Key Nominees Pty Limited v Ace Insurance Limited [2008] NSWDC 62

Reported Decision : 6 DCLR (NSW) 357

New South Wales District Court

CITATION: Key Nominees Pty Limited v Ace Insurance Limited [2008] NSWDC 62

HEARING DATE(S): 8 February 2008

JUDGMENT DATE: 5 March 2008

JURISDICTION: District Court - Civil Jurisdiction

JUDGMENT OF: Johnstone DCJ at 1

DECISION: 1. The balance of the proceedings are to go to trial. 2. The defendant is to pay the plaintiff's costs of the separate question, on the ordinary basis.

CATCHWORDS: PROFESSIONAL NEGLIGENCE - negligent valuation of property taken as security by lender which exercised its power of sale and sold the property at public auction - the net proceeds were insufficient to meet the borrower's indebtedness - claim for shortfall brought by lender directly against the insurer under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 - whether the policy responded was dependent on the date the cause of action arose - a breach of duty causing a person to enter into a disadvantageous transaction that comprises a mere risk of economic loss does not give rise to a cause of action at the time of the transaction, and a cause of action will only accrue at a later time if actual loss materialises or eventuates - whether the contingent loss became actual at the time of the borrower's default, or at the time of auction when the shortfall crystallised

LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1946: s 6

Hawkins v Clayton (1988) 164 CLR 539 at 601 CASES CITED: Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) CLR 414 NSW Aboriginal Land Council v Ace Global Markets Ltd [2005] NSWSC 39 Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514