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Today (25 June 2021), the High Court rejected the application filed by the Insurance Council of Australia to appeal a NSW Court of Appeal decision in November 2020 that insurers could not rely on exclusion wordings citing the Quarantine Act 1908 (Cth) and subsequent amendments to reject claims for disruptions related to COVID-19.
Last year’s decision in November concerned a unanimous judgement by the NSW Court of Appeal (which included the Chief Justice of the Supreme Court) which determined that:
The Biosecurity Act 2015 (Cth) was not a subsequent amendment to the Quarantine Act; and
references to the Quarantine Act were not obvious mistakes that should be construed as if they were, or included, references to the Biosecurity Act.
It is important to note that the original decision is a NSW decision and other states are still able to prosecute test cases in their respective states, though this scenario is highly unlikely.
With this issue determined, we await the trial and decision of a second test case, which will clarify issues such as prevention of access to premises caused by Government mandate, the proximity of an outbreak to a business, as well as the definition of disease.
We will keep you updated on developments arising from the second test case, which is expected to be heard in September 2021.If you have any questions, or you believe you may have a claim, please contact your broker.
