Maclaw No 651 Pty Ltd v CGU Insurance Ltd & Anor

Maclaw No 651 Pty Ltd (the appellant) appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Victoria. The dispute concerned the interpretation of an insurance policy and whether it provided cover for a claim made by the appellant against CGU Insurance Ltd and another insurer (the respondents). The appellant sought indemnity under the policy for losses arising from a fire at its premises.

The central legal issue before the High Court was whether the exclusion clause in the insurance policy, which excluded cover for loss arising from "any wilful act or omission by the insured," operated to deny the appellant indemnity for the fire damage. This required the court to consider the meaning of "wilful act or omission" in the context of an insurance contract and whether the actions of the appellant's director, Mr. Gribble, constituted such an act or omission.

The High Court held that for an act or omission to be considered "wilful" for the purposes of the exclusion clause, it must be intentional in the sense that the insured intended to cause the loss that occurred. The court found that while Mr. Gribble's actions may have been negligent or reckless, there was no evidence that he intended to cause the fire or the resulting damage. Therefore, his actions did not fall within the scope of the exclusion clause. The court applied the principle that exclusion clauses in insurance policies are to be construed strictly against the insurer and that the onus is on the insurer to establish that an exclusion applies.

The High Court allowed the appeal, setting aside the order of the Full Court of the Supreme Court of Victoria and remitting the matter to the Supreme Court for determination of the amount of indemnity payable to the appellant.