In Candida Trustee Co Ltd v Teak Construction Group Ltd (in liq) [2026] NZHC 1352, the High Court considered whether a claimant creditor could compel liquidators to disclose a company’s professional indemnity insurance information prior to the claim being resolved.

The Court declined to order disclosure of the policy documents. In doing so, it reaffirmed that insurance arrangements are generally irrelevant to the determination of liability and should not ordinarily be disclosed.

Background

The trustees of the Candida Family Trust brought an arbitration claim against Teak Construction Group Ltd arising from alleged defects in the construction of a car park on Auckland’s North Shore. The losses claimed were in the vicinity of $750,000.

The arbitration hearing was due to start in late April 2026. However, shortly beforehand, Teak was placed into liquidation. The arbitration was then stayed pending determination of an application for leave to continue the proceeding.

Against that background, the applicants sought directions from the High Court requiring the liquidators to disclose Teak’s insurance information, including:

the policy wording;
the policy schedules;
confirmation whether indemnity had been accepted, or whether defence costs were being advanced under a reservation of rights.

AIG, as Teak’s professional indemnity insurer, appeared as an interested non-party and opposed the application.

The Court declined to require the liquidators to disclose the insurance information.

The Court’s Reasoning

The Court recognised that, as a general rule, the existence or extent of insurance is irrelevant to the determination of liability or damages between parties.

The applicants argued that once a company is in liquidation, the usual barriers to obtaining insurance information should be relaxed. In support, they relied on Australian authorities where courts had ordered disclosure of insurance arrangements in insolvency settings.

The High Court did not accept that those cases should dictate the position in New Zealand. O’Gorman J considered that the Australian decisions arose under different statutory regimes and in materially different factual contexts.

The Court held that, from an insurer’s perspective, the commercial sensitivity of such information does not disappear merely because the insured has entered liquidation. Disclosure of such information may create an unfair strategic advantage for a claimant, by allowing evidence or settlement strategy to be tailored with knowledge of the available insurance response.

The Court held that the liquidation of a defendant company does not justify forcing disclosure of policy information simply because a claimant wants to assess whether there is a meaningful pool of insurance available.

While the Court declined to order broad disclosure, it did recognise a narrower entitlement. The Court held that a liquidator must respond to questions necessary to enable a claimant creditor to ensure that notice has been provided to any potentially responsive insurer for the purposes of s 9(6) of the Law Reform Act 1936. That would include the identity of the insurer.

This makes practical sense. Section 9 creates a statutory charge over insurance monies payable in respect of the insured’s liability, and a claimant is entitled to make sure that the insurer has actual notice of that potential charge. The Court drew the line there. Beyond confirming the insurer’s identity for notice purposes, broader policy disclosure was not required.

The applicants argued that they needed the information in order to understand and pursue any rights they might have under s 9 of the Law Reform Act. The Court rejected that submission. O’Gorman J held that the applicants already had the protection afforded by s 9: the statutory charge arises on the happening of the event giving rise to the claim and actual notice had already been brought to the insurer’s attention. No further disclosure was needed to create or preserve that position.

What this Means for Insurers

This decision will be welcomed by insurers and liability underwriters. It reinforces several points.

1. Liquidation does not automatically open up policy disclosure

Claimants cannot assume that once an insured enters liquidation, they will gain access to policy wordings, schedules, limits, exclusions or indemnity position. The starting point remains that insurance is irrelevant to the underlying merits dispute.

2. The Court remains alive to the commercial sensitivity of policy information

The judgment expressly recognises the insurer’s interest in maintaining the confidentiality of policy details, including limits and exclusions. This is particularly important where disclosure could affect litigation strategy, settlement posture or evidentiary presentation.

3. Insurers may still need to be identified for s 9 purposes

Where there is a potentially responsive liability policy, a claimant may be entitled to know the identity of the insurer so it can ensure notice is given for the purposes of s 9 of the Law Reform Act 1936.

Looking ahead: the Contracts of Insurance Act 2024

The applicants relied in part on the forthcoming Contracts of Insurance Act 2024, which, once in force, will create an express regime allowing third-party claimants to request certain insurance information.

The Court held that those future provisions were irrelevant to the present case. The new legislation reflects a different statutory framework, but it is not yet in force and could not be used to expand present entitlements.

Conclusion

The case confirms that the Court will not lightly require disclosure of insurance arrangements merely because an insured company has entered liquidation.

For now, the orthodox position remains intact: insurance information is generally not discoverable unless it is directly relevant to the substantive issues, and a claimant’s desire to assess recoverability or improve its negotiating position will not usually justify disclosure.

For insurers, the decision offers welcome support for preserving confidentiality in relation to policy terms, limits and indemnity position. For liquidators and claimant creditors, it also provides helpful guidance on the narrower question of what must be disclosed to enable notice to be given under s 9 of the Law Reform Act.

Resources

High Court declines to require disclosure of insurance information in liquidation context

Fee Langstone