LCA Marrickville Pty Limited v Swiss Re International SE

• Jurisdiction: Australia Federal only
• Judgment Date: 21 February 2022
• Neutral Citation: [2022] FCAFC 17
• Date: 21 February 2022
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

LCA Marrickville Pty Limited v Swiss Re International SE [2022] FCAFC 17

Appeal from:		Swiss Re International Se v LCA Marrickville Pty Limited (Second COVID‑19 insurance test cases)[2021] FCA 1206
File numbers:	NSD 1076 of 2021NSD 1079 of 2021NSD 1080 of 2021NSD 1081 of 2021NSD 1082 of 2021
Judgment of:	MOSHINSKY, DERRINGTON AND COLVIN JJ
Date of judgment:	21 February 2022
Catchwords:	INSURANCE – construction of policies – principles of construction – requirement to read policy “as a whole” – requirement to read policy provisions in context – giving effect to specific or important clauses which might otherwise be rendered redundant by a broad reading of other clauses – whether incongruence or incoherence as opposed to mere overlap ; INSURANCE – construction of policies – principles of construction – requirement to read policy from the position of an objective third party taking into account the circumstances of the contracting parties – whether different to the position of the reasonable policyholder ; INSURANCE – business interruption insurance – COVID‑19 – cause of loss – causes of loss from government imposed restrictions – whether restrictions imposed as a result of risk of disease, outbreak or threat of disease from overseas ; INSURANCE – business interruption insurance – COVID‑19 – hybrid clauses – composite insured perils with consecutive sequential elements – causal nexus between elements – proximate cause not necessarily required – ordinary construction of connecting words ; INSURANCE – business interruption insurance – COVID‑19 – test cases – concurrent causes of loss – application of the “underlying fortuity principle” – whether general effects of COVID‑19 arose from the same underlying fortuity as insured perils – whether concurrent cause of loss a matter which the parties would naturally expect to occur concurrently with the insured peril ; INSURANCE – business interruption insurance – scope of indemnity – “trends clauses” – whether insured required to bring into account amounts received from third parties – government assistance payments provided without reference to loss incurred ; INSURANCE – business interruption insurance – hybrid clauses – authority acting in response to outbreak of disease – insured obliged to establish authority acted in response to outbreak but not the actual outbreak ; INSURANCE – business interruption insurance – construction of particular insuring clauses – disease clause – hybrid clause – prevention of access clause ; INSURANCE – interest on claims – s 57 of the Insurance Contracts Act 1984 (Cth) – from when is it unreasonable for insurer to withhold payment of an amount – significance as to bona fide dispute as to reasonableness – whether present appeals are exceptional cases permitting insurers to withhold payment without obligation to pay interest ; CONTRACTS – construction – the contra proferentem rule – rule of last resort – application of rule to policies of insurance – application of ejusdem generis and nocitur a sociis rule ; CONTRACTS – meaning of words – “outbreak” – “occurrence” – “conflagration” – “catastrophe” – “premises” – “closure” – “evacuation” – “hindrance” – “physical damage” ; STATUTORY INTERPRETATION – s 61A Property Law Act 1958 (Vic) – application to Acts of the Commonwealth – whether Biosecurity Act 2015 (Cth) a re‑enactment with modifications of Quarantine Act 1908 (Cth) – s 61A applies to Victorian Acts only – Biosecurity Act 2015 (Cth) not a re‑enactment with modifications of Quarantine Act 1908 (Cth) ; STATUTORY INTERPRETATION – s 57 of the Insurance Contracts Act 1984 (Cth) – when unreasonable for insurer to withhold payment of the amount – significance as to bona fide dispute as to reasonableness
Legislation:	Biosecurity Act 2015 (Cth), ss 2, 3, 42, 44, 45, 46, 51, 52, 477 Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth) Coronavirus Economic Response Package Omnibus (Measures No 2) Act 2020 (Cth) Corporations Act 2001 (Cth) Insurance Contracts Act 1984 (Cth), ss 13, 14, 37, 54, 57 National Health Security Act 2007 (Cth) Quarantine Act 1908 (Cth), ss 2, 4, 18 Trade Marks Act 1955 (Cth) Trade Marks Act 1995 (Cth) Acts Interpretation Act 1890 (Vic), ss 3, 4, 5, 6, 22, 27 Acts Interpretation Act 1915 (Vic), s 6 Acts Interpretation Act 1928 (Vic), s 6 Acts Interpretation Act 1958 (Vic), s 7 Interpretation Act 1987 (NSW), ss 5, 12 Interpretation of Legislation Act 1984 (Vic), ss 38, 16, 17 Interpretation of Legislation (Amendment) Act 1993 (Vic) Property Law Act 1958 (Vic), ss 4, 61A Public Health Act 2010 (NSW), s 7 Public Health Act 2005 (Qld), ss 68, 70, 362B Public Health and Wellbeing Act 2008 (Vic), s 200
Cases cited:	Adelaide (SA) Pools & Spa Manufacturing and Installation Pty Ltd v Westcourt General Insurance Brokers Pty Ltd (No 2) [2021] SASC 123 Arbory Group Ltd v West Craven Insurance Services (A Firm) [2007] Lloyd’s Rep IR 491 Australian Broadcasting Commission v Australasian Performing Rights Association Ltd(1973) 129 CLR 99 Australian Pipe & Tube Pty Ltd v QBE Insurance (Australia) Ltd (No 2) [2018] FCA 1450 Arnold v Britton[2015] AC 1619 Australian Casualty Co Ltd v Federico(1986) 160 CLR 513 Axa Reinsurance (UK) plc v Field[1996] 1 WLR 1026 Bankstown Football Club Ltd v CIC Insurance Ltd (unreported, Sup Ct, NSW, 17 December 1993) Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266 BMW Australia Ltd v Brewster (2019) 269 CLR 574 Board of Trade v Hain Steamship Co Ltd[1929] AC 534 Byrnes v Kendall(2011) 243 CLR 253 Cat Media Pty Ltd v Allianz Australia Insurance Ltd (2006) 14 ANZ Ins Cas 61-700 CE Heath Underwriting & Insurance (Aust) Pty Ltd v Edwards Dunlop & Co Ltd(1993) 176 CLR 535 CGU Insurance Ltd v Porthouse(2008) 235 CLR 103 Chapmans Ltd v Australian Stock Exchange Ltd(1996) 67 FCR 402 Cherry v Steele-Park (2017) 96 NSWLR 548 Chief Commissioner of State Revenue v Tasty Chicks Pty Ltd (2012) 87 ATR 880 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 8 ANZ Ins Cas 61-232 Commonwealth v Aurora Energy Pty Ltd (2006) 235 ALR 644 Cornish v Accident Insurance Co Ltd (1889) 23 QBD 453 Dalby v Bio-Refinery Ltd v Allianz Australia Insurance Ltd [2019] FCAFC 85 Day v Adam; Ex parte Day [1989] 2 Qd R 9 Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113 Director-General of Social Services v Hales (1983) 47 ALR 281 DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 Elders Ltd v Swinbank (2000) 96 FCR 303 ...