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Embattled construction boss Nick Di Latte has sued his insurer over rejected cover for a possible $6.5 million in legal claims brought by liquidators after Diploma Group's collapse.
Liquidators are pursuing Mr Di Latte, his wife Carla Di Latte, other family members and a number of Diploma companies in the Supreme Court of Western Australia over $48 million in funds allegedly transferred while the builder-developer was insolvent.
The Fremantle man was director of subsidiary Diploma Construction (WA) from April 2005 until April 2016.
He is accused of breaching his director's duties by knowingly allowing the illegal transfer of funds while the WA construction group was insolvent. He denies these allegations.
The liquidators were appointed in September 2017 after the Federal Court found the firm traded while being seriously and significantly insolvent and that there was lack of confidence in how the group was run.
His insurer Zurich has agreed to cover most of the breach of duty claims brought against him by liquidators.
However, the insurer has said it will not cover $6.5 million in further claims seeking to recoup funds he paid for the sale of an apartment in the Perth CBD and the construction of an apartment in the seaside suburb of Rockingham.
"Zurich is of the opinion that the transactions and payments were made as a consequence of DCWA being insolvent or unable to pay all or any of its debts as and when they fell due," the firm wrote in a letter sent in May last year.
"Zurich therefore considers that the Insolvency Exclusion applies to exclude liability for those claims, including for defence costs."
Mr Di Latte filed proceedings in the NSW registry of the Federal Court last month in an effort to force Zurich to cover these additional claims.
"Mr Di Latte does not accept the determination of Zurich that the new claims are uncovered," he wrote in documents filed with the court.
He is also seeking orders that Zurich pay 64 per cent of defence costs for the WA Supreme Court lawsuits plus his costs of the Federal Court case.
