HWL Ebsworth Insurance Review – April 2016

12 April 2016

Welcome to the latest edition of the HWL Ebsworth Insurance Review.

We are pleased to bring you a quarterly series of articles addressing a range of the latest issues and cases from different States and Territories relevant to various lines of business.

We hope you will find this edition of our Insurance Review useful and encourage you to pass it on to any colleagues to whom it would also be of interest. If they would like to be added to our direct mailing list, please contact marketing@hwle.com.au.

‘Children may act up, but residing at home is not an act for s54’

In the recent decision of the WA Court of Appeal in Allianz Australia Insurance Ltd v Inglis [2016] WASCA 25, it was held that s54 of the Insurance Contracts Act 1984 (Cth) (ICA) did not apply to preclude the operation of an exclusion clause applicable to anyone residing at premises insured under a home owner’s policy. The fact the insured’s child resided at the premises was held not to be an ‘act’ for the purposes of s54 of the ICA but merely a ‘state of affairs’.

The decision highlights the fact that there may be a distinction between ‘acts’ and ‘states of affairs’ which may not always be clear. It also highlights that an ‘act’ may not necessarily preclude the operation of s54 of the ICA simply because it commenced before the policy incepted.

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Assessing damages for loss of earning capacity – When is a comparable earner comparable?

The ACT Court of Appeal in Howard v Aikman [2015] ACTCA 64, reviewed the principals applying to the assessment of damages in claims for economic loss. In particular, the Court emphasised the importance of calling ‘comparable earners’ that represent a ‘true comparison’.

We consider the decision of the ACT Court of Appeal.

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Federal Court opens door to short insurance matters

We discuss the Federal Court’s new specialist “Insurance List for Short Matters’.

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Recklessness and the policy of insurance

We review the Full Court of South Australia’ decision on the term ‘reckless indifference’ within the statutory policy for CTP cover in South Australia.

The particular issue is whether the relevant test is solely subjective or contains an object element.

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Arson – Where an insured plays hard to get: How is an insurer able to get to the truth of the matter? The use of subpoenas: How insurers can get closer to the truth by carefully drafting subpoenas?

We discuss how insurers are becoming frustrated in their attempts to combat fraud by meeting challenges to subpoenas that are ostensibly issued for a legitimate forensic purpose.

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Where’s Waller?

We consider the lessons to be learnt from the findings of the High Court refusal of special leave to appeal from the decision in Waller v James.

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Looking beyond the policy wording: Principles governing rectification of insurance policies

We review the principles of rectification of insurance policies based upon common mistake. We highlight practical tips for insurers on what to look for when faced with a contention by an insured that the policy does not reflect the true intention of the parties.

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Chadwick’s choice…to drive, or not to drive…with a drunk driver

We discuss the contributory negligence of a person injured in a motor vehicle accident when the injured person has relied upon the driving of an intoxicated person and the injured person was not wearing a seat belt.

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Diving injury appeal a reminder that causation is critical to liability

We look at a case involving a claim for damages by a champion schoolgirl swimmer who suffered catastrophic injuries while training for her school swimming club at a council pool.  We discuss the decision by that a defendant is not obliged to take precautions against a risk which has not been identified in applicable guidelines.

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Burning down the house: Underwriting evidence required to establish a fraud defence

The importance of underwriting evidence in cases which concern fraudulent non-disclosure and fraudulent misrepresentation.

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Delay may not cost your security

We consider a recent decision of Lanai Unit Trust v Mallesons Stephen Jacques, in particular the amount of security, and whether the security should include past or future costs of the proceeding.  This was in circumstances where the defendant had delayed bringing the application.

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We hope you find this edition informative and insightful.

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