Murphy & Allen v SwinbankSwinbank v Cleary [1999] NSWSC 934

Murphy & Allen v SwinbankSwinbank v Cleary [1999] NSWSC 934

The dishonesty exclusion is triggered as Cleary & Hoare, particularly Mr Cleary (and Mr Scanlan by reckless omission), deliberately failed to disclose or concealed knowledge or their suspicions regarding the involvement and interest of the Lews in the Equity Sharing Agreements and systematically omitted reference to material facts in solicitor's certificates intended for the trust’s protection, causing the loss. This failure to disclose, and the provision of deliberately false or incomplete solicitor's certificates, constitutes dishonesty within the meaning of the relevant exclusion clause, as determined by an objective standard of honesty expected of solicitors, and is not limited only...

Jurisdiction
Australia
Judgment Date
24 September 1999
Procedural Posture
Civil (equity Division, Commercial List) / Final Judgment – Orders to Be Brought in (short Minutes)
Outcome
Trustees' claims for indemnity under the 1989/90, 1990/91, and 1991/92 insurance policies fail; Orders to be brought in (Short Minutes). Insurers not liable to indemnify. The $500,000 payment cross-claim by insurers against Trustees is dismissed.
Legal Topics
['professional Indemnity Insurance' 'solicitor Duties' 'dishonesty Exclusion' 'known Claims or Claims Circumstances Exclusion' 'breach of Fiduciary Duty' 'notification Under Insurance Policies']
['insurance Law' 'professional Negligence' 'equity Trusts and Trustees'] ['professional Indemnity Insurance' 'solicitor Duties' 'dishonesty Exclusion' 'known Claims or Claims Circumstances Exclusion' 'breach of Fiduciary Duty' 'notification Under Insurance Policies']

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Procedural Posture

Civil (equity Division, Commercial List) / Final Judgment – Orders to Be Brought in (short Minutes)

Legal Issues

  1. 1 ['Whether the dishonesty exclusion in professional indemnity insurance precludes indemnity for Cleary & Hoare for judgment debts arising from the PMA1 and PMA2 transactions;' 'Whether the known claims or claims circumstances exclusion applies;' 'Whether there is one contract or several contracts of insurance and the implications for multiple insureds;' 'Whether there were one or two claims under the insurance policies relating to PMA1 and PMA2;' 'Whether the application of sections of the Insurance Contracts Act 1984 (Cth) alters the outcome.']

Ratio Decidendi

The dishonesty exclusion is triggered as Cleary & Hoare, particularly Mr Cleary (and Mr Scanlan by reckless omission), deliberately failed to disclose or concealed knowledge or their suspicions regarding the involvement and interest of the Lews in the Equity Sharing Agreements and systematically omitted reference to material facts in solicitor's certificates intended for the trust’s protection, causing the loss. This failure to disclose, and the provision of deliberately false or incomplete solicitor's certificates, constitutes dishonesty within the meaning of the relevant exclusion clause, as determined by an objective standard of honesty expected of solicitors, and is not limited only...

Court Disposition

Trustees' claims for indemnity under the 1989/90, 1990/91, and 1991/92 insurance policies fail; Orders to be brought in (Short Minutes). Insurers not liable to indemnify. The $500,000 payment cross-claim by insurers against Trustees is dismissed.

Orders

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