A financier that lost money through unauthorised lending by a senior manager has won a $1.1 million judgment against insurance firm Vero.
The High Court last year ruled that Marac Finance, part of NZX-listed Heartland Bank, had suffered loss by an employee's "unauthorised lending", which left it owed $4.4 million.
The Marac manager involved, Grant Atkinson, between 2003 and 2008 lent substantial sums to a motor vehicle dealer, Rapson Holdings.
The court also ruled last year that Marac was entitled to be compensated for this lending under a commercial crime policy it held with Vero Liability Insurance.
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But the insurance policy -- which had a limit of $1 million -- meant Vero was liable to cover only losses incurred after February 2006.
Because Rapson paid back more than Marac had advanced from February 2006, the financier and insurer argued about whether there was any loss Vero had to cover.
Marac argued the repayments made from February 2006 should come off the amount owing at that point, while Vero contended the repayments would only reduce advances made after that date.
If Vero was right, Marac would not have suffered any loss the insurer would be required to cover.
Justice Patricia Courtney, in a decision made public last week, said she was satisfied that the nature of the Rapson account was a revolving credit facility.
Allowing for interest, she gave a judgment in Marac's favour for $1.1 million.