FAI General Insce Co v AR Griffiths & Sons

FAI General Insurance Co Ltd (FAI) and AR Griffiths & Sons Pty Ltd (Griffiths) were the parties involved in this appeal to the High Court of Australia. The dispute concerned the interpretation of a workers' compensation insurance policy and whether it covered a claim made by Griffiths for a loss arising from the collapse of a building. Griffiths had sought indemnity from FAI under the policy for this loss.

The central legal issue before the High Court was whether the workers' compensation policy issued by FAI to Griffiths extended to cover the loss suffered by Griffiths due to the building's collapse. This required the Court to consider the scope of the policy's coverage, particularly in relation to damage to property and the causal connection between the insured event (the collapse) and the workers' compensation liability.

The High Court determined that the policy, while a workers' compensation policy, did not provide indemnity for damage to property. The Court reasoned that the policy's primary purpose was to cover liabilities arising under workers' compensation legislation, not to insure against direct property damage. Therefore, the collapse of the building, which resulted in property damage, did not fall within the scope of the indemnity provided by the workers' compensation policy, even though it might have indirectly led to workers' compensation claims. The Court applied principles of contractual interpretation to ascertain the true meaning and effect of the insurance policy.