Policy would be insured separately if the insured wanted cover for them, not because they were thought to be an inappropriate subject-matter for insurance altogether.
In my opinion, the exclusion contained in para 4) has no application in this case.
It was common ground between the parties that the Insurer bore the onus of proving the facts relevant to the application of the exclusion. Consequently, it bore the onus of proving that “the total contract value of all work” that was carried out by Tanwar to comply with the notice received from the EPA exceeded $100,000. “Contract work” must mean the value of work done under a contract, which must be the amount payable under the contract for the work. In the present case, the Insurer made no attempt to prove the existence of any contract under which work was done to comply with the EPA notice, let alone the amount payable under that contract or those contracts for that work. Instead, the Insurer sought to prove through the evidence of Mr Cloete the reasonable cost of doing that work. But they are not the same thing. Here, much of the work was undertaken by Tanwar (that is, Mr Tanwar). It appears that Mr Tanwar did engage some subcontractors (such as electricians). However, there is no evidence that the value of the work performed by the subcontractors exceeded $100,000.
Adopting the reasoning of the primary judge, the Insurer submitted that “contract value” was not the same as the contract price and that what was critical was the value of the work, which plainly exceeded $100,000. That submission cannot be accepted. It involves ignoring the word “contract” in the expression. This is not a case where it could be said that the word is superfluous: cf Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266 at 274 (Lord Hoffmann). The concepts of the value of work and the value of the work under a contract are quite distinct. There may have been good reason for choosing the latter concept in this case, since it is to be expected that any contractor undertaking significant work would have its own insurance covering the contract works. In any event, it is plain that the Policy Document refers to the latter concept not the former one.
For those reasons, the appeal in relation to grounds 5 and 6 must succeed.
It is convenient to deal next with the primary judge’s finding in relation to proof of the claim for Property Damage. That finding has two components. First, his Honour found that Tanwar had not proved the loss that it claimed. Unsurprisingly given the evidence, there is no challenge to that finding. In its supplementary written submissions, Tanwar submits that the matter should be referred back to the District Court for a rehearing in relation to damages if this Court upholds the grounds of appeal in relation to liability. There is no proper basis for such an order. The hearing before the District Court related to both liability and damages. Tanwar should not be given an opportunity to re-litigate an issue on which it lost and has not appealed merely because it has succeeded on other grounds.
The second component of the primary judge’s finding contained in J[91] is that if Tanwar had succeeded on liability, his Honour would have reduced the claim under s 54 of the ICA by “the difference between the sum which Tanwar agreed to pay to Tanwar Enterprises [and] the amount asserted by Mr Cloete”, with the result that Tanwar would have recovered the amount of $149,021.
That conclusion was not challenged by a notice of contention. However, it was addressed in the supplementary submissions filed by the Insurer and briefly by Tanwar in oral submissions when it submitted that it was open to this Court on a rehearing to find that the amount of its damage was $149,021.
It is unclear why the primary judge thought that s 54 of the ICA was relevant. That section is concerned with terms of an insurance policy that have the effect of permitting an insurer to refuse to pay a claim by reason of some act or omission of the insured. It has no application to the failure by a plaintiff to prove its loss. The question is whether the reasonable value of the work necessary to undertake the rectification work is a proper measure of the amount that Tanwar is entitled to recover for physical loss or damage to the pipes.
In my opinion, it is. Tanwar was insured under the Policy on a “Reinstatement or replacement” basis. Consequently, the Insurer was obliged either to rebuild the Buildings (which, in the context must mean carry out the rectification work itself) or pay the costs of “rebuilding, repairing or replacing” the pipes. By denying liability, it failed to do that. Consequently, Tanwar was entitled to recover as damages the reasonable cost of undertaking that work, which on the evidence of Mr Cloete was $149,021.
It follows that Tanwar was entitled to judgment for at least that amount.
The primary judge was correct to conclude that Tanwar had failed to prove its claim for lost rent.
Clause 10 of the lease between Tanwar and Tanwar Enterprises relevantly provides:
“(a) If during the currency of this lease the demised premises or a substantial part thereof is destroyed so substantially as to be wholly unfit for occupation by the lessee then the rental hereby reserved shall abate and this lease and the term hereby created may if the lessor so elects and of its election in writing notifies the lessee within one (1) month of the destruction or damage be terminated and brought to an end PROVIDED THAT if the lessor does not give such notice and does not within a period of three (3) months from such occurrence commence to restore the demised premises the lessee may by notice in writing to the lessor terminate this lease.
(b) In the event that the demised premises or any part thereof shall at any time during the continuance of the lease be damaged so as to render part of the same unfit for occupation and use by the lessee then a proportionate part of the rent hereby reserved according to the nature and extent of the damage sustained shall abate until the demised premises shall have been rebuilt or made fit for the occupation and use of the lessee.
…”
The lease does not permit abatement of rent in other circumstances and no other basis was suggested by Tanwar. There was no evidence before the primary judge that the requirements of cl 10 had been satisfied. Consequently, there was no evidence that Tanwar Enterprises was entitled to an abatement of rent.
It follows that ground 8 must fail.
Tanwar is entitled to recover $149,021 in respect of its claim. Under s 57 of the ICA, Tanwar is entitled to interest on that amount commencing “on the day as from which it was unreasonable for the insurer to have withheld payment of the amount”. However, no claim for interest was made, and it is difficult to see why Tanwar would be entitled to interest when it never properly proved its claim and the amount of the Insurer’s liability was not quantified until now.
The Insurer accepted that Tanwar would be entitled to the costs of the appeal if it succeeded in establishing its claim to the $149,021, as it has done. For the same reason, it should be entitled to the costs at first instance.
Accordingly, the orders I propose are:
Appeal allowed;
Set aside the orders of Weber SC DCJ made on 13 December 2024 and in their place order:
(a) That there be judgment for the plaintiff in the sum of $149,021; (b) That the defendant pay the plaintiff’s costs of the proceedings;
**********
Tanwar Institute of Professional Studies Pty Ltd as trustee for Tanwar Family Trust
Gordian Runoff Ltd [2025] NSWCA 247
(2014) 226 FCR 471
(2004) 218 CLR 451
(2004) 219 CLR 165
Appeal allowed in part; the primary judge’s orders were set aside and replaced with judgment for Tanwar for $149,021, and Gordian was ordered to pay Tanwar’s costs of the proceedings and appeal.
Fourth, it is plain that the numbered lists were not intended to be exclusive categories. The clearest example are categories 1) and 5), which both cover sheds. It follows that one category should not be used to read down another.
Against that background, it is possible to turn to the question whether the pipes connecting the tanks to the bowsers fell within the definition of “Buildings”. In my opinion, they did. Contrary to the conclusions of the primary judge, there is nothing in the definition that suggests that it only covers improvements above ground. The definition covers “foundations” which almost invariably are underground. It also covers “swimming pools” and “storage tanks”, which are usually underground. The ordinary meaning of “building” would cover the basement of a building, which by its nature is underground.
In my opinion, the pipes fall within the description “other structural improvements pertaining to the Buildings”. “Structural” in this sense should be understood as an adjectival form of “structure”. It means any improvement that is a structure. The pipes, or fuel lines as they are frequently referred to, fall within that description. They obviously “pertain” to the storage tanks for the petrol because they connect the storage tanks to the bowsers. The storage tanks fall within the defined term “Buildings” because they are expressly included by para 5).
It follows that the appeal in relation to ground 4 must succeed.