BNY Trust v MMJ Real Estate [2018] NSWSC 1938

So what does the exclusion clause exclude?  

A lender relied on valuations in advancing money. The loans were defaulted on. The lender tried, and failed, to sell the property to satisfy the outstanding sum.  

The lender then sued the valuers. The valuers cross-claimed against their insurer.  The insurer attempted to rely on an exclusion clause set out at [6].   

The clause excused the insurer from paying out to the valuers if the loss was caused by a valuation being given lender who was not an ADTI supervised by APRA *and* if the valuation agreement did not include a certain “prudent lender” clause.  

The issue was: the lender was not an ADTI supervised by APRA, and the agreement did not include the prudent lender clause, *but* the absence of the clause did not cause the loss!  

The insurer said: the mere absence of the clause means we don’t have to pay: [12].  

The insureds said: the absence of the clause did not cause the loss. It was caused by something else. So you *do* have to pay: [13]  

The Court agreed with the insureds: [23].  An element of its reasoning was that the policy had retrospective effect, reaching back to a time before APRA even existed: [33].  

And so: what did this exclusion clause exclude? Not this particular claim.