FEDERAL COURT OF AUSTRALIA

AON Risk Services Australia Limited v Lumley General Insurance Limited [2005] FCA 133

CORRIGENDUM

AON RISK SERVICES AUSTRALIA LIMITED V LUMLEY GENERAL INSURANCE LIMITED

N 550 OF 2003

CONTI J

25 FEBRUARY 2005 (CORRIGENDUM 9 MARCH 2005)

SYDNEY

CORRIGENDUM

In the judgment of Justice Conti delivered 25 February 2005 please make the following amendment:

Paragraph 159, in the third sentence from the end of the paragraph beginning with ‘These issues are also tied up with’, inside the parentheses:

Please remove the words ‘handwritten page’ from within the parentheses so that the paragraph now reads:

‘Mr Bailey’s testimony was to the effect that at least by January 2002, SLE was not earning enough premium income from the Hostpak Scheme, although no detail, much less financial documentation, was placed in evidence by SLE in that regard.  The implications of that testimony are equivocal, in the sense that it was unclear whether the level of income the subject of concern to Lumley was gross premium income, or excess of premium income over claims paid out.  SLE was said by Mr Bailey to be in any event not troubled by the levels of risk, but needed additional income generally, and hence the alleged commercial reason why SLE was said not to have agreed to an increase in the maximum deductible up to $5000, because ‘at higher levels of deductible’, less business would be underwritten, and that would defeat the object of commensurate increases in premium rates.  Lumley accepted of course that there was no doubt that the Hostpak Scheme’s ‘automatic binder’ was varied in January 2002, with SLE allowing AON to write risks for deductibles of up to $2500; above $2500 however, it was Lumley’s case that AON did not have authority to bind cover under the bordereau scheme.  Consequently, so Lumley concluded, deductibles could only be agreed between SLE and AON by way of ‘ordinary offer and acceptance’, in other words on a case by case basis.  The applicants’ offer and acceptance case purportedly reflected an offer by Lumley through Ms Prasad of a premium based on .22% gross in relation to the Parkview, and Ms Prasad’s ostensible authority to have so made that offer resolved further debate or dispute on the acceptability to SLE of that .22% gross rate.  These issues are also tied up with the subject of Lumley’s (very lengthy) thirteenth submission, which I will shortly address.  What Lumley sought to do, by raising this issue as to the authority of AON to conclude the underwriting of the Parkview, was to obviate at the threshold the factual issues tendered by the applicants as set out in [43]-[45] above.  In the light of Ms Meyer’s handwritten notes at the foot of her email of 9 January 2002 to Mr Edwards of AON, and Ms Meyer’s attribution of the source of that information to Mr Bailey, Lumley was seemingly driven to raising this issue as to Mr Carr’s lack of authority.’

Associate:

Date:                9 March 2005