CGU Insurance Limited v Blakeley & Ors

CGU Insurance Limited appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Queensland. The dispute concerned the interpretation of a professional indemnity insurance policy issued by CGU to a firm of solicitors, Blakeley & Ors. The solicitors had been sued by a former client, Mr. John, for professional negligence. CGU denied liability under the policy, arguing that the claim was excluded by a specific clause.

The High Court was required to determine whether the professional indemnity insurance policy issued by CGU to Blakeley & Ors covered the claim made by Mr. John. Specifically, the court had to consider the meaning and application of an exclusion clause within the policy that related to claims arising from the solicitors' involvement in certain types of property transactions. The central legal issue was whether Mr. John's claim fell within the scope of this exclusion.

The High Court found in favour of CGU, holding that the exclusion clause was clear and unambiguous. Their Honours reasoned that the solicitors' conduct, which gave rise to Mr. John's claim, fell squarely within the circumstances described by the exclusion. The court applied principles of contractual interpretation, emphasizing that the plain and ordinary meaning of the words used in the policy should be given effect, particularly in the context of an exclusion clause intended to limit the insurer's liability.

The High Court allowed the appeal and ordered that the judgment of the Full Court of the Supreme Court of Queensland be set aside. CGU Insurance Limited was therefore not liable to indemnify Blakeley & Ors in respect of Mr. John's claim.