Business interruption insurance exclusionary language citing the repealed Quarantine Act returned to the center of attention during the hearing of the model case currently in Federal Court.
QBE argued today that a claim by a travel company is not covered, as Section 61A of the Victorian Property Act has the effect of replacing the repealed Act in the Biosecurity Act. on the quarantine.
The article of the law says that when a law is “repealed and re-enacted”, the references in the contracts will be considered as referring to the new law.
Senior lawyer Ian Pike told the court that it was clear that the Biosafety Act met the criteria because it basically worked the same way to solve the same problems.
The biosafety law was meant to be an update, but with a broader scope, and there was “nothing radically different” from its predecessor, he said.
“They are both headed for the same goal,” he said. “And they do it essentially the same way.”
Mr Pike argued that it was also clear that Section 61A applied to Commonwealth law and not just Victorian laws.
The case, QBE v David Coyne in his capacity as liquidator of Educational World Travel, is heard alongside the nine claims presented by the Insurance Council of Australia in the second test case, after they were submitted to the Australian Financial Complaints Authority.
The issue of Victorian law was also raised during the hearing in the litigation involving IAG and Melbourne-based Meridian Travel, and is relevant to another case involving Chubb and a landlord claim.
In the Meridian case it was also argued that the policy fell under the Victorian Act as it was issued in that state and that it was irrelevant that the broker’s address is in New South Wales .
The New South Wales Court of Appeal concluded in the first test case that language citing the Quarantine Act and subsequent amendments could not be considered to include the Biosafety Act. But the question of Victorian law was not debated in this case.
A court ruling on the property law’s restriction of coverage would only affect BI’s claims when the contract is governed by Victorian law.
The Federal Court hearing before Judge Jayne Jagot is expected to continue until Wednesday.