Lawyers seek special leave for Court of Appeal to hear business interruption insurance test case

Business interruption insurance test case adjourned in an unusual move to ensure a faster judgment.

A finding in the case could trigger the activation of Business Interruption Insurance policies for thousands of small businesses around Australia.

The long awaited kick off to the legal test from Australia‘s insurance industry as to the wording of business interruption insurance policies has been pushed back on the eve of its opening directions hearing.

The high-stakes case appeared before Justice David Hammerschlag on Friday but was adjourned so lawyers for both sides could seek to ensure agreed facts and the matter heard by a higher court.

Ensuring an agreement of the facts would see the test case focus purely on questions of wording rather than a dispute over facts.

Clayton Utz and Clyde & Co sought to have the matter relisted for next week to give time for a motion to be filed for the matter to be heard by the NSW Court of Appeal, in effect leapfrogging having the case heard by just one judge.

The reason for this is the view that the outcome of the case would almost certainly be appealed by either side and a sitting of the NSW Court of Appeal would allow a judgment to be reached sooner.

The move to have the case heard by the Court of Appeal is unusual and points to just how high stakes the outcome of the case might be.

The outcome of the Court of Appeal judgment could possibly be appealed to the High Court of Australia, if permission is given.

The test case, initiated by the Insurance Council of Australia with approval from the Australian Financial Complaints Authority, is aimed at testing the wording of many business interruption insurance policies which reference the defunct Quarantine Act.

Costs for lawyers acting for both sides in the case are being paid by the ICA.

Both parties also sought leave for the matter to be heard expeditiously, in recognition of the view expressed when the case started that an outcome was desirable soon.

A finding in the case could trigger the activation of Business Interruption Insurance policies for thousands of small businesses around Australia and push insurers to pay out hundreds of millions of dollars.

The case currently before the Supreme Court of NSW involves a caravan park in the NSW City of Tamworth insured by HDI Global Specialty SE (Australia), the other a food distributor in Melbourne insured by Hollard Insurance.