QBE Insurance Australia Ltd v Vasic

QBE Insurance Australia Ltd appealed to the Court of Appeal of New South Wales against a decision concerning the interpretation of an indemnity insurance policy. The dispute arose from an incident where the insured's son, who was accompanying a licensed shooter on an overnight hunting excursion on the insured's property, sustained injuries from a fire. The core of the disagreement lay in whether the insurance policy provided coverage for this specific event, given the insured's activity of allowing licensed shooters onto their properties for hunting purposes.

The Court of Appeal was required to determine the proper construction of the insurance policy, specifically whether the coverage clause applied to the circumstances of the son's injury. A key legal issue involved the admissibility of extrinsic evidence in interpreting the policy, including the proposal and wording of a previous insurance policy, and a statement from an insurance broker regarding the policy's genesis. The court also considered the scope of knowledge of surrounding circumstances that could be attributed to the contracting parties for the purpose of interpretation.

The Court reasoned that the knowledge of surrounding circumstances to be attributed to a reasonable person in the position of the contracting parties should be understood by reference to what the parties actually knew in the context of their mutual dealings. The court found no evidence that the insurers had knowledge of the previous policy documents or that the parties had knowledge of how the current policy was developed. Consequently, the extrinsic evidence was not admitted to inform the interpretation of the policy. The appeal was dismissed, with the court ordering that the appellants file a notice of appeal within 14 days and that the appeal be dismissed with costs.