Rockment Pty Ltd t/a Vanilla Lounge v AAI Limited t/a Vero Insurance

Rockment Pty Ltd, trading as Vanilla Lounge, sought to recover business interruption losses against AAI Limited, trading as Vero Insurance. The dispute centred on the interpretation of an exclusion clause in an insurance policy, which excluded coverage for losses arising from a human biosecurity emergency declared under the Biosecurity Act 2015 (Cth). The primary issue for the court was whether the exclusion clause applied to losses that were not directly caused by the declaration of a human biosecurity emergency but were instead caused by a lockdown ordered by a state government in response to the emergency.

The court considered whether the exclusion clause's reference to a "human biosecurity emergency declared under the Biosecurity Act 2015 (Cth)" was limited to the declaration itself or extended to the emergency, its circumstances, or the underlying human disease. Rockment argued that the exclusion applied only to losses directly caused by the declaration, while Vero contended that the clause covered any loss arising from the emergency, regardless of the entity that ordered the lockdown. The court determined that the exclusion clause did not apply to losses caused by a state lockdown in response to a federal declaration of a human biosecurity emergency, as the losses were not directly caused by the declaration but by the state's lockdown orders.

The court's reasoning hinged on the principle that the exclusion clause's trigger was the declaration of a human biosecurity emergency under the Biosecurity Act, not the emergency or the underlying disease. Since Rockment's losses resulted from a state lockdown and not from actions taken under the Biosecurity Act, the exclusion clause did not apply. The court found that the exclusion clause was not broad enough to cover losses resulting from state-imposed lockdowns in response to federal declarations.

The court ordered that the exclusion clause in the insurance policy did not apply to losses that were not directly caused by a declaration of a human biosecurity emergency under the Biosecurity Act 2015 (Cth). The costs of determining this separate question were to be costs in the cause.