SQLserver 2005 to 2012 com.microsoft.sqlserver.jdbc.SQLServerException: Implicit conversion from data type varbinary to datetime2 is not allowed

We are migrating from 2005 to 2012. One of the functionality is failing with this error com.microsoft.sqlserver.jdbc.SQLServerException: Implicit conversion from data type varbinary to datetime2 is not allowed. Use the CONVERT function to run this query.

We use SQLJDBC driver 3.0 to communicate with SQL server 2012. I see this issue is happening when we try to insert null value to datetime column (nullable column). Same however works in 2005. Any help with this issue is appreciated.