AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 13

AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 13 - ACTCA 2008 case summary — Zoe

[184]

114. A number of claims are made in the SFASC against the applicant which were not included in the ASC or the FASC. First, it is claimed that the applicant did not establish by way of valuations the true replacement values for the respondent's buildings and, in that respect, breached the services contract and the duty of care which was said to be owed to the respondent. Secondly, it is claimed that whilst the applicant knew or should have known that there needed to be disclosure of the true replacement values of both buildings and contents, the applicant knew or ought to have known that the valuations of buildings provided both to the respondent and to the insurers were not the true replacement costs of those buildings and that no valuation of the contents of the respondent's buildings had been carried out. In that regard it is said also that the applicant breached the services contract or its common law duty of care to the respondent. Thirdly, it is claimed against the applicant that it failed to give proper advice to the respondent in relation to any deductible applicable under the contract of insurance. It is pleaded that the applicant failed to advise the respondent of the effect of a $1,000,000 deductible in the event that loss or damage was suffered by more than one building and that it was necessary to include buildings and contents valued at less than the deductible in any declaration of value to the insurers and/or the consequences of failing to do so. Fourthly, the respondent claims that the applicant failed to insure the buildings on the PNI Schedule, which was the subject matter of the respondent's claim against the applicant in the ASC and the FASC. However, the claim is not presented in the same way as it was. The plea is that the applicant was instructed by the respondent to insure the buildings in both the Schedule C and the PNI Schedule in the 2002 year. It is claimed that the applicant was aware that the respondent required the same insurance cover in 2003 as it had taken out in 2002.

[326]

234. In my opinion, the trial judge failed to give sufficient weight to the following matters. First, that the respondent's claim in relation to the non-insurance of the PNI Schedule of buildings and contents is materially different in the SFASC. It no longer is a claim that the respondent failed to comply with its instructions to arrange insurance in respect to those buildings and contents. It is a claim that the applicant failed to define the respondent's requirements for insurance and thereafter failed to cause the PNI Schedule of buildings and contents to be insured. Secondly, the SFASC raises a number of new claims but, most importantly, a claim that the applicant failed to arrange valuations such that the respondent's buildings and contents were underinsured. Thirdly, that the respondent was aware as early as 2003 that the first defendant at least intended to rely upon the provisions of s 28 of the Insurance Contracts Act 1984 (Cth) because the respondent had understated the value of the buildings and contents, the subject matter of the contract of insurance. Fourthly, that the respondent was aware, after the first and second defendants filed their defences, that those defendants were relying upon a defence under s 28(3) of the Insurance Contracts Act 1984 (Cth) which, in turn, relied upon an allegation that the respondent's buildings and contents were undervalued. Fifthly, that the respondent refused to give any explanation as to why the respondent had not previously brought the further claims against the applicant when it knew of the first and second defendant's defence under the Insurance Contracts Act 1984 (Cth). Sixthly, that the application was so late that the trial would have had to have been adjourned even if the application to amend had been unsuccessful. It must be borne in mind that the application to amend was first signalled when the applicant entered judgment against the first, second and third defendants and the application was heard almost two weeks after the trial was due to start. Seventhly, that if the application to amend were allowed the applicant would need to re-examine the whole of its defence by reference to the change in which the respondent put its case against the applicant in relation to the PNI Schedule of buildings and contents and by reference to the further claims raised in the SFASC. Eighthly, unless the applicant was compensated by way of all of its costs thrown away to the date of amendment on an indemnity basis, the applicant would suffer prejudice.

At a glance

Court

Decision date

Source

Judgment (359 paragraphs)

AON Risk Services Australia Ltd v Australian National University [2008] ACTCA 13 (25 August 2008)

Parties

Legislation Cited (10)

Cases Cited (11)