A court has underlined the binding powers of Australian Financial Complaints Authority (AFCA) decisions, finally ending a woman’s fight for a payout after her insurer rejected a claim for thousands of dollars of stolen jewellery. 

In summarily dismissing Hulya Ofli’s lawsuit against Insurance Manufacturers of Australia, the Victorian Supreme Court found the claimant had earlier accepted a complaints authority decision partially in favour of the insurer, meaning her subsequent legal bid could have no prospect of success. 

“Once a complaint is made to AFCA, the AFCA rules form a contract between the complainant, AFCA and the financial services firm,” Associate Justice Catherine Gobbo said in her April 5 judgment. “AFCA’s determination of the complaint is final and binding on both parties if accepted by the complainant.” 

Ms Ofli went to AFCA after lodging a claim on her RACV Insurance policy for a break-in at her home in Westmeadows, Victoria, in April 2021. Among the items she had claimed for was a white gold and diamond ring valued at $23,000, a $6000 drone, a $4200 gold and diamond bracelet, and 22 other gold bracelets. 

The insurer denied the claim on the grounds it was fraudulent. It said Ms Ofli failed to show the items were owned by her, and questioned whether the break-in happened as described. Ms Ofli disputed this and, through AFCA, sought cover for the items and property damage, plus compensation for mental harm and distress due to the insurer’s allegations. 

AFCA found no evidence of fraud and rejected any suggestion the break-in was staged. But it said there were “legitimate concerns” about Ms Ofli’s credibility and ordered the insurer to pay only for some lower-value items she had proven she owned. 

It ruled out compensation for non-financial loss, noting the insurer was entitled to investigate the matter. 

Almost a year after accepting the determination in August 2022, Ms Ofli launched her lawsuit. Among her arguments were that the AFCA decision was only in relation to her policy’s “general contents coverage” for $61,000 and not the “additional valuable items” coverage, totalling $55,000. She said a claim on the latter was still outstanding. 

She said she initially accepted the AFCA determination because it cleared her of fraud, but argued she was not bound by it because she was never told about the formation of a tripartite contract under the AFCA rules. She said if she was properly informed, she would not have agreed to the determination. 

Bu the judge rejected her argument. “She accepted AFCA’s determination in writing and then insisted on [the insurer] complying with the determination,” Associate Justice Gobbo said. “The plaintiff’s assertion now that she did not accept the AFCA determination is simply not maintainable ... The plaintiff cannot now simply walk away from a determination that is not to her liking once the final determination was made and accepted by her, and try to start again.” 

The court ruling is available here.