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

Tsiragakis v Mallet [2025] VSCA 134

The applicant and respondent were work colleagues. On 2 May 2024, the respondent attempted suicide by driving her motor vehicle into a power pole. The applicant did not witness the accident, but arrived at the scene approximately 40 minutes later, by which time the respondent had already been taken away. When the applicant arrived, she observed a damaged motor vehicle and power pole.

At first instance, the applicant sued her employer and the respondent for negligence in respect of psychiatric injury she alleged she sustained following the accident. The trial judge found, amongst other matters, that it was not reasonably foreseeable that the applicant, as a work colleague, would attend the aftermath of an accident in which the respondent had attempted suicide. Accordingly, the applicant’s claim was dismissed. The applicant then sought leave to appeal on the basis that the trial judge erred in finding that no duty of care existed as between the respondent and the applicant.

The Court of Appeal noted that, in similar-fact cases, where the plaintiff neither witnessed the happening of the incident nor its immediate aftermath, the Courts had focused on the evidence concerning the nature and closeness of the relationship between the plaintiff and the injured party and, by extension, the foreseeability that injury to the injured party was likely to occasion psychiatric injury to the plaintiff.

In this instance, the applicant adduced insufficient evidence that it was reasonably foreseeable that she would attend the scene of an accident – and, thereby, witness the aftermath – if the respondent attempted suicide. Specifically, there was no evidence that the applicant’s employer would be notified of such an event and that, even if this occurred, a supervisor or other representative of the employer would likely attend the scene, let alone a work colleague. Further, no evidence was adduced in relation to the particular relationship between the applicant and the respondent that meant the applicant’s attendance at the scene was foreseeable. On top of that event, if it was foreseeable that the applicant would attend, there was no evidence that it was reasonably foreseeable that she may suffer psychiatric injury by turning up 40 minutes after the accident occurred (particularly after the respondent had been taken away).

Accordingly, the Court of Appeal found that no duty of care could be established and, on that basis, dismissed the appeal.

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Geoghegan v Wood; Wood v Geoghegan [2025] NSWSC 586

The plaintiff was the owner of a property in Lake Cathie that was constructed in late 2018. After experiencing structural defects in his home, the plaintiff brought a claim against the first defendant, a builder, for a breach of the statutory warranties under the Home Building Act 1989 (NSW) and Building Practitioners Act (NSW), and second and third defendants, the structural engineers who prepared the structural engineering design. The plaintiff sought damages for rectification works and associated costs, including alternative storage and accommodation.

The dispute centred on the scope of the rectification works necessary to address the structural defects (which had been admitted by trial) and the evidence of the parties’ experts, namely Stephen Bolt for the second and third defendants and Robert Madden for the plaintiff, in relation to the costings of those works.

The Court preferred the evidence of Mr Madden over Mr Bolt, finding that Mr Bolt adopted positions beyond his expertise as a quantity surveyor and that he gave inconsistent and unreliable testimony. Mr Bolt’s evidence on key issues, such as the need for development consent, labour requirements and handling of structure elements, was contradictory and based on misrepresentations of the engineering design. The Court found that Mr Bolt had substituted his own flawed assessment of the scope of the works for that of an expert engineer, undermining the credibility of his cost estimates. Accordingly, the Court found in favour of the plaintiff, awarding damages of $457,658.46 against the defendants.

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Stanberg v State of New South Wales [2025] NSWCA 12

In 2019, the plaintiff suffered a back injury during a long jump event at Neutral Bay Public School when he landed on a hard surface in the sandpit. The plaintiff sued the defendant, alleging that it was vicariously liable in negligence for the school’s failure to ensure a sufficient level of sand in the landing pit and to adequately rake the sand in between jumps.

The District Court dismissed the claim, finding that the school had taken reasonable precautions to prevent the risk of injury, including in maintaining the sand depth and using a ‘Softfall’ material at the bottom of the pit.

On appeal, the Court of Appeal unanimously held that the primary judge erred in concluding that the school had taken reasonable precautions to prevent the plaintiff’s injury. In doing so, it criticised the school for only raking the sandpit after every second or third jump. The Court of Appeal also found there was no direct evidence supporting the presence of ‘Softfall’ material at the base of the pit. The Court of Appeal further rejected the defendant’s arguments on causation, finding that the available medical evidence supported a traumatic event consistent with the plaintiff’s account, and, in relation to damages, accepted that the primary judge erred in failing to award buffer damages for future economic loss.

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Pearce v Waller Legal Pty Ltd [2025] VSC 324

In 2015, the plaintiff engaged the defendant to act on his behalf in relation to a historical institutional abuse claim relating to events that took place in 1977 and 1978 at his school, which was managed and controlled by the Order of the Missionaries of the Sacred Heart (MSC).

In February 2017, the plaintiff’s claim against MSC was settled for $140,000 inclusive of costs. As part of the settlement agreement, the plaintiff renounced all legal rights against MSC. There was also an acknowledgement that no claim for economic loss had been made by the plaintiff and that the settlement sum did not include an economic loss component.

In February 2021, the plaintiff issued a fresh proceeding against MSC. The Court set aside that part of the settlement relating to the plaintiff’s claim for general and special damages, but refused to set aside the part relating to economic loss. The plaintiff’s claim for general and special damages was later resolved for $400,000 (in addition to the $140,000 which he received as part of the initial settlement).

The plaintiff subsequently sued the defendant for negligent advice and misleading conduct in relation to the defendant’s handling of, and advice provided in relation to, his economic loss claim. The main issue at trial was whether the defendant’s conduct resulted in the plaintiff losing the right or opportunity to recover substantial damages for economic loss from MSC. The Court considered several matters, including whether the defendant adequately investigated the plaintiff’s claim, the accuracy of the advice provided to the plaintiff and the strength of his Ellis defence (being the all-encompassing term for the difficulties of suing at common law for abuse suffered as a result of the actions of the Catholic clergy), as well as other potential obstacles to prosecution.

The Court found the defendant had breached its duty of care, including by giving erroneous advice. On that basis, it awarded the plaintiff $263,000, being an allowance of $200,000 for the loss of opportunity to pursue an economic loss claim to the point of a successful mediation or settlement conference, and $63,000 for the plaintiff’s inability to use that sum for a 7 year period.

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Alananzeh v Zgool Form Pty Ltd [2025] ACTCA 19

In 2021, the appellant sustained injuries while working as a labourer at a construction site in Canberra. He brought a common law claim against the first respondent, his employer, and the second respondent, the formwork contractor. The appellant subsequently joined the Workers Compensation Default Insurance Fund Manager as the third respondent, because the first respondent did not hold the required workers compensation insurance.

The appellant was awarded $243,900 in damages, but appealed the primary judge’s assessment of those damages on the basis there was an error in relation to the reduction for vicissitudes. The second respondent filed a cross-appeal, challenging the primary judge’s findings on duty of care, breach, contributory negligence and the assessment of vicissitudes as part of the damage’s calculation.

In relation to vicissitudes, the appellant successfully argued that the primary judge erred by applying a 25% reduction across all heads of damages, rather than limiting the reduction to future economic loss. Both the second and third respondents conceded the error, acknowledging that such reductions conventionally apply to future economic loss only, not past losses or other heads of damages. As a result, the Court of Appeal accepted this ground of appeal, increasing the total award of damages from $243,900 to $300,200.

In relation to the cross-appeal, the Court of Appeal found that the second respondent exercised sufficient control over the worksite and its subcontractors to give rise to a duty of care, noting that the second respondent co-ordinated the allocation of work areas, issued safety instructions and had overall responsibility for formwork operations. Accordingly, the Court of Appeal held that the primary judge did not err in finding that the second respondent owed a duty of care to the appellant and that this duty was breached. The appeal was allowed and the cross-appeal dismissed.

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