Welcome to our General Insurance Insights Newsletter, bringing you the latest case notes on key judgments from April and May 2025 affecting general insurers in Australia.
Richardson v Tooradin District Sports Club Inc [2025] VCC 459
The plaintiff was a gaming cashier who was employed by the defendant, a district sports club (the club).
On 7 February 2020, the plaintiff was working at the cashier desk when a masked robber armed with a knife entered the club and demanded that the plaintiff ‘put all the money in the bag’ (the incident).
The plaintiff brought a claim for damages against the defendant in relation to psychiatric injuries she suffered as a result of the incident. The plaintiff alleged the defendant was negligent in, amongst other things, failing to have a receptionist desk that was always manned with an employee trained to keep a watch and focus on security, and failing to have an electronic locking system (ESL) that enabled the employee to shut the entrance door when a suspicious person was seen entering the club.
Based on lay and expert evidence given at trial, the Court found there was no breach of the defendant’s duty of care and that it had reasonable security measures in place at the club at the time of the incident. That included numerous CCTV cameras, duress alarms, glass security screens at the gaming counter, a gaming safe room and minimum staffing numbers. There was also a receptionist desk that was manned at least 80% of the time. The Court specifically rejected the argument that the defendant was required to have a receptionist desk manned 100% of the time, noting that there was expert evidence that it was not reasonable to expect a venue like the club would have a security person (let alone a receptionist who was focused on security) engaged working on a Wednesday morning (when the incident occurred). That finding meant the other additional security measures the plaintiff alleged should have been in place had no effect. The Court also found there was no reasonable need for an ESL, which would have been difficult to activate in preventing this type of armed robbery and was more for lockdowns.
The Court commented that, even if a breach of duty had been established, the plaintiff would still have failed on causation as it was not satisfied that anyone manning the receptionist desk would have taken any action, including activating the ESL, in the six seconds between when the offender was first captured by the CCTV and he entered the club. Accordingly, the proceeding was dismissed.
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Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (in administration) (No 6) [2025] FCA 542
The first respondent was a registered training organisation that supplied vocational education and training courses to students through an ‘online’ campus under the Commonwealths Vocational Education and Training Fee Higher Education Loan Program’ (VET-HELP). The first respondent engaged marketing and sales agents, on a commission basis, to recruit students to enrol in their online courses. Between 2015 and 2016, the first respondent enrolled thousands of students into online diploma courses under the VET-HELP scheme.
In 2018, the Australian Competition and Consumer Commission (ACCC) initiated proceedings, alleging unconscionable conduct and misleading representations under the Australian Consumer Law against the first respondent, as well as the second respondent, the parent company of the first respondent, and the fourth respondent, the chief operating officer of the second respondent and acting chief executive officer of the first respondent.
The relevant contraventions were established, with the Court making declarations that:
- The first respondent knew there was a real risk that recruitment agents would engage in unethical conduct in the recruitment of students with the result that students became enrolled in circumstances where they did not do so willingly and without full knowledge of the obligations being incurred. As a result, the students, many of which never engaged in their courses, were left with significant Commonwealth debts.
- On that basis, the first respondent had engaged in offending conduct.
- The fourth respondent and, by extension, the second respondent, was knowingly concerned in or a party to that conduct.
Based on those findings, and with the respondents have exhausted all avenues for appeal on liability, the Court was required to determine the appropriate civil penalties and related relief that should be imposed. After considering all relevant principles, the Court imposed total penalties of $20.75 million on the first respondent, $10 million on the second respondent and $400,000 on the fourth respondent.
In relation to the fourth respondent, it was noted that he was an insured under a directors and officers insurance policy issued to the second respondent and that he had made a claim under that policy in relation to the proceedings. The insurance policy provided the fourth respondent with an indemnity in respect of ‘civil penalties which an Insured is legally obligated to pay including but not limited to civil fines or civil penalties imposed pursuant to … the Competition and Consumer Act 2010 (Cth)‘. The ACCC argued the Court had the power to order that the fourth respondent not claim on or accept any indemnification under the policy (known as a ‘personal payment order’), arguing that, if that occurred, it would ‘render the penalty devoid of any sting or burden and thus remove, or at least drastically reduce, any specific or general deterrent effect…’
Whilst the Court was prepared to assume (for the purpose of the proceedings) that it had such a power, it refused to exercise it. That was because, although the fourth respondent consciously and deliberately engaged in the offending conduct, he was not aware that it was unconscionable (and, in that sense, his conduct could not be considered wilful). Also, he was not dishonest and did not intend to cause harm. With that in mind, the Court commented that, it would undermine the intention and utility of directors and officers insurance, if courts too readily made orders preventing insureds from having the benefit of it, particularly if their conduct was not wilful or dishonest.
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Brown v Etna Developments Pty Ltd [2025] NSWSC 358
The plaintiffs purchased a residential property in Gosford next to a development site owned by the first defendant. The first defendant engaged the second defendant, a builder, to manage the project. The third to sixth defendants were members of the family who operated or worked for the second defendant.
Despite geotechnical engineer advice that there was a high risk of landslide to the boundary between the two properties, the first and second defendants excavated the site, causing land to collapse on the plaintiffs’ property, trapping their motor vehicles, preventing access and rendering their property virtually worthless and subject to a high risk of further instability and damage to their house.
The plaintiffs issued proceedings against the defendants seeking damages for trespass and negligence. By the time the trial commenced, the first defendant was in external administration, the second defendant was in liquidation and the development site had been abandoned.
The Court found that each of the defendants trespassed onto the plaintiffs’ property as the second defendant failed to respect the boundary between the properties and encroached onto the plaintiffs’ property by erecting a site fence and excavating beyond the boundary, without the plaintiffs’ consent. Accordingly, the defendants had ‘intentionally or negligently enter[ed] or remain[ed] on or directly caus[ed] any physical matter to come in contact with, land in the possession of another without permission or lawful authority’. For that purpose, land included the soil, sub-soil and fixtures on the property, such as the plaintiffs’ house.
The Court also found the defendants liable in negligence, as the first and second defendants did nothing to ensure the stability of the boundary, ignored the geotechnical engineer’s advice and failed to comply with the Council’s conditions of development approval. Further, they breached their statutory duty under s177 of the Conveyancing Act 1919, which required them ‘not to do anything in relation to land that removes the support provided by the supporting land to any other land’.
The Court went on to consider the involvement of the third to sixth defendants, including whether they could be held personally liable as directors. To that end, it confirmed that directors are not personally liable for a company’s torts merely because they have general control of the company’s business. In this case, however, the fourth and fifth defendant ran the operations of the second defendant. Further, both those defendants, as well as the third defendant, were found to have been aware of the risks identified in the geotechnical report and failed to take any steps to adhere to the recommendations in that report or the conditions of the Council’s approval. On that basis, all were found to have breached their duty of care, with the greatest share of liability apportioned to the fifth defendant on the basis that he was more actively engaged in causing loss, having operated the excavator and supervised excavation work by others.
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Delaney v Federation Council [2025] NSWDC 14
The plaintiff alleged that, in 2012, she sustained injury when she fell from a three-meter diving board onto surrounding concrete at the Corowa Swimming Pool that was managed by the defendant (the incident). At the time, the plaintiff was six years old. The defendant brought a cross-claim against Remlap Company Pty Ltd (Remlap Company), the lessee of the pool. In defence of that claim, Remlap Company alleged it had contracted the day to day running and management of the pool to Mr and Mrs Sigmund.
Whilst it was not controversial that the plaintiff fell from the diving board, there was a dispute regarding the precise mechanism of the fall. On that issue, the Court found that, whilst the plaintiff was on the diving board and holding onto a left hand railing, she lost her footing, possibly after slipping due to the wet surface, and fell through the gap between the railing and the diving board.
The plaintiff alleged negligence against the defendant on various grounds, including that it failed to apply anti-slip surface to the diving board, failed to install adequate railings, failed to erect and maintain warnings signs, failed to have an adequate system of supervision and failed to have a system to prevent minors from using the diving board. Whilst the Court rejected the argument that the diving board was unreasonably slippery and posed a hazard when wet, it accepted that there should have been additional railings and/or perspex or mesh enclosed sides to the diving board. On that basis, the Court found the defendant had breached its duty of care to the plaintiff as a lawful entrant to the pool and user of the diving board.
In relation to Remlap Company, the Court, after considering the relevant authorities, found that Mr and Mrs Sigmund should properly be regarded as independent contractors of Remlap Company, as opposed to agents or employees, and on that basis, Remlap Company could not be found legally liable for their acts or omissions in managing the pool. Further, it found that Remlap Company had discharged its obligations, as an occupier and lessee of the pool, in engaging Mr and Mrs Sigmund, as suitably experienced and qualified operators, to fulfil its management and supervision obligations under the lease. Accordingly, the Court found there was no breach of duty by Remlap Company to the plaintiff. However, the Court found the defendant was entitled to be fully indemnified by Remlap Company based on a term of the lease and that Remlap Company had breached a contractual obligation to effect insurance that indemnified the defendant in respect of its liability.
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Valleve Holdings Pty Ltd v Shepperd [2025] TASSC 28
The plaintiff was the operator of a café at a leased premises. It entered into a contract with Scott Emery, trading as Yarra Valley Commercial (YVC), to carry out fit out works. YVC subcontracted the plumbing work to the defendants. In the course of carrying out those works, an apprentice employed by the defendants left three waste pipes uncapped. In the days after, there was an egress of water and steam from the waste pipes that resulted in damage to the fit out and stock owned by the plaintiff.
The plaintiff sued the defendants in negligence for the property damage and consequential loss. The sole (legal) issue was whether the plaintiff’s claim was one for pure economic loss (or property damage) and, therefore, whether the defendants owed the plaintiff a duty of care.
The Court found that the defendants’ reliance on authorities involving claims for pure economic loss was misplaced as they involved claims by subsequent purchasers whose only loss could be measured as a diminution in the value of the property, which was a loss the purchaser could have protected itself against. In this case, however, the plaintiff was a lessee in possession of the property and was not in the same or an analogous position to a subsequent purchaser. Indeed, it was the nature of the relationship between the plaintiff and the defendants and the fact that negligence occasioned damage to the property (which the plaintiff was in position) that framed the cause of action, not whether there was a ‘defect’ to the property (at the point of sale).
On that basis, the Court found that the duty of care owed by the defendants to the plaintiff was well established and not novel, and the plaintiff’s claim was allowed.
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Milne v SDN Children’s Services and BRC Recruitment Pty Ltd (No. 2) [2025] NSWSC 310 & Milne v SDN Children’s Services and BRC Recruitment Pty Ltd (No. 3) [2025] NSWSC 427
A summary of the initial NSW Supreme Court decision was summarised in our November 2024 – January 2025 insurance insights newsletter.
In that decision, the Court found in favour of the plaintiff and made orders apportioning 70% liability to the first defendant, the childcare centre operator and host employer, and 30% to the second defendant, the labour hire agency.
In decisions No. 2 and 3, the main issue was an assessment of the plaintiff’s damages. The principal findings were to award the plaintiff:
- $49,500 for non-economic loss damages, being 25% of the most extreme case;
- $234,500 for past economic loss, based on the plaintiff’s inability to work 30 hours per week with a 10% reduction to account for the probability that she would have been required to take time off work for an (unrelated) knee replacement surgery at some point in time;
- $181,042 for future economic loss, on the basis that the plaintiff would have worked for a further 7 years (to 67 years old) and then applying the relevant multiplier and 15% for vicissitudes; and
- $83,288.46 for past treatment expenses and $150,000 for future treatment expenses.
Milne v SDN Children’s Services and BRC Recruitment Pty Ltd (No. 2) [2025] NSWSC 310 – Click here to view the full case
Milne v SDN Children’s Services and BRC Recruitment Pty Ltd (No. 3) [2025] NSWSC 427 – Click here to view the full case
This article was written by Ashley Harding, Partner, Madeleine Dashiell, Solicitor and Claudia Albert, Solicitor.
