Welcome to our General Insurance Insights Newsletter, bringing you the latest case notes on key judgements from July to September 2025 affecting general insurers in Australia.

State of New South Wales v T2 (by his tutor T1) [2025] NSWCA 165

The plaintiff was a 14 year old student at Fairvale High School. In October 2017, the plaintiff was waiting at an unsupervised bus stop near the school, when a friend alerted him to the threat of an attack by another student (XY). The plaintiff sought help from the school’s administration office, but found it unattended. The plaintiff’s mother also attempted to call the school twice, but her calls were unanswered. The plaintiff returned to the bus stop where he was assaulted by about 12 students, who led him to a nearby park to film the attack which was posted on social media. The main assailant was XY. At the time, XY had recently returned from a 20-day suspension with a known history of bullying and intimidation. The school’s counsellor had recommended XY participate in ongoing counselling and complete a risk assessment program, but neither recommendation was implemented.

The plaintiff, through his mother, brought proceedings against the State of New South Wales alleging negligence in relation to the assault of the plaintiff. The State’s position was that, whilst it owed its students a duty of care, that duty did not extend to incidents involving students outside school grounds or outside school hours. At first instance, the Supreme Court of NSW found in favour of the plaintiff, awarding $1.75 million in damages. The State appealed.

On appeal, the NSW Court of Appeal found that the school’s duty of care extended beyond the school boundaries and hours. However, it rejected the argument that the plaintiff’s diagnoses of autism and oppositional defiant disorder, and XY’s prior history of bullying, required the school to exercise a higher duty of care than it owed to students generally. Whilst the Court of Appeal was not satisfied that the school’s failure to conduct a formal risk assessment of XY (and its decision to allow XY to return to school without him completing it) amounted to a breach of its duty of care or was causative of the plaintiff’s loss and damage. It did find that the school was negligent in failing to supervise the bus stop and leaving the administrative office unattended within a reasonable period of time after school finished. Further, after considering the circumstances of the case and the available medical evidence, the Court of Appeal refused to disturb the trial judge’s award damages.

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374, 376 New South Head Road Pty Ltd v SMLXL Projects (NSW) Pty Ltd [2025] NSWSC 886

On 23 December 2023, the plaintiff, a developer, and the first defendant, a contractor, entered into a contract with the first defendant to design and construct alterations to an existing four-storey retail and commercial building, including building two additional residential levels, and constructing a new six-storey building with a retail premises on the ground floor at 374 and 376-382 New South Head Road, Double Bay. The contract imposed extensive design and constructions obligation on the first defendant, as well as warranties that the works would be fit for purpose, of good workmanship, and compliant with the approved design. After the works were completed, various disputes arose concerning alleged breaches of the design and construct contract by the first defendant relating, in particular, to mechanical ventilation, water ingress and defects in the concrete façade.

On 4 July 2023, the first defendant went into liquidation. The plaintiff subsequently commenced proceedings and sought the leave of the Court, pursuant to the Third Party Claims Act 2017, to recover its loss and damage from the second defendant, the first defendant’s professional indemnity insurer.

The Court dismissed the plaintiff’s application for leave to proceed against second defendant in its entirety. In doing so, it held that the plaintiff failed to establish an arguable case that the first defendant would, if it was found liable to the plaintiff, be entitled to an indemnity under the three policies it held with the second defendant. It did so on the basis that none of the correspondence from the plaintiff in relation to the issues with the development constituted a ‘claim’ under the policies, being a written demand for compensation, damages or non-monetary relief. In doing so, the Court made a number of key findings in relation to what does and does not constitute a ‘claim’ under professional indemnity policies of the nature of those held by the first defendant. It noted, in particular, that neither the expression of a complaint nor requesting a proposal to address alleged breaches of a contract nor foreshadowing a demand once further investigations are carried out will amount to a ‘claim’

As a result, leave under the Third Party Claims Act 2017 was refused, and all claims against second defendant were dismissed.

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Habermann v Cook Shire Council [2025] QSC 214

The plaintiff was employed by the defendant as a senior Council officer. An email that had been fabricated by a third party and purporting to be authored by the plaintiff was sent to the defendant’s Chief Executive Officer. The email falsely portrayed the plaintiff as racist and having engaged in a deceitful misuse of her position to prevent a local Aboriginal corporation from assuming control of the lease of a failed waterfront cruise business.

The email was deployed by the director of the cruise business as an example of the defendant’s alleged maladministration to encourage it to settle a dispute over outstanding debts. It was subsequently tabled in Parliament, resulting in the public destruction of the plaintiff’s character. As a result, the plaintiff suffered a psychiatric injury, leaving her unable to perform her employment in any capacity.

One of the principal issues at trial was whether the tabling of the email in parliament was a necessary cause of the plaintiff’s injury. The plaintiff’s main allegations were that the defendant, as her employer, owed her a duty to take reasonable care to avoid a foreseeable risk of injury, including psychological injury, and, in exercising that duty, it failed to avoid the perpetuation, in the public domain, of the allegation that the plaintiff was the author of the fabricated email. Additionally, it was alleged that, despite the plaintiff’s repeated denials that she had authored the email and requests that the defendant engage an independent IT expert to verify the author of the email, the defendant failed to do so. The defendant argued that its duty of care to its employees did not extend to guarding against the actions of third parties (namely the relevant Member of Parliament), as such third parties could not be controlled by the defendant.

The Court found the defendant breached its duty of care by failing to undertake the simple task of demonstrating that the email was a fabrication. Relevant to that finding was evidence that the defendant was aware of the email’s existence and its potential to cause significant reputational harm to the plaintiff, that it had the means to disprove the email’s authenticity and that it failed to follow through on its promise to investigate and communicate its findings to key stakeholders, including the plaintiff. The plaintiff was awarded $2,359,037.64 in damages.

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Mason-Leonarder v Balfran Removals Pty Ltd (No 2) [2025] ACTSC 363

The plaintiff was employed by the first defendant as a removalist. From time to time, the first defendant provided removalist services to the second defendant.

On 25 October 2022, the plaintiff was working for the second defendant at the Canberra Institute of Technology to dispose of furniture and other items. Upon arriving to work, he was instructed by the Facilities Manager of the second defendant to dismantle furniture and other items, and then transport them to a loading dock at the premises to dispose of into a number of skip bins. The plaintiff’s request to open the skip bins and walk the furniture into them was refused. Further, he was told not to obstruct the roadway with his truck whilst disposing of the items. The plaintiff reported his concerns about the task to his supervisor and also the second defendant, whilst proposing alternative methods for disposing of the items. However, those suggestions were rejected.

In following the defendants’ instructions, the plaintiff attempted to throw a heavy piece of a dismantled desk from his truck into a skip bin, which required him to twist his body. In doing so, he immediately felt a sharp pain in his left leg, causing it to give way and for the plaintiff to fall off the back his truck. As a result, he sustained a significant injury which resulted in a long term disability.

The main issue before the Court was whether the plaintiff’s injury was caused by the negligence of one or both of the defendants and, if so, how liability should be apportioned between them.

The Court found that both defendants owed the plaintiff a duty of care and that duty had been breached. In the case of the first defendant, it had failed to have an appropriate system of providing direction to its employees when faced with difficulties in performing their work tasks. Specifically, it failed to give the plaintiff appropriate guidance as to how to perform the removalist task safely after he contacted his supervisor to raise concerns. The second defendant, as the occupier of the premises, breached its duty of care by imposing unsafe work conditions on the plaintiff and preventing him for utilising safe methods of performing his tasks. In doing so, it exposed the plaintiff to an unreasonable risk of injury.

In considering the respective culpability of the defendants, the Court found that both were equally liable and that their independent acts and omissions each caused the plaintiff’s injury. Accordingly, the Court apportioned 50% contribution to each defendant.

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Ioannidis v Carretero [2025] NSWDC 258

The plaintiff was walking her dog on a retractable lead when an unrestrained dog, owned by the defendant, escaped from a nearby property and viciously attacked the plaintiff’s dog. In the course of the attack, the plaintiff sustained physical injuries. The plaintiff later developed PTSD, including ongoing anxiety associated with being outside and not wanting to deal with people.

The key issue before the Court was whether the plaintiff could recover damages for her psychiatric injury under s 25(1) of the Companion Animals Act 1998, which imposes a strict liability on a dog’s owner in respect of “bodily injury” caused by their dog wounding or attacking another person.

The Court held that “bodily injury” under the relevant section refers to physical injuries, as well as any psychiatric sequelae of those injuries, resulting from an attack on the other person. It does not extend to damages associated with the psychological trauma of the plaintiff witnessing the attack on another (including their own pet). The Court also found that the onus of disentangling causation and, in this case, the extent to which the plaintiff’s condition could be attributed to the trauma associated with the attack on her dog, as opposed to herself, lay on the defendant.

After considering the medical expert evidence called by both parties, the Court determined that the defendant had failed to discharge that onus, finding that the attack upon the plaintiff and her dog were “inextricably linked” and that the plaintiff’s psychiatric injuries were suffered “in one traumatic event”. Accordingly, the plaintiff was awarded $101,788.63 in damages in respect of both her physical and psychiatric injuries.

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This article was written by Ashley Harding, Partner, Madeline Dashiell, Solicitor and Claudia Albert, Solicitor.