GIO General Ltd v Booksan

GIO General Ltd (the appellant) appealed to the High Court of Australia against a decision of the Full Federal Court which had overturned an earlier decision of a single judge. The dispute concerned the interpretation of a workers' compensation insurance policy issued by GIO to Booksan Pty Ltd (the respondent). Booksan sought indemnity under the policy for a claim made against it by an employee, Mr. G. A. Smith, who had suffered a psychiatric injury. GIO denied liability, arguing that the claim was excluded by the policy.

The High Court was required to determine whether the policy's exclusion clause, which excluded liability for "any claim for or in respect of any loss, damage, injury or illness arising out of or in the course of any employment," applied to the claim made by Mr. Smith. Specifically, the court had to consider whether the exclusion applied to the employer's liability to the employee, or only to the employee's direct claim against the employer.

The High Court, in allowing the appeal, held that the exclusion clause was clear and unambiguous. Gleeson CJ and Callinan J reasoned that the policy insured GIO against liability to third parties, and the exclusion clause operated to exclude liability for claims arising out of employment. The court found that Mr. Smith's psychiatric injury arose out of his employment, and therefore, the claim fell within the exclusion. The language of the policy was interpreted to mean that GIO was not liable to indemnify Booksan for the employee's claim, as the claim itself was one arising out of employment.

The High Court ordered that the appeal be allowed and the orders of the Full Federal Court be set aside. The court remitted the matter to the Federal Court for further orders consistent with the High Court's judgment.