Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Ltd (No 2)

In the case of Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Ltd (No 2), the insured sought to recover under two business interruption policies for loss of weekly turnover. The insured, Tropical Reef Shipyard Pty Ltd (TRS), claimed that damage to a slipway used for repair and maintenance services resulted in business interruption and loss of weekly turnover. The insurer, QBE Insurance (Australia) Ltd (QBE), applied for summary judgment, arguing that TRS could not establish a loss of turnover consistent with the operation of the policies. QBE's application hinged on the proper construction of the policies, particularly the definition of "loss of Turnover" and the calculation of that loss.

The court was required to determine whether the policies covered a situation where actual turnover exceeded the actual average weekly turnover during the indemnity period. The policies defined "Turnover" as "money paid or payable to you for goods sold and for services rendered" and provided that loss of turnover is calculated by subtracting actual weekly turnover from actual average weekly turnover. QBE argued that if actual turnover exceeded the actual average weekly turnover in some weeks, the balance in a nominal running account should be positive, and the amount paid should be deducted from that account. TRS contended that the policies should be interpreted to mean that any excess of actual turnover over actual average weekly turnover should be disregarded in calculating the loss of turnover.

The court denied the insurer's application for summary judgment, holding that the possibility of repleading should be considered before making a summary judgment. The court found that the summary judgment application was denied because the court was not satisfied that there was no reasonable possibility that the plaintiff could succeed at the trial. The court also held that post-contract facts should not be considered when interpreting the contracts. The court found that the interpretation of the policies should be based on the language of the contracts and not on the subsequent conduct of the parties.

The court stood over the respondent’s motion for summary judgment and ordered each party to pay its own costs.