BANK OF QUEENSLAND LTD V AIG AUSTRALIA LTD

[2018] NSWSC 1689, New South Wales Supreme Court, Stevenson J, 6 November 2018

Insurance (liability) - Aggregation - Deductible to be borne for each claim - Whether claims were to be aggregated into a single claim

The Bank, through an intermediary, DDH, operated Money Market Deposit Accounts (MMDAs) for its clients. 192 clients had appointed SFP as their financial planner, and SFP through DDH arranged MMDAs for those clients. Between March 2004 to January 2013 funds were withdrawn from the MMDAs by SFP without proper client authorisation. In February 2013 SFP went into liquidation. The 192 account holders sought to recover their losses from the Bank, alleging that funds had been released on the strength of emails and suspicious activity had not been investigated. The account holders formed a Group for the purposes of representative proceedings, and each signed a "Class Member Registration Form" setting out the various transgressions of the Bank and seeking compensation. A settlement was reached in May 2018 under which each of the Bank and DDH was to pay AUS$6 million to the Group. The Bank's liability policy had a deductible of AUS$2 million for "each and every claim". A "Claim" was defined as either: "(i) any suit or proceeding … brought by any person against an Insured"; or "(ii) any … demand from any person that it is the intention of the person to hold and insured responsible for the results of any specified Wrongful Act". The term "Wrongful Act" meant "any act or error or breach of duty or omission or conduct". Finally, there was an aggregation clause under which all "Claims arising out of, based upon or attributable to one or a series of related Wrongful Acts" were deemed to be a single claim.