Insurance & Financial Services

10/04/2014 TURKALERT | Trouble in paradise - foreign defendant loses inappropriate forum argument
On 2 April 2014 the New South Wales Supreme Court dismissed a defendant’s notice of motion to set aside a statement of claim on the grounds of forum non conveniens.

The plaintiff, suffered personal injury when he slipped and fell down the stairs at the Outrigger Reef Fiji Resort.

Justice Fullerton held that the defendant had not satisfied the Court that New South Wales was a ‘clearly inappropriate forum’.

Her Honour reiterated that simply because the substantive law to be applied would be the law of a foreign jurisdiction does not mean that the local forum is ‘clearly inappropriate.’ Interestingly, Her Honour noted that due to advances in audio-visual technology, witnesses were now able to give evidence without being in the Court room.

This matter serves as a reminder that the question to be considered is whether or not the forum is ‘clearly inappropriate’. The comparative appropriateness of another forum is not a relevant consideration. Author: Michael Adie Practice Areas: Insurance & Financial Services
8/04/14 TURKALERT: High Court says no restriction to Compensation to Relatives claims for loss of economic support - Taylor v The Owners - Strata Plan No 11564 [2014] HCA 9
On 2 April 2014 the High Court in Taylor v The Owners - Strata Plan No 11564 [2014] HCA 9
overturned a decision of the New South Wales Court of Appeal which had applied the damages cap on economic loss under the Civil Liability Act 2002 (NSW) to claims for loss of financial support brought pursuant to the Compensation to Relatives Act 1897 (NSW).

The decision will have a significant impact on the assessment of damages in Compensation to Relatives claims and may prompt an amendment to s12 of the Civil Liability Act to bring that section in line with similar provisions in the Motor Accidents Compensation Act 1999 (NSW) and Workers Compensation Act 1987(NSW). Author: Paul Angus Practice Areas: Insurance & Financial Services
2/04/14 TURKALERT | Slippery Slope - Domestic occupier held liable for DIY on slippery driveway
On 28 March 2014 the Court of Appeal in NSW held a domestic occupier liable for a plaintiff’s slip on a steep sloping driveway after the defendant had personally undertaken the sealing of the driveway approximately 12 months before.

The occupier of the residential premises was found negligent for failing to either engage an expert to reseal the driveway or properly follow the manufacturer’s guidelines or heed the warning regarding the use of the sealant product on sloping surfaces.

This decision sounds warning bells for for domestic occupiers who undertake DIY projects which create a danger as a result of which an entrant subsequently suffers injury. Author: Paul Angus Practice Areas: Insurance & Financial Services
18/02/14 TURKALERT: Court finds underwriting evidence sufficient for insurer to reduce its liability to nil where an innocent misrepresentation has been made
The New South Wales Supreme Court has decided that a non-fraudulent or innocent misrepresentation in a proposal for a policy of trade credit insurance entitled the insurer to reduce its liability to nil as the insurer would not have entered into the policy had the misrepresentation not been made. Justice McDougall of the Supreme Court decided the case after it was remitted back to him for determination on that issue alone from the Court of Appeal. Author: Daniel Turk / Priya Paquet Practice Areas: Insurance & Financial Services / Commercial Disputes & Transactions
29/01/14 TURKALERT: TurksLegal welcomes senior financial services lawyer to their ranks
TurksLegal is pleased to announce the appointment of Kim Perry as Special Counsel to the Sydney Financial Services team.

Kim joins TurksLegal from the Commonwealth Bank, where he was previously Executive Legal Counsel leading the insurance and financial services team and was a senior transaction lawyer providing high level financial services legal advice to the bank’s market leading wealth management businesses.

Kim has more than 25 years experience and his expertise includes financial services licensing, regulation and disclosure; product development and distribution, organisation restructures and rationalisation and financial services dispute resolution.

“We have been steadily growing our practice in the regulatory and transactional aspects of our insurance financial services practice,” said John Myatt, Practice Group Head.

“We worked well with Kim as a long term client and are delighted he has chosen to add his strength to our team alongside lead partner, Darryl Pereira. His senior role at CBA has given Kim a fantastic range of high level exposure. We are delighted that the expertise he has built up dealing with key regulators and across many complex transactions will now be available to our client base.” Practice Areas: Insurance & Financial Services
12/12/2013 TURKALERT: Are you ready for the changes to recoveries from the ICA Amendments?
The changes to Section 67 under the amendments to the Insurance Contract Act 1984 commence in just over two weeks time and apply to all general insurance contracts entered into or renewed after
28 December 2013. Insurers need to be alert to the change in their rights regarding subrogated recoveries and be proactive in initiating recoveries to ensure their recovery rights are preserved. Author: Paul Angus Practice Areas: Insurance & Financial Services
02/09/13 TURKALERT: Court of Appeal overturns finding that reckless indifference constituted fraudulent misrepresentation
The NSW Court of Appeal has overturned a decision of the NSW Supreme Court which found
pre-contractual fraudulent misrepresentation in a proposal for a trade credit insurance policy. The Court of Appeal found that the primary judge’s reasons did not justify a finding of ‘reckless indifference’ to the truth by the insured, absent an examination of their intent.

Other aspects of the lower court judgment were not disturbed.

The decision confirms the heavy burden insurers face in sustaining an avoidance of a policy for fraud under s28(2)of the Insurance Contracts Act (the Act) and highlights that when it comes to proving fraud in the proposal, insurers must be able to prove the necessary mental intent of the person alleged to have provided the fraudulent answer. Author: Priya Paquet / Millie Teh Practice Areas: Insurance & Financial Services / Commercial Disputes & Transactions
1/08/13 TURKALERT | Costs of preventing further damage - insured or not?
The recent NSW Court of Appeal decision of Vero Insurance Ltd v Australian Prestressing Services Pty Ltd emphasises that an insured under a policy for material damage will not necessarily be entitled to indemnity under that policy for any costs incurred in preventing damage to the insured property unless specifically provided for within the policy wording.

The Court of Appeal also affirmed well-established authority that terms will not be implied into a contract of insurance where the implication of such a term contradicts an express term of the policy. Author: Priya Paquet Practice Areas: Insurance & Financial Services
21/06/13 CLIENT UPDATE: BREAKING NEWS: Insurance Contracts Amendment Bill 2013 Becomes Law
The Insurance Contracts Amendment Bill 2013 was passed by the Senate yesterday afternoon and is expected to receive Royal Assent and become law within weeks. The Bill represents the most important overhaul of Australian insurance law since the early 1980’s. Practice Areas: Insurance & Financial Services
13/05/13 TURKALERT: Overtaking a turning vehicle – where does the blame lie?
Waterfall v Antony [2012] VSC 458

The Victorian Supreme Court has considered the issues of negligence in motor vehicle collisions involving turning and overtaking vehicles when faced with conflicting versions of events. The decision emphasizes that the mere fact that the one party may be performing an unexpected, or even illegal, manoeuver does not obviate the need of the other party to ensure it continues to undertake all appropriate steps whilst driving. Practice Areas: Insurance & Financial Services
08/05/2013 TURKALERT: Queensland Court of Appeal not “nuts” - Domestic occupiers not required to remove all risks
Graham v Welsh [2012] QCA 282

On 19 October 2012 the Queensland Court of Appeal found in favour of the defendant occupier in an appeal from an action brought by a plaintiff in the Queensland District Court who slipped on a large gumnut which had fallen from a gum tree onto the entry stairs to a residential property. Author: Paul Angus Practice Areas: Insurance & Financial Services
02/05/13 TURKALERT: Totally and Permanently Disabled and still at work?
Hannover Life Re of Australasia Ltd v Dargan [2013] NSWCA 57

The Court of Appeal has recently delivered a major ruling regarding the interpretation of TPD definitions, including the issues of retraining and whether a claimant can satisfy the definition of
TPD if they are working part-time.

This paper will review the Court of Appeal’s decision regarding the interpretation of TPD definitions. Author: Lisa Norris / Michael Iacuzzi Practice Areas: Insurance & Financial Services
12/04/13 TURKALERT: Does Santa need a little helper?
In the case of Bainbridge v James and Jacotine (trading as James Leigh Promotions) & Liuzag Custodians [2013] VSCA 12, the Victorian Supreme Court - Court of Appeal – recently considered whether, amongst other things, the actions of a particularly risk averse occupier create a duty of care. Author: Peter Moriarty / Benjamin Karalus Practice Areas: Insurance & Financial Services
20/03/2013 CLIENT UPDATE: NSW Court of Appeal Delivers Major Ruling on TPD, Retraining and Part-Time Employment
Clients may recall that in Dargan v United Super Pty Ltd & Anor [2011] NSWSC 1316), Gzell J at first instance found that a claimant who had formerly been a truck driver was TPD, despite continuing to work as a taxi driver, because in order to retain his taxi driver licence, he had to undertake a training course. Gzell J felt that this ‘retraining’ meant that work as a taxi driver fell outside the claimant’s pre-disablement education, training and experience. Author: Lisa Norris / Michael Iacuzzi Practice Areas: Insurance & Financial Services
25/01/13 TURKALERT: The Illegality Defence – Has your insured been misbehaving?
Insurers and superannuation fund trustees assessing life and disability claims may have cause to consider an insured’s unlawful conduct and whether grounds arise to decline a claim on the basis of the illegality defence. There are a number of aspects to the illegality defence. This paper will review the impact of public policy on claims for indemnity arising out of unlawful conduct on the part of insureds. Author: Peter Riddell Practice Areas: Insurance & Financial Services
30/11/12 TURKALERT: Insurance Contracts Amendment Bill
The Hon Bill Shorten MP has just released exposure draft legislation in relation to the Insurance Contracts Amendment Bill (the 2013 Bill). As many of you will be aware the Insurance Contracts Amendment Bill 2010 (the 2010 Bill) was introduced into Parliament in March 2010. The 2010 Bill contained amendments to the Insurance Contracts Act 1984 (the ICA), arising from the recommendations in the Cameron/Milne report into the operation of the ICA. Author: Ros Wicks Practice Areas: Insurance & Financial Services
21/11/12 TURKALERT: Stronger Super Regulations - What it means for Insurance
The Government has released for comment the Exposure Draft of the Superannuation Legislation Amendment Regulation 2012 (draft regulations) relating to accrued default amounts, MySuper and insurance.

The draft regulations contain key details regarding how insurance in superannuation can be offered from 1 July 2013. In a welcome development the draft regulations make provision for existing members to have their insurance grandfathered. Author: Darryl Pereira Practice Areas: Insurance & Financial Services
19/10/2012 TURKALERT: Loss Adjuster Reports - when does privilege attach?
The recent Federal Court decision of Ensham Pty Limited v AIOI Insurance Company Limited [2012] FCA 710 sought to clarify when legal professional privilege may attach to the reports of loss adjusters. Author: Benjamin Karalus Practice Areas: Insurance & Financial Services
30/08/12 TURKALERT: “The life insured just won’t co-operate” – is this a failure to mitigate?
Insurers assessing disability claims are often faced with a situation where a claimant refuses to undertake certain treatment which might (or even would) enhance their prospects of recovery, perhaps to the extent that they would no longer qualify for benefits under the life insurance contract in issue. This frequently raises the question whether the claimant has ‘a duty to mitigate’ in these circumstances.

The answer is, often, yes and no. Author: Lisa Norris / Melissa Godfrey Practice Areas: Insurance & Financial Services
09/08/12 CLIENT UPDATE | Promotions in the Financial Services and General Insurance Teams at TurksLegal
A memorable financial year that has seen TurksLegal achieve outstanding outcomes for our clients and receive several major panel appointments has been capped by well-deserved promotions from within our General Insurance and Financial Services teams. Author: John Myatt Practice Areas: Insurance & Financial Services
09/07/12 TURKALERT: Non-disclosures held to be fraudulent in trade credit claim
On 7 June 2012 the New South Wales Supreme Court found in PrePaid Services v Atradius [2012] NSWSC 608 that the trade credit insurer was entitled to deny a claim on the basis that the insureds had not properly disclosed the credit history of the insured buyer nor was the insured able to establish that debts arising from its trading relationship were in fact covered by the policy as the terms of trade were not on the same terms as disclosed to the insurer. Practice Areas: Insurance & Financial Services
28/05/12 TURKALERT: Third Tranche of Stronger Super: What it means for Group Insurance
The recently released exposure draft Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 (draft Bill) includes key details regarding the provision of insurance
benefits to members of a regulated superannuation fund.

Unfortunately the draft Bill does not make clear the extent to which group insurance policies will need to adopt insurance definitions that are identical with the relevant conditions of release. Author: Darryl Pereira Practice Areas: Insurance & Financial Services
08/03/12 TURKALERT: High Court “chips” in on causation
The High Court yesterday upheld the plaintiff’s appeal from the NSW Court of Appeal in Strong v Woolworths t/as Big W [2012] HCA 5.

The 4 to 1 majority accepted the plaintiff’s “slight” probability evidence on causation as sufficient to discharge the onus of proof on the plaintiff in the absence of evidence from the defendant occupier to disprove causation. Author: Paul Angus Practice Areas: Insurance & Financial Services
14/12/11 TURKALERT: Hurly Burly at the Hoey Moey – Liability of Hoteliers for Patron’s Assault on Another Patron

On 8 November 2011 the Court of Appeal considered the liability of a hotel operator and licensee for injuries suffered by a hotel patron in an assault on a public street, in circumstances where there had been earlier altercations between the victim and assailant within the hotel premises.

Practice Areas: Insurance & Financial Services
13/12/11 TURKALERT: FOS release approach to calculating loss in financial advice disputes

How damages should be measured in a financial advice complaint can be a contentious issue. The release by FOS on how they measure loss contains useful pointers on their approach to calculating compensation. Licensees when preparing submissions should take into account the methodology FOS has stated it adopts in calculating loss in a financial advice complaint.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
13/10/11 CLIENT UPDATE: TurksLegal promotes two new stars to partnership
TurksLegal is delighted to announce the promotions of Darryl Pereira and Michael Lamproglou to partnership. Practice Areas: Insurance & Financial Services / Employers Liability
5/10/11 NEWSFLASH: Government releases draft legislation for FoFA and MySuper

The final tranche of the Future of Financial Advice (FoFA) draft legislation, the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2011, was released last week on 28 September 2011.The Government also released the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011.

Practice Areas: Insurance & Financial Services
21/09/11 NEWSFLASH: Final details of the Government's Stronger Super reforms
The Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, has today (21 September 2011) released the final details of the Government's Stronger Super reforms in the Stronger Super Information Pack available at strongersuper.treasury.gov.au. In this article we examine the key reforms as they relate to APRA-regulated superannuation funds. Practice Areas: Insurance & Financial Services
07/09/11 TURKALERT: FOFA reforms- Further clarity in everyone's best interest

The first tranche of FOFA introduces, among other things, the best interests test. The manner in which this test has been drafted however does not ensure an adviser who complies with the best interest steps mandated in the draft legislation will meet the obligation to act in the client’s best interests. In practical terms we would expect that an adviser who satisfies the prescribed best interest steps will more than likely have complied with the obligation to act in the client’s best interests absent exceptional circumstances.

This article will focus on the FOFA Bill in relation to the best interests test and how a licensee can show compliance with the obligation to take reasonable steps to ensure their representatives comply with the best interests test.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
06/09/11 CLIENT UPDATE: TPD clauses and super trustees' duties

The NSW Court of Appeal recently re-examined the nature of the duties a trustee owes to its members when entering into a new policy of life insurance. The Court found that a trustee had not breached any duty owed to its members by entering into a group life insurance policy which contained different terms to an earlier policy.

The Court also revisited the relevance of capacity for part-time employment to TPD claims generally. The Court found that, generally, a claimant who can work part-time will not be TPD for the purposes of a ‘typical’ TPD definition.

Author: Lisa Norris Practice Areas: Insurance & Financial Services
05/09/11 NEWSFLASH: APRA guidance - Draft contribution, benefit accrual and payment standards
On Wednesday 31 August 2011, APRA released Superannuation Prudential Practice Guide Draft SPG 270 and SPG 280. The draft SPGs do not introduce any new requirements, however they update the previous APRA guidance to reflect legislative changes introduced since then. Practice Areas: Insurance & Financial Services
29/08/11 TURKALERT: First tranche of draft FOFA legislation released

The Government has today released the first tranche of draft legislation of the Future of Financial Advice (FOFA) reforms. The reforms are proposed to commence on 1 July 2012. Interested parties should consider the changes and the impact on their businesses. Written submissions on the draft legislation are due by 16 September 2011.

Practice Areas: Insurance & Financial Services
07/07/11 TURKALERT: FOS and the ‘theoretical’ complainant

When is a FOS complaint out of time, and what gives a Court the right to say so?

In this case, the plaintiff challenged a ruling by the Financial Ombudsman Service (FOS) that it did not have jurisdiction to deal with the plaintiff’s complaint against a decision of MetLife Insurance Ltd (MetLife) to terminate salary continuance insurance (SCI) benefits. FOS had determined that the complaint was lodged more than 6 years after the plaintiff became aware of all relevant facts, and so it could not deal with the complaint.

Author: Lisa Norris Practice Areas: Insurance & Financial Services
30/06/11 TURKALERT: Electrocution Case - Appeal produces questionable split decision on negligence

On 15 March 2011 the NSW Court of Appeal handed down its decision in Stephens v Giovenco; Dick v Giovenco [2011] NSWCA 53. The case involved difficult decisions about the duties of care owed by a landlord and his plumber in respect of the state of a partly decommissioned solar hot water system that caused the death by electrocution of a handyman retained by the landlord to fix a leaky roof and, if necessary, to remove the system.

Author: Roger Walter Practice Areas: Insurance & Financial Services
15/06/11 TURKALERT: An Insurer can Choose its own IME

The Supreme Court of New South Wales recently determined that a life insurer is entitled to have a claimant insured medically examined by a suitably qualifi ed doctor of the insurer’s choice in order to determine whether the claimant insured is totally and permanently disabled (TPD).

This decision should deter claimant insureds from refusing to attend independent medical examinations (IME) arranged by insurers, absent compelling reasons why they should not attend.

Specifically, this decision demonstrates that there is no legal basis for a common assertion made in recent times by plaintiff solicitors, that a doctor chosen for an IME should predominantly work treating patients as opposed to providing expert reports.

Practice Areas: Insurance & Financial Services
11/05/11 CLIENT UPDATE: Federal Budget 2011 - Superannuation Changes

We have summarised the changes to superannuation announced last night by the Government in the 2011 Federal Budget.

Practice Areas: Insurance & Financial Services
10/05/11 CLIENT UPDATE: Future of Financial Advice Reforms

On 28 April 2011, the Government released its Information Pack titled ‘Future of Financial Advice 2011’ (FOFA Reforms). In this Client Update, we provide a summary of each of the reforms set out in the FOFA Reforms and the proposed timing for the introduction of each.

Practice Areas: Insurance & Financial Services
10/05/11 TURKALERT: When is a Heart Attack not an Accident?

The Court of Appeal of the Supreme Court of Western Australia recently ruled on whether death caused by the formation of a blood clot inside a coronary artery was caused by ‘bodily injury’ that resulted from an ‘accident’ within the meaning of a policy of insurance.

The case revisits after many years the issues surrounding the concept of an ‘accident’ previously ruled on by the High Court in the well-known case of Australian Casualty Co Ltd v Federico but this time in the context of a fatal heart attack and against a background of progressive heart disease of which the insured was unaware.

Author: John Myatt Practice Areas: Insurance & Financial Services
14/04/11 CLIENT UPDATE: Updated ASIC Regulatory Guidance
ASIC has updated various regulatory guides (RGs) Practice Areas: Insurance & Financial Services
31/03/11 TURKALERT: A Dangerous Exercise in Breach of Duty of Care

On 24 March 2011, the NSW Court of Appeal handed down its decision in Wilson v Nilepac Pty Ltd t/as Vision Personal Training (Crows Nest). The case raises three matters of interest: (a) establishing liability in negligence in the context of supervised physical exercise; (b) the admission of some of the opinion of an expert in circumstances involving a finding that his evidence is unreliable; (c) the significance of ‘social utility’ as one of the considerations listed in s5B(2) of the Civil Liability Act 2002.

Author: Roger Walter Practice Areas: Insurance & Financial Services / Employers Liability
08/03/11 CLIENT UPDATE: Change Management Plans

On 28 February 2011, APRA wrote to superannuation fund trustees about the need to have in place a Change Management Plan (CMP) whenever a significant change is being considered by the trustee or its service providers. We have analysed the key points about the contents of a CMP in APRA’s letter and have included below some of our own observations which trustees may wish to consider in meeting APRA’s requirements.

Practice Areas: Insurance & Financial Services
25/02/11 CLIENT UPDATE: Edington Revisited – Full Federal Court Clarifies the Role of the SCT

The Full Federal Court has allowed an appeal by a trustee in relation to its decision to decline a member’s total and permanent disability (TPD) claim. In doing so, the Court has given guidance about the role of the Superannuation Complaints Tribunal (SCT) in reviewing trustee decisions. In particular, the Court has ruled that since the SCT undertakes a fresh hearing for the purpose of determining for itself whether a trustee’s decision was fair and reasonable, the SCT is not obliged to scrutinise the reasoning process of the trustee.

Practice Areas: Insurance & Financial Services
18/02/11 TURKALERT: Are your Claims Procedures Adequate to Protect your Trustee?

On 17 December 2010, the Supreme Court of NSW (Gzell J) handed down its decision in Apostolovski v Total Risk Management [2010] NSWSC 1451. This case gives superannuation fund trustees and their advisers guidance in relation to the trustee’s fiduciary duties in the processing of claims for superannuation benefits, including the timely processing of claims and related matters.

In Apostolovski, the Court considered two main issues:

  • from what date interest was payable on a total and permanent disablement benefit; and
  • whether the trustee was liable to pay equitable compensation for breach of trust by the trustee on the basis that the trustee’s ‘gross lack of diligence’ (at para 52) in failing to make the payment of the benefit in a timely manner had caused the member loss.
The judgment provided a useful commentary on the nature of the fiduciary duty which a trustee of a superannuation fund owes to a member making a claim for a TPD benefit; and the recent High Court decision in Finch v Telstra Super Pty Ltd [2010] HCA 36.

Practice Areas: Insurance & Financial Services
14/12/10 TURKALERT: ASIC Simplifies Website Disclosure

Effective 13 December 2010, ASIC released Class Order [CO 10/1219] Facilitating online delivery of PDSs, FSGs and SOAs and Regulatory Guide 221 Facilitating online financial services disclosures (RG 221).

[CO 10/1219] modifies the Corporations Act 2001 (Act) and the Corporations Regulations 2001 (Regulations) to enable providers in certain circumstances to make required disclosures online without the requirement that the provider be reasonably satisfied that the disclosure has been received.

In RG 221, ASIC sets out its interpretation of the online disclosure provisions in the Act. ASIC also explains the relief it has given in [CO 10/1219].

Practice Areas: Insurance & Financial Services
10/12/10 TURKALERT: Section 45 Insurance Contracts Act 1984 - Revisited after Speno Ruling

The 30 November 2010 decision of the Supreme Court of Queensland in Nicholas v Wesfarmers Curragh Pty Ltd & Or is the first s45 decision of significance since the High Court’s decision in Zurich last year. The Supreme Court held that an ‘other insurance’ clause was rendered void by s45 and in doing so it dealt with arguments about the meaning of ‘entered into’ in the context of the second policy being a group policy taken out on behalf of a wholly owned subsidiary.

Author: Roger Walter Practice Areas: Insurance & Financial Services / Employers Liability
12/11/10 TURKALERT: 2009 ANZIIF Annual Review of Life Insurance Case Law

Earlier this year, TurksLegal combined with Australia’s premier industry training organisation, ANZIIF, to provide the case law content for the Annual Review of Life Insurance Law, published by Thomson Reuters.

The information provides an overview of key life insurance law cases in the Australian courts in 2009, and a summary of the implications of the decisions made in each case.

Authored by TurksLegal experts from the Insurance and Financial Services team, the information is a useful resource for all life insurance professionals.

Practice Areas: Insurance & Financial Services
09/11/10 TURKALERT: The High Court has the Last Word - Finch v Telstra Super Pty Ltd

In December 2009, the Victorian Court of Appeal published its judgment overturning the decisions of Justice Byrne in favour of the member granting his claim for Total and Permanent Invalidity.

The High Court of Australia has now substantially reversed the Court of Appeal decision, emphasising the important role superannuation trustees play in national retirement savings policy and ‘the legitimate expectations which beneficiaries of superannuation funds have that decisions about benefit(s) will be soundly taken…’

It also provides guidance to life insurers, particularly in assessing claims where the liability to pay a benefit turns upon the formation of the insurer’s opinion.

Author: John Myatt / Lisa Norris Practice Areas: Insurance & Financial Services
08/11/10 TURKALERT: The Obligations of Motorists when Confronted with Turning Heavy Vehicles - Shaw v Menzies & Anor [2010] QSC 390

In Shaw v Menzies & Anor [2010] QSC 390 the Supreme Court of Queensland on 30 September 2010, in the single Judge decision of Justice Martin, held that the obligation rests on both the drivers of heavy vehicles and ordinary passenger vehicles to act reasonably in all circumstances – including in circumstances where a driver is permitted to perform a dangerous manoeuvre by virtue of the road rules.

Author: Paul Angus Practice Areas: Insurance & Financial Services
01/11/10 CLIENT UPDATE: Is your Superannuation PDS up to Scratch?

ASIC’s Report 214 Review of Superannuation PDSs was released last week. The Report sets out ASIC’s findings following its 2010 review of 200 product disclosure statements (PDSs) for superannuation products.

Practice Areas: Insurance & Financial Services
28/10/10 CLIENT UPDATE: Superannuation Law - Moving Forward
Here’s a brief snapshot of where changes to superannuation law are up to at the moment. Practice Areas: Insurance & Financial Services
30/09/10 TURKALERT: Criminal Damage Severs Causal Link in Over-Valuation for Loan Case

On 22 September 2010, the Victorian Court of Appeal handed down its decision in Hay Property Consultants Pty Ltd & Anor v Victorian Securities Corporation Limited & Ors, a case in which a lender claimed damages against valuers under s82 of the Trade Practices Act 1974 for misleading and deceptive conduct. The lender would not have made the loan had the over-valuation not occurred. It was held on appeal that the lender was not entitled to damages against the valuers because the chain of causation was broken by criminal damage that occurred before the lender took possession.

Author: Roger Walter Practice Areas: Insurance & Financial Services
07/09/10 CLIENT UPDATE: Updated Regulatory Guide 168 Disclosure: Product Disclosure Statements (and other Disclosure Obligations) (RG 168)

Yesterday (6 September 2010), ASIC re-released RG 168 which updates and consolidates ASIC guidance in relation to PDSs and other disclosure obligations. The updated RG 168 is expected to assist product issuers, including superannuation fund trustees and insurers, to make more effective disclosure in their PDSs and other disclosure documents.

Practice Areas: Insurance & Financial Services
19/08/10 CLIENT UPDATE: Claims Professionals Called Upon to Showcase their Expertise

TurksLegal, together with ANZIIF, today launched the 2010 ANZIIF TurksLegal Claims Scholarship and invited all claims professionals in the general insurance sector to showcase their expertise by submitting an entry to win an all expenses paid trip overseas.

Practice Areas: Insurance & Financial Services
17/08/10 CLIENT UPDATE: TurksLegal Announces New Appointments
TurksLegal is delighted to announce new appointments within their Sydney office. Practice Areas: Insurance & Financial Services / Commercial Disputes & Transactions / Employers Liability
12/08/10 CLIENT UPDATE: APRA’s New Prudential Practice Guides

Following its dialogue with industry under the consultation package titled Guidance for superannuation licensees: Capital, Risk management, Adequacy of resources, Fitness and propriety, APRA has now released final form Prudential Practice Guides (PPGs) on those subjects. APRA has also released a Response to Submissions paper which addresses the main issues raised in submissions under the consultation package and APRA’s responses to them.

Practice Areas: Insurance & Financial Services
09/08/10 TURKALERT: Valuation Vigilance - Is your Due Diligence up to Scratch?
Last week, APRA wrote to superannuation fund trustees advising them to exercise increased vigilance in relation to the valuation of unlisted investments. APRA has warned that it will be looking for evidence of this increased vigilance in its prudential reviews of trustees. In this TurkAlert we analyse the impact of APRA’s letter on trustees. We also set out some of the issues that trustees should consider in ensuring that their governance and due diligence processes are consistent with APRA’s stance on the valuation of unlisted assets.
Practice Areas: Insurance & Financial Services
02/08/10 TURKALERT: Government to Introduce MySuper

Yesterday, in the first part of its response to the Cooper Review into Australia’s Superannuation System (Cooper Review), the Government announced that it will introduce MySuper. Superannuation fund trustees will be able to offer MySuper products from 1 July 2013.

Practice Areas: Insurance & Financial Services
05/07/10 CLIENT UPDATE: Cooper Review Final Report

Today the Government released the Super System Review Final Report (Report), the culmination of the Super System Review.

Practice Areas: Insurance & Financial Services
01/07/10 CLIENT UPDATE: Severe financial hardship applications - Farm Family Support Scheme payments

Where a member makes an application to a superannuation fund trustee on the grounds of severe financial hardship, the trustee may release part of a member’s superannuation entitlements if satisfied that the member has been in receipt of a Commonwealth income support payment for 26 continuous weeks and is unable to meet reasonable and immediate family living expenses. However, Farm Family Support Scheme payments did not qualify as Commonwealth income support payments for the purposes of severe financial hardship applications.

Practice Areas: Insurance & Financial Services
30/06/10 CLIENT UPDATE: Extension in Drawdown Relief for Account-Based Pensions

The Government has today announced that it will extend the drawdown relief currently provided for account-based superannuation pensions to the 2010-11 year.

Practice Areas: Insurance & Financial Services
22/06/10 CLIENT UPDATE: Short and Simplified Product Disclosure Statements – Regulations Registered

The Corporations Amendment Regulations 2010 (No 5) which amend the Corporations Regulations 2001 to prescribe the form and contents of short and simplified Product Disclosure Statements (PDSs) for superannuation products and certain other financial products commenced on 22 June 2010. However, the Regulations are not in force until 22 June 2011 at which time superannuation trustees must comply with the new regime if they roll existing PDSs or offer new products requiring a new PDS. From 22 June 2012, all PDSs need to comply with the new regime.

Practice Areas: Insurance & Financial Services
18/06/10 CLIENT UPDATE: Unclaimed Superannuation Money Protocol Document

The Australian Tax Office (ATO) has recently published on its website the Unclaimed superannuation money protocol document which provides guidance for superannuation trustees and administrators in relation to the payment and reporting of members’ superannuation entitlements to the ATO.

Practice Areas: Insurance & Financial Services
17/06/10 TURKALERT: Merkel v SCT: Are Your Policies and Procedures Consistent?

This case addresses two important concepts in dealing with complaints by members - procedural fairness; and the jurisdiction of the Superannuation Complaints Tribunal (SCT). The procedural fairness aspects of the case related to the treatment by the SCT of a complainant. The case also gives insight into what the court will consider when determining whether a complaint falls outside the jurisdiction of the SCT as a complaint that ‘relates to the management of a fund as a whole’.

Practice Areas: Insurance & Financial Services
01/06/10 TURKALERT: SRC Act Revisited. Edington v Superannuation Complaints Tribunal (2010) FCA 504

The Federal Court of Australia recently re-examined the role of the Superannuation Complaints Tribunal (‘SCT‘) in considering a complaint in the context of a declined application for a total and permanent disablement (‘TPD’) benefit.

While the decision turned on its facts, it is a useful case study demonstrating the SCT’s role pursuant to s37of the Superannuation (Resolution of Complaints) Act 1993(Cth) (‘the SRC Act').

The case also provides some useful guidance regarding the extent to which medical evidence considered by decision makers should be mentioned in the documents setting out their material findings.

Author: Lisa Norris Practice Areas: Insurance & Financial Services
21/05/10 CLIENT UPDATE: Small Business Superannuation Clearing House – Registration

Further to our Client Update of 14 May 2010 in relation to the Small Business Superannuation Clearing House (Clearing House) to be administered by Medicare Australia, the Government has now announced that eligible small businesses (those with less than 20 employees) can register to use the Clearing House from Monday, 24 May 2010.

Practice Areas: Insurance & Financial Services
14/05/10 TURKALERT: Damages Ain’t Damages - A motor vehicle owner need not have suffered an actual loss in order to claim damages - Tehan v Saric [2010] VSC 175

In Tehan v Saric [2010] VSC 175 the Supreme Court of Victoria on 23 April 2010, in the single Judge decision of Justice Bell, held that property damage arising from a motor vehicle collision crystallises at the time of the accident and that damages for that loss are recoverable no matter what choice the owner makes in respect of the vehicle or what happens to the vehicle following the accident.

Author: Paul Angus Practice Areas: Insurance & Financial Services
14/05/10 CLIENT UPDATE: Small Business Superannuation Clearing House

The Government’s Small Business Superannuation Clearing House for small businesses (Clearing House) has passed through Parliament.

Practice Areas: Insurance & Financial Services
10/05/10 CLIENT UPDATE: Superannuation Legislation Update

As you will no doubt be aware, Federal Parliament resumes on Tuesday 11 May 2010, when the 2010/2011 Federal Budget will be handed down. While several fundamental changes to super have already been announced by the Government in its response to the Henry Review, it’s likely that further superannuation changes will be announced in the Budget. We will keep you advised of these changes.

Practice Areas: Insurance & Financial Services
10/05/10 CLIENT UPDATE: Full Bench of High Court to consider appeal in Finch v Telstra

The long running saga concerning this controversial TPD claim has been referred to the full bench of the High Court to hear as an appeal.

Author: Peter Riddell / Alph Edwards / John Myatt / Lisa Norris Practice Areas: Insurance & Financial Services
05/05/10 TURKALERT: Trustees’ Duties, TPD and Part Time Work: Are the Courts Reining Back?

The Supreme Court of New South Wales recently re-examined the nature of the duties a trustee owes to its members when entering into a new policy of life insurance. The Court found that a trustee had not breached any duty owed to its members by entering into a group life insurance policy which contained different terms to an earlier policy, some of which could (arguably) be regarded as less favourable than the terms of an earlier policy.

The Court also revisited the relevance of capacity for part time employment to TPD claims generally. Rein J did not accept that a claimant with capacity to work part time is generally entitled to a TPD benefit, or that the word ‘employment' in a TPD definition necessarily means ‘full time employment'.

Author: Lisa Norris / Michael Iacuzzi Practice Areas: Insurance & Financial Services
03/05/10 CLIENT UPDATE: The Henry Tax Review – Superannuation Changes

The Federal Government’s response to the Henry Tax Review contains some fundamental changes to the superannuation system in Australia.

Practice Areas: Insurance & Financial Services
30/04/10 TURKALERT: New Supreme Court Decision on Policy Commencement, Misrepresentation and Non-Disclosure

The Supreme Court of New South Wales has recently found that a life insurer was entitled to avoid an income protection policy for ‘innocent’ non-disclosure and misrepresentation.

In the course of its judgment, the Court made several findings which provide a handy guide for claims managers in relation to some commonly encountered issues in connection with non-disclosure.

Author: Fiona Hanlon / Ros Wicks Practice Areas: Insurance & Financial Services
20/04/10 CLIENT UPDATE: MySuper - The Cooper Review’s Latest Preliminary Report

The Cooper Review has today released its latest preliminary report called MySuper: Optimising Australian Superannuation.

Practice Areas: Insurance & Financial Services
23/03/10 PAPER: Insurance Contracts Amendment Bill 2010

The much anticipated amendments to the Insurance Contracts Act arising from the 2004 Cameron Milne report were introduced into Federal Parliament for a second reading on Wednesday 17 March 2010.

To access the Bill and the accompanying Explanatory Memorandum, please click here.

The amendments include provisions which provide:

  • That a breach of the duty of good faith is a breach of the Act.
  • For electronic communication between insurer and insured
  • For the ‘unbundling’ of different types of cover under the one policy for the purposes of applying remedies for non-disclosure and misrepresentation
  • That the life insured has the same duty of disclosure as the insured
  • An extension of the general insurance proportionate s28 remedy to life policies (except life policies providing death cover and those with a surrender value)
  • A continuation of the traditional s29 remedy for life policies providing death cover and those with a surrender value
  • For the cancellation of life polices on the same grounds as general insurance policies i.e. for a breach of the duty of good faith, non-disclosure, misrepresentation and a breach of a provision of the contract
  • Third party beneficiaries with the same rights and obligations as insureds
  • A reworked s32 dealing with avoidance of group cover, which removes some well documented anomalies in the section

Author: Alph Edwards Practice Areas: Insurance & Financial Services
19/03/10 CLIENT UPDATE: Consultation to Begin on 'Unfair' Terms in Insurance Contracts

On 17 March 2010 the Federal Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, released an options paper seeking comments on options to address 'unfair' terms included in insurance contracts.

Author: Peter Riddell / Paul Angus / Alph Edwards / Peter Moriarty / John Myatt / Lisa Norris / Roger Walter Practice Areas: Insurance & Financial Services
16/03/10 TURKALERT: Insured or not Insured? That is the Question

On 22 February 2010, in AMP Capital Investors Ltd & Ors v Parsons Brinckerhoff Australia Pty Ltd & Ors, Justice Palmer handed down a short but interesting judgment in the Equity Division of the Supreme Court of NSW, ordering the reinstatement of a company for the purpose of allowing an investigation of whether an insurance policy existed.

Author: Roger Walter Practice Areas: Insurance & Financial Services
22/02/10 CLIENT UPDATE: Changes to Superannuation Disclosure Rules

The long term superannuation disclosure rules which require superannuation trustees to disclose five-year and ten-year returns in periodic statements are to be streamlined.

Practice Areas: Insurance & Financial Services
05/02/10 TURKALERT: Original Underwriter not Required - Court Upholds an Insurer’s Right To Avoid Under s29(2) of the ICA

In Kenan Berk v Westpac Securities Administration Ltd & Anor the Supreme Court of NSW has found that a life insurer was entitled to avoid a policy pursuant to s29(2) of the Insurance Contracts Act 1984 (Cth) (the Act) for fraudulent misrepresentation and non-disclosure.

The judgment is noteworthy because it clarifies one controversial point with respect to the nature of the underwriting evidence required under s29(2) — namely, that a life insurer does not necessarily have to call the original underwriter to establish that it would not have offered the policy on the same terms.

The case was unusual because the insured made the concession that if the answers on the application were his, then he was guilty of fraud. Nonetheless the judgment still demonstrates that some truthful answers in an application document does not of itself lead to an inference that the insured has not been fraudulent.

Author: Alph Edwards / Darryl Pereira Practice Areas: Insurance & Financial Services
19/01/10 TURKALERT: Trustees Incidental Errors do not Undermine Genuine Consideration - Telstra Super Pty Ltd v Finch

We previously reported on the two earlier judgments handed down in 2008 in relation to this contested claim for total and permanent invalidity. Please click see our earlier TurkAlerts:
'Remittance of a Decision to the Trustee is the Rule, not the Exception’ and 'Focus on a Trustee’s Obligations When Assessing a Claim'

The judgment of the Victorian Court of Appeal was published just before Christmas. The main legal issue decided was one regarding the construction of the deed in question and this makes the judgment of limited relevance as a precedent. It nevertheless includes a useful commentary regarding the circumstances in which a court may intervene in a discretionary decision on the ground the discretion was not exercised in good faith, upon real and genuine consideration.

Importantly, the Victorian Court of Appeal has signalled that not all departures from ‘procedural fairness’ will vitiate a decision on this ground. Harassed trustees can take comfort from the Court’s observation that the fact that a trustee makes an incidental factual error or does not undertake every possible inquiry is not sufficient reason for it to set aside a decision that was made in good faith, on real and genuine consideration and for a proper purpose.

Author: John Myatt Practice Areas: Insurance & Financial Services
11/12/09 TURKALERT: High Court Clarifies s45 and Double Insurance Dilemma

On 2 December 2009, the High Court handed down its decision in the Speno Rail Maintenance case, Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd. By confining the operation of s45 of the Insurance Contracts Act 1984, which seeks to confine the operation of ‘other insurance’ clauses, the decision has the effect of permitting the operation of clauses voided in part by the section, at least to the extent that the offending part can be excised and the insured was not itself a contracting party in the contract for the other insurance. The decision has the effect of limiting the instances of double insurance and therefore the opportunities for successful contribution claims between insurers.

Author: Peter Moriarty / Roger Walter Practice Areas: Insurance & Financial Services
10/12/09 CLIENT UPDATE: Draft AML/CTF Rules - Risk-only Life Policy Interests in Super Funds

AUSTRAC has this week released new draft AML/CTF rules for public consultation. These rules exempt from the AML/CTF Act entities which provide designated services under items 42(a) and 43(a) of the AML/CTF Act in respect to risk-only life policy interests in a superannuation fund.

Practice Areas: Insurance & Financial Services
08/12/09 TURKALERT: The Discretion Not to Disclose Material Prior to Trial - Has ‘Markus’ Privilege Survived the Civil Procedure Act 2005?

In Halpin & Ors v Lumley General Insurance Limited (2009) NSWCA 372, a general insurer was successful in seeking an order that certain witness affidavits and report, relevant in testing the credibility of Plaintiffs in a fraud case, be quarantined from the usual requirement that all evidence be served on the other party prior to trial.

Practice Areas: Insurance & Financial Services
18/11/09 TURKALERT: Liability of Hoteliers to Departing Patrons

On 10 November 2009, the High Court confirmed in its decision in the Tandra Motor Inn case that those responsible for operating premises licensed to serve alcohol are generally not under a duty of care to impede or limit a patron’s autonomy, despite it being apparent that in exercising that autonomy, the patron would be leaving the premises in circumstances involving a heightened risk of harm attributable to their intoxication. The High Court also recognised that, in this context, exceptional circumstances may give rise to a duty of care in particular situations.

Practice Areas: Insurance & Financial Services
16/11/09 TURKALERT: Don’t Shoot the Occupier! Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem (2009) HCA 48

On 10 November 2009, the High Court delivered a joint judgment in Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem (2009) HCA 48 and considered the issue of whether an occupier of licensed premises owed a duty of care to patrons at a New Years Eve function, to prevent injury from the criminal conduct of another person.

In the process, the Court also clarified that under the Civil Liability Act 2002 (NSW) (the CLA) the main test of causation relevant to determining liability of an occupier is the ‘but for’ test.

Author: Paul Angus Practice Areas: Insurance & Financial Services
02/11/09 TURKALERT: A Newey Approach to Interest under the Insurance Contracts Act

In Aaron Newey v First Superannuation Pty Ltd & Anor [2009] NSWSC 1100, Rein J found that an insurer’s and trustee’s decisions to defer a TPD claim were reasonably based and declined to award interest and costs in the claimant’s favour. It was found that the proceedings were commenced prematurely.

A decision maker can defer assessment of a claim where the claimant is going to undergo treatment or surgery and that treatment or surgery could enable the claimant to return to work within their education, training or experience.

Author: Lisa Norris / Michael Iacuzzi Practice Areas: Insurance & Financial Services
16/10/09 TURKALERT: High Court Rules on Incorrect Formulation of Duty of Care

On 13 October 2009 the High Court handed down its decision in Sydney Water Corporation v Turano finding that there was no negligence and that the NSW Court of Appeal had wrongly formulated the duty of care by employing the concept of foreseeability incorrectly.

Author: Roger Walter Practice Areas: Insurance & Financial Services
13/10/09 CLIENT UPDATE: Deductibility of Disability Benefit Premiums for Complying Superannuation Funds

In the view of the Australian Taxation Office (ATO), disability benefit insurance premiums are deductible only to the extent that the applicable insurance policy has a necessary connection to a liability of a complying superannuation fund to provide permanent incapacity benefits. The deductibility does not, in the view of the ATO, apply to other types of disability benefits. However, industry practice has been that a premium insuring against any form of permanent disability is fully deductible.

Practice Areas: Insurance & Financial Services
08/10/09 CLIENT UPDATE: Disability Superannuation Benefit; Webb v Teeling

The Australian Tax Office has released ATO ID 2009/108 which deals with the definition of ‘disability superannuation benefit’ in section 995-1(1) of the Income Tax Assessment Act 1997 (ITAA97). Paragraph (b) of that definition requires that two legally qualified medical practitioners have certified that, because of ill-health, it is unlikely that the person can ever be gainfully employed in a capacity for which he or she is reasonably qualified because of education, experience or training.

In the case of Webb v Teeling handed down last week, the Federal Court dismissed an applicant’s appeal from a decision of the Superannuation Complaints Tribunal (SCT) regarding the distribution of a death benefit paid from a superannuation fund. This case is important for trustees and their advisers considering death claim allocations.

Practice Areas: Insurance & Financial Services
16/09/09 CLIENT UPDATE: The Flap about Flipping

Following the recent Australian Industrial Relations Commission decision to effectively give industry funds a monopoly over default super arrangements, the latest salvoes in the ongoing war between industry superannuation funds and retail superannuation mastertrusts are centring around the practice of ‘flipping’.

Practice Areas: Insurance & Financial Services
07/09/09 TURKALERT: TPD Claims and ‘Full Time’ Work - Is Your Evidence Sufficient?

In Purcell v APS Chemicals Superannuation Pty Ltd & The National Mutual Life Association of Australasia [2009] FCA 981, His Honour Justice Marshall found that there was no evidence before the Superannuation Complaints Tribunal (the Tribunal) of the Appellant’s capacity to perform ‘full time’ work. His Honour therefore determined that the Tribunal made an error of law in finding that the Trustee’s and Insurer’s decision to reject the Appellant’s total and permanent disability claim was fair and reasonable. The decision emphasises the need for insurers and trustees to have evidence of a claimant’s capacity to return to work on a ‘full time’ basis when considering total and permanent disability claims, where the claimant was working full time prior to disablement. A failure to do so could result in the insurer’s or trustee’s decision being open for review by a Court.

Author: Peter Riddell / Helen Barnett Practice Areas: Insurance & Financial Services
02/09/09 CLIENT UPDATE: Loss Rollover for Merging Superannuation Funds

A recent measure to assist the superannuation industry to consolidate by simplifying fund mergers is exposure draft bill, ‘Tax Laws Amendment (2009 Measures No. 6) Bill 2009: Loss roll-over for merging superannuation funds,’ released on 31 July 2009. A draft Explanatory Memorandum to the draft exposure bill was released on Treasury’s website on 17 August 2009.

Practice Areas: Insurance & Financial Services
31/07/09 CLIENT UPDATE: TurksLegal Rewards Talent and Promotes Star Performers

TurksLegal is delighted to announce new appointments within their Sydney and Melbourne offices.

Practice Areas: Insurance & Financial Services / Employers Liability / Banking
10/07/09 CLIENT UPDATE: Intra-Fund Superannuation Advice to Members

ASIC Class Order CO 09/210 was registered on 8 July 2009. This Class Order provides relief for superannuation trustees (other than trustees of self-managed superannuation funds) and their authorised representatives (together called Advisers) from the personal advice requirements of Section 945A of the Corporations Act 2001 (Act) in limited circumstances.

Practice Areas: Insurance & Financial Services
08/07/09 AUSTRAC Accepts Enforceable Undertakings from Two Banks

Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Act), the Australian Transaction Reports and Analysis Centre (AUSTRAC) may accept Enforceable Undertakings from reporting entities which it regulates, as a method of enforcing the Act.

AUSTRAC has accepted Enforceable Undertakings from two banks in relation to breaches of the Act.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
30/06/10 TURKALERT: Remedies for Non-Disclosure under Group Cover

The Insurance Contracts Act 1984 (Cth) (‘the ICA’) makes it clear that where there have been non-disclosures by a proposed member upon joining a scheme, the insurer can utilise the remedies in s29 as though there was an individual contract of insurance with the trustee regarding that member. The insurer can in that way avoid the contract to pay the underwritten cover to the member.

What happens, however, where a member takes out additional units of cover after they joined the fund?

Author: Lisa Norris Practice Areas: Insurance & Financial Services
26/05/09 CLIENT UPDATE: Updated ASIC Regulatory Guide 175, ‘Licensing: Financial Product Advisers - Conduct and Disclosure’

On 22 May 2009, ASIC released its updated Regulatory Guide 175 Licensing: Financial Product Advisers – Conduct and Disclosure (RG 175).

RG 175 sets out how certain conduct and disclosure obligations in Part 7.7 of the Corporations Act 2001 apply to the provision of financial product advice to retail clients.

The update consolidates the guidance previously given by ASIC about financial services and media advisories, including guidance via ASIC’s FAQs. It incorporates changes in the law since RG 175 was last updated on 28 May 2007.

Practice Areas: Insurance & Financial Services
14/05/09 CLIENT UPDATE: Superannuation aspects of the Federal Budget 2009-2010.

The following information highlights the key superannuation changes handed down in the Federal Budget on Tuesday 12 May 2009 and summarises the ATO’s explanation of the meanings of ‘ordinary time earnings’ (OTE) and ‘salary or wages’ for Superannuation Guarantee purposes, as set out in Superannuation Guarantee Ruling SGR 2009/2.

Practice Areas: Insurance & Financial Services
11/05/09 TURKALERT: Investing in Unlisted Assets – Important Guidance for Superannuation Fund Trustees

The investment by superannuation funds in unlisted assets is now under the microscope, given the liquidity and valuation issues associated with those assets in the current market conditions. In a recent letter to superannuation fund trustees, the Australian Prudential Regulatory Authority (APRA) has given guidance to trustees as to what it regards as prudent practice when setting valuation policies and processes for unlisted assets.

To assist super trustees in meeting APRA’s expectations, this TurkAlert summarises APRA’s guidance and sets out what we think trustees ought to consider in respect of investing in and valuing unlisted assets. We have also set out some valuable tips on the internal management of valuation policies and processes by superannuation fund trustees.

Practice Areas: Insurance & Financial Services
08/05/09 TURKALERT: Trustees and Adverse Materials - How to Make a Smart Decision when Assessing TPD Claims
The decision of Tuftevski v Total Risks Management Pty Ltd as trustee of the BHP Billiton Superannuation Fund (1) from Acting Justice Smart of the New South Wales Supreme Court follows a trend of cases such as Baker, Finch and Kowalski, which find the courts expanding the boundaries as to when the exercise of discretion by a superannuation trustee can be reviewed, while ostensibly staying within the confines of the principles set out in Karger v Paul.

The decision suggests that superannuation trustees who fail to provide claimants with an opportunity to respond to adverse materials are at risk of having their decisions open to review for want of bona fide inquiry and genuine consideration. Author: Peter Riddell / Helen Barnett Practice Areas: Insurance & Financial Services
14/04/09 TURKALERT: Amending your Constitution - Important Developments for Responsible Entities

The decision in ING Funds Management Ltd v ANZ Nominees Ltd; ING Funds Management Ltd v Professional Associations Superannuation Ltd [2009] NSWSC 243, handed down on 3 April 2009, provides important judicial guidance on how a Responsible Entity (RE) of a managed investment scheme may modify its constitution.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
07/04/09 TURKALERT: Non-Disclosure: Court Allows Life Insurer to Vary Insured Amount Under Section 29 (4)

In Phillips v ING Life Limited (1) the Federal Court has rejected a challenge to a life insurer’s decision to vary an insured amount on the basis of non-disclosure and misrepresentation under s29 (4) of the Insurance Contracts Act (the Act).

Author: Alph Edwards Practice Areas: Insurance & Financial Services
03/04/09 TURKALERT: Important Changes to Reporting Requirements for Superannuation Trustees

For the 2008/2009 reporting season and beyond, periodic member statements for regulated superannuation funds (other than SMSFs) must now include a statement of long-term investment returns.

Annual reports for super funds can now be provided on a website maintained by or on behalf of the trustee.

This TurkAlert outlines the nature of these legislative changes and suggests how trustees may avoid the potential for confusion that they may create.

Practice Areas: Insurance & Financial Services
31/03/09 TURKALERT: Landmark Decision on Dependency and Domestic Services

In Amaca Pty Limited v Novek the NSW Court of Appeal was required to rule on a number of arguments raised in connection with the issue of dependency in the context of applying s15B of the Civil Liability Act 2002. This decision of 17 March 2009 is a clear pronouncement on how s15B is to be interpreted and applied. The two main aspects of the decision are the points made about dependency and the incidental benefit of services provided.

Author: Roger Walter Practice Areas: Insurance & Financial Services
25/03/09 TURKALERT: The Victorian Bushfires – Expediting Payment of Claims

Many life insurers are utilising a variety of measures to facilitate the fast tracking of claims arising as a result of the Victorian Bushfires. The Victorian State Coroner has adopted a disaster victim identification process which, whilst internationally recognised and thorough, may result in a delay of many months before all victims can be identified. In the meantime, insurers, IFSA and the Supreme Court of Victoria are taking pro-active steps, as outlined in the paper, to provide early help to victims and their families.

Author: Peter Riddell / Helen Barnett Practice Areas: Insurance & Financial Services
04/03/09 CLIENT UPDATE: TurksLegal expands its Insurance & Financial Services team

TurksLegal is delighted to announce that Paul Cleary has joined the firm as a Partner in the Insurance & Financial Services group.

Practice Areas: Insurance & Financial Services
24/02/09 TURKALERT: New Development in Liability of Hoteliers to Patrons

The Tasmanian Court of Appeal has held that situations can arise where a hotel and its licensee can owe a duty of care to patrons who become intoxicated, distinguishing the New South Wales Court of Appeals’ ruling in South Tweed Heads Rugby Football League Club Limited v Cole [2002] 55 NSWLR 113 and applying the later decision of the High Court in that matter.

In this case the hotel and its licensee were found to be negligent in returning the keys of a motorcycle to a patron who drank at the hotel for some three hours beforehand.

Practice Areas: Insurance & Financial Services
19/02/09 TURKALERT: Court Considers the Duty to Reconsider a TPD Claim

The recent decision of the Federal Court of Australia in Kowlaski v MMAL Staff Superannuation Fund Pty Ltd(1) demonstrates that the duty to reconsider in TPD claims is not enlivened unless new material is presented.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
05/02/09 TURKALERT: Apportioning Liability for Bad Financial Advice

We have recently seen a series of spectacular corporate collapses arising from poor management decisions which may not have been readily apparent to investors and their financial advisers at the time.

Financial advisers are usually the first ones to be called upon when investors seek compensation in these situations, but is it possible to apportion liability between the financial adviser and the other parties who, if sued, might also be responsible for the client’s loss? In particular, is the Financial Ombudsman Service (FOS) required to apportion liability when it determines a complaint made against the adviser?

A recent failed attempt by a financial adviser at judicial review in the Supreme Court of Victoria arising out of the Westpoint saga has shed some light on the answer...

Author: John Myatt Practice Areas: Insurance & Financial Services
18/12/08 TURKALERT: Council Watches Causation Case Go Down Drain in NSW Court of Appeal

The Court of Appeal’s recent decision in Jackson v Lithgow City Council combines the use of inference and what was almost lay opinion evidence in a good illustration of how causation in negligence may be proved on the balance of probabilities with only minimal circumstantial evidence and in the context of competing plausible scenarios.

Author: Roger Walter Practice Areas: Insurance & Financial Services
05/12/08 TURKALERT: Remittance of a Decision to the Trustee is the Rule, not the Exception

We recently reported on Alan Michael Finch v Telstra Super Pty Ltd [2008] VSC 481, in which the Supreme Court of Victoria found that a trustee can in certain circumstances be required to provide procedural fairness to a claimant.

The Court has now decided what should happen next with respect to Mr Finch’s claim.

Author: Lisa Norris Practice Areas: Insurance & Financial Services
21/11/08 TURKALERT: Focus on a Trustee’s Obligations When Assessing a Claim

In Alan Michael Finch v Telstra Super Pty Ltd [2008] VSC 481, the Supreme Court of Victoria found that a trustee can in certain circumstances be required to provide procedural fairness to a claimant. The obligation to do so arises from the duty to make enquiries as to certain matters and to offer the claimant the opportunity to respond to the information received. Failure to do so can constitute breach of the trustee’s obligation to decide a question in good faith and give it genuine consideration. The reasoning applied by the court also impacts upon the procedural fairness obligations of life insurers.

Author: Lisa Norris / Michael Iacuzzi Practice Areas: Insurance & Financial Services
13/11/08 TURKALERT: Income Protection Policies – Is your Offset Clause Effective?

In Carolyn Philips (née Durrand) v Tower Australia Ltd(1) Einstein J of the Supreme Court of New South Wales held that the defendant insurer was not entitled to offset disability support pension payments received by the plaintiff against disablement benefits payable under an income protection insurance policy. His Honour also commented on the calculation of interest payable on past benefits pursuant to s57 of the Insurance Contracts Act 1984 (Cth).

Author: Peter Riddell / Helen Barnett Practice Areas: Insurance & Financial Services
08/10/08 TURKALERT: Where should a Trustee invest a death benefit pending completion of a claim?

In its Quarterly Bulletin, issue no. 52 (the Bulletin), the Superannuation Complaints Tribunal (SCT) has drawn attention to the implications the current investment volatility can have concerning death benefits. Death benefits may remain in limbo for a considerable period of time before being paid and therefore can be substantially reduced in periods of negative returns. The issues for Trustees are where to invest the death benefit and who if anyone, has the power to change the investment option while a claim is being considered.

Practice Areas: Insurance & Financial Services
26/09/08 TURKALERT: Finding of Non-Delegable Duty of Care Breaks Boundaries for Children

In this month’s decision in Fitzgerald v Hill(1) it was held that a taekwondo school operator was negligent by reason of his breach of a non-delegable duty of care to one of his pupils. This is the first time that an Australian appellate court has ventured outside the sort of institutional relationships encountered in areas like health and education to find a child the object of a non-delegable duty of care.

Author: Roger Walter Practice Areas: Insurance & Financial Services
25/09/08 TURKALERT: Proposed Changes to Dispute Resolution Requirements

On 8 September 2008 the Australian Securities and Investment Commission (ASIC) released consultation paper No 102 ‘Dispute resolution – review of RG 139(1) and RG 165(2) (Consultation Paper) concerning proposed changes to internal dispute resolution (IDR) requirements for financial services providers and external dispute resolution (EDR) schemes approved by ASIC. Comments are required by 7 November 2008 and it is anticipated that the revised Regulatory Guides will be released sometime in mid 2009.

Some of the proposed changes are significant including:

  • replacing monetary limits with compensation caps for EDR schemes;
  • increasing the monetary limits for some EDR schemes;
  • removing the power of members of EDR schemes to veto changes to rules; and
  • publishing details of complaints to EDR Schemes including the names of the financial services providers involved.

Practice Areas: Insurance & Financial Services
30/07/08 TURKALERT: Beware – Occupier Can Be Liable for Criminal Act of Third Party

On 2 June 2008, the District Court considered the question of whether a defendant occupier has a duty to protect a plaintiff against the criminal wrongdoing of a third party.

This decision of the District Court extends the exceptions to the Modbury Triangle rule, noting that in some particular instances, an occupier may have a duty to protect others against the criminal wrongdoing of a third party.

Practice Areas: Insurance & Financial Services
03/06/08 TURKALERT: Court Confirms 6 Months is the Time for Assessing TPD

In Mabbett v Watson Wyatt Superannuation & Anor the NSW Supreme Court has confirmed that the correct date for assessing the likelihood of a return to employment under a standard Total and Permanent Disability (TPD) definition is 6 months after the insured ceased work due to the relevant condition.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
22/04/08 TURKALERT: Towing the Line: Responsibilities of Oversized, Heavy and Towing Vehicles on our Roads

On 5 December 2007, the Supreme Court of New South Wales, Court of Appeal considered the liability and responsibilities of a heavy vehicle driver in circumstances where conditions are not hazardous or dangerous. In a 2:1 majority decision, the Court held that displaying a sign such as “OVERSIZE” or “TOWED VEHICLE” could, in the absence of any other negligent act, constitute a sufficient carriage of the duty to take reasonable care for the safety of other road users.

Author: Paul Angus Practice Areas: Insurance & Financial Services
17/04/08 TURKALERT: Slash and Burn - A Duty of How Much Care?

The Supreme Court of Queensland recently reviewed the content of the duty of care owed in the context of a fire which spread from one farm to an adjoining one and resulted in devastation of the neighbouring mango farm’s crop. Particular attention was paid to the role to be played by the so-called “Shirt Calculus”, propounded by Mason J in Wyong Shire Council v Shirt, and which has long been held to be one of the bed-rocks of the law of negligence in Australia.

Practice Areas: Insurance & Financial Services
31/03/08 TURKALERT: Interpretation of Commercial Leases & Associated Documents

Two decades have passed since the last substantial High Court decision on the relief available to landlords under commercial leases. On 27 March 2008 the High Court handed down its decision in Gumland Property Holdings Pty Limited v Duffy Bros Fruit Market (Campbelltown) Pty Limited, a case that dealt with a range of issues, but particularly the availability of loss of bargain damages following termination based not on repudiation by the lessee, but on its breach of an agreed essential term, and whether a guarantor’s covenant to guarantee payment of rent by the lessee touches and concerns the land so that, despite there being no privity of contract, the covenant passes with the leasehold reversion upon the sale of the premises.

Author: Roger Walter Practice Areas: Insurance & Financial Services
20/03/08 TURKALERT: First Home Saver Accounts – Can they make a difference?

The Federal Government released an outline of its proposed arrangements for the new first home saver accounts (FHOA’s) in February 2008. The introduction of these new accounts was previously announced by the Government as a means of assisting people to purchase their first home. The release of the proposal paper (the Paper) is timely given that it coincides with further increases in interest rates.

The Government is consulting closely with the financial services industry and all aspects of how FHOA’s are to operate is open to discussion.

The Paper contains some surprises for superannuation trustees, including the fundamental requirement that superannuation funds can only offer FHOA’s through a separate trust.

Practice Areas: Insurance & Financial Services
20/02/08 TURKALERT: Careful Planning Required for Content of Threshold Transaction Reports

On 18 December 2007 AUSTRAC released amending rules dealing with information to be included in a threshold transaction report. The rules introduce a new Chapter 19 into the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (1) which applies from 12 December 2008. Chapter 19 will be replaced from 1 January 2011 to expand the information to be included in a threshold transaction report to AUSTRAC to include additional details where a person other than the customer conducts the transaction. The level of information to be included is quite onerous and careful planning will be required to ensure all necessary processes are in place to ensure reporting entities can complete their threshold transaction reports and submit to AUSTRAC in the required 10 business days timeframe.

Practice Areas: Insurance & Financial Services
06/02/08 TURKALERT: Will Your AML/CTF Compliance Officer Meet AUSTRAC’s High Standards?

On 19 December 2007 AUSTRAC released a draft guidance note on the role of an AML/CTF compliance officer (the draft Guidance Note). The appointment of an AML/CTF compliance officer is a requirement under Part A of the AML/CTF Compliance Program (Program) and applies from 12 December 2007. This draft Guidance Note is the first detailed indication of how AUSTRAC regards this role and what it will look for when conducting an audit. It is clear that AUSTRAC sees this role as significant and pivotal to a reporting entity's approach to compliance and not one that can be taken on by a junior member of staff or a person lacking the skills and expertise required.

Practice Areas: Insurance & Financial Services
04/02/08 TURKALERT: Responsible Occupiers of Licensed Premises Give Disorderly Patrons the Boot

On 5 December 2007, the New South Wales Supreme Court considered the liability of the occupier, the licensee, and the provider of security services of a hotel, for injury occasioned to a hotel patron in a fight between persons in the street, where there had been a previous altercation between those persons in the hotel.

Author: Paul Angus Practice Areas: Insurance & Financial Services
10/12/07 TURKALERT: TPD Claims: Court Exercises Trustee’s Discretion

The recent decision of the NSW Supreme Court in Jeffrey Guy Baker v Local Government Superannuation Scheme Pty Ltd(1) demonstrates the Court's willingness in TPD claims to review a trustee’s discretion and even exercise that discretion for itself.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
08/11/07 TURKALERT: Recent Appellate Decision Means The Ceiling Doesn’t Fall In On Landlords

A decision against a landlord who had been found liable when a woman fell through the ceiling of the premises she tenanted was recently overturned on appeal. In reversing the decision the NSW Court of Appeal concluded that the condition of the roof area did not render the premises unfit for the residential purpose for which they were let and, as a result, the landlord was not in breach of the duty of care.

Practice Areas: Insurance & Financial Services
30/10/07 TURKALERT: Terminal Illness benefits now tax free – but don’t forget to check the fine print!

Lump sum superannuation member benefits paid to terminally ill members are tax free from 12 September 2007. The Government aims to make all necessary changes to relevant legislation by 1 July 2008. In the meantime, the ATO has modified the treatment of such benefits using a legislative instrument effectively making them tax free. The timing of the modification’s introduction, its simplistic approach, and its limited shelf life (only applies up to 30 June 2008 pending legislative amendments) have raised a number of practical questions. To address these questions, the ATO has answered a number of FAQs on the topic.

Practice Areas: Insurance & Financial Services
29/10/07 TURKALERT: Reasonable Decision Sees Plaintiff Fall At The First Hurdle Rumble v Host Plus & National Mutual

The recent decision of the NSW District Court in Rumble v Host-Plus Pty Limited & The National Mutual Life Association of Australasia Limited(1) shows that, with careful attention to procedural fairness, an insurer and trustee can successfully defend their decision to decline a Total and Permanent Disablement (TPD) claim as reasonable and unchallengeable even though, on the balance of probabilities, a court feels that the plaintiff may well be totally and permanently disabled.

Author: Fiona Hanlon / Ros Wicks Practice Areas: Insurance & Financial Services
29/10/07 TURKALERT: Counting The Costs - Important implications for both trustees and insurers in TPD litigation

Who pays the legal costs and how much is recoverable can have a big impact on group life insurers’ and trustees’ bottom line once the litigation has concluded. These issues were played out in a recent decision which provides a guide as how to best manage your company’s exposure.

Practice Areas: Insurance & Financial Services
23/10/07 TURKALERT: Changes to Streamlined Breach Reporting and use of ABNs as Identifiers - the Next Instalments

The Federal Government has now passed all legislation to streamline breach reporting to ASIC and APRA, and to replace the use of ACN, SFN, and RSE related numbers in favour of ABNs as an entity’s official identifier. APRA and ASIC still need to agree on the terms on which they will accept a single breach report as having been lodged with them both. To this end, a joint discussion paper has been released, which includes an overview of APRA and ASIC’s intended approach and a draft of the dual breach reporting form. On paper the streamlined breach reporting provisions will reduce red-tape for the industry, however a number of question marks hang over the effectiveness of the draft form that should be clarified before APRA and ASIC’s approach is finalised.

Practice Areas: Insurance & Financial Services
18/10/07 TURKALERT: No Tortious Duty of Good Faith for Insurers

The NSW Court of Appeal(1) has overturned the NSW District Court decision of Garcia v CGU Workers Compensation Pty Limited (2) and confirmed that the authorities do not support the existence of a tortious duty of good faith.

Whilst the lower court decision involved a workers compensation insurer, the decision had potentially dire ramifications for group life insurers as it provided a potential basis for insured members challenging declined TPD claims to seek damages well in excess of insured benefits.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
16/10/07 TURKALERT: Interpretation of Contractual Indemnities

This is the first NSW decision at appellate level on the construction of indemnity clauses since the High Court decision in Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424. This recent decision illustrates the difficulties often encountered in the construction of indemnity clauses and how the law is applied in resolving them.

Author: Roger Walter Practice Areas: Insurance & Financial Services
10/10/07 TURKALERT: Superannuation Contributions Recoverable under the Bankruptcy Act –

The Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007 has been passed to allow trustees in bankruptcy to recover certain superannuation contributions. These amendments apply to superannuation contributions made on or after 28 July 2006, with the legislation providing the process to recover them commencing on 16 October 2007.

Practice Areas: Insurance & Financial Services
10/08/07 TURKALERT: Streamlined ASIC & APRA Breach Reporting & Replacing the Display of RSE Numbers with ABNs

The Financial Sector Legislation Amendment (Simplifying Regulation and Review) Bill 2007 (Bill) was introduced to the House of Representatives on 21 June 2007. The Bill is in response to Rethinking Regulation, which was the report of the Taskforce on Reducing Regulation Burdens on Business.

Concerning the superannuation industry, the Bill proposes changes to the Superannuation Industry (Supervision) Act 1993 (SIS Act), Corporations Act 2001 (Corporations Act), and A New Tax System (Australian Business Number) Act 1989 (ABN Act). The changes would introduce measures to streamline breach reporting and replace the display of Registrable Superannuation Entity (RSE) Licence, and RSE, numbers in documents with an Australian Business Number (ABN) instead.

This TurkAlert summarises the superannuation aspects of the Bill and makes some observations on their impact on trustees in particular and the superannuation industry.

Practice Areas: Insurance & Financial Services
10/07/07 TURKALERT: A Case of Interest? TPD Claims and s57 of the Insurance Contracts Act

In Diosdado Sayseng v Kellogg Superannuation Pty Ltd & Anor1 Nicholas J of the Supreme Court of New South Wales held that the plaintiff was entitled to interest on his total and permanent disablement benefit (TPD), from a date prior to the insurer’s initial decision to decline the claim.

The decision underlines the importance for insurers to take a proactive and considered approach in their management of TPD claims so as to avoid potentially large awards of interest. This is of particular significance given the proposed amendments to the Insurance Contracts Act 1984 (Cth) (the Act) and Regulations, which will see an increase in the prescribed interest rate.

Author: Peter Riddell Practice Areas: Insurance & Financial Services
03/08/07 TURKALERT: Courting the Risk & the Refusal of Indemnity

In Brescia Furniture Pty Limited v QBE Insurance (Australia) Limited & Mercantile Mutual Insurance (Australia) Limited [2007] NSWSC 598 (unreported decision of Hammerschlag J dated 6 July 2007) the plaintiff, Brescia, having been refused indemnity under an industrial special risk policy providing cover against property damage and consequential loss of profits, successfully sued for damages for breach of the insurance contract.

Author: Roger Walter Practice Areas: Insurance & Financial Services
02/08/07 TURKALERT: At last! - Incorporation by Reference Regulations Released

The long awaited regulations allowing product issuers the option of incorporation by reference of statements and information (information) into their products for Product Disclosure Statement (PDS) and Statement of Advice (SOA) have been released. The Corporations Amendment Regulations 2007 (No. 10) (the Regulations) apply from 22 August 2007.

Practice Areas: Insurance & Financial Services
10/07/07 TURKALERT: Superannuation Law Updates: The 30 June Rush (And What You Have Missed)

The start of the 2008 financial year has brought with it the commencement of the vast majority of the Federal Government’s 2006 Budget “Simpler Super” changes. While the superannuation industry has been busy processing extraordinary numbers of contributions, there was a flurry of final updates to, and clarification of, the Simpler Super changes to superannuation law. In addition, the Government took the opportunity to release changes to legislation supporting Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) and Australian Financial Services (AFS) Licensing.

Practice Areas: Insurance & Financial Services
05/07/07 TURKALERT: Last Minute Changes to Simple Super Regulations

28 June 2007 saw the passing of the latest round of changes to the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations). The Superannuation Industry (Supervision) Amendment Regulations 2007 (No. 3) (SIS Amendment No. 3), introduced a number of last minute changes to the previous amendments relating to the 2006 Federal Budget Simpler Super (now “Better Super”) changes, which were:

* prohibiting trustees of chosen funds requesting employers to sign participation agreements;
* changing a trustee’s obligation to return certain contributions to the paying entity instead of the member; and
* some technical changes.

This article summaries these latest amendments and suggests actions that superannuation trustees should consider taking in light of the changes.

Practice Areas: Insurance & Financial Services
04/07/07 TURKALERT: Carr Smashed: Motor Vehicle Cost of Repairs v Replacement Value

In the recent case of Neville Kingsbury-Carr v Glenn William Kiliman1 the ACT Supreme Court re-examined the issues of whether a vehicle owner was entitled to have his vehicle repaired or whether his damages should be confined to the lower value of a replacement vehicle.

Author: Michael Adie / Benjamin Karalus Practice Areas: Insurance & Financial Services
02/07/07 TURKALERT: Disclosure of Accessible Financial Products: Section 1012IA Corporations Act & ASIC Policy Statement 184

After many drafts and much consultation the final version of ASIC Policy Statement 184 (PS 184) has finally been released. PS 184 deals with delivery of product disclosure for investment strategies. In particular the policy is intended to assist superannuation fund trustees to comply with the product disclosure requirements in Section 1012IA (s.1012IA) of the Corporations Act 2001 (the Act).

Practice Areas: Insurance & Financial Services
02/07/07 TURKALERT: TPD Claims: Work Capacity or Work Reality?

In Diosdado Sayseng v Kellogg Superannuation Pty Ltd & Anor1 the NSW Supreme Court has held that an insurer must consider the actual likelihood of a claimant obtaining employment in the open market when considering a TPD claim. This is so irrespective of whether the TPD definition contains the words “unable ever” or “unlikely ever” to work again.

Author: Darryl Pereira Practice Areas: Insurance & Financial Services
01/07/07 TURKALERT: Tying Up Loose Ends From Schaffer

The NSW Court of Appeal has confirmed that a life insurer asserting what it would have done had it known the true facts when avoiding a policy under s29 (3) of the Insurance Contracts Act (“the Act”), does not have to show it would have rejected an application outright as at the date the Policy was incepted.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
18/06/07 TURKALERT: Landlords Not Required to Ensure Premises “Absolutely Safe”

The New South Wales Court of Appeal recently held that whilst a landlord owed a duty to take reasonable care to avoid foreseeable risk of injury to an entrant, the landlord did not have to make the premises as safe as reasonable care could make them.

Author: Paul Angus Practice Areas: Insurance & Financial Services
01/06/07 TURKALERT: Offers Made at Mediation: Can They Form a Basis for an Indemnity Costs Order?

In Azzi & Ors v Volvo Car Australia Pty Ltd1 the New South Wales Supreme Court was asked to consider whether an offer made at mediation was admissible in an application for an indemnity costs order.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
24/04/07 TURKALERT: When Does Total Disability Commence Under an Income Protection Policy?

The Supreme Court of New South Wales has held that for total disability to occur under an income protection policy, all elements of total disability, as defined under the policy, must be satisfied1.

Author: Alph Edwards / Ros Wicks Practice Areas: Insurance & Financial Services
10/03/07 TURKALERT: The High Court on Non-Delegable Duties, Contractors & Roads

On 27 February 2007 the High Court of Australia handed down its decision in Leichhardt Municipal Council v Montgomery. In allowing the appeal the High Court held that the Council did not owe a non-delegable duty of care in circumstances where, in its capacity as roads authority under the Roads Act 1993 (NSW), it had engaged an independent contractor to carry out upgrading work.

Author: Roger Walter Practice Areas: Insurance & Financial Services
01/03/07 TURKALERT: Court of Appeal Confirms Heart Attack Decision

In an earlier Turk Alert, I discussed the case of Larwint Pty Ltd v Norwich Union Life Australia1, a Supreme Court of Victoria decision dealing with a dispute as to whether the plaintiff had suffered a heart attack as defined under his trauma insurance policy.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
01/02/07 TURKALERT: Insurance Contracts Amendment Bill 2007

On 12 February 2007, the Parliamentary Secretary to the Treasurer released for public comment draft legislation amending the Insurance Contracts Act 1984.

Author: John Myatt Practice Areas: Insurance & Financial Services
09/01/07 TURKALERT: Simplification of Superannuation Bills

Once again the Federal Government has marked the festive season by presenting the superannuation industry with another substantial piece of legislation. The legislation introducing the Budget 2006 changes as part of the Government’s initiative to simplify Superannuation was introduced into Parliament on 7 December 2006.

Practice Areas: Insurance & Financial Services
01/01/07 TURKALERT: TPD Claims: Does an Insurer Have to Obtain Evidence to Support the Claimant’s Case?

In Dumitrov v SC Johnson & Sons Superannuation Pty Limited & Anor1 the NSW Supreme Court has confirmed that when an insurer is asked to reconsider a decision to reject a Total and Permanent Disablement Benefit (TPD) claim, it must “reinvestigate” the claim afresh rather than just review its original decision.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
14/12/06 TURKALERT: Negligence is Not Always the Cause of Motor Vehicle Accidents

In a recent decision, the Queensland Court of Appeal issued a reminder that sometimes motor vehicle accidents happen without the negligence of either party – despite attempts at “well focused hindsight”.

While this case related to a claim for personal injury, the principles could apply equally in a claim for damage to the vehicle or to other property hit by a vehicle as a consequence of the hazardous conditions of the road.

Practice Areas: Insurance & Financial Services
07/12/06 TURKALERT: Supreme Court Dismisses Plaintiff’s Claim Under ‘Any One Duty’ Definition

On 17 November 2006, the Victorian Supreme Court dismissed a Plaintiff’s claim for benefits under an income protection policy containing an ‘any one duty’ definition.

The decision underlines the importance of credit on the part of Plaintiffs claiming for medical conditions, such as depression or chronic fatigue syndrome, which are largely assessed by the subjective reporting of symptoms.

The decision also provides some guidance as to what amounts to a ‘sickness’ under an income protection policy, the Court finding that “narcissistic personality traits do not constitute disability sickness as contemplated by the policy.”

Author: Peter Riddell Practice Areas: Insurance & Financial Services
21/11/06 TURKALERT: Time Limits for Negligent Advice - Will the High Court Extend the Boundaries?

On 8 May 2006, the ACT Court of Appeal upheld a finding by Chief Justice Higgins in the case of Commonwealth of Australia v John Griffith Cornwell1 (Cornwell). The case dealt with a cause of action for negligent misstatement brought by a member of the Commonwealth Superannuation Fund that was not statute barred even though it was brought some 29 years after the statement had been made by the Employer. On 1 September 2006, the High Court granted the Commonwealth leave to appeal this decision.

Author: Helen Barnett Practice Areas: Insurance & Financial Services
15/11/06 TURKALERT: Moral Risk

In the context of a contract of insurance, under which both parties are obliged by statute to exercise the utmost good faith toward one another, the integrity of the insured would seem to be a matter of fundamental importance to the insurer.

Author: John Myatt Practice Areas: Insurance & Financial Services
05/11/06 TURKALERT: Old Building Standards No Excuse for Occupiers’ Failure to Fix

In Morgan v Owners of Strata Plan 13937 and Anor the NSW Court of Appeal found that it is no excuse for an occupier to fail to rectify a risk simply because the building complied with old building standards.

Practice Areas: Insurance & Financial Services
16/10/06 TURKALERT: General Insurance Companies APRA Prudential Standard GPS 231 - Outsourcing

APRA has released a package of new prudential standards to apply to life insurance companies (including friendly societies), general insurance companies and authorised deposit taking institutions, covering requirements for:

• responsible persons to meet fit and proper requirements;
• a risk management framework;
• business continuity management; and
• outsourcing arrangements involving “material business activities”.

These changes are intended to standardise prudential management for all APRA regulated entities to the extent that is possible given the diversity of those entities.

Practice Areas: Insurance & Financial Services
11/10/06 TURKALERT: Life Companies APRA Prudential Standard LPS 231 - Outsourcing

APRA has released a package of new prudential standards to apply to life insurance companies (including friendly societies), general insurance companies and authorised deposit taking institutions, covering requirements for:

• responsible persons to meet fit and proper requirements;
• a risk management framework;
• business continuity management; and
• outsourcing arrangements involving “material business activities”.

These changes are intended to standardise prudential management for all APRA regulated entities to the extent that is possible given the diversity of those entities.

Practice Areas: Insurance & Financial Services
22/09/06 TURKALERT: Occupiers Only Required to Take “Reasonable” Precautions in the Circumstances

On 21 September 2006, the New South Wales Court of Appeal upheld an appeal by the defendant occupier on the basis that the trial judge erred in finding negligence in the manner in which employed security guards responded to a situation. The case raises the question of what reasonable steps an occupier must take in relation to a risk in the process of determining the occupier’s liability.

Practice Areas: Insurance & Financial Services
10/08/06 TURKALERT: TPD Claims: SCT must apply Correct Definition

The Federal Court has allowed an appeal from the decision of Justice Lindgren who upheld a Superannuation Complaints Tribunal (“the SCT”) decision in favour of the trustee’s decline of Ms Cullinane’s claim for a Disablement benefit.

Author: Ros Wicks Practice Areas: Insurance & Financial Services
09/08/06 TURKALERT: Employers Should Enquire about Criminal Histories

A recent decision of the Supreme Court of NSW found that an employer who was shot a number of times by an employee, placed with him under the Commonwealth JobStart scheme, voluntarily assumed the risk associated with the undisclosed criminal past of the employee once he became aware that the employee had previously been in prison. The Commonwealth Employment Service (“CES”) was found to have breached its duty in failing to disclose the criminal history, but the breach was found too remote to the incident as a result of the plaintiff’s contributing acts.

Author: Paul Angus Practice Areas: Insurance & Financial Services
02/08/06 TURKALERT: 'Out of Character’ Super Contributions Now Subject to Bankruptcy Law

In September 2005, a Turk Alert was released about the Government’s consultation paper on proposed changes to the Bankruptcy Act 1996 to allow Trustees in Bankruptcy to recover excessive superannuation contributions. The Government has now determined not to proceed with this proposal on the basis that it was unduly complicated for both the bankruptcy and superannuation systems.

Practice Areas: Insurance & Financial Services
30/06/11 TURKALERT: Electrocution on Appeal Produces Questionable Split Decision

On 15 March 2011 the NSW Court of Appeal handed down its decision in Stephens v Giovenco; Dick v Giovenco [2011] NSWCA 53. The case involved difficult decisions about the duties of care owed by a landlord and his plumber in respect of the state of a partly decommissioned solar hot water system that caused the death by electrocution of a handyman retained by the landlord to fix a leaky roof and, if necessary, to remove the system.

Author: Roger Walter Practice Areas: Insurance & Financial Services
11/07/06 TURKALERT: When Is a Heart Attack a Heart Attack? Diagnostic Criteria Must Be Met to Qualify For Trauma Benefit

The Supreme Court of Victoria1 has ruled that where diagnostic criteria is specified as being required before an entitlement to an insured trauma benefit arises, that criteria must be met before the entitlement arises.

In coming to this decision, the Court adopted the reasoning of the NSW Court of Appeal in MLC v O’Neil2 which dealt with an identical issue.

Author: Alph Edwards Practice Areas: Insurance & Financial Services
02/07/06 TURKALERT: Vicarious Liability of Employers For Intentional Criminal Acts of Employees

A recent decision of the Supreme Court of Queensland is a timely reminder to employers and insurers of the possibility that an employer will be held vicariously liable for the deliberate and criminal conduct of their employees if the conduct had a sufficient “closeness of connection” with the duties the employee was engaged to perform.

Author: Paul Angus Practice Areas: Insurance & Financial Services
24/04/06 TURKALERT: TPD Claims: Considering Wrong Definition is Not Necessarily Fatal

In Cullinane v Mercer Benefit Nominees Limited, Justice Lindgren of the Federal Court upheld a Superannuation Complaints Tribunal (“Tribunal”) decision in favour of a Trustee’s decline of a claim for Total and Permanent Disablement (“TPD”) benefits.

Practice Areas: Insurance & Financial Services
23/03/06 TURKALERT: Access To Personal Information Collected By Insurer Investigating a Claim

The Privacy Commissioner has released the above Case Note, which is one of four finalised complaints the Commissioner regards as of interest to the general public. The Commissioner only publishes Case Notes which involve a new interpretation of the Privacy Act (the Act), illustrate systemic issues, or the application of Privacy Law to a particular industry. The identities of the parties remain private.

Practice Areas: Insurance & Financial Services
10/03/06 TURKALERT: Statements of Advice - Has ASIC done Enough?

Ever since Chapter 7 was added to the Corporations Act to promote “confident and informed decision making by consumers of financial products and services” 1 there has been a degree of tension between the complexity of the legislation and the primary objective of facilitating informed consumer decision making.

Author: John Myatt Practice Areas: Insurance & Financial Services
25/02/06 TURKALERT: Contribution Splitting Regulations
The Tax Laws Amendment (Superannuation Contributions Splitting) Act 2005 (‘the Act’) was assented to on 14 December 2005, amending the Income Tax Assessment Act 1936 (ITAA) to deal with the tax consequences of splitting contributions between a member of a superannuation fund and his or her spouse. Practice Areas: Insurance & Financial Services
18/02/06 TURKALERT: Be careful, the driveway upon which you are to walk is no different from most other driveways

On 8 December 2005, the High Court of Australia handed down its decision in the matter of Neindorf v Junkovic. It reversed the earlier judgment of the Supreme Court of South Australia which ruled that the occupier of domestic premises was liable to compensate a visitor to the occupier’s garage sale who tripped over on uneven paving stones on the driveway1.

Author: Peter Riddell Practice Areas: Insurance & Financial Services
17/01/06 TURKALERT: Warning - Shopping May Be Hazardous to Your Health...

The plaintiff was a weekly visitor to the Hunter Street Mall where she shopped with her adult daughter. On 11 July 2000 the plaintiff was present at the Mall, when her shoe caught on an uneven paver, causing her to trip forward and injure herself.

Author: Paul Angus Practice Areas: Insurance & Financial Services
16/01/06 TURKALERT: Leaner, More Flexible Disclosure

The Corporations (Amendment) Regulations (2005), which commenced on 20 December 20051, amends the Corporations Act and Regulations. It is designed to provide greater simplicity and flexibility in relation to the circumstances in which Financial Services Guides (“FSGs”) and Product Disclosure Statements (“PDSs”) are given. The amendments offer some relief in relation to the type of and extent of information level that must be contained in them.

Author: John Myatt Practice Areas: Insurance & Financial Services
12/01/06 TURKALERT: Are the Defences Available to Highway Authorities Equally Relevant to Private Occupiers?

The New South Wales Court of Appeal recently overturned a decision in favour of a defendant because the trial judge applied the same tests that apply to highway authorities to a private occupier. The case raises the question of just how far the defences that are available to highway authorities are relevant to private occupiers and also examines the role played by the concept of an “obvious risk” in the process of determining the occupier’s liability.

Practice Areas: Insurance & Financial Services

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John Myatt John Myatt
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