Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

regarded as under a professional duty to monitor the condition of leased premises and ensure they were kept in good repair, it is difficult to see that any professional duties were owed by the agent in respect of property management, a major component of the agent’s business.’ 351 His Honour also distinguished the case before him from the facts in GIO General Ltd v Newcastle City Council, which had led Kirby P to define professional services as the provision of ‘advice and services of a skilful character according to an established discipline’ . While that definition was appropriate in the context of a local government authority, a broader approach was necessary for a real estate agent who performed very few functions in the context of property management that would fall within that definition. ‘The question whether a breach of duty answers the description of a breach of a professional duty depends upon characterisation of the overall activity in the context of which the breach occurs, and is not answered by concentrating on the specific task which has not been performed or badly performed so as to give rise to liability. The relatively simple tasks of the council clerks the subject matter of the cases relied upon by the insurer were not part of the councils’ professional activities. The breaches by the agent’s employees in the present case, on the other hand, occurred in the course of carrying out the activity of property management, which in my opinion is to be regarded as a professional activity for the purposes of the policy of insurance.’ 352 Justice Nettle agreed that the breach of professional duty covered by the policy was intended to include tasks performed by the insured during its business as a real estate agent and the provision of its usual services to its clients. In his view, it was irrelevant that some of the property management services ‘may have demanded little in the way of intellectual activity or skill in performance. ’ 353 Justice Buchanan concluded the agent was entitled to policy cover in respect of its breach of a professional duty (Nettle JA and Hollingworth AJA agreeing), saying: ‘Given that the general principles of contractual construction apply as much to policies of insurance as to any other contract, the conception of “professionalism” within a given policy of insurance must always depend upon the business to which the policy relates and thus upon the “profession” which is in view.’ 354 In Weir Services Australia Pty Ltd v AXA Corporate Solutions Assurance, 355 the NSW Court of Appeal endorsed Nettle JA’s approach by looking at the whole of the activity as opposed to the particular task or step. The Court in Weir noted that: ‘If a solicitor’s clerk fails to serve a pleading within time and the client thereby suffers loss or damage, it is not to the point to say that the task of service is merely mechanical. Likewise, if a solicitor’s typist carelessly omits the word “not” at a vital point in a letter of advice, it is irrelevant that typing, viewed in isolation, is a routine activity requiring limited intellectual input. The fact is that, in each case, the missed step or imperfectly performed task is integral to the practice of the solicitor’s profession and undoubtedly forms part of the rendering of a professional service.’ 356 His Honour emphasised that the policy must be read as a whole:

351 Ibid 293. 352 Ibid 294. 353 Ibid 296. 354 Ibid 297. 355 (2018) 359 ALR 314. 356 Ibid [124].

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