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INSIDE |
50/50 |
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Court finds that contribution fights between defendants should end up 50/50 unless one defendant is clearly more at fault. ...read more |
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Broken Down |
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Is it negligent to leave a broken down car in the middle of the road? Not always. ...read more |
Contractors Unhinged from Principals
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The High Court retreats from a move towards making companies liable for the actions of independent contractors. ...read more |
| Case Closed |
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Cover under an ISR policy has been limited strictly to the wording of the public authority order provision.....read more |
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Supervening Stress |
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Liability for ongoing personal injury losses can be terminated by a subsequent disability if resulting from a natural cause. ...read more |
| All Genuine Offers Accepted |
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Calderbank offers won’t work if there is no genuine compromise offered....read more |
| With the Benefit of Hindsight |
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Drivers are usually blamed when a small child runs out onto the road. Not in this case....read more |
| Joint Privilege |
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This case answers the question of when an insurer can withhold a circumstances report from an insured because of privilege....read more |
| Document Retention and Destruction Legislation |
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This update will assist in bringing you up to date with the changes to the Act and the implications on your business. ...read more |
Case Closed
Melissa Macrae
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The insured had a contract with Pan Pharmaceuticals to manufacture certain therapeutic goods. In April 2003, Pan's licence was suspended for 6 months and its products were recalled. The licence suspension and product recall impacted significantly on the insured’s business.
The insured made a claim for business interruption totalling $2.5 million on its industrial special risks policy. The policy covered loss resulting from “an interruption of, or interference with, the business directly or indirectly arising from a closure …. of the whole or part of the premises by an order of a competent public authority consequent upon …. sanitary arrangements at the premises”.
The schedule to the policy made it clear that the premises referred to in the insuring clause were the insured's own premises, or any other premises where it stored its goods.
The insurer denied the claim.
The Supreme Court of New South Wales found that the ISR policy did not respond to the insured’s claim. In reaching its decision, the Court accepted that Pan’s premises were covered, but found that there had not been a “closure” as required by the policy. The Court found that as a result of the licence suspension, activity at Pan’s premises ceased, but the premises were not closed in the sense that nobody could enter them. The evidence showed that inspectors and other testers had access to Pan’s premises within the suspension period.
Even if Pan’s premises had been closed, the Court found that the order suspending the licence, which was made by the Delegate of the Secretary of the Department of Health, was not an order by a competent public authority. The policy required that the order be made by, for example, the Department of Health itself, and not a delegate.
It is clear that the Court gave the policy a very strict and technical reading. It is expected that the insured will appeal the decision: CAT Media Pty Ltd v Allianz Australia Insurance Limited. |
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