LCA Marrickville Pty Limited v Swiss Re International SE

The appeal in LCA Marrickville Pty Limited v Swiss Re International SE was brought by the appellant, LCA Marrickville Pty Limited, against the respondent, Swiss Re International SE. The dispute centred around the interpretation and application of insurance policies, specifically in the context of business interruption claims arising from COVID-19 restrictions in Australia. The case was heard by the Full Court of the Federal Court of Australia.

The court was required to address several key legal issues. These included the principles of construction applicable to the insurance policies, the interpretation of specific insuring clauses, the determination of whether COVID-19 related losses were covered under the policies, and the application of statutory provisions such as section 57 of the Insurance Contracts Act 1984 (Cth) concerning interest on claims. Additionally, the court had to consider the scope of indemnity under the policies, particularly in relation to government assistance payments, and the application of the contra proferentem rule to the policies.

The court's reasoning involved a detailed analysis of the policy wording and the relevant statutory provisions, taking into account established principles of contractual interpretation. The court emphasised the importance of reading the policy as a whole and in context, ensuring that specific clauses were not rendered redundant by broader provisions. The court found that the policies did not cover losses arising from government-imposed restrictions due to the risk of disease from overseas. It also concluded that COVID-19 related losses were not covered under the policies, and that interest under section 57 of the Insurance Contracts Act 1984 (Cth) was not payable. The court further held that the Biosecurity Act 2015 (Cth) was not a re-enactment with modifications of the Quarantine Act 1908 (Cth), and thus section 61A of the Property Law Act 1958 (Vic) did not apply.

The appeal was allowed in part, with the primary judge’s answers to the questions posed by the parties being amended. The court dismissed the cross-appeal and made no order as to costs. The decision provides clarity on the interpretation of insurance policies in the context of COVID-19 related business interruption claims.