The Victorian Court of Appeal has thrown out a case in which a property owner sought to claim directly against insurers while suing their plumber clients.

Cathy O’Connell – who has featured in media reports on the difficulty of claiming against licensed plumbers and the adequacy of their compulsory insurance – sued builder Lentelle in 2022 alleging defects in work on her two properties in Windsor, Melbourne.

The builder joined two plumbers to the action but in May 2024 went into liquidation, and Ms O’Connell was paid out by the domestic building insurer.

She then sought to sue three plumbers – Nix, JDF and Trevaskis – which held the insurance required of plumbers through Berkley Insurance (Nix), Chubb (JDF) and WFI Insurance (Trevaskis).

Ms O’Connell said in July 2023 she asked the plumbers to claim against their insurance, but they refused. So she argued she was entitled to claim directly against the insurers, citing a clause in the ministerial order relating to compulsory cover for licensed plumbers.

The court says that after the plumbers were joined as third parties, they did call on their insurance, but Ms O’Connell said that was irrelevant to her entitlement to claim directly against the insurers because she “beat them to it”.

Chubb and Berkley accepted the claims, but WFI said Trevaskis was not covered.

Ms O’Connell’s case arguing for the insurers to be joined to the action was first heard in the County Court, which refused to allow the move. Ms O’Connell appealed.

In dismissing the case, the Appeals Court says under the ministerial order an owner may claim on the insurance in limited circumstances, such as when the plumber refuses to claim. In this case the plumbers had claimed.

The County Court ruling that Trevaskis was not entitled to be indemnified by WFI was well-founded, it says.

Ms O’Connell said the insurance of at least $5 million for public works and completed work liability, and $50,000 per claim for other liability, was “junk insurance”. But the Appeals Court finds the plumbers’ policies complied with the ministerial order.

It also says that once the insurers accepted the plumbers’ claims, the insurers took over the defence of the trial, which has a date set in the County Court.

The Court of Appeal found Ms O’Connell could not bypass the trial. The insurers were not obliged to pay claims unless the plumbers were held liable.

Ms O’Connell also appealed against the County Court’s decision for her to pay costs, but the Appeals Court has upheld that decision. 

Read the judgment here.