Weekly Insurance Law Review: Friday, 4 September 2015 View in browser
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A daily Bulletin listing our choice of Decisions of Superior Courts of Australia.

Weekly Insurance Law Review

Executive Summary (One Minute Read)
Royal Commission into Trade Union Governance and Corruption - Commissioner Heydon’s reasons for ruling on disqualification applications - applications dismissed
Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd (FCAFC) - consumer law - contraventions of Australian Consumer Law - appeal against pecuniary penalties imposed on companies dismissed
Allan J Heasman Pty Ltd v Commissioner of Taxation (FCAFC) - taxation - income tax - objections to assessment of tax and penalties dismissed - appeal dismissed
Australian Competition & Consumer Commission v Dateline Imports Pty Ltd (FCAFC) - consumer law - trade practices - misleading or deceptive conduct - false representations - reasonable grounds - appeal allowed in part
Allen v Robbie (NSWCA) - negligence - motor vehicle accident - appellant driver liable for respondent’s injury in motor vehicle accident - appeal dismissed
Rankin v Gosford City Council (NSWCA) - negligence - motorcyclist injured in collision with barriers moved by unlawful conduct of third parties - Council did not owe motorcyclist duty of care to avoid creation of risk by third parties’ unlawful acts - appeal dismissed
Hollingsworth v Bushby (NSWCA) - judicial review - refusal of permission to give evidence in relation to application for leave to appeal was not a denial of procedural fairness - summons dismissed
Patrick Stevedores Operations (No 2) Pty Ltd v Hennessy; FBIS International Protective Services (Aust) Pty Ltd v Hennessy (NSWCA) - work injury damages - slip and fall on door-sill - occupier and employer not liable - appeal allowed
Cram Fluid Power Pty Ltd v Green (NSWCA) - workers compensation - worker disentitled from making further claim for lump sum compensation - appeal allowed
Coshott v Barry (NSWCA) - judicial review - bankruptcy - solicitors’ costs - joint debtors - interest on bills of costs - appeal allowed in part
Pham v NRMA Insurance Ltd (NSWSC) - judicial review - motor accidents compensation - causation - no error in decision of Medical Review Panel - summons dismissed
Larsen v Grace Worldwide (Aust) Pty Ltd (No 2) (NSWSC) - negligence - transport of goods - bailment - defendant liable as bailee for damaged items - bulk of claims not made out - judgment for plaintiffs
Smith v Pennington (NSWSC) - negligence - plaintiff detained under Mental Health Act 2007 (NSW) granted period on leave from hospital - plaintiff injured in attempted suicide - Health District not liable
Porter v Phong Le (NSWSC) - medical negligence - application for separate determination of question whether general practitioner breached duty of care dismissed
Panos v FSS Trustee Corporation (NSWSC) - insurance - superannuation - plaintiff not entitled to total and permanent disablements benefit under policy issued by insurer to trustee - claim dismissed
Erickson v Bagley (VSCA) - negligence - occupier’s liability - appellant injured when walking on driveway of premises in darkness - occupiers not liable - appeal dismissed
Boral Resources (Vic) Pty Ltd v CFMEU (Ruling No 1) (VSC) - evidence - tort of intimidation - impact of pleaded ban was fact in issue - evidence (with one exception) admissible
Fertility Control Clinic v Melbourne City Council (VSC) - judicial review - alleged nuisance by protesters’ activities - Council’s advice to Clinic erroneous but within jurisdiction - Court’s power to grant mandamus not enlivened - declaration
Absolute Analogue Inc v Sundance Resources Ltd (WASCA) - contract - oral contract - erroneous credibility findings - appeal allowed - retrial
Frigger v Professional Services Of Australia Pty Ltd (WASCA) - application for leave to appeal by non-parties to primary decision - Court not empowered under s471 Corporations Act 2001 (Cth) to grant leave - application dismissed
Summaries With Link (Five Minute Read)
Royal Commission into Trade Union Governance and Corruption
Reasons for Ruling on Disqualification Applications
Commissioner Heydon
Royal Commission - bias - four groups of persons sought disqualification on ground of apprehended bias - applications centred on an agreement to deliver Sixth Annual Sir Garfield Barwick Address, an event organised by Lawyer’s Branch and Legal Policy Branch of NSW Division of Liberal Party of Australia (agreement) - applicants contended agreement might cause fair-minded lay observer reasonably to apprehend Commissioner might not bring impartial mind to resolution of questions in course of Commission’s inquiries - two main submissions: ‘Liberal Party Event’ submission and ‘Liberal Party fundraiser’ submission - Commissioner rejected ‘Liberal Party Event’ submission for three reasons: ‘no apprehension of bias from non-political speech’, ‘no logical connection between any predisposition and the issues’ and ‘no reason to find incapacity to deal with issues impartially’ - Commissioner rejected ‘Liberal Party fundraiser’ submission for three reasons: ‘no apprehension of intention to raise funds or generate support’, ‘no logical connection between any predisposition and the issues’ and ‘no reason to find incapacity to deal with issues’ - Commissioner concluded it was not the case that fair-minded lay observer might apprehend Commissioner might not bring impartial mind to resolution of questions - applications dismissed.
RoyalCommission
[From Benchmark Wednesday, 2 September 2015]
Director of Consumer Affairs Victoria v Alpha Flight Services Pty Ltd [2015] FCAFC 118
Full Court of the Federal Court of Australia
Barker, Katzmann & Beach JJ
Consumer law - Director of Consumer Affairs Victoria appealed against pecuniary penalties imposed on companies in respect of product safety contraventions of Australian Consumer Law - contraventions concerned supply, offer for supply and possession or control of goods subject of permanent ban imposed by Consumer Protection Notice No 5 of 2012 issued under Competition and Consumer Act 2010 (Cth) - Sch 2, ss118(1), (2) & (3) & 224 Competition and Consumer Act - s8 Australian Consumer Law and Fair Trading Act 2012 (Vic) - held: no error in primary judge’s treatment of issue of deterrence - no failure to have regard to maximum penalties - no error in primary judge’s approach to looking at course of conduct - no error in primary judge’s approach to character of contraventions and object of provisions of Australian Consumer Law - penalties imposed on companies not manifestly inadequate - appeal dismissed.
Director
[From Benchmark Friday, 28 August 2015]
Allan J Heasman Pty Ltd v Commissioner of Taxation [2015] FCAFC 119
Full Court of the Federal Court of Australia
Siopis, Davies & Wigney JJ
Taxation - income tax - Administrative Appeals Tribunal affirmed Commissioner’s decision to disallow appellant taxpayer’s objection to assessments of tax and penalties for 1998 and 1999 income years - Tribunal rejected taxpayer’s claim that assessments issued out of time, challenge to disallowance of amounts taxpayer claimed were deductible business expenses, and challenge to imposition of additional tax for intentional disregard of the law - taxpayer appealed against Federal Court’s affirmation of Tribunal’s decision and against its dismissal of related application under s39B Judiciary Act 1903 (Cth) for declaration assessments invalid (s39B application) - deductibility of contributions to employee welfare fund under s8-1 Income Tax Assessment Act 1997 (Cth) - held: contention rejected that Court erred in finding Tribunal reviewing objection to original assessments not amended assessments - contention rejected that assessments not legally effective because it was beyond Commissioner’s power - no error in finding that taxpayer was not entitled to deduction for claimed amounts - Tribunal did not err in holding taxpayer had not discharged burden under s14ZZK Taxation Administration Act 1953 (Cth) of proving additional tax imposed was excessive - appeal against rejection of s39B application failed - appeal dismissed.
AllanJHeasman
[From Benchmark Tuesday, 1 September 2015]
Australian Competition & Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114
Full Court of the Federal Court of Australia
Gilmour, McKerracher & Gleeson JJ
Consumer law - trade practices - first respondent published representations concerning hair-straightening product that it imported for sale - principal representation was product did not contain formaldehyde - primary judge concluded appellant ACCC had not proved formaldehyde representations contravened ss52(1) & 53(a) Trade Practices Act 1974 (Cth) - claim that respondent’s managing director was knowingly involved in alleged contraventions necessarily failed - ACCC appealed against primary judge’s conclusions - respondent sought to affirm dismissal on grounds other than those that primary judge relied on and cross-appealed from finding it contravened s52(1) by making representation in letter that ban on sale of product in Ireland would be overturned and that it had no reasonable grounds to make representation - s140 Evidence Act 1995 (Cth) - held: ACCC’s challenge to primary judge’s findings concerning effective life of product succeeded - primary judge ought to have found respondent breached s52(1) by making representations to effect that it had reasonable grounds to make each of certain representations - even assuming ACCC did not establish representations false, it did not follow that at time of making representation respondent and managing director had reasonable grounds to make it - appeal allowed in part - Notice of Contention dismissed - cross-appeals dismissed.
ACCC
[From Benchmark Wednesday, 2 September 2015]
Allen v Robbie [2015] NSWCA 247
Court of Appeal of New South Wales
McColl & Simpson JJA; Harrison J
Negligence - motor vehicle accident - respondent injured when struck by motor vehicle driven by appellant - respondent sued appellant for damages in negligence - primary judge found accident caused by appellant’s negligence and gave judgment for respondent with no discount for contributory negligence - appellant appealed - held: appellant failed to demonstrate connection between nominated failures to find specific facts and erroneous outcome - primary judge entitled to conclude appellant at fault in circumstances - primary judge did not misapply s5B Civil Liability Act 2002 (NSW) - no error in conclusion on contributory negligence - no error in approach to economic loss - appeal dismissed.
Allen
[From Benchmark Thursday, 27 August 2015]
Rankin v Gosford City Council [2015] NSWCA 249
Court of Appeal of New South Wales
Basten, Macfarlan & Simpson JJA
Negligence - Council engaged in repairs to section of road - 60 hollow plastic barriers placed along the roadway in lane - unknown persons moved section of chain of barriers - appellant motorcyclist injured in collision with barriers where they crossed lane - appellant sued Council seeking damages for negligence - trial judge dismissed proceedings, finding Council did not owe appellant duty of care extending to protection of him from unlawful conduct of third parties - Pt 5, ss5B, 5C & 45 Civil Liability Act 2002 (NSW) - Dictionary, Roads Act 1993 (NSW) - s45E Transport Administration Act 1988 (NSW) - held: trial judge correct to conclude law did not impose duty on Council to take steps to avoid creation of risk by third parties’ unlawful acts - appeal dismissed.
Rankin
[From Benchmark Thursday, 27 August 2015]
Hollingsworth v Bushby [2015] NSWCA 251
Court of Appeal of New South Wales
Basten, Macfarlan & Leeming JJA
Administrative law - judicial review - District Court refused applicant leave to appeal against convictions in Local Court for offences under Prevention of Cruelty to Animals Act 1979 (NSW) - District Court also refused to allow applicant to give evidence in relation to application on basis that she failed provide it in affidavit form in accordance with pre-trial directions - applicant sought judicial review under s69 Supreme Court Act 1970 (NSW) - applicant contended she was denied procedural fairness constituting jurisdictional errors - held (by majority): refusal to allow applicant to give evidence was proper exercise of discretion and was not a denial of procedural fairness - applicant did not establish practical prejudice eventuated from ruling - summons dismissed.
Hollingsworth
[From Benchmark Thursday, 27 August 2015]
Patrick Stevedores Operations (No 2) Pty Ltd v Hennessy; FBIS International Protective Services (Aust) Pty Ltd v Hennessy [2015] NSWCA 253
Court of Appeal of New South Wales
McColl, Basten & Leeming JJA
Negligence - employee injured in slip and fall on door-sill at worksite in wet weather - employee sued occupier of premises and employer - occupier occupied container terminal - employer provided security services at site under a written security services agreement executed on behalf of occupier and employer - ss5B, 5C, 5E & 5R Civil Liability Act 2002 (NSW) - ss151H & 151Z Workers Compensation Act 1987 (NSW) - primary judge satisfied that reasonable person in occupier’s position would have taken precaution of installing step and awning at entrance - occupier negligent - employer in breach of non-delegable duty of care and personally negligent for failing to undertake relevant inspection of gatehouse and to request that occupier undertake repairs - no contributory negligence - failure to install step was necessary condition of injury - occupier had direct control of premises and primary responsibilities as occupier - liability apportioned at 60% for occupier - 40% for employer - ss5B, 5C, 5D Civil Liability Act 2002 (NSW) - r51.53 Civil Procedure Rules 2005 (NSW) - s151Z Workers Compensation Act 1987 (NSW) - employer and occupier appealed, challenging primary judge’s findings of breach and causation in light of limited findings of primary fact - held: neither employer nor occupier breached duties of care in failing to take precautions against risk posed by step from the ground into demountable hut which was “higher than normal” - conclusion rested on unchallenged rejection of employee’s case as to height of step, leaving behind insufficient evidence to support finding it was reasonable to take measures to address risk posed by step - appeal allowed.
Patrick
[From Benchmark Friday, 28 August 2015]
Cram Fluid Power Pty Ltd v Green [2015] NSWCA 250
Court of Appeal of New South Wales
Beazley ACJ, Emmett & Gleeson JJA
Workers’ compensation - injured worker employed as maintenance fitter made claim for lump sum compensation under s66 Workers Compensation Act 1987 (NSW) (1987 Act) - claim accepted and compensation paid - worker’s condition deteriorated - worker underwent spinal surgery - solicitors made claim on worker’s behalf for further lump sum compensation under s66 - employer rejected claim on basis that in light of amendments made to 1987 Act by provisions introduced by Workers Compensation Legislation Amendment Act 2012 (NSW) (2012 Amendments), worker was precluded from pursuing claim - worker sought referral of dispute to Workers Compensation Commission - employer appealed against decision of arbitrator that matter be remitted to Registrar for referral to approved medical specialist for assessment of whole person impairment - President of Commission confirmed arbitrator’s decision - employer sought leave to appeal under s 353(4) Workplace Injury Management and Workers Compensation Act 1998 (NSW) - whether worker entitled to pursue second claim for compensation - held: transitional provisions made plain that new “one claim” limitation applied to claims for lump sum compensation made on or after critical date - worker had already made his one claim for lump sum compensation - the new s66(1A) disentitled worker from making claim further lump sum compensation - appeal allowed.
CramFluid
[From Benchmark Friday, 28 August 2015]
Coshott v Barry [2015] NSWCA 257
Court of Appeal of New South Wales
McColl & Emmett JJA, Brereton J
Bankruptcy - solicitors sent two bills of costs to applicant and husband, who were their former clients - District Court and Local Court issued judgments consequent upon filing of certificates of determination of costs, neither of which included amount for interest - applicant and husband sought to set aside registration of certificates on basis of husband’s bankruptcy - solicitors sought inclusion of interest and removal of husband as party - District Court judge and Local Court judge ordered husband be removed as party and that judgments be amended to include interest - consequences of bankruptcy of husband - solicitors’ entitlement to recover interest on unpaid amount of costs up to date of filing of certificates of determination - issue estoppel - competency of appeals - whether applicant’s challenges properly agitated by way of summons for judicial review - whether time for filing summons should be extended - held: in relation to bankruptcy issue, Court held that where there were joint debtors, s58 Bankruptcy Act 1966 (Cth) did not impinge on creditor’s right to take steps against non-bankrupt debtor - the lower Courts did not have jurisdiction to give judgment for interest component - appeal allowed in part.
Coshott
[From Benchmark Monday, 31 August 2015]
Pham v NRMA Insurance Ltd [2015] NSWSC 1205
Supreme Court of New South Wales
Harrison AsJ
Judicial review - motor accidents compensation - plaintiff injured in motor vehicle accident, then subsequently injured in second motor vehicle accident - proceedings concerned second motor vehicle accident - plaintiff suffered minimal physical injury in second accident but developed major psychological injury - Medical Review Panel found psychological injury not caused by second motor vehicle accident - plaintiff sought declaration that certificate and statement of reasons issued by Medical Panel was void and of no effect - causation - s58 Motor Accidents Compensation Act 1999 (NSW) - Allianz Australia Insurance Ltd v Gonzales [2013] NSWSC 362 - Clauses 1.7, 1.8 & 1.9 Permanent Impairment Guidelines - whether injury caused by “the use or operation of the vehicle” or by some other factor - held: Panel did not err by not concluding that there was very substantial link between motor vehicle accident and major depressive episode Review - Panel’s reasons were adequate - Panel did not misunderstand or misapply Gonzales, nor misdirect itself - nothing illogical, irrational or unreasonable about Panel’s decision to rely heavily on doctor’s report - summons dismissed.
Pham
[From Benchmark Friday, 28 August 2015]
Larsen v Grace Worldwide (Aust) Pty Ltd (No 2) [2015] NSWSC 1224
Supreme Court of New South Wales
Schmidt J
Negligence - bailment - plaintiffs engaged defendant to transport furniture and household goods from Australia to Germany - plaintiffs pursued claims against defendant in contract, bailment, for negligence and intentional damage, breach Trade Practices Act 1974 (Cth) and trespass to chattels - plaintiffs claimed someone for whom defendant was responsible tried to kill or injure them by applying substance to top of dresser - held: defendant was liable as bailee of plaintiffs possessions for items damaged either during repacking or transport, as accepted - plaintiffs’ evidence not credible or reliable - plaintiffs did not establish substance deliberately placed on top of dresser while in defendant’s custody and control or that defendant responsible for such conduct, even if it occurred - evidence did not establish substance toxic, contaminated possessions and property, or caused ill health - plaintiffs failed to establish they suffered damage for which defendant responsible, other than that conceded - no entitlement to aggravated or exemplary damages - while bulk of plaintiffs’ claims failed there must be judgment in their favour.
Larsen
[From Benchmark Monday, 31 August 2015]
Smith v Pennington [2015] NSWSC 1168
Supreme Court of New South Wales
Garling J
Negligence - plaintiff involuntarily detained under Mental Health Act 2007 (NSW) - plaintiff granted period of leave to reside with parents - plaintiff injured when he attempted suicide while on leave - plaintiff claimed Health District responsible for negligence hospital staff which he claimed caused his injuries - held: plaintiff demonstrated breach of duty by Health District by failure of hospital and its staff to have conference with plaintiff’s parents concerning doctor’s decision to allow plaintiff to proceed on leave, so that parents could be properly informed and necessary precautions to assist plaintiff to minimise risk of suicide attempt - breach of duty did not cause plaintiff’s injuries - plaintiff’s parents did all that could be required of them to take care for plaintiff - plaintiff had determined to embark upon a course of action which led to the serious injuries - judgment for Health District.
Smith
[From Benchmark Monday, 31 August 2015]
Porter v Phong Le [2015] NSWSC 1218
Supreme Court of New South Wales
Simpson JA
Medical negligence - plaintiff by tutor sought order pursuant to r28.2 Uniform Civil Procedure Rules 2005 (NSW) that there be a separate determination of question whether defendant general practitioner breached duty of care to plaintiff prior to all other issues in proceedings - held: Court not persuaded any departure from normal course of litigation warranted - Court not persuaded determination of issue whether defendant breached duty of care could be easily or properly undertaken if separated from causation - overlap between medical experts relevant to breach and causation especially problematic - it was Court’s experience that cost involved in two hearings likely to far exceed costs involved in one - posing of separate questions by judges who were not trial judge was not adoption of flexible procedure but imposition of rigid one - application for separate determination dismissed.
Porter
[From Benchmark Monday, 31 August 2015]
Panos v FSS Trustee Corporation [2015] NSWSC 1217
Supreme Court of New South Wales
Robb J
Insurance - accident and sickness insurance - plaintiff claimed to be entitled to total and permanent disability benefit (TPD benefit) under insurance policy issued by insurer to trustee in respect of superannuation fund of which plaintiff was member - whether plaintiff entitled to order that insurer pay trustee total and permanent disability benefit - medical evidence - credit - held: plaintiff failed to establish he was incapacitated within definition of TPD in policy - plaintiff failed to establish he was entitled to TPD benefit trustee had claimed on his behalf under policy - claim dismissed.
Panos
[From Benchmark Tuesday, 1 September 2015]
Erickson v Bagley [2015] VSCA 220
Court of Appeal of Victoria
Kyrou & Kaye JJA
Negligence - occupier’s liability - applicant claimed damages for injuries sustained while walking in darkness on driveway of premises owned and occupied by respondents - plaintiff claimed injuries caused by breach of duty and breach of contract by respondents - trial judge found appellant failed to establish respondents d breached duty of care or that alleged breach of duty would have caused the injuries - trial judge dismissed claim - applicant sought leave to appeal - ss14B(3) & s 48(1) Wrongs Act 1958 (Vic) - held: trial judge correct to conclude reasonable occupier would have expected applicant to have at least used his own artificial light source such as a torch - applicant failed to establish that risk of harm in lack of lighting on driveway was not insignificant - appeal dismissed.
Erickson
[From Benchmark Thursday, 27 August 2015]
Boral Resources (Vic) Pty Ltd v CFMEU (Ruling No 1) [2015] VSC 445
Supreme Court of Victoria
Bell J
Evidence - Boral claimed against Union in reliance on tort of intimidation in relation to ban on purchase of concrete products from Boral by Victorian construction principals and sub-contractors - common ground that by reason of entry of default judgment, allegations in statement of claim taken to be admitted - trial for assessment of damages - Union objected to evidence proposed to be led by Boral on basis it did not relate to any fact in issue - held: proposed evidence (with one exception) relevant and admissible under s56(1) Evidence Act 2008 (Vic) because it met test of relevance specified in s55(1) - impact of pleaded ban was a fact in issue in relation to categories of loss on which Boral relied - proposed evidence relevant to that issue - exception pertained to excluded evidence which did not relate to pleaded ban and was not probative of any issue in trial.
Boral
[From Benchmark Friday, 28 August 2015]
Fertility Control Clinic v Melbourne City Council [2015] VSC 424
Supreme Court of Victoria
McDonald J
Judicial review - Clinic contended activities of protesters constituted a nuisance under Public Health and Wellbeing Act 2008 (Vic) and that Council was required by ss60 & 62 to take steps to remedy alleged nuisance - Clinic contended Council’s response to its complaint amounted to a constructive failure to perform duties imposed by Act - Clinic sought orders compelling Council to remedy alleged nuisance - held: no actual or constructive failure by Council to perform duties imposed by Act - Council did not misdirect itself when addressing whether protesters’ activities constituted a nuisance - Clinic entitled to declaration that Council’s advice did not constitute advice as to method of settling matter privately within meaning of s62(3)(b) - Council’s advice erroneous, but within jurisdiction - Court’s power to grant mandamus not enlivened - declaration made.
Fertility
[From Benchmark Friday, 28 August 2015]
Absolute Analogue Inc v Sundance Resources Ltd [2015] WASCA 168
Court of Appeal of Western Australia
McLure P; Buss & Mazza JJA
Contract - trial judge held that respondent (Sundance) not contractually obliged to issue 30 million options in Sundance to second appellant - alleged oral contract made between second appellant on appellants’ behalf and two others on Sundance’s behalf - trial judge made adverse general credibility findings against second appellant and did not accept his uncorroborated evidence where contradicted by other evidence or unlikely - general credibility findings challenged on appeal - appellants contended trial judge's failure to accept second appellant’s evidence concerning crucial conversations was against weight of evidence and compelling inferences - appellants also challenged individual findings of fact - held: trial judge erred in findings as to credibility and factual findings - appeal allowed - retrial ordered.
Absolute
[From Benchmark Tuesday, 1 September 2015]
Frigger v Professional Services Of Australia Pty Ltd [2015] WASCA 167
Court of Appeal of Western Australia
Buss & Murphy JJA
Corporations - applicants sought leave pursuant to s471C Corporations Act 2001 (Cth) to appeal against primary decision concerning costs orders - applicants were not parties to primary decision - held: s471C did not confer power on Court to enable a person who was not party to orders made in curial decision in proceedings in which person was not party to commence appeal - Court would also refuse to grant leave in exercise of its discretion in any event - application dismissed.
Frigger
[From Benchmark Tuesday, 1 September 2015]
The Road Not Taken
By Robert Frost

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,

And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.

RobertFrost