McLennan v Insurance Australia Ltd

The appeal in *McLennan v Insurance Australia Ltd* concerned a dispute over a fire insurance policy. The appellant, the insured, sought to recover under the policy for a loss caused by fire, while the respondent insurer denied liability. The matter came before the Court of Appeal of New South Wales, constituted by Beazley P, Meagher and Ward JJA.

The central legal issue before the Court of Appeal was the onus of proof in relation to a fire insurance policy that excluded cover for loss caused by a deliberately lit fire. Specifically, the Court had to determine whether the insured bore the onus of proving that the fire was not deliberately lit, or whether the insurer bore the onus of proving that it was.

The Court of Appeal allowed the appeal, setting aside the judgment of the District Court. The Court reasoned that the exclusion clause in the insurance policy operated as a defence for the insurer. Consequently, the onus rested on the insurer to prove that the fire was deliberately lit to avoid liability under the policy. The Court found that the insurer had failed to discharge this onus.

The Court of Appeal ordered judgment for the appellant against the respondent in the sum of $750,000, together with interest calculated in accordance with s 57 of the *Insurance Contracts Act 1984* (Cth). The respondent was also ordered to pay the appellant's costs of both the District Court proceedings and the appeal.