La Trobe v ACE Insurance [2008] NSWSC 1303

This involved a lender seeking to recover from a negligent valuer’s professional indemnity insurer. The Lender claimed that REA valuers in providing a valuation to the Lender used by the Lender for the purposes of granting a loan, acted negligently, was misleading or deceptive in breach of s 52 of the Trade Practices Act and was in breach of contract.

ACE Insurers submitted that the alleged cause of action occurred prior to the period of insurance. Hislop J relying on the High Court case of Kenny & Good v MGICA (1992) Pty Limited [1999] HCA 25 held that the cause of action arose when the mortgagor defaulted, and not on the date of advance. His Honour also noted that it was arguable that the loss was not reasonably ascertainable until the property was passed in or when a subsequent valuation from an independent valuer was obtained.

ACE contended insufficient notification of the claim had been given. However the court held that, as a result of a letter sent to the valuer and various communications between the parties referring to disclosure being made to ACE, it was arguable that, during the period of insurance, the claim was made. His Honour granted leave to the Lender to commence proceedings against ACE.

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