A Win For The Battlers

Illawarra Mercury

Monday February 27, 2006

By MEGAN LEVY

A SMALL Kemblawarra engineering firm has won a legal battle against a major Australian insurance company, opening the door for a multimillion-dollar compensation claim.

The case was due to be heard in the High Court of Australia after more than three years of legal wrangling between Lasermax Engineering and QBE Insurance.

QBE withdrew one day before the hearing.

The battle erupted when a fire on a Kemblawarra electricity pole caused a massive power surge that destroyed Lasermax's $1.4 million laser. Lasermax held an insurance policy with QBE Insurance that covered damage to the property caused by fire.

However QBE Insurance argued it was the power surge - and not the fire - that damaged the laser.

After an earlier NSW Court of Appeal decision in Lasermax's favour, QBE Insurance was due to appeal the decision in the high court in Canberra late last year.

However QBE Insurance withdrew its appeal one day before the court date. Now Lasermax is planning to seek $4 million to $5 million from QBE Insurance and energy supplier Integral Energy.

Mark McDonald from McGuire and McInerney solicitors, for Lasermax, said a hearing date in the Supreme Court was expected for the middle of the year.

"The court has given a timetable in which we have got to have our expert reports filed," Mr McDonald.

"These are reports dealing with the quantum of our loss and as to whether the machine is a total loss, or whether it was repairable.

"The problem is we have been scouring the world to find someone who can tell us that, and there doesn't seem to be anyone around who can say that the machine is repairable. Our case is that it's a complete loss."

The state-of-the-art YAG laser was the only one of its kind used commercially in Australia to cut, weld and treat materials.

The financial strains of the prolonged court battle have caused the Kemblawarra shop to close and 10 people to lose their jobs.

Lasermax partner Bob Urquhart said the company had lost major accounts with BHP and the Roads and Traffic Authority.

The ruling could impact on the way insurance policies are interpreted across the nation, the company's legal team believes, as well as impact on the way energy supply companies look after their infrastructure.

QBE and Integral Energy declined to comment on the matter as it was still before the courts.

© 2006 Illawarra Mercury

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