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September 2014 Presidents column

AILA grieves strong supporter’s death

AILA lost a friend and a firm supporter when Tasmania's 27th Governor, Peter Underwood, died on July 7, aged 76, after surgery complications.

Mr Underwood was farewelled at a state funeral in Hobart.

He is fondly remembered by AILA members, in particular those in Tasmania, having been a strong supporter of the association throughout his lengthy legal career.

Mr Underwood spoke at national conferences hosted by the island state, most recently opening the 2012 conference, Devil of a Time.

In 2004, the then Justice Underwood delivered a paper for AILA entitled, “Is Miss Donohue’s snail in mortal peril?”

The paper covered his views on state and territory legislatures’ “hasty and ill-advised responses to the perceived liability crisis”. This year’s Geoff Masel memorial lecture, by SA Supreme Court Justice Kevin Nicholson, has explored that same theme a decade on and his sentiments are similar (see lead story).

Mr Underwood was made a Supreme Court judge in 1984 and promoted to Chief Justice in 2004. He became Governor of Tasmania in 2008.

Antarctic litigation ends

The lead story in the March issue of Resolve covered the Federal Court litigation that ultimately found Vero was not liable to indemnify the Federal Government for damages and remediation costs from an oil spill in Antarctica.

Federal Court Justice David Yates had found the Federal Government was uninsured for remediation costs from the 1999 fuel spill of about 2,300 litres at Casey Base.

Vero had issued an ultimate net loss policy (for excess of in-house retention) on July 13, 1999, with the insured noted as the Commonwealth of Australia through its self-managed fund, Comcover.

Justice Yates had agreed with Vero that land damage was not covered by the policy.

When the case went to appeal before the full bench of the Federal Court, two judges ruled in Vero’s favour but the third wrote a dissenting judgement. The Federal Government sought leave to appeal to the High Court, but in June the High Court decided against hearing the case.

Great Southern settles

In the June issue, I mentioned that the High Court had not yet heard the special leave application in the Great Southern case (Moore v Chubb).

Because of the potential ramifications for the industry, stakeholders were keenly awaiting a High Court decision on whether it would hear the appeal and, if so, whether it would follow the NZ Supreme Court’s lead in Bridgecorp.

However, industry newsletter Cover Note’s July 10 issue reported the parties had reached a conditional settlement. McInnes Wilson Lawyers principal Mylton Burns told Cover Note: "If the conditions are satisfied, the High Court special leave application will not proceed."

He said that meant the Australian position on s6 of the NSW Law Reform (Miscellaneous Provisions) Act and equivalent ACT and NT law provisions would remain, enabling directors to use D&O policies to fund defences.

That should mean status quo remains, with the Bridgecorp decision applying only across the Tasman.

Class action resolved

A settlement has also been reached in the long-running class action litigation over Victoria's Black Saturday bushfires. Claimants will receive almost $500 million.

The Guardian reported lead plaintiff Carol Matthews and an estimated 10,000 members claimed energy provider SPI Electricity’s faulty equipment ignited the Kilmore East/King Lake bushfire in February 2009.

SP AusNet, registered as SPI Electricity, and other parties agreed to settle the action in July. The fire killed 119 people, destroyed 1,200 homes and caused an estimated $1billion of damage.

SP AusNet said the settlement was reached without admission of liability by it or any other party.

The group also sued Utility Services Corporation Ltd, which was contracted by SP AusNet to maintain the line, and Victoria’s Department of Sustainability and Environment for allegedly failing to reduce fuel loads. The parties and their insurers will share the settlement.

Interim FSI report released

The Financial System Inquiry released its interim report on July 15.

The report sets out the committee’s views on the objectives of the financial system and the principles that should guide its development. It discusses the financial system from nine perspectives and makes 28 observations on how the system currently works. For each observation, it sets out a range of options for change, including the option of no change.

The document is highly relevant to our industry and I urge members to read it and consider participating in the ongoing process of analysis, which will culminate in a final report in November.

Add par for ozpres.law.doc 25/8/14

Congratulations Michael Gill

Congratulations to AIDA president and AILA founding father Michael Gill, who was a very deserving winner of a lifetime achievement award at the ANZIIF-Asia Insurance Review annual industry awards on August 20.

The award recognises individuals who have made significant contributions to advancing, promoting and improving the standing and development of the industry over their careers.

Michael’s achievements are many and I’d like to add my pat on the back to him for a job well done.



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