MAINSTREAM AQUACULTURE PTY LTD V CALLIDEN INSURANCE LTD

[2011] VSC 286, Supreme Court of Victoria, Justice Croft, 24 June 2011

Insurance (business interruption) - Policy requiring material damage - Fuse on electricity pole tripped by power surge - Whether fuse "property" - Whether fuse "damaged" - Application of exclusion for electrical breakdown

The assured was a commercial fish breeder. The electricity to the assured's property was supplied by Powercor, through a substation situated on the property but owned by Powercor, and was used principally to oxygenise the water in which the fish were kept. Mainstream had purchased a generator in order to provide a supplementary power supply in case of an interruption to the mains supply. On 26 October 2008 there was a loss of electrical power supply to the property, caused by a power surge which led to the tripping of a fuse on a Powercor pole located on the property. The generator failed to operate. The assured received payment for property damage, and sought recovery under a separate business interruption policy which responded where financial loss was caused by damage to property on the premises which was insured, and for that purpose damage to the property of a utility supplier was treated as property damage. The policy excluded loss caused by electrical breakdown. The Supreme Court of Victoria held, on preliminary issues, that the business interruption policy was triggered.