Construction Law Review

Construction Law Review – May

Please refer below to our Construction Law Review, selected from AR Conolly’s Daily Bulletins covering Insurance, Banking, Construction & Government.

Pennsylvania Manufacturers’ Association Insurance Company v. Johnson Matthey, Inc No 330 M.D. 2015
Commonwealth Court of Pennsylvania
Colins, Senior Judge
Insurance – environmental contamination – Pennsylvania Manufacturers’ Association Insurance Company (insurer) filed petition for review against company (JMI) and Pennsylvania Department of Environmental Protection (DEP) – insurer sought declaratory judgment it was not obliged to defend or indemnify JMI concerning DEP’s lawsuit against JMI in which DEP sought costs of environmental contamination cleanup – insurer sought summary relief – identification of ‘appropriate trigger of coverage’ – construction of insurance contract – whether facts alleged in DEP’s lawsuit could trigger coverage under policies – whether insurance policy an ‘occurrence’ policy or ‘claims made’ policy – ‘first manifestation of the injury’ – held: environmental contamination claims fell within exception to first manifestation rule – policies were triggered ‘if undetected environmental contamination occurred during the policy period’ – insurer did not show contamination did not occur in policy periods or first manifested before policy periods – insurer not entitled to a declaratory judgment it had no obligation to defend or indemnify JMI – summary relief refused.
Pennsylvania Manufacturers’ Association

Australian Securities and Investments Commission, in the matter of NSG Services Pty Ltd v NSG Services Pty Ltd [2017] FCA 345
Federal Court of Australia
Moshinsky J
Corporations – financial advice – life risk insurance and superannuation products – defendant (NSG) provided financial services advice – Australian Securities and Investments Commission (ASIC) contended NSG’s representatives failed to comply with ss961B & 961G Corporations Act 2001 (Cth) concerning provision of personal advice to clients, and that NSG contravened s961L by failing to take reasonable steps to ensure representatives complied – ASIC also alleged NSG breached s961K in respect of unauthorised representatives’ breaches of ss961B & 961G – requirement of compliance with ‘Future of Financial Advice Reforms’ – Corporations Amendment (Further Future of Financial Advice Measures) Act 2012 (Cth) – ‘best interests’ duty – requirement that providers ‘provide advice that is appropriate to the retail client’ – held: NSG accepted it contravened relevant provisions – parties forwarded agreed minutes of proposed declarations and prepared agreed statement of facts – Court satisfied to make declarations ‘substantially in the terms’ of minutes of proposed declarations – declarations made.
Australian Securities and Investments Commission

Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd; Guan v Linfield Developments Pty Ltd [2017] NSWCA 99
Court of Appeal of New South Wales
McColl, Ward & Gleeson JJA
Contract – specific performance – appeals arising from disputes concerning acquisition of land by Shuangxing Development Pty Ltd (SXG) – Linfield sought to enforce a call option contained in development agreement – SXG was in administration – SXG agreed to purchase land and entered development agreement with third party – development agreement contained call option in Linfield’s favour – event of default occurred – Linfield called for land under option – Australia Capital Financial Management Pty Limited (ACFM) claimed its interest as equitable mortgagee had priority over Linfield’s interest in respect of call option – primary judge found in favour of Linfield – ACFM, and Ms Guan, who controlled SXG at time of purchase of land and various companies which guaranteed SXG’s obligations, appealed – date on which Linfield’s equitable interest arose – whether primary judge erroneously drew adverse inferences resulting in denial of procedural fairness – whether ACFM engaged in disentitling conduct – time of assessment of allegedly penal nature of call option – use of expert evidence – whether call option unenforceable – whether SXG entitled to relief against forfeiture – held: ACFM’s appeal allowed in part – Ms Guan’s appeal dismissed.
Australia Capital Financial Management

AAI Ltd t/as Vero Insurance v Kalnin Corporation Pty Ltd; Kalnin Corporation Pty Ltd v AAI Ltd t/as Vero Insurance [2017] NSWSC 548
Supreme Court of New South Wales
Stevenson J
Contract – insurance – second defendant was director of first defendant – second defendant owned property he used as storage facility which he decided to develop through first defendant – first defendant obtained development consent for construction of residential complex – first defendant engaged a builder to carry out development – builder applied to plaintiff for certification as eligible to obtain statutory home warranty insurance and insurance policy – plaintiff required defendants to execute an indemnity – second defendant executed indemnity on own and first defendant’s behalf – following completion of project, owners corporation notified plaintiff of allegedly defective work – owners corporation made claim for indemnity under policy – plaintiff was liable to indemnify for ‘structural defects’ as defined in Home Building Act 1989 (NSW) – plaintiff paid amount for remedial works – plaintiff sought to recover the amount from defendants – held: plaintiff failed to satisfy condition precedent to notify defendants ‘promptly of the proposed settlement’ of claim by owners corporation – this failure was sufficient to dispose of plaintiff’s claim – plaintiff invited to make further submissions as to evidence that payments it made were for structural defects resulting from builder’s acts or omissions.

Comcare v Wuth [2017] FCA 433
Federal Court of Australia
Rares J
Workers’ compensation – Comcare appealed against decision of Administrative Appeals Tribunal that Comcare was liable to pay respondent compensation under s24 Safety, Rehabilitation and Compensation Act 1988 (Cth) for ‘chronic migrainous headaches’, non-economic loss, and on basis degree of permanent impairment was 14% – respondent cross-appealed, contending Tribunal erred in construing s8 in calculating normal weekly earnings – whether misconstruction of Ch 18 of AMA Guides – whether erroneous usage of ‘clinical judgment’ impairment evaluation method – whether denial of procedural fairness – held: Comcare’s grounds of appeal failed – Tribunal erred in calculation of normal weekly earnings – appeal dismissed – cross-appeal allowed.


Angus Developments Pty Limited v Kim [2017] NSWSC 584
Supreme Court of New South Wales
Pembroke J
Contract – contractual construction – plaintiff (as developer) and defendants (as land owner) entered development agreements – separate question – whether, on agreement’s proper construction, defendants not obliged to sell parcel until ‘Development Consent’, as defined in agreement, had been obtained – timing of sale – memorandum of understanding – held: separate question answered in plaintiff’s favour – separate question in favour of plaintiff – clauses of agreement not subject to condition precedent that plaintiff obtain Development Consent under agreement.
Angus Developments