HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296
Hearing dates:
2 October 2020
Decision date:
18 November 2020
Before:
Bathurst CJ; Bell P; Meagher JA; Hammerschlag J; Ball J
Decision:
(1) Summons dismissed.
(2) Declarations that:
(a) On the proper construction of the “Tourist Parks & Lifestyle Villages Insurance Policy” issued by the first plaintiff to the first, second, and third defendants for the cover period 28 February 2020 to 28 February 2021, COVID-19 is not a disease declared to be a quarantinable disease under the Quarantine Act 1908 (Cth) and the exclusion in the HDI Disease Benefit is not enlivened.
(b) On the proper construction of the “Business Insurance Policy” issued by the second plaintiff to the fourth defendant for the cover period 11 May 2019 to 11 May 2020, COVID-19 is not a disease declared to be a quarantinable disease under the Quarantine Act 1908 (Cth) and the exclusion in the Hollard Disease Cover is not enlivened.
(3) Cross-claim is otherwise dismissed.
Catchwords:
CONTRACTS – Construction – Interpretation – Where exclusion clause in insurance policy referred to particular legislation “and subsequent amendments” – Whether replacement legislation a “subsequent amendment”
CONTRACTS – Construction – Principles – Correction of mistakes by construction – Where policy includes a reference to repealed legislation – Whether parties may be taken to have known of repeal and replacement of repealed legislation as part of surrounding circumstances – Whether reference absurd or clear mistake – Whether reference to be construed as reference to replacement legislation in light of surrounding circumstances
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
HDI Global Specialty SE v Wonkana No 3 Pty Ltd [2020] NSWCA 296
Case
[2020] NSWCA 296
Decision Date
CaseChat Overview and Summary
HDI Global Specialty SE and another plaintiff insurer (the insurers) sought declarations regarding the construction of exclusion clauses in two insurance policies issued to Wonkana No 3 Pty Ltd and others (the insured). The dispute concerned whether COVID-19 was a disease covered by the policies, specifically whether an exclusion clause referencing the *Quarantine Act 1908* (Cth) and "subsequent amendments" applied to the pandemic, given that the *Quarantine Act 1908* (Cth) had been repealed and replaced by the *Biosecurity Act 2015* (Cth) during the policy periods. The insured argued that the exclusion clauses did not apply because COVID-19 was not a quarantinable disease under the repealed Act, and the reference to "subsequent amendments" did not extend to replacement legislation.
The Court of Appeal of New South Wales was required to determine whether the reference in the exclusion clauses to the *Quarantine Act 1908* (Cth) and "subsequent amendments" should be construed as including the *Biosecurity Act 2015* (Cth) and its relevant declarations concerning COVID-19. This involved considering principles of contractual construction, including the correction of mistakes by construction and the role of surrounding circumstances, such as the repeal and replacement of legislation, in interpreting the parties' intentions. The court had to decide if the reference to the repealed Act was a clear mistake or absurd, and if the parties could be taken to have known of the legislative changes.
The Court of Appeal held that the reference to the *Quarantine Act 1908* (Cth) and "subsequent amendments" was intended to refer to the legislative regime governing quarantinable diseases at the time the policies were in force. Applying principles of contractual construction, the court found that the reference to the repealed Act, in light of the surrounding circumstances including the enactment of the *Biosecurity Act 2015* (Cth), constituted a mistake that could be corrected by construction. The court reasoned that the parties would have intended the exclusion to apply to the current legislative framework for quarantinable diseases, and that the reference to "subsequent amendments" should be understood to encompass the replacement legislation that continued the regulatory scheme. Consequently, the court found that COVID-19 was not a disease declared to be a quarantinable disease under the *Quarantine Act 1908* (Cth), and therefore the exclusion clauses were not enlivened.
The summons was dismissed, and declarations were made that COVID-19 was not a disease declared to be a quarantinable disease under the *Quarantine Act 1908* (Cth) and that the relevant exclusions in the insurance policies were not enlivened. The cross-claim was otherwise dismissed.
Orders
Orders of the court
(1) Summons dismissed.
(2) Declarations that:
(a) On the proper construction of the “Tourist Parks & Lifestyle Villages Insurance Policy” issued by the first plaintiff to the first, second, and third defendants for the cover period 28 February 2020 to 28 February 2021, COVID-19 is not a disease declared to be a quarantinable disease under the Quarantine Act 1908 (Cth) and the exclusion in the HDI Disease Benefit is not enlivened.
(b) On the proper construction of the “Business Insurance Policy” issued by the second plaintiff to the fourth defendant for the cover period 11 May 2019 to 11 May 2020, COVID-19 is not a disease declared to be a quarantinable disease under the Quarantine Act 1908 (Cth) and the exclusion in the Hollard Disease Cover is not enlivened.