Zurich Australian Insurance Limited, in the matter of Zurich Australian Insurance Limited

Zurich Australian Insurance Limited, an authorised insurer under the Insurance Act 1973 (Cth), applied to the Federal Court of Australia for dispensation from certain requirements of section 17C(2) of the Act in relation to the transfer of its compulsory third-party insurance business to Gordian, a company authorised to carry on the business of general insurance run-off. The application was supported by affidavits from Cathy Anne Manolios, Sandra O’Sullivan, and Hilary Janette Bates. The primary legal issue was whether the Court should grant dispensation from the requirement to provide an approved summary of the scheme to every policyholder affected by the transfer, in accordance with section 17C(2)(c) of the Act. The Court considered the plain policy intention of section 17C(2)(c) and the importance of allowing dispensation only in exceptional circumstances. However, the Court found that, due to the nature of the business and the proposed notification steps, it was appropriate to grant the dispensation in this case. The Court concluded that there was little utility in requiring the scheme summary to be given to policyholders with no unsettled claims or for whom Zurich had no current mailing address. The Court also noted that the Australian Prudential Regulation Authority had been consulted and had not objected to the proposed dispensation or notification steps. The Court made orders dispensing with the requirement to provide an approved summary of the scheme to certain policyholders, on condition that Zurich took certain steps to notify and publicise the scheme, including sending the summary to policyholders and claimants with unsettled claims and making the scheme and related documents available for inspection.

The Court's decision highlights the importance of considering the plain policy intention of the relevant provisions of the Act when deciding whether to grant dispensation from those provisions. However, the Court also recognised that dispensation may be appropriate in certain circumstances, particularly where there is little utility in requiring compliance with the provisions in question and other steps are taken to ensure that affected policyholders are adequately informed and have an opportunity to make submissions to the Court. The orders made by the Court in this case reflect a balanced approach that seeks to achieve the policy objectives of the Act while also taking into account the practical realities of the situation.