Ce Heath Underwriting & Insurance (Australia) Pty Limited v Edwards Dunlop & Co Limited

CE Heath Underwriting & Insurance (Australia) Pty Limited (the applicant) sought special leave to appeal to the High Court of Australia from a decision of the court below concerning an insurance dispute with Edwards Dunlop & Co Limited (the respondent). The core of the dispute involved a claim for losses caused by an employee's dishonesty, which spanned several years. The applicant acknowledged liability for losses occurring within the policy year ending April 1987 and the policy year in force at the time of discovery, but disputed liability for losses occurring prior to these periods, amounting to approximately $420,000.

The legal issues before the High Court concerned the interpretation of a blanket fidelity policy and its predecessors. Specifically, the court was required to determine what constituted the "policy period" for the purposes of indemnity. The respondent argued that successive renewals effectively extended the original policy, creating a continuous period of cover. In contrast, the applicant contended that each renewal constituted a separate, discrete policy period, requiring both the loss to have occurred within that specific period and to have been discovered within 12 months of its end for indemnity to be payable.

The applicant's submission was that the court below erred in its interpretation by effectively assuming a continuous period of cover, rather than treating each policy period as distinct. This approach, the applicant argued, led to an incorrect construction of the policy wording. The applicant sought leave to appeal on the basis that the majority decision below was attended by sufficient doubt to warrant further consideration by the High Court, highlighting the genuine importance of the point of law raised by the interpretation of the insurance contract.