Insurance and transport law : controlling insurance contract terms : Section 54 of the Insurance Contracts Act – compliance, recovery and accountability

Commonwealth legislation covering insurance contracts contains numerous provisions designed to control the operation and effect of terms in life and general insurance contracts. For example, the Life Insurance Act 1995 (Cth) contains provisions regulating the consequences attendant upon incorrect statements in proposals [1] and non-payment of premiums, [2] provides that an insurer may only exclude liability in the case of suicide if it has made express provision for such contingency in its policy, [3] and severely restricts the efficacy of conditions as to war risks. [4] The Insurance Contracts Act 1984 (Cth) is even more intrusive and has a major impact upon contractual provisions in the general insurance field. It is beyond the scope of this note to explore all of these provisions in any detail but examples of controls and constraints imposed upon the operation and effect of contractual provisions include the following. A party is precluded from relying upon a provision in a contract of insurance if such reliance would amount to a failure to act with the utmost good faith. [5] Similarly, a policy provision which requires differences or disputes arising out of the insurance to be submitted to arbitration is void, [6] unless the insurance is a genuine cover for excess of loss over and above another specified insurance. [7] Similarly clause such as conciliation clauses, [8] average clauses, [9] and unusual terms [10] are given qualified operation. [11] However the provision in the Insurance Contracts Act that has the greatest impact upon, and application to, a wide range of insurance clauses and claims is s 54. This section has already generated a significant volume of case law and is the focus of this note. In particular this note examines two recent cases. The first, Johnson v Triple C Furniture and Electrical Pty Ltd [2012] 2 Qd R 337, (hereafter the Triple C case), is a decision of the Queensland Court of Appeal; and the second, Matthew Maxwell v Highway Hauliers Pty Ltd [2013] WASCA 115, (hereafter the Highway Hauliers case), is a decision of the Court of Appeal in Western Australia. This latter decision is on appeal to the High Court of Australia. The note considers too the decision of the New South Wales Court of Appeal in Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2013] NSWCA 252 (hereafter the Prepaid Services case).These cases serve to highlight the complex nature of s 54 and its application, as well as the difficulty in achieving a balance between an insurer and an insured's reasonable expectations.

Higher fuel prices are associated with lower air pollution levels

Air pollution is a persistent problem in urban areas, and traffic emissions are a major cause of poor air quality. Policies to curb pollution levels often involve raising the price of using private vehicles, for example, congestion charges. We were interested in whether higher fuel prices were associated with decreased air pollution levels. We examined an association between diesel and petrol prices and four traffic-related pollutants in Brisbane from 2010 to 2013. We used a regression model and examined pollution levels up to 16 days after the price change. Higher diesel prices were associated with statistically significant short-term reductions in carbon monoxide and nitrogen oxides. Changes in petrol prices had no impact on air pollution. Raising diesel taxes in Australia could be justified as a public health measure. As raising taxes is politically unpopular, an alternative political approach would be to remove schemes that put a downward pressure on fuel prices, such as industry subsidies and shopping vouchers that give fuel discounts.

‘Hiring a Nashville sensation’ : using narrative learning to develop the problem solving skills of contract law students

This article discusses the design of interactive online activities that introduce problem solving skills to first year law students. They are structured around the narrative framework of ‘Ruby’s Music Festival’ where a young business entrepreneur encounters various issues when organising a music festival and students use a generic problem solving method to provide legal solutions. These online activities offer students the opportunity to obtain early formative feedback on their legal problem solving abilities prior to undertaking a later summative assessment task. The design of the activities around the Ruby narrative framework and the benefits of providing students with early formative feedback will be discussed.

Questions and Answers : Contract Law [5th ed.]

LexisNexis Questions & Answers - Contract Law provides an understanding of contract law and gives a clear and systematic approach to analysing and answering problem and exam questions. Each chapter commences with a summary of the relevant cases and identification of the key issues. Each question is followed by a suggested answer plan, a sample answer and comments on how the answer might be assessed by an examiner. The author also offers advice on common errors to avoid and practical hints and tips on how to achieve higher marks.

Choosing appropriate contract methods for design-build projects

For design-build (DB) projects, owners normally use lump sum and Guaranteed Maximum Price (GMP) as the major contract payment provisions. However, there was a lack of empirical studies to compare the project performance within different contract types and investigate how different project characteristics affect the owners’ selection of contract arrangement. Project information from Design-build Institute of America (DBIA) database was collected to reveal the statistical relationship between different project characteristics and contract types and to compare project performance between lump sum and GMP contract. The results show that lump sum is still the most frequently used contract method for DB projects, especially in the public sector. However, projects using GMP contract are more likely to have less schedule delay and cost overrun as compared to those with lump sum contract. The chi-square tests of cross tabulations reveal that project type, owner type, and procurement method affect the selection of contract types significantly. Civil infrastructure rather than industrial engineering project tends to use lump sum more frequently; and qualification-oriented contractor selection process resorts to GMP more often compared with cost-oriented process. The findings of this research contribute to the current body of knowledge concerning the effect of associated project characteristics on contract type selection. Overall, the results of this study provide empirical evidence from real DB projects that can be used by owners to select appropriate contract types and eventually improve future project performance.

Who gets the deposit when trustees for a bankrupt buyer disclaim a real estate contract?

The decision of Henry J in Majet v Goggin and Miller (as joint and several trustees of bankrupt estate of Brett-Hall) [2015] QSC 38 dealt with the fate of a deposit that was paid under a real estate contract that did not complete in unusual circumstances.

Exploring internal communication's impact on psychological contract currencies

Internal communication is a central process by which employees exchange information, build relationships and share organisational values. Fundamental to this process is the psychological contract. However, there is limited understanding of how internal communication influences psychological contract. The study contributes to theory by demonstrating that the dimensions of internal communication independently influence internal stakeholders' psychological contract beliefs. For managers, the findings can be used as a framework to improve internal communication processes and strategies.

Email negotiations form a binding land contract without a 'signature'

Email is rapidly replacing other forms of communication as the preferred means of communication between contracting parties. The recent decision of Stellard Pty Ltd v North Queensland Fuel Pty Ltd [2015] QSC 119 reinforces the judicial acceptance of email as an effective means of creating a binding agreement and the willingness to adopt a liberal concept of ‘signing’ in an electronic environment.

An agreement to negotiate a contract in good faith: No legal content and too uncertain for enforcement

The decision of Baldwin v Icon Energy Ltd [2015] QSC 12 is generally instructive upon the issue of the minimum required to enforce an agreement to negotiate .The language of these agreements is always couched in terms which include the expressions “good faith” and “reasonable endeavours” as descriptive of the yardstick of behaviour of each party in the intended negotiation to follow such an agreement. However, the mere statement of these intended characteristics of negotiation may not be sufficient to ensure that the agreement to negotiate is enforceable.

Insurance contract disclosure – an uncertain balance

This article canvasses recent case law adjudicating the uneasy disclosure balance between the interests of the insurer and the insured in the process of transacting an insurance contract. It examines also the consequences of non-disclosure and misrepresentation and whether the avowed legislative intent — that the liability of the insurer in respect of a claim is to be reduced to the amount that would place the insurer in the position it would have been had the non-disclosure or misrepresentation not occurred — is being achieved in practice. As there is no doubt as to who bears the onus of proof as to non-disclosure or misrepresentation it is surprising that insurers continue to flounder in this regard in relation to underwriting guidelines and adherence to them. The article reviews recent case law in this context and stresses that an insurer wishing to preserve its capacity to avoid liability on the basis that it would not have entered into a contract at all had the true situation been known to it must maintain detailed underwriting guidelines supported by consistent adherence to those guidelines. Recent case law also emphasises that the insurer must provide clear and cogent admissible evidence from appropriate personnel and officers of the company to discharge its onus.

Shariah perspective on marriage contract and practice in contemporary Muslim societies

Forced marriages are worldwide phenomena and also exist in Pakistani society. It involves the lack of free and full consent of at least one of the parties to a marriage. Mostly, females are victims of forced marriages. It is prevalent in the name of religion in many Muslim countries; however, it is purely a traditional and cultural phenomenon which has nothing to do with religion. Forced marriages are different from arranged marriages in which both parties freely consent to enter into marriage contract and they have no objection on the choice of partner selected by their parents. This study will highlights different forms of forced marriages in Pakistani society.

Infrastructure charges and residential land prices in Brisbane, Australia

This paper examines the question of whether the imposition of developer infrastructure charges on housing developers affects the price of residential land. Developer paid fees or charges are a commonly used mechanism for local governments to fund new infrastructure as a “user pays” method of funding new urban infrastructure. Some argue these costs are passed back to the original land owner by way of lower land prices. However, property developers claim these charges are added on to new land prices, with flow on negative impact to housing affordability. This paper presents the findings of a hedonic land price model that provides the first empirical evidence that infrastructure charges do increase residential land prices in Brisbane, Australia. This research is consistent with international findings and supports the proposition that developer paid infrastructure charges are over-passed to home buyers and are a significant contributor to reduced housing affordability.

The effect of ground leases on house prices in Helsinki

One imperfection in housing markets is imperfect knowledge about legal interests such as ground leases. Both actual reduced legal interest as well as uncertainty surrounding rights and future lease payments for houses constructed on leased land may affect prices relative to houses built on freehold land. We use regression analysis of sales prices of condominium transactions in Helsinki to examine the effect ground leases have on house prices. We find that prices on condominiums constructed on leased lots are discounted at least 5 %, on average. In addition, we see that the announcement of potentially large increases in base rents upon renewal contributes to the discount.

Analysis of the distribution of the number of bidders in construction contract auctions

The number of bidders, N, involved in a construction procurement auction is known to have an important effect on the value of the lowest bid and the mark up applied by bidders. In practice, for example, it is important for a bidder to have a good estimate of N when bidding for a current contract. One approach, instigated by Friedman in 1956, is to make such an estimate by statistical analysis and modelling. Since then, however, finding a suitable model for N has been an enduring problem for researchers and, despite intensive research activity in the subsequent thirty years little progress has been made - due principally to the absence of new ideas and perspectives. This paper resumes the debate by checking old assumptions, providing new evidence relating to concomitant variables and proposing a new model. In doing this and in order to assure universality, a novel approach is developed and tested by using a unique set of twelve construction tender databases from four continents. This shows the new model provides a significant advancement on previous versions. Several new research questions are also posed and other approaches identified for future study.

Quick abnormal-bid-detection method for construction contract auctions

Non-competitive bids have recently become a major concern in both Public and Private sector construction contract auctions. Consequently, several models have been developed to help identify bidders potentially involved in collusive practices. However, most of these models require complex calculations and extensive information that is difficult to obtain. The aim of this paper is to utilize recent developments for detecting abnormal bids in capped auctions (auctions with an upper bid limit set by the auctioner) and extend them to the more conventional uncapped auctions (where no such limits are set). To accomplish this, a new method is developed for estimating the values of bid distribution supports by using the solution to what has become known as the German tank problem. The model is then demonstrated and tested on a sample of real construction bid data and shown to detect cover bids with high accuracy. This work contributes to an improved understanding of abnormal bid behavior as an aid to detecting and monitoring potential collusive bid practices.