The Court refused leave to join Lloyd's underwriters as defendants under s 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), holding that while the 'development valuation' exclusion in both the policy wording (s 7.2) and endorsement was at least arguably inapplicable — because the valuation was not of vacant land or land where improvements were to be demolished for redevelopment — the 'prudent lenders' exclusion in s 7.6 was unarguably engaged. The valuation failed to include a clause (or clauses of substantially similar effect) stating assumptions that the non-ADI lender had complied with its own lending guidelines, considered prudent credit risk aspects including the borrower's ability to service the loan, and was lending at a conservative and prudent loan-to-value ratio. The mere quotation of a policy endorsement capping LVR at 70% did not convey the required assumption, and a general expectation that the lender would be 'notionally subject to finance industry standards' fell well short of the model clause's requirements.
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