On 25 December 2011, a storm resulted in an inundation of hail and rain which led to pooling under the concrete slab of Ms Guastalegname’s home. As a result of the pooling, there was a heave of the clay soil causing it to expand and raise the concrete slab, subsequently lifting the walls and roof frame of the building, leading to cracking and other damage to the home.
Ms Guastalegname claimed indemnity under her ‘Home Building Insurance’ policy with AAMI for the cost of repairing the damage to her home. AAMI admitted that the storm was an insured event and had caused the inundation which resulted in the heave and the damage of the home. However, indemnity was denied on the grounds that a general exclusion clause in respect of loss or damage “arising from or involving soil movement or settlement” applied. Therefore, the sole issue for the Court to determine was whether the term ‘heave’ fell within the ordinary meaning of ‘soil movement’, and thus, whether the general exclusion clause had application.