Flanagan v Bernasconi [2023] NSWCA 150

Flanagan v Bernasconi [2023] NSWCA 150

The appeal failed because Dr Flanagan did not establish that the policy she would have obtained but for the broker's breach would have responded to the pool damage. The hydrostatic valves were probably defective and did not function as designed, so a CGU or like policy's exclusion for accidental damage caused by "a defect in an item" would have applied; the phrase was not limited to defects present from the outset. In any event, Dr Flanagan was on notice of the risk of the pool lifting, had only been advised that the pool could be emptied, serviced and refilled, left it empty for financial reasons without investigating the leak or taking simple precautions, and thereby failed to comply...

Jurisdiction
Australia
Judgment Date
04 July 2023
Procedural Posture
Appeal and Cross Appeal in Professional Negligence Proceedings Against an Insurance Broker and Brokerage / Court of Appeal From Supreme Court of New South Wales, Common Law Decision [2022] NSWSC 381
Outcome
Appeal dismissed; cross-appeal dismissed; appellant/cross-respondent ordered to pay the cross-appellants/respondents' costs of the appeal and cross-appeal.
Legal Topics
['insurance Broker Duty of Care' 'causation' 'insurance Policy Exclusions' 'defect in an Item Exclusion' 'reasonable Precautions Condition' 'onus of Proof']
['negligence' 'professional Negligence' 'insurance Law' 'contract Interpretation'] ['insurance Broker Duty of Care' 'causation' 'insurance Policy Exclusions' 'defect in an Item Exclusion' 'reasonable Precautions Condition' 'onus of Proof']

Case Brief

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Procedural Posture

Appeal and Cross Appeal in Professional Negligence Proceedings Against an Insurance Broker and Brokerage / Court of Appeal From Supreme Court of New South Wales, Common Law Decision [2022] NSWSC 381

Legal Issues

  1. 1 ["Whether Dr Flanagan bore the onus of proving that, but for the broker's breach, she would have obtained a policy that would have responded to her claim, including that relevant exclusions would not apply." 'Whether the primary judge erred in finding that a policy such as the CGU policy would not have covered the damage because of an exclusion for accidental damage or loss caused by a defect in an item.' 'Whether the phrase "defect in an item" was limited to a defect present from the outset or extended to hydrostatic valves which did not function as designed.' 'Whether the primary judge erred in finding that Dr Flanagan failed to take reasonable precautions to prevent a claim by leaving the pool empty without investigating the leak or refilling it.' "Whether it was necessary to determine the respondents' cross-appeal challenging findings that Dr Flanagan would have taken out alternative cover and that an available alternative insurer would have paid the claim."]

Ratio Decidendi

The appeal failed because Dr Flanagan did not establish that the policy she would have obtained but for the broker's breach would have responded to the pool damage. The hydrostatic valves were probably defective and did not function as designed, so a CGU or like policy's exclusion for accidental damage caused by "a defect in an item" would have applied; the phrase was not limited to defects present from the outset. In any event, Dr Flanagan was on notice of the risk of the pool lifting, had only been advised that the pool could be emptied, serviced and refilled, left it empty for financial reasons without investigating the leak or taking simple precautions, and thereby failed to comply...

Court Disposition

Appeal dismissed; cross-appeal dismissed; appellant/cross-respondent ordered to pay the cross-appellants/respondents' costs of the appeal and cross-appeal.

Orders

  • ['The appeal is dismissed.' 'The cross-appeal is dismissed.' "The appellant/cross-respondent is to pay the cross-appellants/respondents' costs of the appeal and cross-appeal."]