Australian Legal System and Business Law - Assignment Example

Business Law Name: Lecturer: Course: Date: Question 1: Australian legal system Outline In a recent civil litigation case about accident compensation, a company called Ellis Management Services Pty Ltd had appealed against a decision of a court that had ruled in favour of Eric Ross Taylor, who worked for the company. Taylor was granted leave to start proceedings for pain and suffering damages under section 134AB (16)(b) of the AC Act. He had sustained ulnar dysfunction injuries at the right elbow in the course of his employment at the company. His application had been heard in the County Court by Judge Parrish on 22, 26 and 28 November 20121. The Victorian Supreme Court judges dismissed the company’s appeal2. Experiences at the Court The court was made of two judges. The judges sat at a high bench in front of the court room. The judges controlled the courtroom. The public sat at the back of the courtroom within the public gallery. Representatives of the Office of the Director of Public Prosecution were also present. A barrister was also present wearing robes. The instructing clerk was also present in the court. The appellants or the applicants sat on the left hand side of the bar table. The court hearing took place between 10.15am to 4.15 pm. The hearing started when the judge’s associate who sat before the judges’ bench called the names of the matter. All parties in the case stood to speak. When addressing the judges, those speaking referred to them using the title “your honour” and “your honours” while addressing both judges. When the hearing began, each party stated their name. The lawyer representing the applicant was first called to make his submission before sitting down at the bar table. The lawyer representing the respondent (Taylor) then made his submission. On various occasions, the appellant was given an opportunity to make further submission in response. This was however limited to responding to such matters that had been claimed by the other party. In cases of adjournment, every person present in the courtroom stood up when the judges left the courtroom. When the judges returned to the courtroom, the instructing clerk informed everyone to stand until asked to be seated. After the ruling had been made, everyone left the courtroom quietly. Issue The central legal issue of the case is whether the trial court had depended on loss of earning capacity consequences to grant Taylor the leave, and whether the consequences that the injury that Taylor had sustained in the course of his employment actually met considerable threshold test. Relevant Law In applying for the appeal, Ellis Management Services relied on circumstances where Taylor had earlier on sought leave in compliance with section 134AB(17) of the Accident Compensation Act 1985 in order to bring proceedings to recover compensation for ‘pain and suffering” but however failed to request for leave to recover compensation for “loss of earning capacity3.” The company further relied on case law Advanced Wire & Cable Pty Ltd v Abdulle to protest against a ruling of the trial court on whether a worker who had loss of earning capacity could meet the considerable test as well as whether 40 percent injury to a plaintiff as provided for by section 134AB(38)(e) of the Accident Compensation Act 1985 called for entitlement to damages for pain and suffering4. Application The company argued that the trial court’s ruling had resulted from an error in assessing whether it was appropriate to grant leave when he relied on several prospective employments. The company also argued that the injury that Taylor has sustained did not meet the test for “serious injury” as stipulated in section 134AB(38)(b) of the Accident Compensation Act 1985. The company further argued that the trial court had not considered evidence demonstrating that the respondent still had the capacity to work, be employed and to earn similar income he had earned before the injury. Earlier, in applying for compensation, Taylor had relied on the injury he had got while working for the company. He had also made the application in consideration to pain and suffering damages on claims that the injury was in line with the description of serious injury under section 134AB(37) of the Accident Compensation Act 1985. The court had granted Taylor the leave pursuant to section 134AB(16)(b) of the Accident Compensation Act 1985 (Vic)5. Conclusion The judges of the Supreme Court (Judge Beach and Judge Osborn) rejected the application for appeal by Ellis Management Services on grounds that the ruling of the trial court was not an error as claimed by the company. Question 1: Insurance Issue The central legal issue is whether Brett breached the doctrine of utmost good faith and whether his claims are fraudulent claims. Relevant Law The doctrine of utmost good faith is a common law principle that specifies that each party entering into a contract of insurance maintains legal obligation to act with utmost good faith. The duty of good faith is a mutual responsibility between the insured and the insurer. Each individual must therefore be honest as well as make accurate information with regard to making the insurance contract. The insured therefore has the responsibility to act with good faith in the entire contract with the insurer6. In which case, fraudulent claims refer to breach of duty of good faith with regard to making claims that arise when a claim is brought for an item that has not been lost or when a false statement is made that relates to the circumstances that lead to a loss or to what happened after the loss7. Therefore, an insured would lose the right to claim an item in instances where they have knowingly made false statement or statements of loss as well as the right to part of the claim that was sustained under additional policies. A false statement gives the insurer the right to decline a claim by the insurer despite of whether the insurer would in due course find out the truth8. What will constitute bad faith is dependent on the circumstances of the case. In most cases, courts will often be willing to look at the conduct of the insurer and the insured throughout the process of the claim to establish whether with regard to the circumstances, the insured or the insurer acted in utmost good faith. In practice, bad faith is a separate tor that demands proof of systematic and outrageous insurance fraud9. A false statement must therefore link to any aspect of claim as well as one made with the insured’s knowledge, or made recklessly with no regard to whether it is true of false. Such facts were established in the case law Andrusiw v. Aetna Life Insurance Co. of Canada where the insured had suffered stroke and made clams for disability benefits, later the insurer made discovery that the insured had been working, and therefore the insurer terminated the benefits10. The court found that the insured had lied as he was not totally disabled in order to continue receiving benefits. In the case Haiduc v. Alberta Motor Assn. Insurance Co., the matter concerned an action for coverage of stolen car where the insurer had counterclaimed for punitive damages11. The court held that the insured had made false statements in respect to the claim and hence dismissed the insured’s action. Application In the present case scenario, Brett insured his father’s life for $500,000 that was to be payable when his father died. However, Brett misstated his father’s age to be 49 instead of 45. Bret knowingly made the statement of age. The age is in this case relates to the circumstances of the death of his father. The false statement therefore links to any aspect of claim as well as one made with the insured’s knowledge, or made recklessly with no regard to whether it is true or false. In addition, Brett should have insured his father against accidental death, which insured his father from death due to accident. In which case, if there was proof that his father had contracted HIV/AIDS, then Brett cannot be paid the claims. Conclusion Brett cannot made successful claims from the insurer since the false statement gives the insurer the right to decline the claim. References Anon (n.d.). The Mutual Duty of Good faith. retrieved: Austlii (2013). Accident Compensation Act 1985. retrieved: CIS (2013). Utmost Good Faith. Retrieved: MVPLaw (2013). The Basics of Bad Faith. retrieved: Case Laws Advanced Wire & Cable Pty Ltd v Abdulle [2009] VSCA 170 Andrusiw v. Aetna Life Insurance Co. of Canada (2001), 33 C.C.L.I. (3d) 238 Haiduc v. Alberta Motor Assn. Insurance Co. (2003), 47 C.C.L.I. (3d) 104 Taylor v Ellis Management Services Pty Ltd [2012] VCC 1864 Read More