mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543
Outcome: followed
Some basic propositions about s 21 should be borne in mind before approaching the detail of the issue. (1) "Knows" and "known" are strong words. They mean considerably more than "believes" or "suspects" or even "strongly suspects" (per McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514 at 531; see also Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458 per Davies A-JA at 75259). (2) The "matter" must be known to the insured. (3) On one alternative, the "matter" must also be known to be relevant to the decision of the particular insurer whether to accept risk, and, if so, on what terms in this case, on the basis put forward, by Macquarie Underwriting. As Gummow and Hayne JJ said in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [70] : "Under the Act, attention is shifted from the prudent insurer to the particular insurer." Although their Honours were in dissent in the result, this statement is obviously correct. (See also Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd [1990] VR 919 ; (1989) 92 ALR 661.) (4) Relevance to the acceptance of the risk in the sense of the particular insurance hazard is required (McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [32] ). (5) In the other alternative, it must be found that a reasonable person in the circumstances could be expected to know that the matter was relevant to the decision of the particular insurer. There is some debate about the meaning of the words "the circumstances". Although they plainly mean the circumstances of the particular case, the debate is said to be between subjective and extrinsic circumstances (see the discussion in Mann P, Annotated Insurance Contracts Act (4 th ed, Lawbook Co, 2003), para 21.10.8). (6) There is a debate as to whether an insured can "know" a matter by its agent cf McHugh, Kirby and Callinan JJ at [30] with Gummow and Hayne JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [82] [89]. Pending further clarification by the High Court, the wider view should be taken following Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 per Powell JA at 610 611 (agreed with by Priestley JA and Clarke JA). (7) The obligation applies to renewal of a contract (s 11(9)(b)) ( Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353).
Case: Malec v JC Hutton Pty Ltd [1990] HCA 20 ; (1990) 169 CLR 638
Outcome: cited
Quantification of damages is a different matter. It has been said that the defendants have to establish that, absent the breach of duty, relevant cover would have been obtained, eg Ferrcom Pty Ltd v Inbush (NSW) Pty Ltd (1997) 9 ANZ Ins Cas 61-339 per Cole JA at 76732. That is so if full indemnity is to be awarded, cf Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1 per Mason, Wilson and Dawson JJ at 13. The position is different if less than full indemnity is considered. Reconstruction of what would have occurred if the correct advice had been given involves a hypothetical set of past circumstances. As explained in Malec v JC Hutton Pty Ltd [1990] HCA 20 ; (1990) 169 CLR 638 , particularly per Brennan and Dawson JJ at 639 640 and Deane, Gaudron, McHugh JJ at 642 643, this is not decided as if it were an assessment on the balance of probabilities as to whether an event did or did not happen. Furthermore, in considering this case, it is to be borne in mind that Aon prevented the posited situation occurring and that it, not the defendants, was the expert in the field. See, generally, Cee Bee Marine Ltd v Lombard Insurance Co Ltd [1990] 2 NZLR 1 at 5 6. The reconstruction of events in this case does not depend upon what the defendants would have done in a particular situation in the sense discussed by Buchanan JA in Crown Insurance Services Pty Ltd v National Mutual Life Association of Australasia Ltd (2005) 13 ANZ Ins Cas 61-659 at [9] [14]. It principally (but not entirely) depends upon the assessment as to what others would have done. It is to be noted that the discussion of this question by Ashley J in TBI Pty Ltd v Aon Financial Planning Ltd (2004) 13 ANZ Ins Cas 61-601 at [213] [218] was tentative obiter dicta.
Case: Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648
Outcome: cited
However, even if O 6 r 11(3) alone is considered and operates according to its terms, there is a real issue in this case as to the last step the effect of the limitation provisions. In Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648 it was pointed out that no new cause of action comes into being against the personal representative of a deceased tortfeasor the existing cause of action survives. In that case, time runs for limitation purposes from accrual of the cause of action against the deceased (see per Gibbs CJ, Murphy and Wilson JJ at 652; Mason J at 659). The same principle must be applicable in relation to a cause of action that survives for the benefit of the personal representation of the deceased estate, absent any special provisions. That principle applies to an action by a trustee in bankruptcy to enforce a liability of the bankrupt ( Re Mansell; Ex parte Norton (1892) 66 LT 245). The same principle should apply in the case of the assignment of a cause of action. The original cause of action remains the foundation of the action (although not directly applicable, see " The Jordan Nicolov" [1990] 2 Lloyds Reps 11 per Hobhouse J at 19; Lefevre v White [1990] 1 Lloyd's Reps 569 per Popplewell J at 577 citing Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363 per Lord Denning at 373; cf per Jacobs J in Re Harry Simpson &amp; Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 at 209. In the present case, the same causes of action have been pursued at all times.
Case: National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514
Outcome: distinguished
There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267.
Case: Payne v Parker [1976] 1 NSWLR 191
Outcome: applied
In my opinion, counsel for the defendants is correct in submitting that a Jones v Dunkel inference is also available because of the failure by Aon to call evidence from those involved in the negotiations for Macquarie Underwriting, particularly Stuart Coleman. The availability of a Jones v Dunkel inference in the case of a witness who is a third party can be a difficult issue. Macquarie and Aon are not in the "same camp" and Coleman is not under the control of Aon. In a sense, he was available to both parties. However, only the broker, Aon, had dealings with the potential insurer. The client was not, and would never be, directly in that loop. Between the parties here, it was natural for Aon rather than the defendants to call the evidence from those at Macquarie Underwriting who were involved in the dealings between Aon and Macquarie from the inception of business and in the subsequent management of the business including the proposed renewal. The failure to lead this evidence further buttresses the inference in favour of the defendants ( Payne v Parker [1976] 1 NSWLR 191 per Glass JA at 201 202; Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109 at 123; Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd [1989] FCA 275 ; (1989) 23 FCR 331 at 343 344; Ayoub v Euphoric Pty Ltd (2004) 12 BPR 22,735; [2004] NSWCA 457 per McClellan AJA at [62] [64]).
Case: Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514
Outcome: applied
Some basic propositions about s 21 should be borne in mind before approaching the detail of the issue. (1) "Knows" and "known" are strong words. They mean considerably more than "believes" or "suspects" or even "strongly suspects" (per McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514 at 531; see also Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458 per Davies A-JA at 75259). (2) The "matter" must be known to the insured. (3) On one alternative, the "matter" must also be known to be relevant to the decision of the particular insurer whether to accept risk, and, if so, on what terms in this case, on the basis put forward, by Macquarie Underwriting. As Gummow and Hayne JJ said in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [70] : "Under the Act, attention is shifted from the prudent insurer to the particular insurer." Although their Honours were in dissent in the result, this statement is obviously correct. (See also Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd [1990] VR 919 ; (1989) 92 ALR 661.) (4) Relevance to the acceptance of the risk in the sense of the particular insurance hazard is required (McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [32] ). (5) In the other alternative, it must be found that a reasonable person in the circumstances could be expected to know that the matter was relevant to the decision of the particular insurer. There is some debate about the meaning of the words "the circumstances". Although they plainly mean the circumstances of the particular case, the debate is said to be between subjective and extrinsic circumstances (see the discussion in Mann P, Annotated Insurance Contracts Act (4 th ed, Lawbook Co, 2003), para 21.10.8). (6) There is a debate as to whether an insured can "know" a matter by its agent cf McHugh, Kirby and Callinan JJ at [30] with Gummow and Hayne JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [82] [89]. Pending further clarification by the High Court, the wider view should be taken following Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 per Powell JA at 610 611 (agreed with by Priestley JA and Clarke JA). (7) The obligation applies to renewal of a contract (s 11(9)(b)) ( Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353).
Case: Poseidon Ltd &amp; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
Outcome: cited
The next question is what loss flowed from the breach. The role of damages in a case such as the present is to place the wronged party in the position it would have been in if there had been no breach of duty, ie if correct and timely advice had been given. The defendants lost the benefit of that advice. They were never in the position of having the advantage of it. That much is clear. That amounts to a loss caused by the breach sufficient to complete the cause of action (if it is viewed as tort) ( Poseidon Ltd &amp; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 per Mason CJ, Dawson, Toohey and Gaudron JJ at 355 and Brennan J at 362 and 368).
Case: Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363
Outcome: cited
However, even if O 6 r 11(3) alone is considered and operates according to its terms, there is a real issue in this case as to the last step the effect of the limitation provisions. In Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648 it was pointed out that no new cause of action comes into being against the personal representative of a deceased tortfeasor the existing cause of action survives. In that case, time runs for limitation purposes from accrual of the cause of action against the deceased (see per Gibbs CJ, Murphy and Wilson JJ at 652; Mason J at 659). The same principle must be applicable in relation to a cause of action that survives for the benefit of the personal representation of the deceased estate, absent any special provisions. That principle applies to an action by a trustee in bankruptcy to enforce a liability of the bankrupt ( Re Mansell; Ex parte Norton (1892) 66 LT 245). The same principle should apply in the case of the assignment of a cause of action. The original cause of action remains the foundation of the action (although not directly applicable, see " The Jordan Nicolov" [1990] 2 Lloyds Reps 11 per Hobhouse J at 19; Lefevre v White [1990] 1 Lloyd's Reps 569 per Popplewell J at 577 citing Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363 per Lord Denning at 373; cf per Jacobs J in Re Harry Simpson &amp; Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 at 209. In the present case, the same causes of action have been pursued at all times.
Case: Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109
Outcome: cited
In my opinion, counsel for the defendants is correct in submitting that a Jones v Dunkel inference is also available because of the failure by Aon to call evidence from those involved in the negotiations for Macquarie Underwriting, particularly Stuart Coleman. The availability of a Jones v Dunkel inference in the case of a witness who is a third party can be a difficult issue. Macquarie and Aon are not in the "same camp" and Coleman is not under the control of Aon. In a sense, he was available to both parties. However, only the broker, Aon, had dealings with the potential insurer. The client was not, and would never be, directly in that loop. Between the parties here, it was natural for Aon rather than the defendants to call the evidence from those at Macquarie Underwriting who were involved in the dealings between Aon and Macquarie from the inception of business and in the subsequent management of the business including the proposed renewal. The failure to lead this evidence further buttresses the inference in favour of the defendants ( Payne v Parker [1976] 1 NSWLR 191 per Glass JA at 201 202; Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109 at 123; Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd [1989] FCA 275 ; (1989) 23 FCR 331 at 343 344; Ayoub v Euphoric Pty Ltd (2004) 12 BPR 22,735; [2004] NSWCA 457 per McClellan AJA at [62] [64]).
Case: Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 
Outcome: distinguished
One well established category where an assignment is valid (recognised by the authorities cited in Poulton 89 CLR 540 at 602) is an assignment of property, even though the property may be incapable of being recovered without litigation or, as it was put by Lord Roskill in Trendtex [1982] AC 679 at 703, where the cause of action is incidental to a right of property that has been acquired. There is no reason why such a cause of action could not include tort in an appropriate case eg detinue or conversion. However, based upon the submissions in this case, examples of the practical application of the principle are sparse. Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 was cited but the decision turned on what was held to be the assignment of a debt (37 FCR at 394 395). In Monk v Australian and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 there had been no assignment of the cheques that would have constituted the necessary property. In that case, Cohen J referred to the decision of Gault J in First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 where it was held (at 757) that the assignment of a debenture by a parent company to a subsidiary included an assignment of causes of action in tort against a receiver of the company that issued the debenture and that the causes of action in tort were ancillary to the assignment of the debenture and so valid. The effect of that decision is somewhat clouded by the subsequent appellate history of the case ( First City Corporation Ltd v Downsview Nominees Ltd [1990] 3 NZLR 265; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295) although the appeals did not turn upon the point in issue here.
Case: Re Harry Simpson &amp; Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 ; (1963) 81 WN (Pt 1) (NSW) 207
Outcome: cited
However, even if O 6 r 11(3) alone is considered and operates according to its terms, there is a real issue in this case as to the last step the effect of the limitation provisions. In Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648 it was pointed out that no new cause of action comes into being against the personal representative of a deceased tortfeasor the existing cause of action survives. In that case, time runs for limitation purposes from accrual of the cause of action against the deceased (see per Gibbs CJ, Murphy and Wilson JJ at 652; Mason J at 659). The same principle must be applicable in relation to a cause of action that survives for the benefit of the personal representation of the deceased estate, absent any special provisions. That principle applies to an action by a trustee in bankruptcy to enforce a liability of the bankrupt ( Re Mansell; Ex parte Norton (1892) 66 LT 245). The same principle should apply in the case of the assignment of a cause of action. The original cause of action remains the foundation of the action (although not directly applicable, see " The Jordan Nicolov" [1990] 2 Lloyds Reps 11 per Hobhouse J at 19; Lefevre v White [1990] 1 Lloyd's Reps 569 per Popplewell J at 577 citing Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363 per Lord Denning at 373; cf per Jacobs J in Re Harry Simpson &amp; Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 at 209. In the present case, the same causes of action have been pursued at all times.
Case: Re Mansell; Ex parte Norton (1892) 66 LT 245
Outcome: cited
However, even if O 6 r 11(3) alone is considered and operates according to its terms, there is a real issue in this case as to the last step the effect of the limitation provisions. In Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648 it was pointed out that no new cause of action comes into being against the personal representative of a deceased tortfeasor the existing cause of action survives. In that case, time runs for limitation purposes from accrual of the cause of action against the deceased (see per Gibbs CJ, Murphy and Wilson JJ at 652; Mason J at 659). The same principle must be applicable in relation to a cause of action that survives for the benefit of the personal representation of the deceased estate, absent any special provisions. That principle applies to an action by a trustee in bankruptcy to enforce a liability of the bankrupt ( Re Mansell; Ex parte Norton (1892) 66 LT 245). The same principle should apply in the case of the assignment of a cause of action. The original cause of action remains the foundation of the action (although not directly applicable, see " The Jordan Nicolov" [1990] 2 Lloyds Reps 11 per Hobhouse J at 19; Lefevre v White [1990] 1 Lloyd's Reps 569 per Popplewell J at 577 citing Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363 per Lord Denning at 373; cf per Jacobs J in Re Harry Simpson &amp; Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 at 209. In the present case, the same causes of action have been pursued at all times.
Case: Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267 
Outcome: cited
There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267.
Case: TBI Pty Ltd v Aon Financial Planning Ltd (2004) 13 ANZ Ins Cas 61-601 
Outcome: distinguished
Quantification of damages is a different matter. It has been said that the defendants have to establish that, absent the breach of duty, relevant cover would have been obtained, eg Ferrcom Pty Ltd v Inbush (NSW) Pty Ltd (1997) 9 ANZ Ins Cas 61-339 per Cole JA at 76732. That is so if full indemnity is to be awarded, cf Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1 per Mason, Wilson and Dawson JJ at 13. The position is different if less than full indemnity is considered. Reconstruction of what would have occurred if the correct advice had been given involves a hypothetical set of past circumstances. As explained in Malec v JC Hutton Pty Ltd [1990] HCA 20 ; (1990) 169 CLR 638 , particularly per Brennan and Dawson JJ at 639 640 and Deane, Gaudron, McHugh JJ at 642 643, this is not decided as if it were an assessment on the balance of probabilities as to whether an event did or did not happen. Furthermore, in considering this case, it is to be borne in mind that Aon prevented the posited situation occurring and that it, not the defendants, was the expert in the field. See, generally, Cee Bee Marine Ltd v Lombard Insurance Co Ltd [1990] 2 NZLR 1 at 5 6. The reconstruction of events in this case does not depend upon what the defendants would have done in a particular situation in the sense discussed by Buchanan JA in Crown Insurance Services Pty Ltd v National Mutual Life Association of Australasia Ltd (2005) 13 ANZ Ins Cas 61-659 at [9] [14]. It principally (but not entirely) depends upon the assessment as to what others would have done. It is to be noted that the discussion of this question by Ashley J in TBI Pty Ltd v Aon Financial Planning Ltd (2004) 13 ANZ Ins Cas 61-601 at [213] [218] was tentative obiter dicta.