NEWCASTLE CITY COUNCIL v GIO GENERAL LIMITED; Matter No S 177/96; NEWCASTLE CITY COUNCIL v GIO GENERAL LIMITED trading as GIO AUSTRALIA; Matter No S 178/96 Insurance - Statutory interpretation
2 December 1997 Insurance - Statutory interpretation
Insurance—Liability insurance—"Claims made" policy—Notice of facts that might give rise to a claim given to insurer during period of insurance—Claims made on insured after period of insurance had expired—Whether s 40(3) of the Insurance Contracts Act 1984 (Cth) applies to "claims made" policies. Statutory interpretation—Purposive approach—Identification of mischief—Circumstances in which reference can be had to extrinsic material—Resolution of conflict between literal meaning and apparent purpose of statutory provision. Insurance Contracts Act 1984 (Cth), ss 11, 40. Acts Interpretation Act 1901 (Cth), ss 15AA, 15AB.
Orders
Order: Matter No S 177/96
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal and in lieu thereof order that the appeal to that Court be dismissed with costs, save as to those issues remitted to the Court of Appeal by Order 3 of this Order.
3. Remit the matter to the Court of Appeal to hear and determine whether the appeal from the judgment of Bainton J should be allowed and the declarations made by Bainton J be set aside in so far as those orders are necessary to permit the making of a declaration:
(a) that on or about 18 July 1990 and on or about 23 December 1991, the Appellant gave notice in writing to the Respondent of facts that might give rise to the claim against the Appellant
made by the Newcastle Workers Club as soon as was reasonably practicable after the insured became aware of those facts, so as to comply with s 40(3) of the Insurance Contracts Act 1984 (Cth); and
(b) that the Respondent is not relieved of liability under its policy by reason only of the fact that the claim made by the Appellant in respect of its liability (if any) to the Newcastle Workers Club was made after the expiration of the relevant policy period.
Matter No S 178/96
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal and in lieu thereof order that the appeal to that Court be dismissed with costs.
Decision
BRENNAN CJ
On 28 December 1989, an earthquake struck the city of Newcastle, causing loss of life and damage to property. A coronial inquest into the death of the 12 persons who lost their lives in the earthquake was held. Some had died in the Newcastle Workers' Cooperative Club when the structure of the Club collapsed; others had died or been injured when other structures in the city collapsed. At the inquest, a barrister raised the question whether the appellant ("the Council") was negligent in the manner in which it conducted its building inspection functions. The next day, 18 July 1990, the Newcastle Herald contained anarticle stating, inter…
Grounds of appeal
[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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Details
AGLC
Newcastle City Council v GIO General Ltd [1997] HCA 53
Case
[1997] HCA 53
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal concerning the interpretation of a "claims made" insurance policy and the application of section 40(3) of the *Insurance Contracts Act 1984* (Cth). The dispute arose between Newcastle City Council (the appellant) and GIO General Ltd (the respondent insurer). The Council had received notice of potential claims after its insurance policy with GIO had expired, but had notified GIO of the underlying facts giving rise to these potential claims during the currency of the policy. The central question was whether section 40(3) of the Act, which requires an insurer to be notified of facts that might give rise to a claim, applied to "claims made" policies where the claim itself is made after the policy period.
The High Court was required to determine whether section 40(3) of the *Insurance Contracts Act 1984* (Cth) applied to "claims made" insurance policies, specifically in circumstances where notice of facts that might give rise to a claim was given to the insurer during the policy period, but the actual claim was made after the policy had expired. The Court also had to consider the principles of statutory interpretation, including the purposive approach and the circumstances under which extrinsic material could be considered, to resolve any conflict between the literal meaning of the statutory provision and its apparent legislative purpose.
The Court, applying a purposive approach to statutory interpretation, held that section 40(3) of the *Insurance Contracts Act 1984* (Cth) was intended to protect insured parties by ensuring that notice of potential claims given during the policy period would be effective even if the claim itself was made later. The judges reasoned that a literal interpretation, which would deny coverage in such circumstances, would frustrate the purpose of the Act, which was to provide a more comprehensive system of insurance law. They considered that the mischief the provision sought to remedy was the potential for insurers to avoid liability by relying on technicalities related to the timing of claims when notice of the underlying facts had been given promptly. The Court allowed the appeal, setting aside the orders of the Court of Appeal and remitting the matter to that Court to determine whether the appeal from the primary judge should be allowed, with declarations to be made regarding the Council's compliance with section 40(3) and the insurer's continued liability.
Orders
Orders of the court
Matter No S 177/96
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal and in lieu thereof order that the appeal to that Court be dismissed with costs, save as to those issues remitted to the Court of Appeal by Order 3 of this Order.
3. Remit the matter to the Court of Appeal to hear and determine whether the appeal from the judgment of Bainton J should be allowed and the declarations made by Bainton J be set aside in so far as those orders are necessary to permit the making of a declaration:
(a) that on or about 18 July 1990 and on or about 23 December 1991, the Appellant gave notice in writing to the Respondent of facts that might give rise to the claim against the Appellant made by the Newcastle Workers Club as soon as was reasonably practicable after the insured became aware of those facts, so as to comply with s 40(3) of the Insurance Contracts Act 1984 (Cth); and
(b) that the Respondent is not relieved of liability under its policy by reason only of the fact that the claim made by the Appellant in respect of its liability (if any) to the Newcastle Workers Club was made after the expiration of the relevant policy period.
Matter No S 178/96
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal and in lieu thereof order that the appeal to that Court be dismissed with costs.