Appeal handed down in Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2022] FCAFC 16 – Chamberlains Law Firm

31.03.22
By Chamberlains Admin
Last year, we wrote about the Federal Court’s decision in Star Entertainment Group Limited v Chubb Insurance Pty Ltd [2021] FCA 907 on business interruption insurance claims resulting from COVID-19 lockdowns. The decision was appealed by Star Entertainment Group Limited and on 21 February 2022, the Full Court of the Federal Court of Australia handed down its decision in Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2022] FCAFC 16.

Background

The Star Entertainment Group (the Star) and its subsidiaries held an insurance policy with Chubb Insurance Australia (Chubb) and various other Australian and international insurers. The Star made a claim with Chubb for business interruption losses as a result of the COVID-19 related government restrictions across Australia. Chubb denied the Star’s claim on the basis that the policy did not cover for the losses claimed. In response, the Star sued Chubb and the other insurers for breach of contract.
The primary judge, Chief Justice Allsop, found in favour of the insurers, holding that the policy did not extend to indemnifying the Star to loss of use, or custom or financial loss resulting from the government restrictions related to the pandemic.

Issues on appeal

The Star appealed this decision on the following grounds:
As a reminder, memorandum 7 of the policy essentially states that for the purpose of the policy, ‘damage’ extends to losses resulting from or caused by an authority for the purpose of preventing or restricting any catastrophe.

Judgment

The Court held that read in context, the reference to ‘catastrophe’ in the policy does not apply to loss resulting from the actions of an authority to prevent or restrict the spread of human disease. Rather, ‘catastrophe’ refers to a physical phenomenon.
The Court also held that memorandum 9 dealt with matters related to human infectious and contagious diseases, and that memorandum 7 is to be read as to as avoid inconsistency with this.
The Full Court dismissed the Star’s appeal, agreeing with the primary judge’s decision in favour of the insurers.

Key takeaways

It is important to remember that the Court has emphasised that each case will be determined on its own circumstances and merits. The operative insuring clause of the policy and applicable exclusions should be carefully considered when determining how a policy may respond to COVID-19 business interruption losses.
If you believe you hold an insurance policy which may respond to losses arising from the COVID-19 pandemic and/or government restrictions, get in touch with our team today.
 
***Assisted by Madeline Furchtmann***
 
If you have any questions or concerns please contact Lachlan McBride of our Insurance & Dispute Resolution Team on 02 9264 9111
Contact Lachlan McBride.
Director.
Lachlan has extensive experience as a commercial litigator, with a focus on insurance and debt recovery related issues. He has demonstrated expertise in litigation involving insurance, heavy motor and transport issues, debt recovery, contractual interpretation, corporations law, and commercial fraud.
Lachlan has advised and assisted in a number of high profile litigation matters. He understands the impact litigation has on the individuals and businesses involved and provides professional, tailored advice to help his clients in their time of need.
26.04.22
Equity steps to remedy the breach of a purchaser in a property transaction – Hamann v Taleb [2021] NSWSC 1632 The plaintiffs were purchasers of property in Bexley by way of a contract…
31.03.22
A domestic violence victim (the Complainant) lodged a complaint with the Australian Financial Complaints Authority (AFCA) against her former insurer, RAA Insurance Limited (RAA), for removing her from a comprehensive motor policy jointly…
31.03.22
In Count Financial Limited v Pillay [2021] NSWSC 99, the Court considered an application for leave to proceed against a professional indemnity insurer under the Civil Liability (Third Party Claims Against Insurers) Act…
31.03.22
The Full Court of the Federal Court of Australia have handed down their decision in the appeal of the second COVID-19 business interruption test case with findings largely in favour of insurers. Background…
31.03.22
A homeowner took out a home and contents insurance policy with Hollards on 17 March 2021. On 19 March 2021, the insured’s home was flooded by a river. The insured lodged a claim…
24.02.22
The NSW Court of Appeal delivered judgment in Globe Church Incorporated v Allianz Australia Insurance Ltd [2019] NSWCA 27 and found that indemnification under a policy for insurance accrues at the time of…
14.02.22
Allianz Australia Insurance Limited v Rawson Homes Pty Ltd [2021] NSWCA 224 In 2021, the New South Wales Court of Appeal overturned the primary judge’s ruling in Allianz Australia Insurance Limited v Rawson…
14.02.22
A premium is an amount that an insured pays an insurer for cover under a contract for insurance. The premium reflects the amount an insurer considers appropriate having regard to the risks associated…
21.01.22
In law, a conflict of interest may arise where a person (such as a lawyer) owes a duty to serve the interests of another person (such as a client) and is simultaneously serving…
13.01.22
In January 2017, a tenant was replacing a clutch kit on his vintage vehicle and was welding a patch on the floor of this vehicle. This resulted in a fire that caused significant…

source

Leave a Comment